EXHIBIT 10.29
EXECUTION COUNTERPART
F&G MECHANICAL CORPORATION
PLEDGE AGREEMENT
This Agreement, dated as of February 12, 1998, is among Xxxxxxxxx
Xxxxxxx and Xxxxxxxxx X. Xxxxxxxx (collectively, the "PLEDGORS"), and F&G
Mechanical Corporation, a Delaware corporation (the "LENDER"). The parties agree
as follows:
1. BACKGROUND; CERTAIN RULES OF CONSTRUCTION; DEFINITIONS. The Pledgors own
equity interests in Xxxxx Properties LLC, a New Jersey limited liability company
(the "BORROWER"), which engages in real estate development. The Lender has
provided loans to the Borrower in an aggregate principal amount of $5,600,000.
As a condition to providing such loans, the Lender has required the Pledgors to
make the pledge of stock contemplated hereby to secure the payment of the
Obligations (as defined below). Capitalized terms are used in this Agreement as
specifically defined below in this Section 1. Except as the context otherwise
explicitly requires, (a) the capitalized term "Section" refers to sections of
this Agreement, (b) the capitalized term "Exhibit" refers to exhibits to this
Agreement, (c) references to a particular Section shall include all subsections
thereof, (d) the word "including" shall be construed as "including without
limitation", (e) terms defined in the UCC and not otherwise defined herein have
the meaning provided under the UCC, (f) references to a particular statute or
regulation include all rules and regulations thereunder and any successor
statute, regulation or rules, in each case as from time to time in effect, and
(g) references to a particular Person include such Person's successors and
assigns to the extent not prohibited by this Agreement. References to "the date
hereof" mean the date first set forth above.
1.1. "AGREEMENT" means this Pledge Agreement, as amended and in effect
from time to time.
1.2. "BANKRUPTCY CODE" means Title 11 of the United States Code.
1.3. "BANKRUPTCY DEFAULT" means an Event of Default referred to in
Section 6.1.5.
1.4. "BORROWER" is defined in the preamble to this Agreement.
1.5. "COLLATERAL" is defined in Section 2.1.
1.6. "CSI" means Comfort Systems USA, Inc., a Delaware corporation.
1.7. "CSI STOCK" means CSI's Common Stock, par value $.01 per share.
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1.8. "EVENT OF DEFAULT" is defined in Section 6.1.
1.9. "GUARANTEE" means any personal guarantee of the payment and
performance in full of the Obligations issued by any Pledgor to the Lender
pursuant to Section 9.1.
1.10. "OBLIGATIONS" means all present and future liabilities,
obligations and indebtedness of any Obligor owing to the Lender under or in
connection with this Agreement or the Note, including obligations in respect of
principal, interest, fees, charges, indemnities and expenses from time to time
owing under this Agreement or the Note (whether accruing before or after a
Bankruptcy Default).
1.11. "OBLIGORS" means each of the Borrower and the Pledgors.
1.12. "LENDER" is defined in the preamble to this Agreement.
1.13. "NOTE" means the Promissory Note dated February 12, 1998, as
amended in effect from time to time, issued by the Borrower to the Lender in the
principal amount of $5,600,000.
1.14. "MERGER AGREEMENT" means the Agreement and Plan of Merger dated as
of February 12, 1998, as amended and in effect from time to time, among CSI, the
Lender, F&G Mechanical Corporation, a New Jersey corporation, and the Pledgors.
1.15. "PERSON" means any present or future natural person or any
corporation, association, partnership, joint venture, joint stock, limited
liability or other company, business trust, trust, organization, business or
government or any governmental agency or political subdivision thereof.
1.16. "PLEDGED STOCK" is defined in Section 2.1.1.
1.17. "PLEDGORS" is defined in the preamble to this Agreement.
1.18. "SECURITIES ACT" means the federal Securities Act of 1933.
1.19. "UCC" means the Uniform Commercial Code as in effect in New Jersey
on the date hereof; PROVIDED, HOWEVER, that with respect to the perfection of
the Lender's lien in the Collateral and the effect of nonperfection thereof, the
term "UCC" means the Uniform Commercial Code as in effect in any jurisdiction
the laws of which are made applicable by section 9-103 of the Uniform Commercial
Code as in effect in New Jersey.
