EXHIBIT 10.9.5
--------------
THIS INSTRUMENT AND THE OBLIGATIONS REPRESENTED THEREBY IS
SUBORDINATE IN ALL RESPECTS TO CERTAIN OBLIGATIONS OF CHEMPOWER,
INC. AND ITS SUBSIDIARIES TO FIRST NATIONAL BANK OF OHIO,
INCLUDING A PROMISSORY NOTE IN THE MAXIMUM PRINCIPAL AMOUNT OF
$15,700,000 DATED AS OF FEBRUARY 28, 1997.
PLEDGE AGREEMENT
----------------
(American Eco Corporation)
THIS PLEDGE AGREEMENT (this "Pledge Agreement"),
is made and entered into as of this 28th day of February, 1997 by
and between AMERICAN ECO CORPORATION, an Ontario, Canada
corporation ("Pledgor") and XXXXXX X. XXXX, his executors,
administrators, successors, and assigns, as Agent (the "Agent")
for XXXXXX X. XXXX and XXXX X. ROCHESTER (jointly and severally,
the "Principal Shareholders").
1. Pledge. Pledgor hereby pledges to the Agent,
------
for the benefit of the Agent and the Principal Shareholders and
its and their successors and assigns, and grants to the Agent a
security interest in, the following property:
(a) All shares of capital stock of CHEMPOWER,
INC., an Ohio corporation ("Chempower") issued and
outstanding and owned by Pledgor on the date hereof, which
Pledgor represents consist of the shares identified on the
schedule attached hereto, and any shares of capital stock of
Chempower issued in respect thereof, together with any
dividends, splits, distributions, or related rights or
proceeds of the foregoing;
(b) All shares of capital stock of Chempower
issued and outstanding and owned by Pledgor at any time and
from time to time hereafter during the term of this Pledge
Agreement and any shares of capital stock of Chempower
issued in respect thereof, together with any dividends,
splits, distributions, or related rights or proceeds of the
foregoing; and
(c) All contract rights of Pledgor, and any and
all intangible rights associated therewith, existing on the
date hereof and at any time and from time to time arising
hereafter during the term of this Pledge Agreement in
respect of the issuance or delivery to Pledgor of any shares
of capital stock of Chempower (whether in the form of
subscriptions, purchase agreements, options, warrants, stock
bonuses, or other rights of any type or description for the
acquisition by Pledgor of any such shares).
The foregoing property is collateral (the "Collateral") for the
payment in full when due of any and all obligations and
indebtedness of Chempower and Pledgor to the Agent and for the
due and punctual performance of all obligations, covenants, and
agreements of Chempower and Pledgor under that certain Financing
Agreement by and among Pledgor, Chempower, the Principal
Shareholders, and the Agent of even date herewith (the "Financing
Agreement") and under the transactions contemplated thereby,
including but not limited to the Principal Shareholders' Note and
the Principal Shareholders' Guaranty, as well as any and all
obligations and indebtedness of Pledgor to Agent or the Principal
Shareholders, created or incurred in the future as a result of
further loans, accommodations, or otherwise (all such payment,
performance, or indebtedness obligations, the "Obligations").
Pledgor warrants and represents that, except for limitations
imposed by applicable securities laws, there are no restrictions
upon the transfer of any of the Collateral and Pledgor has the
full and unrestricted right to transfer the Collateral. Pledgor
further warrants and represents that as of the date hereof
Pledgor is the sole shareholder of Chempower.
Pledgor agrees to execute and deliver to the
Agent, concurrent with execution hereof, each certificate
evidencing shares of capital stock of Chempower issued and
outstanding and owned by Pledgor on the date hereof, together
with duty executed blank stock powers relating thereto. Pledgor
agrees promptly to deposit hereunder with the Agent any
additional certificates (accompanied by duly executed blank stock
powers) evidencing additional shares of capital stock of
Chempower that are issuable or deliverable to Pledgor hereafter
during the term of this Pledge Agreement and constitute
collateral hereunder, which shall stand pledged and assigned as
Collateral for the Obligations in the same manner as the property
pledged and delivered concurrent with the execution hereof.
2. REPRESENTATIONS, WARRANTIES, AND COVENANTS OF
---------------------------------------------
PLEDGOR.
