STOCK PLEDGE AGREEMENT
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AGREEMENT dated as of the 24th day of July, 1998, by and
between USIS ACQUISITION, LLC, a Delaware limited liability
company ("Pledgor"), and AMERICAN ECO CORPORATION, an Ontario
corporation ("Pledgee").
R E C I T A L S
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A. Pledgor has entered into a Letter Agreement with
Pledgee dated as of the date hereof (the "Letter Agreement") with
respect to the purchase by Pledgor of certain promissory notes
("US Industrial Notes") of U S Industrial Services, Inc., a
Delaware corporation ("US Industrial").
B. Pledgor has executed and delivered a Secured Promissory
Note payable to the order of Pledgee dated as of the date hereof
in the principal amount of $12,900,000 (the "Pledgor Note") in
partial payment for the purchase by Pledgor from Pledgee of US
Industrial Notes.
C. As a material inducement to Pledgee to accept the
Pledgor Note, Pledgor has agreed to pledge to Pledgee, and to
grant Pledgee a security interest in, certain collateral, as
described herein.
NOW, THEREFORE, in consideration of the foregoing and other
good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, Pledgor and Pledgee hereby agree
as follows:
1. Grant of Security Interest. As collateral security for
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Pledgor's due and punctual performance of the Obligations (as
hereinafter defined), Pledgor hereby pledges and delivers to
Pledgee the Collateral (as hereinafter defined), and grants,
assigns, transfers and conveys to Pledgee a continuing security
interest in the Collateral.
2. Obligations. This Agreement, and Pledgor's grant to
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Pledgee of a security interest in the Collateral, is made to
secure the due and punctual payment and other performance of
Pledgor's obligations under the Pledgor Note, including all
amendments, modifications, renewals, extensions or replacements
hereof or thereof (collectively, the "Obligations").
3. Collateral. As used herein, the term "Collateral"
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shall mean
3.1. 5,295,858 shares of common stock, $.01 par value
(the "Shares"), of US Industrial owned by Pledgor and
certificates representing the Shares and such additional property
at any time and from time to time receivable by Pledgee hereunder
or otherwise distributed in respect of or in exchange for any or
all of such Shares;
3.2. all additional shares of stock of US Industrial
from time to time acquired by Pledgor in any manner, and the
certificates representing such additional shares, and all
options, warrants, dividends, cash, instruments and other rights
and options from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of such
shares; and
3.3. the property and interests described in Section 4;
together with any and all products and proceeds of any of the
foregoing in whatever form.
4. Collateral Adjustments. If, during the term of this
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Agreement,
4.1. any stock dividend, reclassification, readjustment
or other change is declared or made in the capital structure of
US Industrial, or
4.2. any subscription warrant(s) or any other right(s)
or option(s) shall be issued in connection with the Collateral,
then all new, substituted and additional shares, warrants,
rights, options and other securities issued by reason of any of
the foregoing shall be immediately delivered to and held by
Pledgee under the terms of this Agreement and shall constitute
the Collateral hereunder; provided, however, that Pledgor's
failure to so deliver such property to Pledgee shall in no way
affect the security interest granted therein as hereinabove
provided.
5. Subsequent Changes Affecting Collateral. Pledgor
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represents and warrants that it has made its own arrangements for
keeping itself informed of changes and potential changes
affecting the Collateral (including, but not limited to, rights
to convert, rights to subscribe, payments of dividends,
reorganization and other exchanges, tender offers and voting
rights), and Pledgor agrees that Pledgee shall not have any
obligation to inform Pledgor of any such changes or potential
changes or to take any action or omit to take any action with
respect thereto. Pledgee may, after the occurrence of an Event
of Default, without notice and at its option, transfer or
register the Collateral or any part thereof into its or its
nominee's name with and without any indication that such
Collateral is subject to the security interest hereunder.