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2. COLLATERAL.
2.1. SECURITY INTEREST. As security for the payment and performance of
the Obligations, each Pledgor pledges and collaterally grants and assigns to the
Lender for the benefit of the holders from time to time of any Obligation, and
creates a security interest in favor of the Lender for the benefit of such
holders in, all of such Pledgor's right, title and interest in and to (but none
of his obligations or liabilities with respect to) the items and types of
present and future property described in Sections 2.1.1 through 2.1.3, whether
now owned or hereafter acquired, all which shall be referred to as the
"COLLATERAL":
2.1.1. PLEDGED STOCK. All of the shares of CSI Stock held by such
Pledgor and listed on Exhibit 2.1.1, and all substitutions and exchanges
therefor (collectively, the "PLEDGED STOCK").
2.1.2. DISTRIBUTIONS. All dividends and other distributions
(including income, return of capital and liquidating distributions) on,
and all rights of redemption with respect to, the Pledged Stock.
2.1.3. PROCEEDS. All proceeds of the items of Collateral
described or referred to in Sections 2.1.1 and 2.1.2.
2.2. REPRESENTATIONS, WARRANTIES AND COVENANTS WITH RESPECT TO
COLLATERAL. The Pledgors jointly and severally represent, warrant and covenant
that:
2.2.1. DELIVERY OF CERTIFICATES. The Pledgors will deliver to the
Lender certificates representing the Pledged Stock, accompanied by stock
transfer powers executed in blank and, if the Lender so requests, with
signatures guaranteed, all in form and manner satisfactory to the
Lender.
2.2.2. NO LIENS OR RESTRICTIONS ON TRANSFER OR CHANGE OF CONTROL.
Each Pledgor is the sole legal and beneficial owner of the Pledged Stock
set forth opposite such Pledgor's name on Exhibit 2.1.1. All Collateral
is free and clear of any liens and restrictions on the transfer thereof,
except for (a) liens created under this Agreement and (b) restrictions
on transfer created under the Merger Agreement. None of the Collateral
is subject to any option to purchase or similar rights of any Person.
Each Pledgor agrees that, without the written consent of the Lender,
such Pledgor will not assign or transfer any Collateral or grant any
lien on any Collateral except as provided in this Agreement.
2.2.3. FURTHER ASSURANCES. Upon the Lender's request from time to
time, the Pledgors will execute and deliver, and file and record in the
proper filing and recording places, all such instruments, including
financing statements, and will take all such other
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action, as the Lender deems advisable for confirming to it the
Collateral or to carry out any other purposes of this Agreement or the
Note.
2.3. ADMINISTRATION OF COLLATERAL. The Collateral shall be administered
as follows, and if an Event of Default shall have occurred and be continuing,
Section 2.4 shall also apply.
2.3.1. DISTRIBUTIONS. Unless an Event of Default shall have
occurred and be continuing, each Pledgor shall be entitled to receive
all dividends and distributions on or with respect to the Pledged Stock
pledged by such Pledgor. If an Event of Default shall have occurred and
be continuing, all dividends and distributions on or with respect to the
Pledged Stock shall be retained by the Lender (or if received by any
Pledgor shall be held by such Pledgor in trust and shall be immediately
delivered by such Pledgor to the Lender in the original form received,
endorsed in blank) and held by the Lender as part of the Collateral or
applied by the Lender to the payment of the Obligations in accordance
with Section 2.4.5.
2.3.2. VOTING. Unless an Event of Default shall have occurred and
be continuing, each Pledgor shall be entitled to vote or consent with
respect to the Pledged Stock pledged by such Pledgor, and the Lender
will, if so requested, execute appropriate revocable proxies therefor.
If an Event of Default shall have occurred and be continuing, if and to
the extent that the Lender shall so notify any Pledgor in writing, only
the Lender shall be entitled to vote or consent or take any other action
with respect to the Pledged Stock pledged by such Pledgor (and such
Pledgor will, if so requested, execute or cause to be executed
appropriate proxies therefor).
2.4. RIGHT TO REALIZE UPON COLLATERAL. Except to the extent prohibited
by applicable law that cannot be waived, this Section 2.4 shall govern the
Lender's right to realize upon the Collateral if any Event of Default shall have
occurred and be continuing. The provisions of this Section 2.4 are in addition
to any rights and remedies available at law or in equity and in addition to the
provisions of the Note.
