EXHIBIT 10.8
PLEDGE AGREEMENT
NA ACQUISITION CORP., a Pennsylvania corporation (the "Pledgor") and
ARTRA GROUP INCORPORATED, a Pennsylvania corporation (the "Lender"), agree as
follows:
1. Definitions. The following additional definitions apply:
Loan Agreement: That certain Loan Agreement by and between the Pledgor
and the Lender of even date herewith.
Obligations: The term "Obligations" shall have the meaning given that
term in the Loan Agreement.
Pledged Collateral:
(a) All of the Pledgor's rights, title and interest in and to
(but none of the obligations with respect thereto) those shares of capital stock
and limited liability company membership interests described on Schedule A
hereto;
(b) all of the Pledgor's right, title and interest in and to
any certificate, instrument or other evidence of any of the foregoing; and
(c) all proceeds and products of the foregoing, cash and
non-cash.
2. Security Interest. The Pledgor hereby pledges, hypothecates, and
impresses the Pledged Collateral with a lien in favor of the Lender and grants
to the Lender a security interest in the Pledged Collateral, to secure the
punctual payment and performance of all the Obligations.
3. Pledgor's Representations and Warranties. The Pledgor hereby
represents and warrants to the Lender as follows:
(a) The Pledgor is the legal, record and beneficial owner of,
and has good and marketable title to, all of the Pledged Collateral which is
subject to no liens except in favor of the Lender and, except for documents and
instruments evidencing the Lender's security interest in the Pledged Collateral,
no financing statement, security agreement or other lien instrument covering all
or any part of the Pledged Collateral is on file in any public office; and this
Pledge Agreement creates a valid, enforceable first lien on the Pledged
Collateral.
(b) The Pledgor has delivered to the Lender any and all
Pledged Collateral consisting of instruments under Article 9 of the Uniform
Commercial Code (the "Instruments"), perfection of which requires possession by
the Lender. Upon the giving of value by the Lender, the filing of financing
statements on form UCC-1 in the appropriate filing offices, and by virtue of the
Lender's possession of the Instruments, if any, the Lender will obtain a first
priority perfected security interest in the Pledged Collateral.
(c) The Pledgor has delivered to the Lender any and all
transfer powers and assignments with respect to the Instruments, endorsed in
blank, and taken all such other action as may be required to permit the Lender
to effect a transfer of registration of the Instruments to the Lender or its
nominees as permitted hereunder without further action by the Pledgor.
4. Pledgor's Additional Obligations. The Pledgor covenants and agrees
that:
(a) The Pledgor shall not, directly or indirectly, permit or
suffer to be created or to remain, and shall discharge, or promptly cause to be
discharged, any lien on the Pledged Collateral or any part thereof or interest
therein, other than liens in favor of the Lender. The Pledgor shall, unless the
Lender requests otherwise, appear in and diligently contest at the Pledgor's
sole cost and expense, any action or proceeding which purports to affect the
Lender's right, title and security interest in and to the Pledged Collateral or
the priority or validity of this Agreement.
(b) The Pledgor shall not, directly or indirectly, without the
prior written consent of the Lender in each instance obtained, convey, sell,
assign, transfer, hypothecate, dispose of or grant any option with respect to,
or permit any conveyance, sale, assignment, transfer or disposition, or any
grant of any such option, whether voluntary or involuntary, of ownership or
control of all or any part of any legal or beneficial interest in the Pledged
Collateral or any part thereof.
(c) If, with or without the Lender's consent. any of the
Pledged Collateral hereunder shall at any time and from time to time be
converted into or be evidenced by an Instrument perfection of which requires
possession by the Lender, then the Pledgor shall promptly deliver same to the
Lender, accompanied by transfer powers and assignments with respect thereto,
endorsed in blank, in order to permit the Lender to effect transfer of
registration of the Instruments to the Lender or its nominees as permitted
hereunder without further action by the Pledgor.