6. Delivery of Collateral. Concurrently with the
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execution and delivery of this Agreement, Pledgor shall deliver
to Pledgee, in form and substance satisfactory to Pledgee
certificates representing the Collateral, together with duly
executed blank stock powers, with a Medallion signature
guarantee, transferring same.
7. Representations and Warranties. Pledgor represents and
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warrants to Pledgee as follows:
7.1. Organization. Pledgor is a limited liability
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company duly organized, validly existing and in good standing
under the laws of the State of Delaware, with full corporate
power and authority to own or lease its properties, to carry on
its business and to execute, deliver and perform its obligations
under this Agreement.
7.2. Corporate Action. All corporate action
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required to be taken by Pledgor in connection with the execution,
delivery and performance of this Agreement, and the agreements,
instruments and transactions contemplated hereby and thereby, has
been duly taken.
7.3. No Conflicts. Neither the execution and
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delivery of this Agreement or any of the agreements or
instruments contemplated hereby, nor the performance of any of
Pledgor's obligations hereunder or thereunder, will: (a) violate
or conflict with Pledgor's Operating Agreement, as amended to
date or any agreement, commitment, indenture, contract or other
obligation or restriction affecting Pledgor; (b) conflict with,
result in a breach of, constitute (with notice, lapse of time or
both) a default under, or result in the creation or imposition of
any lien, charge, security interest or other encumbrance upon any
of Pledgor's property pursuant to the terms of, any agreement or
instrument to which Pledgor is a party, by which it is bound or
to which any of its properties is subject; or (c) violate any
provision of any law, or any rule, regulation, order, judgment or
decree of any court, governmental agency or body or arbitration
panel to which Pledgor or any of its properties is subject.
7.4. Enforceability. This Agreement, and each of
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the agreements and instruments contemplated hereby executed by
Pledgor, is a legal, valid and binding obligation of Pledgor,
enforceable in accordance with its terms, except that such
enforcement may be subject to bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter
in effect relating to creditors' rights generally or to general
principles of equity that may, among other things, limit the
availability of specific performance, injunctive relief or other
equitable remedies. Pledgor's obligations under this Agreement
and each of the agreements and instruments contemplated hereby
are not subject to any defense, counterclaim or offset of any
kind whatsoever.
7.5. Ownership of Collateral. Pledgor is the
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record and beneficial owner of the Collateral free and clear of
all liens, claims, encumbrances, security interests or equities,
other than the security interest created hereby and restrictions
on resale imposed under the Securities Act of 1933, as amended.
7.6. Perfection. This Agreement and the delivery
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of the Collateral to Pledgee creates in Pledgee a fully perfected
security interest in the Collateral.
8. Covenants and Agreements of Pledgor. Pledgor covenants
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and agrees with Pledgee that from the date hereof and until
payment and satisfaction in full of each and all of the
Obligations, unless Pledgee shall otherwise consent in writing,
Pledgor will:
8.1. Duly observe and perform each and every term and
condition of the Letter Agreement, the Pledgor Note and any and
all other agreements, instruments and documents relating to the
Collateral, and diligently protect and enforce its rights under
all such agreements;
8.2. Not sell, lease, assign, transfer, convey, pledge,
hypothecate, mortgage or further encumber any of the Collateral,
except in the manner as expressly provided for in the Pledgor
Note;
8.3. Promptly pay or otherwise cause to be discharged
any lien, charge, security interest or other encumbrance that may
attach to the Collateral, or any portion thereof, other than
pursuant to this Agreement;
8.4. Defend the Collateral against all claims, liens,
security interests, demands and other encumbrances of third
parties at any time claiming an interest in the Collateral that
is adverse to Pledgee's interest in the Collateral hereunder; and
8.5. Execute and deliver to Pledgee any and all further
agreements, instruments, or documents and take any and all such
further action as Pledgee, in its sole discretion, may deem
necessary or advisable in order to evidence, effectuate, perfect,
protect, maintain, or realize upon Pledgee's security interest in
the Collateral or the priority thereof.