2.4.1. GENERAL AUTHORITY. To the extent specified in written
notice from the Lender to the Pledgor in question, each Pledgor grants
the Lender full and exclusive power and authority, subject to the other
terms hereof and applicable law, to take any of the following actions
(for the sole benefit of the Lender and the holders from time to time of
any Obligations, but at such Pledgor's expense):
(a) to ask for, demand, take, collect, xxx for and receive all
payments in respect of any Pledged Stock which such Pledgor could
otherwise ask for, demand, take, collect, xxx for and receive for his
own use;
(b) to extent the time of payment of any amounts in respect of
the Pledged Stock and to make any allowance or other adjustment with
respect thereto;
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(c) to settle, compromise, prosecute or defend any action or
proceeding with respect to any Pledged Stock and to enforce all rights
and remedies thereunder which such Pledgor could otherwise enforce;
(d) to notify the third party payor with respect to any Pledged
Stock of the existence of the security interest created hereby and to
cause all payments in respect thereof thereafter to be made directly to
the Lender; and
(e) to sell, transfer, assign or otherwise deal in or with any
Collateral or the proceeds thereof, as fully as such Pledgor otherwise
could do.
2.4.2. MARSHALING, ETC. The Lender shall not be required to make
any demand upon, or pursue or exhaust any of its rights or remedies
against, the Pledgor or any other Person with respect to the payment of
the Obligations or to pursue or exhaust any of its rights or remedies
with respect to any collateral therefor or any direct or indirect
guarantee thereof. The Lender shall not be required to marshal the
Collateral or any guarantee of the Obligations or to resort to the
Collateral or any such guarantee in any particular order, and all of its
rights hereunder or under the Note shall be cumulative. To the extent it
may lawfully do so, each Pledgor absolutely and irrevocably waives and
relinquishes the benefit and advantage of, and covenants not to assert
against the Lender, any valuation, stay, appraisement, extension,
redemption or similar laws now or hereafter existing which, but for this
provision, might be applicable to the sale of any Collateral made under
the judgment, order or decree of any court, or privately under the power
of sale conferred by this Agreement, or otherwise. Without limiting the
generality of the foregoing, each Pledgor (a) agrees that it will not
invoke or utilize any law which might prevent, cause a delay in or
otherwise impede the enforcement of the rights of the Lender in the
Collateral, (b) waives all such laws, and (c) agrees that it will not
invoke or raise as a defense to any enforcement by the Lender of any
rights and remedies relating to the Collateral or the Obligations any
legal or contractual requirement with which the Lender may have in good
faith failed to comply. In addition, each Pledgor waives any right to
prior notice (except to the extent expressly required by this Agreement)
or judicial hearing in connection with foreclosure on or disposition of
any Collateral, including any such right which such Pledgor would
otherwise have under the Constitution of the United States of America,
any state or territory thereof or any other jurisdiction.
2.4.3. SALES OF COLLATERAL. All or any part of the Collateral may
be sold for cash or other value in any number of lots at public or
private sale, without demand, advertisement or notice; PROVIDED,
HOWEVER, unless the Collateral to be sold threatens to decline speedily
in value or is of a type customarily sold on a recognized market, the
Lender shall give the Pledgor granting the security interest in such
Collateral 10 days' prior written notice of the time and place of any
public sale, or the time after which a
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private sale may be made, which notice each of the Pledgors and the
Lender hereby agrees to be reasonable. At any sale of Collateral, the
Lender or any of its respective officers acting on its behalf, or the
Lender's assigns, may bid for and purchase all or any part of the
Collateral, may use all or any portion of the Obligations owed to the
Lender as payment for the Collateral so purchased, and upon compliance
with the terms of such sale may hold and dispose of the Collateral
without further accountability to any Pledgor, except for the proceeds
of such sale or sales pursuant to Section 2.4.5. Each Pledgor will
execute and deliver or cause to be executed and delivered such
instruments, documents, assignments, waivers, certificates and
affidavits, will supply or cause to be supplied such further information
and will take such further action as the Lender shall request in
connection with any such sale.