-------
Pledgor hereby represents and warrants to, and
covenants with, the Agent as follows:
(a) Except for the security interest and pledge
hereunder, when the Collateral is delivered to the Agent,
Pledgor will be the sole owner of the Collateral free from
any lien, security interest, or encumbrance, and Pledgor
will defend the Collateral against all claims and demands of
any persons at any time claiming any interest therein;
(b) Pledgor will promptly pay any and all taxes,
assessments, and governmental charges upon the Collateral
prior to the date penalties attach thereto, except to the
extent that such taxes, assessments, or charges shall be
contested in good faith by Pledgor;
(c) Pledgor will not sell or otherwise assign,
transfer, or dispose of the Collateral, or any interest
therein;
(d) Pledgor will keep the Collateral free from
any lien, security interest, or encumbrance;
(e) The Collateral is duly and validly issued,
fully paid, and nonassessable; and
(f) Pledgor is the sole shareholder of all
outstanding shares of Chempower stock and will not permit
the issuance of any additional shares of capital stock or
debt securities of Chempower.
3. VOTING POWER, DIVIDENDS, ETC.
----------------------------
(a) Unless and until an Event of Default (as
defined in the Financing Agreement) has occurred, Pledgor shall
have the right to exercise all voting, consensual, and other
powers of ownership pertaining to the Collateral, and Pledgor
shall be entitled to receive and retain any dividends or
distributions on the Collateral permitted by the Financing
Agreement, if any, except the following:
(i) stock dividends;
(ii) dividends payable in securities or other
property (other than cash dividends);
(iii) dividends or distributions on dissolution or
on partial or total liquidation or in connection with a
reduction of capital, capital surplus, or paid-in surplus;
and
(iv) other securities issued with respect to or in
lieu of the Collateral (whether upon conversion of any
convertible securities included therein or through stock
split, spinoff, reclassification, merger, consolidation,
sale of assets, combination of shares, or otherwise).
From time to time upon receiving a written request from Pledgor
accompanied by a certificate satisfactory to the Agent and signed
by Pledgor stating that no Event of Default or event which with
notice or passage of time or both would constitute an Event of
Default (a "Possible Default") has occurred and is continuing,
the Agent shall deliver to Pledgor, with respect to any
Collateral then registered in the Agent's name, any assignments
or orders necessary to insure payment to Pledgor or upon its
order of all dividends, interest, and other payments and
distributions to which Pledgor is entitled.
(b) If any Event of Default or Possible Default
shall occur, regardless whether any holder of the Obligations
exercises any available option to declare any of the Obligations
due and payable or seeks or pursues any other remedy available
under this Pledge Agreement or any agreement evidencing or
securing any of the Obligations, then during the continuance of
such Event of Default or Possible Default:
(i) The Agent, or its nominee or nominees, shall
automatically, without further act on the part of any
person, have the sole and exclusive right to exercise all
voting, consensual, and other powers of ownership pertaining
to the Collateral and shall exercise those powers in such
manner as the Agent, in its sole discretion, shall determine
to be necessary, appropriate, or advisable, and Pledgor
shall execute and deliver to the Agent such authorizations,
proxies, and other documents as the Agent may reasonably
request to secure to the Agent the rights, powers, and
authorities conferred upon the Agent by this Subsection (b);
and
(ii) All dividends and other distributions in
respect of the Collateral shall be paid directly to the
Agent and retained by it as part of the Collateral, subject
to the terms of this Pledge Agreement.
4. DISPOSITION OF COLLATERAL AFTER AN EVENT OF
-------------------------------------------
DEFAULT.
-------
(a) If any Event of Default shall have occurred
and be continuing and the amount of the Obligations shall have
been declared due and payable, then, unless the Obligations shall
have been paid in full at or before the time designated in the
notice provided for in clauses (i) or (ii) of this Subsection (a)
or at or before the time the action or suit provided for in
clause (iii) of this Subsection (a) shall be commenced, the Agent
may, in its sole discretion, without further demand,
advertisement, or notice, except as expressly provided for in
clauses (i) or (ii) of this Subsection (a): (y) apply the cash,
if any, then held by it as Collateral for the purposes and in the
manner provided in Section 5; and (z) if there shall be no such
cash or the cash so applied shall be insufficient to make all
payments provided in Subsections (a) and (b) of Section 5:
(i) Following compliance with the requirements of
applicable law, retain the Collateral in satisfaction of the
Obligations, and hold the Collateral so retained, absolutely
free from any claim or right whatsoever (including, without
limitation, any equity or right of redemption) of Pledgor,
which Pledgor hereby specifically waives. Pledgor
specifically agrees that advance written notice of a
proposal by the Agent to retain the Collateral in
satisfaction of the Obligations of no less than five (5)
days is commercially reasonable and not objectionable; or
(ii) Sell the Collateral, or any part thereof, in
one or more sales, at public or private sale, conducted by
an officer or agent of, or auctioneer or attorney for, the
Agent, at the Agent's place of business or elsewhere, for
cash, upon credit or future delivery, and at such price or
prices as the Agent shall in good faith determine, and the
Agent or its nominee may be the purchaser of any or all of
the Collateral so sold, and if the Agent or its nominee is
the purchaser, the price therefor may be paid pursuant to a
credit bid of the Agent or its nominee. Upon any such sale,
the Agent shall have the right to deliver, assign, and
transfer to the purchaser thereof the Collateral so sold.
