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EXHIBIT 10.10
STOCK PLEDGE AGREEMENT
of
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
THIS PLEDGE AGREEMENT (this "Agreement") is made as of November 11,
1997, by ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ (herein called "Debtor") in favor of NationsBank of
Texas, N.A., a national banking association, in its capacity as agent for
itself and certain other Lenders from time to time parties to the Credit
Agreement described herein (herein called "Secured Party").
RECITALS:
1. AEI Holding Company, Inc., a Delaware corporation ("Borrower"), has
executed in favor of Secured Party certain Notes (as defined in the Credit
Agreement) of even date herewith, payable to the order of Lenders (such Notes,
as from time to time amended, and all promissory notes given in substitution,
renewal or extension therefor or thereof, in whole or in part, being herein
collectively called the "Notes").
2. The Notes were executed pursuant to a Credit Agreement of even date
herewith (herein, as from time to time amended, supplemented or restated,
called the "Credit Agreement"), by and between Borrower, and Secured Party,
individually and as agent, and the other Lenders from time to time parties
thereto, pursuant to which Secured Party has agreed to advance funds to
Borrower under the Notes.
3. It is a condition precedent to Secured Party's obligation to
advance funds pursuant to the Credit Agreement that Debtor shall execute and
deliver this Agreement to Secured Party.
4. Debtor owns fifty percent (50%) of the outstanding capital stock of
Borrower.
NOW, THEREFORE, in consideration of the premises, of the benefits
which will inure to Debtor from Secured Party's extensions of credit under the
Credit Agreement, and of Ten Dollars and other good and valuable consideration,
the receipt and sufficiency of all of which are hereby acknowledged, and in
order to induce Secured Party to extend credit under the Credit Agreement,
Debtor hereby agrees with Secured Party as follows:
AGREEMENTS:
ARTICLE I -- Definitions and References
Section 1.1. General Definitions. As used herein, the terms
"Agreement", "Debtor", "Secured Party", "Notes", "Borrower", "Guaranty," and
"Credit Agreement" shall have the meanings indicated above, and the following
terms shall have the following meanings:
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"Collateral" means all property, of whatever type, which is described
in Section 2.1 as being at any time subject to a security interest granted
hereunder to Secured Party.
"Commitment" means the agreement or commitment by Secured Party to
make loans or otherwise extend credit to Debtor under the Credit Agreement, and
any other agreement, commitment, statement of terms or other document
contemplating the making of loans or advances or other extension of credit by
Secured Party to or for the account of Debtor which is now or at any time
hereafter intended to be secured by the Collateral under this Agreement.
"Issuer" means any issuer of Pledged Shares and any successor of such
Issuer.
"Obligation Documents" means the Credit Agreement, all other Loan
Documents, and all other documents and instruments under, by reason of which,
or pursuant to which any or all of the Secured Obligations are evidenced,
governed, secured, guarantied, or otherwise dealt with, and all other
agreements, certificates, and other documents, instruments and writings
heretofore or hereafter delivered in connection herewith or therewith.
"Other Liable Party" means any Person, other than Debtor, but
including Borrower, who may now or may at any time hereafter be primarily or
secondarily liable for any of the Secured Obligations or who may now or may at
any time hereafter have granted to Secured Party a Lien upon any property as
security for the Secured Obligations.
"Pledged Shares" has the meaning given it in Section 2.1(a).
"Related Person" means Debtor and each Other Liable Party.
"Secured Obligations" shall have the meaning given it in Section 2.2.
"UCC" means the Uniform Commercial Code in effect in the State of
Texas on the date hereof.
Section 1.2. Incorporation of Other Definitions. Reference is hereby
made to the Credit Agreement for a statement of the terms thereof. All
capitalized terms used in this Agreement which are defined in the Credit
Agreement and not otherwise defined herein shall have the same meanings herein
as set forth therein. All terms used in this Agreement which are defined in the
UCC and not otherwise defined herein or in the Credit Agreement shall have the
same meanings herein as set forth therein, except where the context otherwise
requires.
Section 1.3. Attachments. All exhibits or schedules which may be
attached to this Agreement are a part hereof for all purposes.
Section 1.4. Amendment of Defined Instruments. Unless the context
otherwise requires or unless otherwise provided herein, references in this
Agreement to a particular agreement, instrument or document (including, but not
limited to, references in Section 2.1) also refer to and include all renewals,
extensions, amendments, modifications, supplements or restatements of any such
agreement, instrument or document, provided that nothing contained
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in this Section shall be construed to authorize any Person to execute or enter
into any such renewal, extension, amendment, modification, supplement or
restatement.
Section 1.5. References and Titles. All references in this Agreement
to Exhibits, Articles, Sections, subsections, and other subdivisions refer to
the Exhibits, Articles, Sections, subsections and other subdivisions of this
Agreement unless expressly provided otherwise. Titles appearing at the
beginning of any subdivision are for convenience only and do not constitute any
part of any such subdivision and shall be disregarded in construing the
language contained in this Agreement. The words "this Agreement", "herein",
"hereof", "hereby", "hereunder" and words of similar import refer to this
Agreement as a whole and not to any particular subdivision unless expressly so
limited. The phrases "this Section" and "this subsection" and similar phrases
refer only to the Sections or subsections hereof in which the phrase occurs.
The word "or" is not exclusive, and the word "including" (in all of its forms)
means "including without limitation". Pronouns in masculine, feminine and
neuter gender shall be construed to include any other gender, and words in the
singular form shall be construed to include the plural and vice versa unless
the context otherwise requires.