9. Voting Rights. During the term of this Agreement, and
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except as provided in the following sentence of this Section,
Pledgor shall have the right to vote the Collateral on all
corporate questions in a manner not inconsistent with the terms
of this Agreement, the Letter Agreement, the Pledgor Note and any
other agreement, instrument or document executed pursuant thereto
or in connection therewith. After the occurrence of an Event of
Default, Pledgee may, at Pledgee's option and following written
notice from Pledgee to Pledgor, exercise all voting rights
pertaining to the Collateral, including the right to take
shareholder action by written consent, and Pledgor hereby
irrevocably constitutes and appoints Pledgee as Pledgor's proxy
and attorney-in-fact, with full power of substitution, to do so.
This proxy shall be irrevocable and shall continue until the
termination of this Agreement in accordance with Section 13.
10. Dividends and Other Distributions.
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10.1. Until the occurrence of an Event of Default,
(i) subject to Section 4 hereof, Pledgor shall be entitled to
receive and retain all dividends and interest paid in respect of
the Collateral; and (ii) Pledgee shall execute and deliver (or
cause to be executed and delivered) to Pledgor all such proxies
and other instruments as Pledgor may reasonably request for the
purpose of enabling Pledgor to receive the dividends or interest
payments which it is authorized to receive and retain pursuant to
clause (i) of this Subsection.
10.2. After the occurrence of an Event of Default,
(i) all rights of Pledgor to receive dividends and interest
payments in respect of the Collateral shall cease, and all such
rights shall thereupon become vested in Pledgee, for the benefit
of Pledgee, which shall thereupon have the sole right to receive
and hold as Collateral such dividends and interest payments; and
(ii) all dividends and interest payments which are received by
Pledgor contrary to the provisions of clause (i) of this
Subsection shall be received in trust for Pledgee, shall be
segregated from other funds of Pledgor and shall be paid over
immediately to Pledgee as Collateral in the same form as so
received (with any necessary indorsements).
11. Events of Default. Unless specifically waived in
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writing by Pledgee, the existence of any of the following
conditions or the occurrence of any of the following events,
shall constitute an "Event of Default" hereunder:
11.1. Failure to make prompt and punctual payment
or performance when due of any of the Obligations;
11.2. Any representation or warranty in this
Agreement, the Letter Agreement, the Pledgor Note, or in any of
the agreements of instruments contemplated hereby, proves
materially false or misleading in any way;
11.3. Failure to observe or perform any covenant in
this Agreement, the Pledgor Note or under any of the agreements
or instruments contemplated hereby, if such breach is not cured
within fifteen (15) days after notice thereof is given by
Pledgee;
11.4. At any time after the date hereof a case or
proceeding shall have been commenced against Pledgor in a court
having competent jurisdiction seeking a decree or order in
respect of Pledgor (i) under Title 11 of the United States Code,
as now constituted or hereafter amended (the "Bankruptcy Code"),
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or any other applicable Federal, state or foreign bankruptcy or
other similar law or (ii) appointing a custodian, receiver,
liquidator, assignee, trustee or sequestrator (or similar
official) of any of Pledgor's assets, and such case or proceeding
shall not be discharged or dismissed within 30 days of
commencement thereof;
11.5. At any time after the date hereof, Pledgor
shall (i) file a petition seeking relief under the Bankruptcy
Code or any other applicable Federal, state or foreign bankruptcy
or other similar law and (ii) consent to the institution of
proceedings thereunder or to the filing of such petition or to
the appointment of or taking possession by a custodian, receiver,
liquidator, assignee, trustee or sequestrator (or similar
official) of Pledgor's assets;
11.6. Acceleration of the maturity of any other
indebtedness of Pledgee by reason of a default thereunder; or
11.7. Entry of a judgment or order against Pledgor
or any of its properties which has not been bonded or execution
stayed within 30 days of entry thereof.
