EXHIBIT 5
STOCK PLEDGE AND SECURITY AGREEMENT
THIS STOCK PLEDGE AND SECURITY AGREEMENT (the "Agreement") is entered into
as of the 29th day of August, 1997 by and between WELLGATE INTERNATIONAL LTD., a
corporation organized under the laws of the British Virgin Islands ("Pledgor"),
and DEERE PARK EQUITIES, L.L.C., an Illinois limited liability company ("Secured
Party").
R E C I T A L S:
A. Pledgor is a member of Dominion Park, L.L.C., a Delaware limited
liability company (the "Company").
B. The Company is executing a secured promissory note of even date hereof
in favor of Secured Party in the principal amount of $4,760,000 (the "Note").
C. Pledgor is entering into a Limited Recourse Guaranty of even date
herewith pursuant to which Pledgor guarantees, on a limited basis, the payment
of indebtedness owed by the Company to Secured Party under the Note (the
"Guaranty").
D. Pledgor is the legal owner of five hundred thousand shares of common
stock, par value $0.001 per share, of Dominion Bridge Corporation, a Delaware
corporation.
E. As collateral security for the performance of Pledgor's obligations
under the Guaranty and to induce Secured Party to make financial accommodations
to the Company, Pledgor is willing to enter into this Agreement.
A G R E E M E N T:
In consideration of the foregoing recitals and other mutual promises
contained herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:
1. DEFINITIONS. In addition to the terms defined elsewhere in this
Agreement, the following terms shall have the meanings indicated for purposes of
this Agreement (such meanings to be equally applicable to both their singular
and plural forms of the terms defined):
"Collateral" has the meaning ascribed to such term in Section 2.
"Company" has the meaning ascribed to such term in the Recitals
hereto.
"Dominion Bridge" means Dominion Bridge Corporation, a Delaware
corporation.
"Event of Default" has the meaning ascribed to such term in the
Guaranty.
"Guaranty" has the meaning ascribed to such term in the Recitals
hereto.
"Liabilities" means any and all liabilities and obligations of
Pledgor of every kind and description, direct or indirect, absolute or
contingent, whether due or to become due and whether now existing or
hereafter arising in connection with or under the Guaranty.
"Note" has the meaning ascribed to such term in the Recitals hereto.
"Shares" means the five hundred thousand (500,000) shares of
common stock, $0.001 par value per share, of Dominion Bridge owned by
Pledgor and all other shares delivered or required to be delivered
hereunder.
"UCC" means the Uniform Commercial Code of the State of Illinois.
2. GRANT OF SECURITY INTEREST. Pledgor hereby grants to Secured Party,
as collateral security for the prompt and complete performance and observance of
the Liabilities, a security interest in, and Pledgor hereby pledges,
hypothecates, assigns, transfers, sets over and delivers unto Secured Party, the
following (collectively, the "Collateral") subject to the terms and conditions
hereinafter set forth:
(a) the Shares and the certificates representing the Shares, and
all cash, securities, dividends, rights, and other property at any
time and from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of the Shares;
(b) all other property hereafter delivered to Pledgor in
substitution or replacement for or in addition to any of the
foregoing, all certificates and instruments representing or evidencing
such property, and all cash, securities, interest, dividends, rights,
and other property at any time and from time to time received,
receivable or otherwise distributed in respect of or in exchange for
any or all thereof; and
(c) all proceeds of any of the foregoing.
It is the intent, agreement and understanding of Pledgor and Secured Party
that the pledge hereinabove made to Secured Party shall constitute a first
priority pledge and security interest in the Collateral.
3. PERFECTION OF SECURITY INTEREST. Pledgor agrees to (a) immediately
deliver to Secured Party for deposit into a collateral account all certificates
evidencing any of the Collateral which may at any time come into the possession
of Pledgor together with stock powers endorsed
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in blank with respect to the Shares ("Stock Powers") and (b) at the expense of
Secured Party take such other actions as Secured Party may from time to time
reasonably request to perfect Secured Party's security interest in the
Collateral under applicable law.
4. CARE OF COLLATERAL. Secured Party shall cause reasonable care to be
exercised with respect to the custody and preservation of the Collateral.