ARTICLE II -- Security Interest
Section 2.1. Grant of Security Interest. As collateral security for
all of the Secured Obligations, Debtor hereby pledges and assigns to Secured
Party and grants to Secured Party a continuing security interest in and to all
right, title and interest of the following:
(a) Pledged Shares. All of the following, whether now or hereafter
existing, which are owned by Debtor or in which Debtor otherwise has any
rights: all shares of stock of AEI Holding Company, Inc. including but not
limited to the shares described on Exhibit A hereto, all certificates
representing any such shares, all options and other rights, contractual or
otherwise, at any time existing with respect to such shares, and all dividends,
cash, instruments and other property now or hereafter received, receivable or
otherwise distributed in respect of or in exchange for any or all of such
shares (any and all such shares, certificates, options, rights, dividends,
cash, instruments and other property being herein called the "Pledged Shares").
(b) Proceeds. All proceeds of any and all of the foregoing Collateral
and, to the extent not otherwise included, all payments under insurance
(whether or not Secured Party is the loss payee thereof) or under any
indemnity, warranty or guaranty by reason of loss to or otherwise with respect
to any of the foregoing Collateral.
In each case, the foregoing shall be covered by this Agreement, whether
Debtor's ownership or other rights therein are presently held or hereafter
acquired and however Debtor's interests therein may arise or appear (whether by
ownership, security interest, claim or otherwise).
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Section 2.2. Secured Obligations Secured. The security interest
created hereby in the Collateral constitutes continuing collateral security for
all of the following obligations, indebtedness and liabilities, whether now
existing or hereafter incurred or arising:
(a) Credit Agreement Indebtedness. The payment by Borrower, as and
when due and payable, of the "Obligations", as defined in the Credit Agreement,
and of all amounts from time to time owing by Borrower under or in respect of
the Credit Agreement, or any of the other Obligation Documents to which
Borrower is a party, and the due performance by Borrower of all of its other
respective obligations under or in respect of the various Obligation Documents.
(b) Other Indebtedness. All loans and future advances made by Secured
Party to Borrower or Debtor and all other debts, obligations and liabilities of
every kind and character of Borrower or Debtor now or hereafter existing in
favor of Secured Party, whether such debts, obligations or liabilities be
direct or indirect, primary or secondary, joint or several, fixed or
contingent, and whether originally payable to Secured Party or to a third party
and subsequently acquired by Secured Party and whether such debts, obligations
or liabilities are evidenced by notes, open account, overdraft, endorsement,
security agreement, guaranty or otherwise (it being contemplated that Borrower
or Debtor may hereafter become indebted to Secured Party in further sum or sums
but Secured Party shall have no obligation to extend further indebtedness by
reason of this Agreement).
(c) Renewals. All renewals, extensions, amendments, modifications,
supplements, or restatements of or substitutions for any of the foregoing.
As used herein, the term "Secured Obligations" refers to all present
and future indebtedness, obligations, and liabilities of whatever type which
are described above in this section, including any interest which accrues after
the commencement of any case, proceeding, or other action relating to the
bankruptcy, insolvency, or reorganization of the Borrower or the Debtor.
ARTICLE III -- Representations, Warranties and Covenants
Section 3.1. Representations and Warranties. Debtor represents and
warrants to Secured Party as follows:
(a) Ownership Free of Liens. Debtor has good and marketable title to
the Collateral free and clear of all Liens, encumbrances or adverse claims,
except for the security interest created by this Agreement. No dispute, right
of setoff, counterclaim or defense exists with respect to all or any part of
the Collateral. No effective financing statement or other instrument similar in
effect covering all or any part of the Collateral is on file in any recording
office except any which have been filed in favor of Secured Party relating to
this Agreement.
(b) No Conflicts or Consents. Neither the ownership or the intended
use of the Collateral by Debtor, nor the grant of the security interest by
Debtor to Secured Party herein,
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nor the exercise by Secured Party of its rights or remedies hereunder, will (i)
conflict with any provision of (a) any domestic or foreign law, statute, rule
or regulation, (b) the certificate of incorporation or bylaws of any Issuer, or
(c) any agreement, judgment, license, order or permit applicable to or binding
upon Debtor or any Issuer, or (ii) result in or require the creation of any
Lien, charge or encumbrance upon any assets or properties of Debtor or of any
Issuer or Related Person except as expressly contemplated in the Obligation
Documents. Except as expressly contemplated in the Obligation Documents, no
consent, approval, authorization or order of, and no notice to or filing with,
any court, governmental authority, Issuer or third party is required in
connection with the grant by Debtor of the security interest herein, or the
exercise by Secured Party of its rights and remedies hereunder.
(c) Security Interest. Debtor has and will have at all times full
right, power and authority to grant a security interest in the Collateral to
Secured Party as provided herein, free and clear of any Lien, adverse claim, or
encumbrance. This Agreement creates a valid and binding first priority security
interest in favor of Secured Party in the Collateral, which security interest
secures all of the Secured Obligations. The taking possession by Secured Party
of all certificates constituting Collateral from time to time and the filing of
the financing statements delivered concurrently herewith by Debtor to Secured
Party will perfect, and establish the first priority of, Secured Party's
security interest hereunder in the Collateral securing the Secured Obligations.
No further or subsequent filing, recording, registration, other public notice
or other action is necessary or desirable to perfect or otherwise continue,
preserve or protect such security interest except for continuation statements
or filings described in Section 3.3(d).
(d) Location of Debtor and Records. Debtor's principal place of
residence and the place where the records concerning the Collateral are kept is
his address set forth on the signature page hereto.