12. Pledgee's Remedies. If an Event of Default occurs
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hereunder, then, Pledgee may, at its option, but is not required
to, do any one or more of the following without demand or notice
to Pledgor:
12.1. Declare all of the Obligations immediately
due and payable in full, notwithstanding the terms of any other
writing or evidence of debt;
12.2. Transfer the Collateral into Pledgee's name
or that of its nominee;
12.3. From time to time, proceed with the
foreclosure of Pledgee's security interest and sale of the
Collateral, or any portion of it, in any manner permitted by law
or provided for herein. With respect to the Collateral or any
part thereof which shall then be in or shall thereafter come into
possession or custody of Pledgee or which Pledgee shall otherwise
have the ability to transfer under applicable law, Pledgee may,
in its sole discretion, without notice, after the occurrence of
an Event of Default, sell or cause the same to be sold at any
exchange, broker's board or at public or private sale, in one or
more sales or lots, at such price as Pledgee may deem best, for
cash or on credit or for future delivery, without assumption of
any credit risk, and the purchaser of any or all of the
Collateral so sold shall thereafter own the same, absolutely free
from any claim, encumbrance or right of any kind whatsoever.
Pledgee may, in its own name or in the name of a designee or
nominee, buy the Collateral at any public sale and, if permitted
by applicable law, buy the Collateral at any private sale.
Pledgor shall remain liable for any deficiency following the sale
of the Collateral or any other realization upon the Collateral;
or
12.4. Exercise any and all of the rights and
remedies available to a secured party under the Uniform
Commercial Code in effect at the time in the State of Texas or as
otherwise provided by law.
13. Term. This Agreement shall remain in full force and
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effect until the Obligations have been fully and indefeasibly
paid and satisfied. Upon the termination of this Agreement as
provided above (other than as a result of the sale of the
Collateral), Pledgee will release the security interest created
hereunder and will deliver the Collateral to Pledgor.
14. Notices. Any notice, request, demand or other
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communication give pursuant to the terms of this Agreement shall
be deemed given upon delivery, if hand delivered, upon receipt of
telecopy or telex if telecopied or telexed, or two (2) business
days after deposit in the United States mail, postage prepaid,
correctly addressed to the addresses of the parties indicated
below or at such other address as such party, in writing, shall
have advised the other parties hereto:
To Pledgor: USIS Acquisition, LLC
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▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax No. ▇▇▇-▇▇▇-▇▇▇▇
To Pledgee: American Eco Corporation
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Fax No. ▇▇▇-▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Chairman
15. Governing Law. This Agreement shall be governed by, and
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construed and enforced in accordance with, the laws of the State
of Texas, without regard to choice of law principles.
16. Modifications and Waivers. No modification, amendment
or
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waiver of any provision of this Agreement, nor consent to any
departure of Pledgor herefrom, shall in any event be effective
unless the same shall be in writing and signed by Pledgee, and
then such waiver or consent shall be effective only in the
specific instance and for the purpose for which given.
17. Successors and Assigns. This Agreement shall be
binding
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upon Pledgor, its successors and assigns and inure to the benefit
of Pledgee and its successors and assigns.
18. Integration. This Agreement, together with the Letter
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Agreement, the Pledgor Note and any other security documents
executed in connection herewith, expresses the entire agreement
and understanding of the parties hereto and their respective
affiliates with respect to the matters set forth herein and
supersedes all prior agreements, arrangements and understandings
among the parties hereto and their respective affiliates with
respect to the matters set forth herein. In the event of a
conflict between the terms of this Agreement and the Pledgor
Note, the terms of the Pledgor Note shall govern.
19. Severability. In case any one or more of the
provisions
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contained in this Agreement should be determined by a court of
law to be invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions
contained herein shall not in any way be affected or impaired
thereby.
IN WITNESS WHEREOF, the parties hereto have duly executed
this Agreement as of the date first above written.
PLEDGOR: USIS ACQUISITION LLC, a Delaware
limited liability company
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, III
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, III
Manager
PLEDGEE: AMERICAN ECO, an Ontario corporation
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Chairman