Secured Party shall be deemed to have exercised reasonable care in the custody
and preservation of the Collateral in its possession if it takes such action for
that purpose as Pledgor requests in writing, but failure of Secured Party to
comply with any such request shall not in itself be deemed a failure to exercise
reasonable care.
5. DIVIDEND RIGHTS. Unless and until there occurs an Event of Default,
Pledgor shall have the right to receive any and all dividends and other
distributions with respect to the Collateral (other than distributions
constituting Collateral, which shall be delivered to Secured Party pursuant to
Section 3).
6. SHARE ADJUSTMENTS. In the event that during the term of this
Agreement, any stock dividend, reclassification, readjustment or other change is
declared or made in the capital structure of Dominion Bridge (including, without
limitation, the issuance of additional shares of capital stock of Dominion
Bridge and/or the issuance of new capital stock to Pledgor in connection with
the merger of Dominion Bridge with or into any other firm or entity), then
Secured Party shall have a security interest (with the same priority as herein
established) in all new substituted and additional shares or other securities
issued to or acquired by Pledgor by reason of any such change or exercise, and
such shares or other securities shall become part of the Collateral. In the
event that, during the term of this Agreement, subscription warrants or any
other rights or options shall be issued by Dominion Bridge in connection with
the Collateral, then Secured Party shall have a security interest (with the same
priority as herein established) in such warrants, rights and options, and such
warrants, rights and options shall become part of the Collateral.
7. REINSTATEMENT OF LIABILITIES. To the extent that the Company
discharges any or all of its financial obligations to Secured Party through
making a payment or payments to Secured Party, which payment or payments or any
part thereof are subsequently invalidated, declared to be fraudulent or
preferential, set aside and/or required to be repaid to the Company or any other
party, including without limitation, Pledgor, under any bankruptcy law, state or
federal law, common law or equitable cause, then to the extent of such payment
or repayment, the obligations or any part thereof which has been paid, reduced
or satisfied by such amount shall be reinstated and continued in full force and
effect as of the date such initial payment, reduction or satisfaction occurred.
8. UNCONDITIONAL OBLIGATION. All rights of Secured Party and security
interests hereunder shall be absolute and unconditional irrespective of:
(i) any lack of validity or enforceability of any financial
obligations of the Company to Secured Party or any agreement or instrument
relating thereto;
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(ii) any change in the time, manner or place of payment of, or in any
other term of, all or any of such financial obligations;
(iii) any exchange, surrender, release or nonperfection of any
other collateral, or any release or amendment or waiver of or consent to
departure from any guaranty, for all or any of such obligations; or
(iv) any other circumstance which might otherwise constitute a defense
available to, or a discharge of, Pledgor in respect of the obligations of
the Pledgor under the Guaranty or this Agreement.
9. WAIVERS.
(a) PLEDGOR WAIVES ALL RIGHTS OF SUBROGATION (WHETHER EQUITABLE,
CONTRACTUAL, UNDER SECTION 509 OF THE BANKRUPTCY CODE OR OTHERWISE) TO THE
CLAIMS OF SECURED PARTY AGAINST THE COMPANY.
(b) PLEDGOR FURTHER WAIVES PRESENTMENT AND DEMAND FOR PAYMENT OF ANY
OF THE LIABILITIES, PROTEST AND NOTICE OF DISHONOR OR THE OCCURRENCE OF ANY
DEFAULT WITH RESPECT TO ANY OR ALL OF THE LIABILITIES, AND ALL OTHER
NOTICES TO WHICH PLEDGOR MIGHT OTHERWISE BE ENTITLED, EXCEPT AS OTHERWISE
EXPRESSLY PROVIDED HEREIN.
10. REMEDIES OF SECURED PARTY FOLLOWING DEFAULT.
(a) Upon the occurrence of an Event of Default, Secured Party shall
have all rights, powers, options and remedies of a secured party under the
UCC and under any other applicable law, subject to the provisions of the
Guaranty pertaining to the order of application of the Collateral.
(b) Notwithstanding any provision to the contrary contained herein,
any requirements of reasonable notice shall be met if ten (10) days notice
of such sale or disposition is provided to Pledgor at its address specified
herein. Any other requirement of notice, demand or advertisement for sale
is, to the extent permitted by law, waived.