2.4.4. SALE WITHOUT REGISTRATION. If, at any time when the Lender
shall determine to exercise its rights hereunder to sell all or part of
the Collateral, the Collateral shall not be effectively registered under
the Securities Act (or other applicable law), the Lender may, in its
sole discretion, sell such securities by private or other sale not
requiring such registration in such manner and in such circumstances as
the Lender may deem necessary or advisable in order that such sale may
be effected in accordance with applicable securities laws without such
registration and the related delays, uncertainty and expense. Without
limiting the generality of the foregoing, in any event the Lender may,
in its sole discretion, (a) approach and negotiate with a single
purchaser or one or more possible purchasers to effect such sale, (b)
restrict such sale to one or more purchasers each of whom will represent
and agree that such purchaser is purchasing for its own account, for
investment and not with a view to the distribution or sale of such
securities and (c) cause to be placed on certificates representing the
securities in question a legend to the effect that such securities have
not been registered under the Securities Act (or other applicable law)
and may not be disposed of in violation of the provisions thereof. Each
Pledgor agrees that such manner of disposition is commercially
reasonable, that he will upon the Lender's request give any such
purchaser access to such information regarding the issuer of the
Collateral as the Lender may reasonably request and that the Lender
shall not incur any responsibility for selling all or part of the
Collateral at any private or other sale not requiring such registration,
notwithstanding the possibility that a substantially higher price might
be realized if the sale were deferred until after registration under the
Securities Act (or other applicable law) or until made in compliance
with certain other rules or exemptions from the registration provisions
under the Securities Act (or other applicable law). Each Pledgor
acknowledges that no adequate remedy at law exists for breach by him of
this Section 2.4.4 and that such breach would not be adequately
compensable in damages and therefore agrees that this Section 2.4.4 may
be specifically enforced.
2.4.5. APPLICATION OF PROCEEDS. The proceeds of all sales and
collections in respect of any Collateral shall be applied as follows:
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(a) first, to the payment of the costs and expenses of such sales
and collections, the reasonable expenses of the Lender and the
reasonable fees and expenses of its special counsel;
(b) second, any surplus then remaining to the payment of the
Obligations in such order and manner as the Lender may in its reasonable
discretion determine; and
(c) third, any surplus then remaining shall be paid to the
Pledgors, subject, however, to the rights of the holder of any then
existing lien of which the Lender has actual notice.
2.5. CUSTODY OF COLLATERAL. Except as provided by applicable law that
cannot be waived, the Lender will have no duty as to the custody and protection
of the Collateral, the collection of any part thereof or of any income thereon
or the preservation or exercise of any rights pertaining thereto, including
rights against prior parties, except for the use of reasonable care in the
custody and physical preservation of any Collateral in its possession. The
Lender will not be liable or responsible for any loss or damage to any
Collateral, or for any diminution in the value thereof, by reason of the act or
omission of any agent selected by the Lender acting in good faith.
3. WAIVERS WITH RESPECT TO COLLATERAL. Each Pledgor waives, to the fullest
extent permitted by the provisions of applicable law, all of the following
(including all defenses, counterclaims and other rights of any nature based upon
any of the following):
(a) presentment, demand for payment and protest of nonpayment of
any of the Obligations and notice of protest, dishonor or
nonperformance;
(b) notice of acceptance of, and notice that credit has been
extended in reliance on, this Agreement;
(c) notice of any default or any inability to enforce performance
of the obligations of the Borrower or any other Person with respect to
the Note, or notice of any acceleration of maturity of the Note;
(d) demand for performance or observance of, and any enforcement
of any provision of, the Obligations, this Agreement or the Note or any
pursuit or exhaustion of rights or remedies with respect to any
Collateral or against the Borrower or any other Person in respect of the
Obligations or any requirement of diligence or promptness on the part of
the Lender in connection with any of the foregoing;
(e) any act or omission on the part of the Lender which may
impair or prejudice such rights of such Pledgor, including rights to
obtain subrogation, exoneration,
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contribution, indemnification or any other reimbursement from the
Borrower or any other Person, or otherwise operate as a deemed release
or discharge;
(f) failure or delay to perfect or continue the perfection of any
security interest in any Collateral or any other action which xxxxx or
impairs the value of, or any failure to preserve or protect the value
of, any Collateral;
(g) any statute of limitations or any statute or rule of law
which provides that the obligation of a surety must be neither larger in
amount nor in other respects more burdensome than the obligation of the
principal;
(h) any "single action" or "anti-deficiency" law which would
otherwise prevent the Lender from bringing any action, including any
claim for a deficiency, against such Pledgor before or after the
Lender's commencement or completion of any foreclosure action, whether
judicially, by exercise of power of sale or otherwise, or any other law
which would otherwise require any election of remedies by the Lender;
(i) all demands and notices of every kind with respect to the
foregoing; and
(j) to the extent not referred to above, all defenses (other than
payment) which the Borrower or such Pledgor may now or hereafter have to
the payment of the Obligations, together with all suretyship defenses,
which could otherwise be asserted by such Pledgor.