(e) Pledged Shares. Debtor has delivered to Secured Party all
certificates evidencing Pledged Shares. All such certificates are valid and
genuine and have not been altered. All shares and other securities constituting
the Pledged Shares have been duly authorized and validly issued, are fully paid
and non-assessable, and were not issued in violation of the preemptive rights
of any Person or of any agreement by which Debtor or the Issuer thereof is
bound. All documentary, stamp or other taxes or fees owing in connection with
the issuance, transfer or pledge of Pledged Shares (or rights in respect
thereof) have been paid. No restrictions or conditions exists with respect to
the transfer, voting or capital of any Pledged Shares. The Pledged Shares
constitute the percentage of the class of issued shares of capital stock which
is indicated on Exhibit A. No Issuer of any Pledged Shares has any outstanding
stock rights, rights to subscribe, options, warrants or convertible securities
outstanding or any other rights outstanding whereby any Person would be
entitled to have issued to him capital stock of such Issuer, except as
described on Exhibit A.
Section 3.2. Affirmative Covenants. Unless Secured Party shall
otherwise consent in writing, Debtor will at all times comply with the
covenants contained in this Section 3.2 from the date hereof and so long as any
part of the Secured Obligations or the Commitment is outstanding.
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(a) Ownership and Liens. Debtor will maintain good and marketable
title to all Collateral free and clear of all Liens, encumbrances or adverse
claims, except for the security interest created by this Agreement. Debtor will
not permit any dispute, right of setoff, counterclaim or defense to exist with
respect to all or any part of the Collateral. Debtor will cause to be
terminated any financing statement or other registration or instrument similar
in effect covering all or any part of the Collateral, except any which have
been filed in favor of Secured Party relating to this Agreement. Debtor will
defend Secured Party's right, title and special property and security interest
in and to the Collateral against the claims of any Person.
(b) Further Assurances. Debtor will, at his expense and at any time
and from time to time, promptly execute and deliver all further instruments and
documents and take all further action that may be necessary or desirable or
that Secured Party may request in order (i) to perfect and protect the security
interest created or purported to be created hereby and the first priority of
such security interest; (ii) to enable Secured Party to exercise and enforce
its rights and remedies hereunder in respect of the Collateral; or (iii) to
otherwise effect the purposes of this Agreement, including but not limited to:
(A) executing and filing such financing or continuation statements, or
amendments thereto, as may be necessary or desirable or that Secured Party may
request in order to perfect and preserve the security interest created or
purported to be created hereby; (B) delivering to Secured Party (upon request,
to the extent not otherwise required hereunder to be delivered without request)
all originals of chattel paper, documents or instruments which are from time to
time included in the Collateral; and (C) furnishing to Secured Party from time
to time statements and schedules further identifying and describing the
Collateral and such other reports in connection with the Collateral as Secured
Party may reasonably request, all in reasonable detail.
(c) Inspection and Information. Debtor will keep adequate records
concerning the Collateral and will permit Secured Party and all representatives
appointed by Secured Party, including independent accountants, agents,
attorneys, appraisers and any other persons, to inspect any of the Collateral
and the books and records of or relating to the Collateral at any time during
normal business hours, and to make photocopies and photographs thereof, and to
write down and record any information as such representatives shall obtain.
Debtor will furnish to Secured Party any information which Secured Party may
from time to time request concerning any covenant, provision or representation
contained herein or any other matter in connection with the Collateral or
Debtor's business, properties, or financial condition.
(d) Delivery of Pledged Shares. All instruments and writings
evidencing the Pledged Shares shall be delivered to Secured Party on or prior
to the execution and delivery of this Agreement. All other instruments and
writings hereafter evidencing or constituting Pledged Shares shall be delivered
to Secured Party promptly upon the receipt thereof by or on behalf of Debtor.
All such Pledged Shares shall be held by or on behalf of Secured Party pursuant
hereto and shall be delivered in suitable form for transfer by delivery with
any necessary endorsement or shall be accompanied by fully executed instruments
of transfer or assignment in blank, all in form and substance satisfactory to
Secured Party.
(e) Proceeds of Pledged Shares. If Debtor shall receive, by virtue of
his being or having been an owner of any Pledged Shares, any (i) stock
certificate (including any certificate representing a stock dividend or
distribution in connection with any increase or
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reduction of capital, reorganization, reclassification, merger, consolidation,
sale of assets, combination of shares, stock split, spinoff or split-off),
promissory note or other instrument or writing; (ii) option or right, whether
as an addition to, substitution for, or in exchange for, any Pledged Shares, or
otherwise; (iii) dividends payable in cash (except such dividends permitted to
be retained by Debtor pursuant to Section 4.8 hereof) or in securities or other
property, or (iv) dividends or other distributions in connection with a partial
or total liquidation or dissolution or in connection with a reduction of
capital, capital surplus or paid-in surplus, Debtor shall receive the same in
trust for the benefit of Secured Party, shall segregate it from Debtor's other
property, and shall promptly deliver it to Secured Party in the exact form
received, with any necessary endorsement or appropriate stock powers duly
executed in blank, to be held by Secured Party as Collateral.
(f) Status of Pledged Shares. The certificates evidencing the Pledged
Shares shall at all times be valid and genuine and shall not be altered. The
Pledged Shares at all times shall be duly authorized, validly issued, fully
paid, and non-assessable, and shall not be issued in violation of the
pre-emptive rights of any Person or of any agreement by which Debtor or the
Issuer thereof is bound and shall not be subject to any restrictions with
respect to transfer, voting or Capital of such Pledged Shares.
(g) Notices from Issuer. Debtor will promptly deliver to Secured Party
a copy of each notice or other communication received by Debtor from any Issuer
in respect of any Pledged Shares.
Section 3.3. Negative Covenants. Unless Secured Party shall otherwise
consent in writing, Debtor will at all times comply with the covenants
contained in this Section 3.3 from the date hereof and so long as any part of
the Secured Obligations or the Commitment is outstanding.