5. Certain Rights and Duties of Lender. The Pledgor acknowledges that:
the Lender has no duty of any type with respect to the Pledged Collateral except
for the use of due care in safekeeping any of the Pledged Collateral actually in
the physical custody of the Lender; and prior to the occurrence of any event of
default described in the succeeding paragraph the Lender's rights with respect
to the Pledged Collateral shall be limited to the Lender's rights as a secured
party and Pledgee and the right to perfect its security interest, preserve,
enforce and protect the lien granted hereunder and its interest in the Pledged
Collateral.
6. Events of Default; Remedies. Upon occurrence of a default under any
instrument evidencing any of the Obligations which has not been cured in
accordance with the terms of the respective Loan Documents to which such default
relates, then the Lender, with or without notice to the Pledgor and without
demand for additional collateral, may (a) transfer the Pledged Collateral into
the name of the Lender or its nominee; (b) foreclose upon the Pledged Collateral
in the manner described below; or (c) at its discretion in its own name or in
the name
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of the Pledgor take any action for the collection of the Pledged Collateral,
including the filing of a proof of claim in insolvency proceedings, and may
receive the proceeds thereof and execute releases therefor. After deducting its
expenses, including reasonable attorney's fees, incurred in the sale or
collection of the Pledged Collateral, the Lender shall apply the proceeds to the
Obligations and shall account to the Pledgor for any surplus. The Pledgor agrees
that the Lender has no obligation to liquidate the Pledged Collateral in any
particular order or to apply the proceeds thereof to any particular portion of
the Obligations.
7. Power of Attorney, Etc. The Pledgor hereby irrevocably constitutes
and appoints the Lender the true and lawful attorney-in-fact for and on behalf
of the Pledgor with full power of substitution and revocation in its own name or
in the name of the Pledgor to make, execute, deliver and record any and all
financing statements, continuation statements. assignments, proofs of claim,
powers of attorney, leases, discharges or other instruments or agreements which
the Lender in its sole discretion may deem necessary or advisable to perfect,
preserve, enforce or protect the lien granted hereunder and its interest in the
Pledged Collateral and to carry out the purposes of this Pledge Agreement,
including but without limiting the generality of the foregoing, any and all
proofs of claim in bankruptcy or other insolvency proceedings of the Pledgor,
with the right to collect and apply to the Obligations all distributions and
dividends made on account of the Pledged Collateral. The rights and powers
conferred on the Lender by the Pledgor are expressly declared to be coupled with
an interest and shall be irrevocable until all the Obligations are paid and
performed in full.
8. Miscellaneous. This Pledge Agreement and the Pledged Collateral
shall not be in any way affected by the extension of time or renewal of any of
the Obligations, the modification in any manner or the taking or release in
whole or in part of any security therefor or the obligations of any endorsers,
sureties, Guarantors or other parties or the granting of any other indulgences
to the Pledgor. No termination of this Pledge Agreement shall be effective in
any event until the Lender in its reasonable discretion determines that the
Obligations of the Pledgor covered by this Pledge Agreement have been satisfied
in full.
9. Notices. Except as otherwise specifically provided for herein, any
notice, demand or communication hereunder shall be given in writing (including
facsimile transmission or telex) and mailed or delivered to each party at its
address set forth in the Loan Agreement in accordance with the terms thereof.
10. Choice of Law. This Pledge Agreement is executed under and shall be
construed in accordance with the local laws (excluding the conflict of laws
rules, so-called) of the Commonwealth of Pennsylvania.
11. Successors and Assigns. This Pledge Agreement shall inure to the
benefit of the Lender and its successors and assigns and shall bind the Pledgor
and the successors, representatives and heirs of the Pledgor.
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This Pledge Agreement has been executed by the Pledgor and the Lender
as of the18th day of February, 1999.
ATTEST: NA ACQUISITION CORP.
By: ______________________ By: ______________________
Title: Title:
ARTRA GROUP INCORPORATED
By: ______________________
Title:
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SCHEDULE A
Certificate Number Shares
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7,350 shares of Class A
Common Stock of
▇▇▇▇▇▇▇▇▇.▇▇▇, Inc.
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