Each Pledgor represents that it has obtained the advice of counsel as to the
extent to which suretyship and other defenses may be available to it with
respect to its obligations hereunder in the absence of the waivers contained in
this Section 3.
No delay or omission on the part of the Lender in exercising any right
under this Agreement or the Note or under any guarantee of the Obligations or
with respect to the Collateral shall operate as a waiver or relinquishment of
such right. No action which the Lender or the Borrower may take or refrain from
taking with respect to the Obligations, including any amendments thereto or
modifications thereof or waivers with respect thereto, shall affect the
provisions of this Agreement or the obligations of any Pledgor hereunder. None
of the Lender's rights shall at any time in any way be prejudiced or impaired by
any act or failure to act on the part of any Obligor, or by any noncompliance by
the Borrower with the terms, provisions and covenants of the Note, regardless of
any knowledge thereof which the Lender may have or otherwise be charged with.
4. LENDERS' POWER TO WAIVE, ETC. Each Pledgor grants to the Lender full power in
its discretion, without notice to or consent of such Pledgor, such notice and
consent being expressly waived to the fullest extent permitted by applicable
law, and without in any way affecting the liability of any Pledgor under its
pledge hereunder:
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(a) to waive compliance with, and any default under, and to
consent to any amendment to or modification or termination of any terms
or provisions of, or to give any waiver in respect of, this Agreement,
the Note, the Collateral, the Obligations or any guarantee thereof (each
as from time to time in effect);
(b) to grant any extensions of the Obligations (for any
duration), and any other indulgence with respect thereto, and to effect
any total or partial release (by operation of law or otherwise),
discharge, compromise or settlement with respect to the obligations of
the Obligors or any other Person in respect of the Obligations, whether
or not rights against any Pledgor under this Agreement are reserved in
connection therewith;
(c) to take security in any form for the Obligations, and to
consent to the addition to or the substitution, exchange, release or
other disposition of, or to deal in any other manner with, any part of
any property contained in the Collateral whether or not the property, if
any, received upon the exercise of such power shall be of a character or
value the same as or different from the character or value of any
property disposed of, and to obtain, modify or release any present or
future guarantees of the Obligations and to proceed against any of the
Collateral or such guarantees in any order;
(d) to collect or liquidate or realize upon any of the
Obligations or the Collateral in any manner or to refrain from
collecting or liquidating or realizing upon any of the Obligations or
the Collateral; and
(e) to extend credit under the Note or otherwise in such amount
as the Lender may determine, including increasing the amount of credit
and the interest rate and fees with respect thereto, even though the
condition of the Obligors (financial or otherwise on an individual or
consolidated basis) may have deteriorated since the date hereof.
5. INFORMATION REGARDING THE BORROWER, ETC. Each Pledgor has made such
investigation as it deems desirable of the risks undertaken by it in entering
into this Agreement and is fully satisfied that it understands all such risks.
Each Pledgor waives any obligation which may now or hereafter exist on the part
of the Lender to inform it of the risks being undertaken by entering into this
Agreement or of any changes in such risks and, from and after the date hereof,
each Pledgor undertakes to keep itself informed of such risks and any changes
therein. Each Pledgor expressly waives any duty which may now or hereafter exist
on the part of the Lender to disclose to such Pledgor any matter related to the
business, operations, character, collateral, credit, condition (financial or
otherwise), income or prospects of the Borrower or its properties or management,
whether now or hereafter known by the Lender. Each Pledgor represents, warrants
and agrees that it assumes sole responsibility for obtaining from the
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Borrower all information concerning the Note and all other information as to the
Borrower or its properties or management as such Pledgor deems necessary or
desirable.