(a) Transfer or Encumbrance. Debtor will not sell, assign (by
operation of law or otherwise), transfer, exchange or otherwise dispose of any
of the Collateral, nor will Debtor ▇▇▇▇▇ ▇ ▇▇▇▇ upon or execute, file or record
any financing statement or other registration with respect to the Collateral,
nor will Debtor allow any such Lien, financing statement, or other registration
to exist or deliver actual or constructive possession of the Collateral to any
other Person, other than Liens in favor of Secured Party or expressly permitted
by the Credit Agreement.
(b) Impairment of Security Interest. Debtor will not take or fail to
take any action which would in any manner impair the value or enforceability of
Secured Party's first priority security interest in any Collateral.
(c) Compromise of Collateral. Debtor will not adjust, settle,
compromise, amend or modify any of his rights in the Collateral.
(d) Financing Statement Filings. Debtor recognizes that financing
statements pertaining to the Collateral have been or may be filed where Debtor
maintains any Collateral, has his records concerning any Collateral or has his
principal residence. Without limitation of any other covenant herein, Debtor
will cause or permit any change to be made in his name
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or identity or any change to be made to a jurisdiction other than as
represented in Section 3.1 hereof in (i) the location of any records concerning
any Collateral or (ii) his principal place of residence, unless Debtor shall
have notified Secured Party of such change at least thirty (30) days prior to
the effective date of such change, and shall have first taken all action
required by Secured Party for the purpose of further perfecting or protecting
the security interest in favor of Secured Party in the Collateral. In any
notice furnished pursuant to this subsection, Debtor will expressly state that
the notice is required by this Agreement and contains facts that may require
additional filings of financing statements or other notices for the purposes of
continuing perfection of Secured Party's security interest in the Collateral.
(e) Dilution of Shareholdings. Debtor will not permit the issuance of
(i) any additional shares of any class of capital stock of any Issuer (unless
immediately upon issuance the same are pledged and delivered to Secured Party
pursuant to the terms hereof to the extent necessary to give Secured Party a
first priority security interest after such issue in at least the same
percentage of such Issuer's outstanding shares as Debtor had before such
issue), (ii) any securities convertible voluntarily by the holder thereof or
automatically upon the occurrence or non-occurrence of any event or condition
into, or exchangeable for, any such shares of capital stock, or (iii) any
warrants, options, contracts or other commitments entitling any Person to
purchase or otherwise acquire any such shares of capital stock not outstanding
as of the date of this Agreement.
(f) Restrictions on Pledged Shares. Debtor will not enter into any
agreement creating, or otherwise permit to exist, any restriction or condition
upon the transfer, voting or control of any Pledged Shares.
ARTICLE IV -- Remedies, Powers and Authorizations
Section 4.1. Provisions Concerning the Collateral.
(a) Additional Filings. Debtor hereby authorizes Secured Party to
file, without the signature of Debtor where permitted by law, one or more
financing or continuation statements, and amendments thereto, relating to the
Collateral. Debtor further agrees that a carbon, photographic or other
reproduction of this Security Agreement or of any financing statement
describing any Collateral is sufficient as a financing statement and may be
filed in any jurisdiction by Secured Party may deem appropriate.
(b) Power of Attorney. Debtor hereby irrevocably appoints Secured
Party as Debtor's attorney-in-fact and proxy, with full authority in the place
and stead of Debtor and in the name of Debtor or otherwise, from time to time
in Secured Party's discretion, to take any action, and to execute or indorse
any instrument, certificate or notice, which Secured Party may deem necessary
or advisable to accomplish the purposes of this Agreement including any action
or instrument: (i) to request or instruct each Issuer (and each registrar,
transfer agent, or similar Person acting on behalf of each Issuer) to register
the pledge or transfer of the Collateral to Secured Party; (ii) to otherwise
give notification to any Issuer, registrar, transfer agent, financial
intermediary, or other Person of Secured Party's security interests hereunder;
(iii) to ask, demand, collect, ▇▇▇ for, recover, compound, receive and give
acquittance and receipts for moneys due and to become due under or in respect
of any of the Collateral; (iv)
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to receive, indorse and collect any drafts or other instruments or documents;
(v) to enforce any obligations included among the Collateral; and (vi) to file
any claims or take any action or institute any proceedings which Secured Party
may deem necessary or desirable for the collection of any of the Collateral or
otherwise to enforce, perfect, or establish the priority of the rights of
Secured Party with respect to any of the Collateral. Debtor hereby acknowledges
that such power of attorney and proxy are coupled with an interest, and are
irrevocable.
(c) Performance by Secured Party. If Debtor fails to perform any
agreement or obligation contained herein, Secured Party may itself perform, or
cause performance of, such agreement or obligation, and the expenses of Secured
Party incurred in connection therewith shall be payable by Debtor under Section
4.5.
(d) Collection Rights. Secured Party shall have the right at any time,
either before or after the occurrence of a Default or of an Event of Default,
to notify (or require Debtor to notify) any or all Persons (including any
Issuer) obligated to make payments which are included among the Collateral
(whether accounts, general intangibles, dividends, or otherwise) of the
assignment thereof to Secured Party under this Agreement and to direct such
obligors to make payment of all amounts due or to become due to Debtor
thereunder directly to Secured Party and, upon such notification and at the
expense of Debtor and to the extent permitted by law, to enforce collection
thereof and to adjust, settle or compromise the amount or payment thereof, in
the same manner and to the same extent as Debtor could have done. After Debtor
receives notice that Secured Party has given (and after Secured Party has
required Debtor to give) any notice referred to above in this subsection:
(i) all amounts and proceeds (including instruments and writings)
received by Debtor in respect of such rights to payments, accounts, or
general intangibles shall be received in trust for the benefit of
Secured Party hereunder, shall be segregated from other funds of
Debtor and shall be forthwith paid over to Secured Party in the same
form as so received (with any necessary indorsement) to be, at Secured
Party's discretion, either (A) held as cash collateral and released to
Debtor upon the remedy of all Defaults or Events of Default, or (B) if
any Event of Default shall have occurred and be continuing, applied as
specified in Section 4.3, and
(ii) Debtor will not adjust, settle or compromise the amount or
payment of any such account or general intangible or release wholly or
partly any account debtor or obligor thereof (including any Issuer) or
allow any credit or discount thereon.
