Exhibit 7.4
PLEDGE AGREEMENT
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This PLEDGE AGREEMENT ("Agreement") is made this 24 day of April, 2000
by and between FIFTH THIRD BANK, NORTHEASTERN OHIO, an Ohio banking corporation
("Pledgee") and XXXXXXX X. XXXXXXX TRUST U/A DATED JANUARY 13, 1995 (the
"Pledgor"), Xxxxxxx X. Xxxxxxx, Trustee.
W I T N E S S E T H :
WHEREAS, Pledgee has agreed to extend credit to Pledgor by virtue of a
Draw Note, dated April 24, 2000, in the principal amount of $3,000,000,
executed by Pledgor and made payable to Pledgee (the "Note");
WHEREAS, Xxxxxxx X. Xxxxxxx (the "Guarantor") has executed and
delivered to Pledgee an Unlimited Payment Guaranty, dated April 24, 2000 (the
"Guaranty"), guarantying the indebtedness of Pledgor owed to Pledgee;
WHEREAS, the Pledgor has agreed to secure the repayment of all
liabilities, obligations and indebtedness of the Pledgor as evidenced by the
Note and the Guaranty, by pledging to Pledgee as collateral for the Note and
Guaranty, the Pledgor's interest in the cash and securities held in the Account
as described below and maintained with Fifth Third Securities, Inc. (the
"Broker");
NOW THEREFORE, in consideration of the foregoing premises, Pledgor and
Pledgee agree as follows:
1. DEFINITIONS. "Obligation(s)" means all loans, advances,
indebtedness, liabilities and obligations of Pledgor and Guarantor owed to each
of Pledgee and the affiliates of Fifth Third Bancorp of every kind and
description whether now existing or hereafter arising including without
limitation, those owed by Pledgor or Guarantor to others and acquired by Pledgee
or any affiliate of Fifth Third Bancorp, by purchase, assignment or otherwise,
and whether direct or indirect, primary or as guarantor or surety, absolute or
contingent, liquidated or unliquidated, matured or unmatured, whether or not
secured by additional collateral, and including without limitation all
liabilities, obligations and indebtedness arising under this Agreement, the
Note, the Guaranty and the other loan documents, all obligations to perform or
forbear from performing acts, all amounts represented by letters of credit now
or hereafter issued by Pledgee for the benefit of or at the request of Pledgor
or Guarantor, and all expenses and attorneys' fees incurred by Pledgee and any
affiliate of Fifth Third Bancorp under this Agreement or any other document or
instrument related to any of the foregoing.
2. PLEDGE. Pledgor pledges, mortgages, assigns, transfers, delivers,
deposits, sets over and confirms as a first priority security interest to
Pledgee and its successors and assigns all of Pledgor's right, title and
interest in and to the Securities, Investment Properties and Financial Assets
listed on Exhibit A attached hereto, as may be amended from time to time, and
held in Account No. _________________ (the "Account") maintained by Broker, and
all income, dividends and other distributions thereon and the proceeds thereof
(collectively, the "Interest"), as collateral security for payment and
performance by the Pledgor and Guarantor of the Obligations. Upon acquisition of
any such additional Interest, Pledgor agrees to deliver to Pledgee, all
documents evidencing the Interest and any additional documentation requested by
Pledgee to perfect and protect Pledgee's interest therein. As used herein,
"Securities", "Investment Properties" and "Financial Assets" shall have the
meanings attributed thereto in the current version of the Uniform Commercial
Code as adopted in the State of Pledgee's principal place of business.
3. MINIMUM FAIR MARKET VALUE. The Pledgor hereby agrees that the fair
market value of the Interest on the date hereof is and at all times during the
term of the Note, will be at least $6,000,000 (the "Minimum Value"). If at
any time the fair market value of the Interest falls below the Minimum Value,
Pledgor agrees to remit
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to Pledgee cash, in an amount, or readily marketable securities, acceptable to
Pledgee, of a value necessary to bring the fair market value of the Interest up
to the Minimum Value.
4. REPRESENTATIONS AND WARRANTIES. Pledgor represents and warrants to
Pledgee that:
(a) Pledgor is the sole holder of record and sole beneficial owner of
the Interest, free and clear of any security interest, pledge, or other lien or
encumbrance (collectively, "Lien");
(b) Pledgor has the right and requisite authority to pledge, mortgage,
assign, transfer, deliver, deposit, set over and confirm the Interest to Pledgee
as provided herein; and
(c) Pledgor has obtained all necessary consents, approvals,
authorizations or orders of any person, corporation, partnership, trust,
governmental entity, or other entity required for the execution and delivery of
this Agreement or the delivery of the Interest to Pledgee as provided herein.
The representations and warranties set forth in this Section 4 shall
survive the execution and delivery of this Agreement.
5. DISTRIBUTIONS. Pledgor and Pledgee hereby agree as follows:
(a) All cash distributions and any and all distributions of other
property paid on or with respect to the Interest (collectively, "Distributions")
shall be subject to the lien and security interest of this Agreement.