6. DEFAULTS.
6.1. EVENTS OF DEFAULT. The following events are referred to as "EVENTS
OF DEFAULT":
6.1.1. PAYMENT. The Borrower shall fail to make any payment in
respect of principal of, or interest in respect of, any of the
Obligations owed by it as the same shall become due and payable, whether
at maturity or by acceleration or otherwise, and such failure shall
continue for a period of 10 days after notice thereof by the Lender to
the Pledgors.
6.1.2. COVENANTS. Any Obligor shall fail to perform or observe
any other covenant, agreement or provision to be performed or observed
by it under this Agreement or the Note, and such failure shall not be
rectified or cured to the written satisfaction of the Lender within 30
days after the earlier of (a) notice thereof by the Lender to such
Obligor or (b) such Obligor shall have actual knowledge thereof.
6.1.3. REPRESENTATIONS AND WARRANTIES. Any representation or
warranty of any Pledgor made to the Lender in this Agreement shall be
materially false on the date as of which it was made.
6.1.4. ENFORCEABILITY, ETC. This Agreement or the Note shall
cease for any reason (other than the scheduled termination thereof in
accordance with its terms) to be enforceable in accordance with its
terms or in full force and effect; or any Obligor shall so assert in a
judicial or similar proceeding; or the security interests created by
this Agreement shall cease to be enforceable and of the same effect and
priority purported to be created hereby or thereby.
6.1.5. BANKRUPTCY, ETC. Any Obligor shall:
(a) commence a voluntary case under the Bankruptcy Code or
authorize, by appropriate proceedings of its board of directors or other
governing body, the commencement of such a voluntary case;
(b) (i) have filed against it a petition commencing an
involuntary case under the Bankruptcy Code that shall not have been
dismissed within 60 days after the date on which such petition is filed,
or (ii) file an answer or other pleading within such 60-day period
admitting or failing to deny the material allegations of such a petition
or seeking, consenting to or acquiescing in the relief therein provided,
or (iii) have entered against it an order for relief in any involuntary
case commenced under the Bankruptcy Code;
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(c) seek relief as a debtor under any applicable law, other than
the Bankruptcy Code, of any jurisdiction relating to the liquidation or
reorganization of debtors or to the modification or alteration of the
rights of creditors, or consent to or acquiesce in such relief;
(d) have entered against it an order by a court of competent
jurisdiction (i) finding it to be bankrupt or insolvent, (ii) ordering
or approving its liquidation or reorganization as a debtor or any
modification or alteration of the rights of its creditors or (iii)
assuming custody of, or appointing a receiver or other custodian for,
all or a substantial portion of its property; or
(e) make an assignment for the benefit of, or enter into a
composition with, its creditors, or appoint, or consent to the
appointment of, or suffer to exist a receiver or other custodian for,
all or a substantial portion of its property.
6.2. CERTAIN ACTIONS FOLLOWING AN EVENT OF DEFAULT. If any one or more
Events of Default shall occur and be continuing, then, subject to Section 7, in
each and every such case the Lender may proceed:
(a) to protect and enforce the Lender's rights by suit in equity,
action at law and/or other appropriate proceeding, either for specific
performance of any covenant or condition contained in this Agreement or
in any instrument or assignment delivered to the Lender pursuant to this
Agreement, or in aid of the exercise of any power granted in this
Agreement or any such instrument or assignment; and
(b) to realize upon any and all rights in the Collateral.
To the extent not prohibited by applicable law which cannot be waived, all of
the Lender's rights under this Agreement and the Note shall be cumulative.
7. NON-RECOURSE OBLIGATION. Notwithstanding any provision of this Agreement to
the contrary, (a) this Agreement shall be without recourse to the Pledgors, (b)
the Obligations shall be recourse only to the Collateral and, upon issuance of
any Guarantee, the Pledgor issuing such Guarantee and the assets of such Pledgor
and (c) the Pledgors shall be liable for payment of the Obligations only to the
extent of any foreclosure, suit (including any suit for collection hereunder),
proceeding or other action against the Collateral or, upon issuance of any
Guarantee, the Pledgor issuing such Guarantee and the assets of such Pledgor.