Section 4.2. Event of Default Remedies. If an Event of Default shall
have occurred and be continuing, Secured Party may from time to time in its
discretion, without limitation and without notice except as expressly provided
below:
(a) exercise in respect of the Collateral, in addition to any other
rights and remedies provided for herein, under the other Obligation Documents
or otherwise available to it, all the rights and remedies of a secured party on
default under the UCC (whether or not the UCC applies to the affected
Collateral);
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(b) require Debtor to, and Debtor hereby agrees that he will at his
expense and upon request of Secured Party, promptly assemble all or part of the
Collateral as directed by Secured Party and make it (together with all books,
records and information of Debtor relating thereto) available to Secured Party
at a place to be designated by Secured Party which is reasonably convenient to
both parties;
(c) reduce its claim to judgment or foreclose or otherwise enforce, in
whole or in part, the security interest created hereby by any available
judicial procedure;
(d) dispose of, at its office, on the premises of Debtor or elsewhere,
all or any part of the Collateral, as a unit or in parcels, by public or
private proceedings, and by way of one or more contracts (it being agreed that
the sale of any part of the Collateral shall not exhaust Secured Party's power
of sale, but sales may be made from time to time, and at any time, until all of
the Collateral has been sold or until the Secured Obligations have been paid
and performed in full), and at any such sale it shall not be necessary to
exhibit any of the Collateral;
(e) buy the Collateral, or any part thereof, at any public sale;
(f) buy the Collateral, or any part thereof, at any private sale if
the Collateral is of a type customarily sold in a recognized market or is of a
type which is the subject of widely distributed standard price quotations;
(g) apply by appropriate judicial proceedings for appointment of a
receiver for the Collateral, or any part thereof, and Debtor hereby consents to
any such appointment; and
(h) at its discretion, retain the Collateral in satisfaction of the
Secured Obligations whenever the circumstances are such that Secured Party is
entitled to do so under the UCC or otherwise (provided that Secured Party shall
in no circumstances be deemed to have retained the Collateral in satisfaction
of the Secured Obligations in the absence of an express notice by Secured Party
to Debtor that Secured Party has either done so or intends to do so).
Debtor agrees that, to the extent notice of sale shall be required by law, at
least seven (7) days' notice to Debtor of the time and place of any public sale
or the time after which any private sale is to be made shall constitute
reasonable notification. Secured Party shall not be obligated to make any sale
of Collateral regardless of notice of sale having been given. Secured Party may
adjourn any public or private sale from time to time by announcement at the
time and place fixed therefor, and such sale may, without further notice, be
made at the time and place to which it was so adjourned.
Section 4.3. Application of Proceeds. If any Event of Default shall
have occurred and be continuing, Secured Party may in its discretion apply any
cash held by Secured Party as Collateral, and any cash proceeds received by
Secured Party in respect of any sale of, collection from, or other realization
upon all or any part of the Collateral, to any or all of the following in such
order as Secured Party may elect:
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(a) To the repayment of all costs and expenses, including reasonable
attorneys' fees and legal expenses, incurred by Secured Party in connection
with (i) the administration of this Agreement, (ii) the custody, preservation,
use or operation of, or the sale of, collection from, or other realization
upon, any Collateral, (iii) the exercise or enforcement of any of the rights of
Secured Party hereunder, or (iv) the failure of Debtor to perform or observe
any of the provisions hereof;
(b) To the payment or other satisfaction of any Liens, encumbrances,
or adverse claims upon or against any of the Collateral;
(c) To the reimbursement of Secured Party for the amount of any
obligations of Debtor or any Other Liable Party paid or discharged by Secured
Party pursuant to the provisions of this Agreement or the other Obligation
Documents, and of any expenses of Secured Party payable by Debtor hereunder or
under the other Obligation Documents;
(d) To the satisfaction of any other Secured Obligations;
(e) By holding the same as Collateral;
(f) To the payment of any other amounts required by applicable law
(including any provision of the UCC); and
(g) By delivery to Debtor or to whomever shall be lawfully entitled to
receive the same or as a court of competent jurisdiction shall direct.
Section 4.4. Deficiency. In the event that the proceeds of any sale,
collection or realization of or upon Collateral by Secured Party are
insufficient to pay all Secured Obligations and any other amounts to which
Secured Party is legally entitled, Debtor shall be liable for the deficiency,
together with interest thereon as provided in the governing Obligation
Documents or (if no interest is so provided) at such other rate as shall be
fixed by applicable law, together with the costs of collection and the
reasonable fees of any attorneys employed by Secured Party to collect such
deficiency.
Section 4.5. Indemnity and Expenses. In addition to, but not in
qualification or limitation of, any similar obligations under other Obligation
Documents:
(a) DEBTOR WILL INDEMNIFY SECURED PARTY AND EACH LENDER FROM AND
AGAINST ANY AND ALL CLAIMS, LOSSES AND LIABILITIES GROWING OUT OF OR RESULTING
FROM THIS AGREEMENT (INCLUDING ENFORCEMENT OF THIS AGREEMENT), WHETHER OR NOT
SUCH CLAIMS, LOSSES AND LIABILITIES ARE IN ANY WAY OR TO ANY EXTENT CAUSED BY
OR ARISING OUT OF SUCH INDEMNIFIED PARTY'S OWN NEGLIGENCE, EXCEPT TO THE EXTENT
SUCH CLAIMS, LOSSES OR LIABILITIES ARE PROXIMATELY CAUSED BY SUCH INDEMNIFIED
PARTY'S INDIVIDUAL GROSS NEGLIGENCE OR WILLFUL MISCONDUCT.