Each purchaser (including the Agent) at any such sale shall
hold the Collateral so sold, absolutely free from any claim
or right whatsoever (including, without limitation, any
equity or right of redemption) of Pledgor, which Pledgor
hereby specifically waives. The Agent shall give Pledgor at
least five (5) days advance written notice of any such
public or private sale, and the Pledgor specifically agrees
that notice so given is commercially reasonable. Any such
public sale shall be held at such time or times during
ordinary business hours as the Agent shall fix in the notice
of such sale. At any such public or private sale, the
Collateral may be sold in one lot as an entirety or in
separate parcels. The Agent shall not be obligated to make
any sale pursuant to any such notice. The Agent may, without
notice or publication, adjourn any public sale from time to
time by announcement at the time and place fixed for such
sale, or any adjournment thereof, and any such sale may be
made at any time or place to which the same may be so
adjourned without further notice or publication. In case of
any sale of all or any part of the Collateral for credit or
for future delivery, the Collateral so sold may be retained
by the Agent until the selling price is paid by the
purchaser thereof, but the Agent shall not incur any
liability in case of the failure of such purchaser to take
up and pay for the Collateral so sold, and in case of any
such failure, the Collateral may again be sold under and
pursuant to the provisions hereof; or
(iii) Proceed by an action at law or a suit in
equity to foreclose upon this Pledge Agreement and sell the
Collateral, or any portion thereof, under a judgment or
decree of a court or courts of competent jurisdiction.
(b) If at any time when the Agent shall determine
to exercise its right to sell all or any part of the Collateral
pursuant to Subsection (a) of this Section 4, the Collateral, or
the part thereof to be sold, shall not, for any reason
whatsoever, be freely saleable under the Securities Act of 1933,
as from time to time in effect (the "Securities Act"), the Agent,
in its sole and absolute discretion, is hereby expressly
authorized to sell the Collateral, or any part thereof, by
private sale in such manner and under such circumstances as the
Agent may deem necessary or advisable in order that the sale may
legally be effected without such registration. Without limiting
the generality of the foregoing, in any such event, the Agent, in
its sole and absolute discretion: (x) may proceed to make such
private sale notwithstanding that had registration statement for
the purpose of registering the Collateral, or any part thereof,
shall not have been filed under the Securities Act; (y) may
approach and negotiate with a restricted number of potential
purchasers to effect such sale; and (z) may restrict such sale to
purchasers as to their number, nature of business, and investment
intention, including, without limitation, to purchasers each of
whom will represent and agree to the satisfaction of the Agent
that such purchaser is purchasing for its own account, for
investment, and not with a view to the distribution or sale of
such Collateral or part thereof, it being understood that the
Agent may require Pledgor, and Pledgor hereby agrees upon the
written request of the Agent, to cause a legend or legends to be
placed on the certificates to be delivered to such purchasers to
the effect that the Collateral represented thereby has not been
registered under the Securities Act and setting forth or
referring to restrictions on the transferability thereof. In the
event of any such private sale, Pledgor does hereby consent and
agree that the Agent shall incur no responsibility or liability
for selling all or any part of the Collateral at a price that the
Agent, in its sole and absolute discretion, may deem reasonable
under the circumstances, notwithstanding the possibility that a
higher price might be realized if the sale were public and
deferred until after registration under the Securities Act.
(c) The Agent, as attorney-in-fact pursuant to
Section 6 hereof, may, in the name and stead of Pledgor, make and
execute all conveyances, assignments, and transfers of the
Collateral retained or sold pursuant to this Section 4. Pledgor
shall, if so requested by the Agent, ratify and confirm any
retention, sale, or sales by executing and delivering to the
Agent, or to such purchaser or purchasers, all such instruments
as may, in the judgment of the Agent, be advisable for that
purpose.
5. APPLICATION OF PROCEEDS. The proceeds of any
-----------------------
sale, or of collection, of all or any part of the Collateral
shall be applied by the Agent, without any marshalling of assets,
in the following order:
(a) First, to the payment of all the reasonable
costs and expenses of sale, including without limitation,
reasonable attorneys' fees and all other expenses,
liabilities, and advances made or incurred by the Agent in
connection therewith;
(b) Second, to the payment of the Obligations in
such order as the Agent shall determine, until payment in
full thereof; and
(c) Finally, to the payment to Pledgor, its
successors or assigns, or to other persons lawfully entitled
to receive the proceeds, or as a court of competent
jurisdiction may direct, of any surplus remaining after the
payments referred to in Subsections (a) and (b) of this
Section 5 shall have been made.