8. REPRESENTATIONS AND WARRANTIES. In order to induce the Lender to extend
credit to the Borrower under the Note, the Pledgors jointly and severally
represent and warrant that:
8.1. ENFORCEABILITY. This Agreement constitutes the legal, valid and
binding obligation of each Pledgor, enforceable against each Pledgor in
accordance with its terms.
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8.2. NO LEGAL OBSTACLE TO AGREEMENTS. Neither the execution, delivery
and performance of this Agreement, nor the consummation of any transaction
referred to in or contemplated by this Agreement or the Note, has constituted or
resulted, or will constitute or result, in:
(a) any breach or termination of the provisions of any agreement,
instrument, deed or lease to which any Pledgor is a party or by which
any Pledgor is bound; or
(b) the violation of any law, statute, judgment, decree or
governmental order, rule or regulation applicable to any Pledgor.
No approval, authorization or other action by, or declaration to or filing with,
any governmental or administrative authority or any other Person is required to
be obtained or made by any Pledgor in connection with the execution, delivery
and performance of this Agreement or the transactions contemplated hereby.
9. TERMINATION.
9.1. TERMINATION UPON ISSUANCE OF GUARANTEE. If, after the second
anniversary of the date hereof and prior to the third anniversary of the date
hereof, the market closing price of the CSI Stock (as reported in the WALL
STREET JOURNAL) exceeds $27.00 per share for 60 consecutive calendar days, then:
(a) each Pledgor shall execute and deliver to the Lender a
Guarantee, which Guarantee shall be in form and substance reasonably
satisfactory to the Lender; and
(b) upon the execution and delivery by each Pledgor to the Lender
of a Guarantee, (i) this Agreement shall terminate, (ii) the Collateral
shall revert to the Pledgors and (iii) the right, title and interest of
the Lender in the Collateral shall terminate.
Thereupon, on the Pledgors' demand, the Lender shall redeliver to the Pledgors
any Collateral then in its possession.
9.2. TERMINATION UPON PAYMENT OF OBLIGATIONS. Subject to the prior
termination of this Agreement pursuant to Section 9.1, when all Obligations have
been paid, performed and indefeasibly discharged in full, (a) this Agreement
shall terminate, (b) the Collateral shall revert to the Pledgors and (c) the
right, title and interest of the Lender in the Collateral shall terminate.
Thereupon, on the Pledgors' demand, the Lender shall redeliver to the Pledgors
any Collateral then in its possession.
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10. SUCCESSORS AND ASSIGNS. The provisions of this Agreement shall inure to the
benefit of the Lender and its successors and assigns and shall be binding upon
the Pledgors and their respective successors and assigns; PROVIDED, HOWEVER,
that neither Pledgor may assign his rights or obligations under this Agreement
without the written consent of the Lender.
11. EXPENSES. The Pledgors shall bear all reasonable expenses of the Lender
(including reasonable attorneys' fees and expenses) in connection with the
enforcement of this Agreement and the Note and the collection of the
Obligations.
12. NOTICES. Any notice or other communication in connection with this Agreement
shall be deemed to be given if given in writing (including telex, telecopy or
similar teletransmission) addressed as provided below (or to the addressee at
such other address as the addressee shall have specified by notice actually
received by the addressor), and if either (a) actually delivered in fully
legible form to such address (evidenced in the case of a telex by receipt of the
correct answerback) or (b) in the case of a letter, five business days shall
have elapsed after the same shall have been deposited in the United States
mails, with first-class postage prepaid and registered or certified.
If to any Pledgor, to him at:
c/o F&G Mechanical Corporation
000 Xxx Xxxxxx Xxxx
Xxxxxxxx, Xxx Xxxxxx 00000
If to the Lender, to it at:
F&G Mechanical Corporation
000 Xxx Xxxxxx Xxxx
Xxxxxxxx, Xxx Xxxxxx 00000
Attention: President
with a copy to:
Comfort Systems USA, Inc.
Xxxxx Xxxxxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Attention: General Counsel
13. VENUE; SERVICE OF PROCESS.
(a) Each Pledgor irrevocably submits to the nonexclusive
jurisdiction of the state courts of the State of New Jersey and to the
nonexclusive jurisdiction of the United States District Court for the
District of New Jersey for the purpose of any suit,
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action or other proceeding arising out of or based upon this Agreement
or the Note or the subject matter hereof or thereof.