(b) Prior to the occurrence of a default or an Event of Default under
any of the Obligations and so long as the Interest will continue to meet the
requirements of Section 3 hereof, Distributions in the form of cash may be paid
to and retained by Pledgor. After the occurrence of a default or an Event of
Default under any of the Obligations, all such cash Distributions and all other
Distributions will be remain in the Account or will be paid to the Pledgee
pursuant to the provisions hereof.
(c) In the event that Pledgor receives any Distribution or any cash
Distribution in violation of the provisions of Sections 5(a) & (b) Pledgor shall
promptly notify Pledgee thereof, will hold such Distribution in trust for the
benefit of Pledgee and, if requested by Pledgee, shall immediately deliver such
Distribution in the form received by Pledgor. In the event that the Distribution
is in the form of a check or other instrument, Pledgor shall provide Pledgee
with all necessary endorsements thereon.
6. COVENANTS. Pledgor covenants and agrees that until payment in full
of all of the Obligations:
(a) Without the prior written consent of Pledgee, Pledgor will not
attempt to or further sell, assign, transfer, mortgage, pledge or otherwise
further encumber any of Pledgor's right in or to the Interest or any unpaid
Distributions or xxxxx x Xxxx therein to any other party; and
(b) Pledgor will, at Pledgor's expense, obtain, execute, acknowledge
and deliver all such instruments and take all such action necessary (or as
Pledgee may from time to time request) in order to ensure Pledgee shall have and
retain the benefits of the first priority lien and security interest in the
Interest.
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7. REMEDIES.
(a) Pledgee is hereby authorized and empowered, at its election, to
transfer and register in its name or in the name of its nominee the whole or any
part of the Interest, to exercise the voting rights with respect thereto, to
collect and receive all Distributions made thereon, to sell in one or more sales
after 7 days' notice (which notice Pledgor hereby agrees is commercially
reasonable) but without any previous notice or advertisement, the whole or any
part of the Interest and to otherwise act with respect to the Interest as though
Pledgee was the outright owner thereof, Pledgor hereby irrevocably constituting
and appointing Pledgee as the proxy and attorney-in-fact of Pledgor; provided,
however, the Pledgee shall not have any duty to exercise any such right or to
preserve the same and shall not be liable for any failure to do so or for any
delay in doing so. Any sale may be either for cash or upon credit or for future
delivery at such price as Pledgee may deem fair, and Pledgee may be the
purchaser of the whole or any part of the Interest so sold and hold the same
thereafter in its own right free from any claim of the Pledgor or any right of
redemption. Each sale shall be made to the highest bidder, but Pledgee may
reject any bid at such sale which, in its sole discretion, it shall deem
inadequate. Demands of performance, except as otherwise herein specifically
provided for, notices of sale, advertisements and the presence of property at
sale are hereby waived and any sale hereunder may be conducted by an auctioneer
or by any officer or agent of Pledgee.
(b) If, at the original time or times appointed for the sale of the
whole or any part of the Interest, the highest bid, if there be but one sale,
shall be inadequate to discharge in full all the Obligations, or if the Interest
be offered for sale in lots, if at any of such sales, the highest bid for the
lot offered for sale would indicate to Pledgee, in its discretion, the
likelihood that the proceeds of the sales of all of the Interest will be
insufficient to discharge all the Obligations, the Pledgee may, on one or more
occasions, postpone any of said sales by public announcement at the time of sale
or the time of previous postponement of sale, and no other notice of such
postponement or postponements of sale need be given, any other notice being
hereby waived; provided, however, that any sale or sales made after such
postponement shall be after 7 days' notice to Pledgor.
(c) In the event of any sale(s) hereunder, Pledgee shall, after
deducting all costs or expenses of every kind (including, to the full extent
permitted by law, attorney's fees and disbursements) for care, safekeeping,
collection, sale, delivery or otherwise, apply the residue of the proceeds of
the sale(s) to the payment or reduction, either in whole or in part, of the
Obligations returning the surplus, if any, to Pledgor.
(d) Pledgor agrees that he will not at any time plead, claim or take
the benefit of any appraisal, valuation, stay, extension, moratorium or
redemption law now or hereafter in force in order to prevent or delay the
enforcement of this Agreement, or the absolute sale or transfer to Pledgee of
the whole or any part of the Interest or the possession thereof by any purchaser
at any sale hereunder, and Pledgor waives the benefit of all such laws. Pledgor
agreed that he will not interfere with any right, power and remedy of Pledgee
provided for in this Agreement or now or hereafter existing at law or in equity
or by statute or otherwise, or the exercise or beginning of the exercise by
Pledgee of any one or more of such rights, powers or remedies. No failure or
delay on the part of Pledgee to exercise any such rights, power or remedy and no
notice or demand which may be given to or made upon Pledgor by Pledgee with
respect to any such remedies shall operate as a waiver hereof, or limit or
impair Pledgee's right to take any action or to exercise any power or remedy
hereunder, without notice or demand, or prejudice its rights as against Pledgor
in any respect.