6. THE AGENT APPOINTED ATTORNEY-IN-FACT. The
------------------------------------
Agent is hereby appointed the attorney-in-fact, with full power
of substitution, of Pledgor for the purpose of carrying out the
provisions of this Pledge Agreement and taking any action and
executing any instruments that such attorney-in-fact may deem
necessary or advisable to accomplish the purposes hereof, which
appointment is irrevocable and coupled with an interest.
7. NO WAIVER. No failure on the part of the
---------
Agent to exercise, and no delay on the part of the Agent in
exercising, any right, power, or remedy hereunder shall operate
as a waiver thereof, nor shall any single or partial exercise by
the Agent of any right, power, or remedy hereunder preclude any
other or further right, power, or remedy hereunder. The remedies
herein provided are cumulative and are not exclusive of any
remedies provided by law.
8. TERMINATION OF PLEDGE. This Pledge Agreement
---------------------
shall terminate only upon the complete satisfaction of all the
Obligations, whereupon the Agent shall assign, transfer, and
deliver to Pledgor, or its assignees, without representation,
warranty, or recourse, against appropriate receipts, all the
Collateral, if any, then held by the Agent hereunder.
9. SUCCESSORS AND ASSIGNS. This Pledge Agreement
----------------------
shall be binding upon and inure to the benefit of Pledgor and the
Agent and their respective successors and assigns; provided,
however, that the Agent shall not assign its rights under the
Pledge Agreement except as may be provided in the Financing
Agreement.
10. ADDITIONAL INSTRUMENTS AND ASSURANCE. Pledgor
------------------------------------
hereby agrees, at Pledgor's own expense, to execute and deliver,
from time to time, any and all instruments, and to perform any
and all acts, as the Agent may reasonably request to effect the
purposes of this Pledge Agreement and to secure to the Agent, and
to all persons who may from time to time be the holder(s) of the
Obligations, the benefits of all rights, authorities, and
remedies of the Agent under this Pledge Agreement.
11. FUTURE HOLDERS OF OBLIGATIONS. This Pledge
-----------------------------
Agreement is for the benefit of any and all future holders of the
Obligations in addition to the Agent, each of whom shall, without
further act, become a party hereto by becoming a holder of any of
the Obligations.
12. MISCELLANEOUS. The notice provisions and
-------------
other miscellaneous provisions of the Financing Agreement shall
govern this Pledge Agreement.
13. CUMULATIVE REMEDIES. The rights, powers, and
-------------------
remedies provided herein in favor of the Agent shall not be
deemed exclusive, but shall be cumulative and shall be in
addition to all other rights and remedies in favor of the Agent
existing by agreement, at law, or in equity, including, without
limitation, all of the rights, powers, and remedies available to
a secured party under any law or regulation.
14. SEVERABILITY. If any term or other provision
------------
of this Pledge Agreement is invalid, illegal, or incapable of
being enforced by any rule of law or public policy, all other
terms and provisions of this Pledge Agreement will nevertheless
remain in full force and effect to the same extent as if the
invalid, illegal or unenforceable term or provision were not a
part of this Pledge Agreement.
15. DEFINED TERMS. Capitalized terms used but not
-------------
defined herein shall have the meanings ascribed to them in the
Financing Agreement.
IN WITNESS WHEREOF, the parties hereto have each
caused this Pledge Agreement to be executed as of the day and
year first above written.
AMERICAN ECO CORPORATION
By:/s/Xxxxxxx X. XxXxxxxx
------------------------------
Name:Xxxxxxx X. XxXxxxxx
-------------------------
Title:President
------------------------
AGENT: XXXXXX X. XXXX
By:/s/Xxxxxx X. Xxxx
------------------------------
Name: Xxxxxx X. Xxxx, As
Agent for the Principal
Shareholders
SCHEDULE TO
PLEDGE AGREEMENT
----------------
Name of Class of Number of Certificate
Pledge Entity Equity Securities Shares Owned No. (s)
------------ ---------------- ------------ -----------
Chempower, Inc. Common
EXHIBIT A
---------
RESPECTIVE
PRINCIPAL PERCENTAGE
SHAREHOLDER INTEREST
----------- ----------
XXXXXX X. XXXX 49.9999805035%
XXXX X. ROCHESTER 50.000001949685%