(b) Each Pledgor waives to the extent not prohibited by
applicable law, and agrees not to assert, by way of motion, as a defense
or otherwise, in any such proceeding brought in any of the above-named
courts, any claim that he is not subject personally to the jurisdiction
of such court, that his property is exempt or immune from attachment or
execution, that such proceeding is brought in an inconvenient forum,
that the venue of any such proceeding is improper, or that this
Agreement or the Note, or the subject matter hereof or thereof, may not
be enforced in or by such court.
(c) Each Pledgor consents to service of process in any such
proceeding in any manner permitted by the laws of the State of New
Jersey and agrees that service of process by registered or certified
mail, return receipt requested, at his address specified in or pursuant
to Section 12 is reasonably calculated to give actual notice.
14. WAIVER OF JURY TRIAL. TO THE EXTENT NOT PROHIBITED BY APPLICABLE LAW WHICH
CANNOT BE WAIVED, EACH OF THE PLEDGORS AND THE LENDER WAIVES, AND COVENANTS THAT
HE OR IT WILL NOT ASSERT (WHETHER AS PLAINTIFF, DEFENDANT OR OTHERWISE), ANY
RIGHT TO TRIAL BY JURY IN ANY FORUM IN RESPECT OF ANY ISSUE, CLAIM, DEMAND OR
ACTION ARISING OUT OF OR BASED UPON THIS AGREEMENT OR THE NOTE OR THE SUBJECT
MATTER HEREOF OR THEREOF OR ANY OBLIGATION OR IN ANY WAY CONNECTED WITH THE
DEALINGS OF ANY PLEDGOR OR THE LENDER IN CONNECTION WITH ANY OF THE ABOVE, IN
EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING AND WHETHER IN CONTRACT OR
TORT OR
OTHERWISE. Each Pledgor acknowledges that he has been informed by the Lender
that the provisions of this Section 14 constitute a material inducement upon
which the Lender has relied, is relying and will rely in entering into this
Agreement and the Note, and that he has reviewed the provisions of this Section
14 with his counsel. Any Pledgor or the Lender may file an original counterpart
or a copy of this Section 14 with any court as written evidence of the consent
of the Pledgors and the Lender to the waiver of the right to trial by jury.
15. GENERAL. All covenants, agreements, representations and warranties made in
this Agreement or the Note or in certificates delivered pursuant hereto or
thereto shall be deemed to have been relied on by the Lender, notwithstanding
any investigation made by the Lender on its behalf, and shall survive the
execution and delivery to the Lender hereof and thereof. The invalidity or
unenforceability of any provision hereof shall not affect the validity or
enforceability of any other provision hereof, and any invalid or unenforceable
provision shall be modified so as to be enforced to the maximum extent of its
validity or enforceability. The headings in this Agreement are for convenience
of reference only and shall not limit, alter or otherwise affect the meaning
hereof. This Agreement and the Note constitute the entire understanding of the
parties with respect to the subject matter hereof and thereof and supersede
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all prior and current understandings and agreements, whether written or oral,
with respect to such subject matter. This Agreement may be executed in any
number of counterparts, which together shall constitute one instrument. This
Agreement shall be governed by and construed in accordance with the laws (other
than the conflict of laws rules) of the State of New Jersey.
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Each of the undersigned has executed and delivered this Agreement as an
agreement under seal as of the date first written above.
PLEDGORS
/S/ XXXXXXXXX XXXXXXX
Xxxxxxxxx Xxxxxxx
/S/ XXXXXXXXX X. XXXXXXXX
Xxxxxxxxx X. Xxxxxxxx
LENDER
F&G MECHANICAL CORPORATION
By /S/ XXXXXXX XXXXXX
Title:Xxxxxxx Xxxxxx, Vice President
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EXHIBIT 2.1.1
PLEDGED STOCK
PLEDGOR ISSUER NUMBER OF SHARES
Xxxxxxxxx Xxxxxxx Comfort Systems USA, Inc. 180,262
Xxxxxxxxx X. Xxxxxxxx Comfort Systems USA, Inc. 180,262
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