(b) Debtor will upon demand pay to Secured Party the amount of any and
all costs and expenses, including the fees and disbursements of Secured Party's
counsel and of any
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experts and agents, which Secured Party may incur in connection with (i) the
transactions which give rise to this Agreement, (ii) the preparation of this
Agreement and the perfection and preservation of this security interest created
under this Agreement, (iii) the administration of this Agreement; (iv) the
custody, preservation, use or operation of, or the sale of, collection from, or
other realization upon, any Collateral; (v) the exercise or enforcement of any
of the rights of Secured Party hereunder; or (vi) the failure by Debtor to
perform or observe any of the provisions hereof, except expenses resulting from
Secured Party's individual gross negligence or willful misconduct.
Section 4.6. Non-Judicial Remedies. In granting to Secured Party the
power to enforce its rights hereunder without prior judicial process or
judicial hearing, Debtor expressly waives, renounces and knowingly relinquishes
any legal right which might otherwise require Secured Party to enforce its
rights by judicial process. In so providing for non-judicial remedies, Debtor
recognizes and concedes that such remedies are consistent with the usage of
trade, are responsive to commercial necessity, and are the result of a bargain
at arm's length. Nothing herein is intended, however, to prevent Secured Party
or Debtor from resorting to judicial process at his or its option.
Section 4.7. Other Recourse. Debtor waives any right to require
Secured Party to proceed against any other Person, to exhaust any Collateral or
other security for the Secured Obligations, or to have any Other Liable Party
joined with Debtor in any suit arising out of the Secured Obligations or this
Agreement, or pursue any other remedy in Secured Party's power. Debtor further
waives any and all notice of acceptance of this Agreement and of the creation,
modification, rearrangement, renewal or extension for any period of any of the
Secured Obligations of any Other Liable Party from time to time. Debtor further
waives any defense arising by reason of any disability or other defense of any
Other Liable Party or by reason of the cessation from any cause whatsoever of
the liability of any Other Liable Party. This Agreement shall continue
irrespective of the fact that the liability of any Other Liable Party may have
ceased and irrespective of the validity or enforceability of any other
Obligation Document to which Debtor or any Other Liable Party may be a party,
and notwithstanding any death, incapacity, reorganization, or bankruptcy of any
Other Liable Party or any other event or proceeding affecting any Other Liable
Party. Until all of the Secured Obligations shall have been paid in full,
Debtor shall have no right to subrogation and Debtor waives the right to
enforce any remedy which Secured Party has or may hereafter have against any
Other Liable Party, and waives any benefit of and any right to participate in
any other security whatsoever now or hereafter held by Secured Party. Debtor
authorizes Secured Party, without notice or demand, without any reservation of
rights against Debtor, and without in any way affecting Debtor's liability
hereunder or on the Secured Obligations, from time to time to (a) take or hold
any other property of any type from any other Person as security for the
Secured Obligations, and exchange, enforce, waive and release any or all of
such other property, (b) apply the Collateral or such other property and direct
the order or manner of sale thereof as Secured Party may in its discretion
determine, (c) renew, extend for any period, accelerate, modify, compromise,
settle or release any of the obligations of any Other Liable Party in respect
to any or all of the Secured Obligations or other security for the Secured
Obligations, (d) waive, enforce, modify, amend, restate or supplement any of
the provisions of any Obligation Document with any Person other than Debtor,
and (e) release or substitute any Other Liable Party.
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Section 4.8. Voting Rights, Dividends, Etc. in Respect of Pledged
Shares.
(a) So long as no Default or Event of Default shall have occurred and
be continuing Debtor may receive and retain any and all dividends or interest
paid in respect of the Pledged Shares; provided, however, that any and all
(i) dividends and interest paid or payable other than in
cash in respect of, and instruments and other property received,
receivable or otherwise distributed in respect of or in exchange for,
any Pledged Shares,
(ii) dividends and other distributions paid or payable in
cash in respect of any Pledged Shares in connection with a partial or
total liquidation or dissolution or in connection with a reduction of
capital, capital surplus or paid-in surplus, and
(iii) cash paid, payable or otherwise distributed in
redemption of, or in exchange for, any Pledged Shares,
shall be, and shall forthwith be delivered to Secured Party to hold as, Pledged
Shares and shall, if received by Debtor, be received in trust for the benefit
of Secured Party, be segregated from the other property or funds of Debtor, and
be forthwith delivered to Secured Party in the exact form received with any
necessary indorsement or appropriate stock powers duly executed in blank, to be
held by Secured Party as Collateral.
(b) Upon the occurrence and during the continuance of a Default or an
Event of Default:
(i) all rights of Debtor to receive and retain the dividends
and interest payments which it would otherwise be authorized to
receive and retain pursuant to subsection (a) of this section shall
automatically cease, and all such rights shall thereupon become vested
in Secured Party which shall thereupon have the sole right to receive
and hold as Pledged Shares such dividends and interest payments;
(ii) without limiting the generality of the foregoing,
Secured Party may at its option exercise any and all rights of
conversion, exchange, subscription or any other rights, privileges or
options pertaining to any of the Pledged Shares as if it were the
absolute owner thereof, including, without limitation, the right to
exchange, in its discretion, any and all of the Pledged Shares upon
the merger, consolidation, reorganization, recapitalization or other
adjustment of any Issuer, or upon the exercise by any Issuer of any
right, privilege or option pertaining to any Pledged Shares, and, in
connection therewith, to deposit and deliver any and all of the
Pledged Shares with any committee, depository, transfer, agent,
registrar or other designated agent upon such terms and conditions as
it may determine; and
(iii) all dividends and interest payments which are received
by Debtor contrary to the provisions of subsection (b)(i) of this
section shall be received in trust for the benefit of Secured Party,
shall be segregated from other funds of Debtor, and shall be
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forthwith paid over to Secured Party as Pledged Shares in the exact
form received, to be held by Secured Party as Collateral.