(c) Delay on the part of Secured Party in the exercise of any right
or remedy shall not operate as a waiver thereof, and no single or partial
exercise by Secured Party of any right or remedy shall preclude other or
further exercise thereof or the exercise of any other right or remedy, and
no action of Secured Party permitted hereunder shall impair or affect the
rights of Secured Party in and to the Collateral.
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11. TERMINATION. This Agreement shall terminate on the earlier to occur
of (i) the termination of the Guaranty or (ii) the date all the Liabilities have
been fully paid and performed, at which time, if Pledgor shall so request,
Secured Party shall reassign and redeliver (or cause to be reassigned or
redelivered) to Pledgor, or to such person or persons as Pledgor shall
designate, such of the Collateral (if any) as shall not have been sold or
otherwise applied by Secured Party pursuant to the terms hereof and shall still
be held by it thereunder, together with appropriate instruments of reassignment
and release. Any such reassignment shall be without recourse upon or warranty by
Secured Party.
12. NOTICES. Except as otherwise expressly provided herein, any notice
hereunder to Pledgor or Secured Party shall be in writing and signed and shall
be sent by personal messenger, facsimile, overnight mail or deposited, postage
prepaid, certified mail, return receipt requested, in the United States mail,
and addressed as follows or sent to such address, as Pledgor or Secured Party
may designate by written notice:
IF TO PLEDGOR: Wellgate International Ltd.
c/o Dominion Bridge Corporation
000 Xxxxx Xxxx
Xxxxxxx (Xxxxxx) XXXXXX X0X 0X0
Facsimile: (000) 000-0000
IF TO SECURED PARTY: Deere Park Equities, L.L.C.
000 Xxxxxx Xxxx, Xxxxx 000
Xxxxxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxxx X. Xxxxxxx
Facsimile: (000) 000-0000
Notice sent by personal messenger, facsimile or overnight mail shall be deemed
received upon delivery or transmission of same. Notice sent by United States
mail shall be deemed received three (3) days after deposit in the United States
mail, properly addressed as herein provided, with proper postage prepaid.
13. BINDING AGREEMENT; ASSIGNMENT. This Agreement, and the terms,
covenants and conditions hereof, shall be binding upon and inure to the benefit
of the parties hereto, and their respective successors and assigns, except that
Pledgor shall not be permitted to assign this Agreement or any interest herein
or in the Collateral or any part thereof, or otherwise pledge, encumber or grant
any option with respect to the Collateral or any part thereof, or any cash or
property held by Secured Party as Collateral under this Agreement, except with
the consent of and subordinate to the rights of Secured Party.
14. MODIFICATION AND WAIVER. Neither this Agreement nor any provision
hereof may be amended, modified, waived, discharged or terminated orally nor may
any of the Collateral be released or the pledge of the security interest created
hereby extended, except by an instrument in writing duly signed by or on behalf
of Pledgor and Secured Party hereunder.
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15. SECTION HEADINGS. The section headings used herein are for convenience
of reference only and shall not define or limit the provisions of this
Agreement.
16. GOVERNING LAW; INTERPRETATION. This Agreement shall be governed by
the internal laws of the State of Illinois without regard to conflict of law
provisions thereof. Wherever possible each provision of this Agreement shall be
interpreted in such manner as to be effective and valid under applicable law,
but if any provision of the Agreement shall be prohibited by or invalid under
such law, such provision shall be ineffective to the extent of such prohibition
or invalidity, without invalidating the remainder of such provisions of this
Agreement.
17. COUNTERPARTS. This Agreement may be executed on one or more
counterparts each of which shall be deemed an original and, taken together,
shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective officers thereunto duly authorized as of the
date first above written.
PLEDGOR
WELLGATE INTERNATIONAL LTD.
By: /S/ XXXXXX XXXXXXXXX
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Name: Xxxxxx Xxxxxxxxx
Title: Member
SECURED PARTY
DEERE PARK EQUITIES, L.L.C.
By: /S/ XXXXXXX X. XXXXXXX
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Xxxxxxx X. Xxxxxxx, Managing-Member
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