8. WAIVER. No delay on Pledgee's part in exercising any power of sale,
lien, option or other right hereunder, and no notice or demand which may be
given to or made upon Pledgor by Pledgee with respect to any power of sale,
lien, option or other right hereunder, shall constitute a waiver thereof, or
limit or impair Pledgee's right to take any action or to exercise any power of
sale, lien option, or any other right hereunder without notice or
Page 7.4-3
demand, or prejudice Pledgee's rights as against Pledgor in any respect. In
addition, no action taken by Pledgee hereunder shall in any way impair or limit
Pledgee's right to exercise any or all rights or remedies Pledgee may otherwise
have against Pledgor with respect to any Obligations. This Agreement shall not,
in any manner, be construed as a compromise of any Obligations except to the
extent that a Distribution is applied to reduce the Obligations and then only to
the extent and in the amount of such Distribution actually received by Pledgee.
This is an absolute, unconditional and continuing pledge and will remain in full
force and effect until the Obligations have been fully paid to the Pledgee. This
pledge will extend to and cover renewals of the Obligations and any number of
extensions of time for payment thereof and will not be affected by any
surrender, exchange, acceptance or release by the Pledgee of any other pledge or
any security held by it for any of the Obligations. Notice of acceptance of this
pledge, notice of extensions of credit to the Pledgor from time to time, notice
of default, diligence, presentment, protest, demand for payment, notice of
demand or protest, and any defense based upon a failure of Pledgee to comply
with the notice requirements of the applicable version of Uniform Commercial
Code Section 9-504 are hereby waived. Pledgee, at any time and from time to
time, without the consent of Pledgor, may change the manner, place or terms of
payment of or interest rates on, or change or extend the time of payment of, or
renew or alter, any of the Obligations, without impairing or releasing the
liabilities of Pledgor hereunder. Pledgee in its sole discretion may determine
the reasonableness of the period which may elapse prior to the making of demand
for any payment upon Pledgor, and it need not pursue any of its remedies against
any other party before having recourse against Pledgor under this pledge.
9. INDEMNIFICATION. Pledgor agrees to indemnify and hold Pledgee
harmless from and against any taxes, liabilities, claims and damages, including
reasonable attorney's fees and disbursements, and other expenses incurred or
arising by reason of the taking or the failure to take action by Pledgee, in
good faith, under this Agreement and in respect of any transactions effected in
connection with this Agreement, including without limitation, any taxes payable
in connection with the delivery or registration of the Interest as provided
herein. The obligations of Pledgor under this Section shall survive the
termination of this Agreement.
10. CANCELLATION. Upon payment in full and termination of the
Obligations, Pledgee shall cancel its rights in the Interest under this
Agreement and agrees to execute any documentation necessary to that end. No such
cancellation shall be effective unless in writing.
11. MISCELLANEOUS. This Agreement shall be binding upon Pledgor and
Pledgor's heirs, administrators, successors and assigns, and shall inure to the
benefit of, and be enforceable by, the Pledgee and its successors, transferees
and assigns. None of the terms or provisions of this Agreement may be waived,
altered, modified or amended except in writing duly signed for and on behalf of
the Pledgee and the Pledgor.
12. NOTICES. Any notices under or pursuant to this Agreement shall be
deemed duly sent when delivered by hand or when mailed by registered or
certified mail, return receipt requested, addressed as follows:
(a) If to Pledgee, at:
Fifth Third Bank
0000 Xxxx Xxxxx Xxxxxx
Xxxxxxxxx, Xxxx 00000
Attention: Xxxxx X. Xxxxxx
(b) If to Pledgor, at:
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c/o Xxxxxxx X. Xxxxxxx, Trustee
0000 Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxx, Xxxx 00000
Any party may change such address by sending notice of the change
to the other parties.
13. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, which shall, collectively and separately, constitute one
agreement.
14. GOVERNING LAW; JURISDICTION. All acts and transactions hereunder
and the rights and obligations of the parties hereto shall be governed,
construed and interpreted in accordance with the domestic laws of the state of
Ohio. Pledgor agrees that the state and federal courts in Cuyahoga County, Ohio
or any other court in which Pledgee initiates proceedings have exclusive
jurisdiction over all matters arising out of this Agreement, and that service of
process in any such proceeding shall be effective if mailed to Pledgor at his
address described in the Notices section of this Agreement. PLEDGEE AND PLEDGOR
HEREBY WAIVE THE RIGHT TO TRIAL BY JURY OF ANY MATTERS ARISING OUT OF THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the 24th day of April, 2000.
PLEDGOR:
XXXXXXX X. XXXXXXX TRUST
U/A DATED JANUARY 13, 1995
By: /s/ Xxxxxxx X. Xxxxxxx, Trustee
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Xxxxxxx X. Xxxxxxx, Trustee
PLEDGEE:
FIFTH THIRD BANK, NORTHEASTERN OHIO
By: /s/ Xxxxx X. Xxxxxx
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Its: Vice President
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EXHIBIT A
LIST OF SECURITIES HELD IN THE ACCOUNT
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121,000 SHARES OF COMMON STOCK OF Lorain National Bank
501,306 shares of common stock of Pacific Gateway Properties, Inc.
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