Anything herein to the contrary notwithstanding, Debtor may at all times
exercise any and all voting rights pertaining to the Pledged Shares or any part
thereof for any purpose not inconsistent with the terms of this Agreement or
any other Obligation Document.
Section 4.9. Private Sale of Pledged Shares. Debtor recognizes that
Secured Party may deem it impracticable to effect a public sale of all or any
part of the Pledged Shares and that Secured Party may, therefore, determine to
make one or more private sales of any such securities to a restricted group of
purchasers who will be obligated to agree, among other things, to acquire such
securities for their own account, for investment and not with a view to the
distribution or resale thereof. Debtor acknowledges that any such private sale
may be at prices and on terms less favorable to the seller than the prices and
other terms which might have been obtained at a public sale and,
notwithstanding the foregoing, agrees that such private sales shall be deemed
to have been made in a commercially reasonable manner and that Secured Party
shall have no obligation to delay sale of any such securities for the period of
time necessary to permit the Issuer of such securities to register such
securities for public sale under the Securities Act of 1933, as amended. Debtor
further acknowledges and agrees that any offer to sell such securities which
has been (a) publicly advertised on a bona fide basis in a newspaper or other
publication of general circulation in the financial community of Dallas, Texas
(to the extent that such an offer may be so advertised without prior
registration under the Securities Act), or (b) made privately in the manner
described above to not less than fifteen (15) bona fide offerees shall be
deemed to involve a "public sale" for the purposes of Section 9.504(c) of the
UCC (or any successor or similar, applicable statutory provision) as then in
effect in the State of Texas, notwithstanding that such sale may not constitute
a "public offering" under the Securities Act of 1933, as amended, and that
Secured Party may, in such event, bid for the purchase of such securities.
ARTICLE V. -- Miscellaneous
Section 5.1. Notices. Any notice or communication required or
permitted hereunder shall be given as provided in the Credit Agreement.
Section 5.2. Amendments. No amendment of any provision of this
Agreement shall be effective unless it is in writing and signed by Debtor and
Secured Party, and no waiver of any provision of this Agreement, and no consent
to any departure by Debtor therefrom, shall be effective unless it is in
writing and signed by Secured Party, and then such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given and to the extent specified in such writing.
Section 5.3. Preservation of Rights. No failure on the part of Secured
Party to exercise, and no delay in exercising, any right hereunder or under any
other Obligation Document shall operate as a waiver thereof; nor shall any
single or partial exercise of any such right preclude any other or further
exercise thereof or the exercise of any other right. Neither the execution nor
the delivery of this Agreement shall in any manner impair or affect any other
security for the Secured Obligations. The rights and remedies of Secured Party
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provided herein and in the other Obligation Documents are cumulative and are in
addition to, and not exclusive of, any rights or remedies provided by law. The
rights of Secured Party under any Obligation Document against any party thereto
are not conditional or contingent on any attempt by Secured Party to exercise
any of its rights under any other Obligation Document against such party or
against any other Person.
Section 5.4. Unenforceability. Any provision of this Agreement which
is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or invalidity
without invalidating the remaining portions hereof or thereof or affecting the
validity or enforceability of such provision in any other jurisdiction.
Section 5.5. Survival of Agreements. All representations and
warranties of Debtor herein, and all covenants and agreements herein shall
survive the execution and delivery of this Agreement, the execution and
delivery of any other Obligation Documents and the creation of the Secured
Obligations.
Section 5.6. Other Liable Party. Neither this Agreement nor the
exercise by Secured Party or the failure of Secured Party to exercise any
right, power or remedy conferred herein or by law shall be construed as
relieving any Other Liable Party from liability on the Secured Obligations or
any deficiency thereon. This Agreement shall continue irrespective of the fact
that the liability of any Other Liable Party may have ceased or irrespective of
the validity or enforceability of any other Obligation Document to which Debtor
or any Other Liable Party may be a party, and notwithstanding the
reorganization, death, incapacity or bankruptcy of any Other Liable Party, and
notwithstanding the reorganization or bankruptcy or other event or proceeding
affecting any Other Liable Party.
Section 5.7. Binding Effect and Assignment. This Agreement creates a
continuing security interest in the Collateral and (a) shall be binding on
Debtor and his successors and permitted assigns and (b) shall inure, together
with all rights and remedies of Secured Party hereunder, to the benefit of
Secured Party and its successors, transferees and assigns. Without limiting the
generality of the foregoing, Secured Party may (except as otherwise provided in
the Credit Agreement) pledge, assign or otherwise transfer any or all of its
rights under any or all of the Obligation Documents to any other Person, and
such other Person shall thereupon become vested with all of the benefits in
respect thereof granted to Secured Party, herein or otherwise. None of the
rights or duties of Debtor hereunder may be assigned or otherwise transferred
without the prior written consent of Secured Party.
Section 5.8. Termination. It is contemplated by the parties hereto
that there may be times when no Secured Obligations are outstanding, but
notwithstanding such occurrences, this Agreement shall remain valid and shall
be in full force and effect as to subsequent outstanding Secured Obligations.
Upon the satisfaction in full of the Secured Obligations, upon the termination
or expiration of the Credit Agreement and any other commitment of Secured Party
to extend credit to Debtor, and upon written request for the termination hereof
delivered by Debtor to Secured Party, this Agreement and the security interest
created hereby shall terminate and all rights to the Collateral shall revert to
Debtor. Secured Party will, upon Debtor's request and at Debtor's expense, (a)
return to Debtor such of the Collateral as shall not have been sold or
otherwise disposed of or applied pursuant to the terms hereof; and (b)
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execute and deliver to Debtor such documents as Debtor shall reasonably request
to evidence such termination.
SECTION 5.9. GOVERNING LAW; SUBMISSION TO PROCESS. (I) THIS AGREEMENT
SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
TEXAS APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH
STATE, EXCEPT AS REQUIRED BY MANDATORY PROVISIONS OF LAW AND EXCEPT TO THE
EXTENT THAT THE PERFECTION AND THE EFFECT OF PERFECTION OR NON-PERFECTION OF
THE SECURITY INTEREST CREATED HEREUNDER, IN RESPECT OF ANY PARTICULAR
COLLATERAL, ARE GOVERNED BY THE LAWS OF A JURISDICTION OTHER THAN SUCH STATE.
DEBTOR HEREBY AGREES THAT ANY LEGAL ACTION OR PROCEEDING AGAINST DEBTOR WITH
RESPECT TO THIS AGREEMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF TEXAS OR
OF THE UNITED STATES OF AMERICA FOR THE NORTHERN DISTRICT OF TEXAS AS SECURED
PARTY MAY ELECT, AND, BY EXECUTION AND DELIVERY HEREOF, DEBTOR ACCEPTS AND
CONSENTS FOR HIMSELF AND IN RESPECT TO HIS PROPERTY, GENERALLY AND
UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID COURTS, AND FURTHER AGREES
TO A TRANSFER OF ANY SUCH PROCEEDING TO A FEDERAL COURT SITTING IN THE STATE OF
TEXAS TO THE EXTENT THAT IT HAS SUBJECT MATTER JURISDICTION, AND OTHERWISE TO A
STATE COURT IN TEXAS. DEBTOR WAIVES ANY RIGHT TO STAY OR TO DISMISS ANY ACTION
OR PROCEEDING BROUGHT BEFORE SAID COURTS ON THE BASIS OF FORUM NON CONVENIENS.
IN FURTHERANCE OF THE FOREGOING, DEBTOR HEREBY DESIGNATES AND APPOINTS CT
CORPORATION SYSTEM, ▇▇▇ ▇▇▇▇▇ ▇▇. ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, AS AGENT OF
DEBTOR TO RECEIVE SERVICE OF ALL PROCESS BROUGHT AGAINST DEBTOR WITH RESPECT TO
ANY SUCH PROCEEDING IN ANY SUCH COURT IN TEXAS, SUCH SERVICE BEING HEREBY
ACKNOWLEDGED BY DEBTOR TO BE EFFECTIVE AND BINDING SERVICE IN EVERY RESPECT.
COPIES OF ANY SUCH PROCESS SO SERVED SHALL ALSO, IF PERMITTED BY LAW, BE SENT
BY REGISTERED MAIL TO DEBTOR AT HIS ADDRESS SET FORTH ABOVE, BUT THE FAILURE OF
DEBTOR TO RECEIVE SUCH COPIES SHALL NOT AFFECT IN ANY WAY THE SERVICE OF SUCH
PROCESS AS AFORESAID. DEBTOR SHALL FURNISH TO SECURED PARTY A CONSENT OF CT
CORPORATION SYSTEM AGREEING TO ACT HEREUNDER PRIOR TO THE EFFECTIVE DATE OF THE
CREDIT AGREEMENT. NOTHING HEREIN SHALL AFFECT THE RIGHT OF SECURED PARTY TO
SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL LIMIT THE RIGHT OF
SECURED PARTY TO BRING PROCEEDINGS AGAINST DEBTOR IN THE COURTS OF ANY OTHER
JURISDICTION. DEBTOR SHALL NOT REVOKE SUCH APPOINTMENT BUT IF FOR ANY REASON CT
CORPORATION SYSTEM SHALL RESIGN OR OTHERWISE CEASE TO ACT AS DEBTOR'S AGENT,
DEBTOR HEREBY IRREVOCABLY AGREES TO (A) IMMEDIATELY DESIGNATE AND APPOINT A NEW
AGENT ACCEPTABLE TO AGENT TO SERVE IN SUCH CAPACITY AND, IN SUCH EVENT, SUCH
NEW AGENT SHALL BE DEEMED TO BE SUBSTITUTED FOR CT CORPORATION SYSTEM FOR ALL
PURPOSES HEREOF AND (B) PROMPTLY DELIVER TO SECURED PARTY THE WRITTEN CONSENT
(IN FORM AND SUBSTANCE SATISFACTORY TO AGENT) OF SUCH NEW AGENT AGREEING TO
SERVE IN SUCH CAPACITY.
Section 5.10. Counterparts. This Agreement may be separately executed
in any number of counterparts, all of which when so executed shall be deemed to
constitute one and the same Agreement.
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Section 5.11. Loan Document. This Agreement is a "Loan Document", as
defined in the Credit Agreement, and, except as expressly provided herein to
the contrary, this Agreement is subject to all provisions of the Credit
Agreement governing such Loan Documents.
Section 5.12. Final Agreement.
THIS WRITTEN STOCK PLEDGE AGREEMENT AND THE OTHER LOAN DOCUMENTS
REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED
BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE
PARTIES.
THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
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IN WITNESS WHEREOF, Debtor has caused this Agreement to be executed
and delivered as of the date first above written.
Address of Debtor: DEBTOR:
▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
------------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Address of Records
Concerning Collateral:
▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
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EXHIBIT A
Description of Interests in Issuers
Name of Issuer Certificate No. No. of Shares Percentage Interest
-------------- --------------- ------------- -------------------
AEI Holding
Company, Inc. 1 1 1
AEI Holding 3 49 49
Company, Inc.
1