EXHIBIT 10.17
PLEDGE AGREEMENT
This Pledge Agreement (the "Agreement") is made as of the 10th day of
September, 1996, by and between CHEMICAL LEAMAN CORPORATION, a Pennsylvania
corporation (the "Company") and Reuben M. Rosenthal, a resident of the
Commonwealth of Pennsylvania ("Employee").
BACKGROUND
Pursuant to a Purchase Agreement, dated September 10, 1996, between the
Company and Employee, the Company sold to Employee 43.75 shares of the common
stock of the Company (the "Shares") in exchange for (a) a cash payment of
$74,412.00 and (b) a limited recourse promissory note of Employee, also dated
September 10, 1996, in the principal amount of $188,088.00 (the "Note"). It was
the intent of the parties to the Purchase Agreement that the obligations of
Employee under the Note be secured by the grant of a security interest in the
Shares. The parties hereto desire to evidence such grant by the execution and
delivery of this Agreement.
NOW, THEREFORE, in consideration of the foregoing and of the mutual
promises and covenants herein contained, and intending to be legally bound,
Employee and the Company hereby agree as follows:
ARTICLE 1
PLEDGE
1.1. Grant of Security Interest. Employee hereby assigns, pledges and
grants to the Company a security interest in the Shares, together with all
additions thereto, substitutions or exchanges therefor, proceeds thereof and
distributions thereon (which shall be referred to collectively herein as the
"Collateral"), as collateral security for the Note and for the payment and
performance of all indebtedness, liability and obligations of Employee to
Company (collectively, the "Obligations"), whether for principal, interest,
fees, expenses or otherwise, now existing or hereafter created or arising under
the Purchase Agreement, the Note and this Agreement (collectively, the
"Documents"), all on the terms and conditions set forth herein. The Obligations
shall include amounts for which Employee has no personal liability pursuant to
Paragraph 5 of the Note.
1.2. Limitations on Encumbrances. Prior to the full payment and
performance of the Obligations, Employee agrees not to create or permit to exist
any lien, security interest, or other charge or encumbrance upon or with respect
to any of the Collateral, except the security interest under this Agreement.
1.3. Additional Security. Prior to the full payment and performance of
the Obligations, the Company shall be entitled to receive, as additional
Collateral any and all additional shares of stock or any other property of any
kind distributable on or by reason of the Shares pledged hereunder, whether in
the form of or by way of stock dividends or otherwise, with the sole exception
of normal, regularly declared cash dividends. If any of such property, other
than such cash dividends, shall come into the possession or control of Employee,
Employee shall hold or control and forthwith transfer and deliver the same to
Company subject to the provisions hereof.
1.4. Rights Prior to a Default. So long as no default has occurred
under any of the Obligations or Documents and Employee is in full compliance
with the terms hereof:
(a) Employee shall be entitled to receive and retain any normal,
regularly declared cash dividends paid on the Shares pledged hereunder.
(b) Employee may exercise all voting rights, if any, pertaining to
the Shares for any purpose.
1.5. Further Assurances. Employee shall take all actions (and execute
and deliver from time to time all instruments and documents) necessary or
appropriate or reasonably requested by Company, to continue the validity,
enforceability and perfected status of the pledge of the Shares hereunder.
1.6 No Obligations. The Company shall be under no obligation to take
any actions and shall have no liability (except for negligence or willful
misconduct) with respect to the preservation or protection of the pledged Shares
or any underlying interests represented thereby as against any prior or other
parties.
1.7. Extensions, etc. Employee agrees that the Company, at any time and
without affecting its rights in the pledged Shares and without notice to
Employee, may grant any extensions, releases or other modifications of any kind
respecting the Documents, Obligations and any collateral security therefor and
Employee, except as otherwise provided herein or in the Documents, waives all
notices of any kind in connection with the Obligations, the Documents and any
changes therein or defaults or enforcement proceedings thereunder, whether
against Employee or any other party. Employee hereby waives any rights it has at
equity or in law to require the Company to apply any rights of marshalling or
other equitable doctrines in the circumstances.
1.8. Default. After the occurrence of an Event of Default (as defined
in the Note) or if any agreement of Employee hereunder is breached or proves to
be false (a "Default"):
(a) The Company may transfer or cause to be transferred any of the
pledged Shares into its own or a nominee's or nominees' names.
(b) The Company shall be entitled to receive and apply in payment
of the Obligations any cash dividends or other payment on the pledged Shares.
(c) The Company shall be entitled to exercise in the Company's
discretion all voting rights, if any, pertaining thereto and in connection
therewith and at the written request of the Company, Employee shall execute any
appropriate dividend, payment or brokerage orders or proxies.
(d) Employee shall take any action necessary or required or
reasonably requested by the Company, in order to allow the Company fully to
enforce the pledge of the Shares hereunder and realize thereon to the fullest
possible extent, including but not limited to the filing of any claims with any
court, liquidator or trustee, custodian, receiver or other like person or party.
(e) The Company shall have all the rights and remedies granted or
available to it hereunder, under the Uniform Commercial Code as in effect from
time to time in Pennsylvania, under any other statute or the common law, or
under any of the Documents, including the right to sell the pledged Shares or
any portion thereof at one or more public or private sales upon ten (10) days'
written notice and to bid thereat or purchase any part or all thereof in its own
or a nominee's or nominees' names, free and clear of any equity or redemption;
and to apply the net proceeds of the sale, after
deduction for any expenses of sale, including the payment of all the Company's
reasonable attorneys' fees in connection with the Obligations and the sale, to
the payment of the Obligations in any manner or order which the Company in its
sole discretion may elect, without further notice to or consent of Employee and
without regard to any equitable principles of marshalling or other like
equitable doctrines.
1.9. Appointment as Attorney-in-Fact. Effective upon the occurrence of
a Default, Employee hereby irrevocably appoints Company as its attorney-in-fact
to execute, deliver and record, if appropriate, from time to time any
instruments or documents in connection with the Collateral, in Employee or the
Company's names.
1. 10. Duration of Provisions. The provisions of this Agreement shall
remain in full force and effect until the payment and satisfaction in full of
the Obligations.
ARTICLE 2
MISCELLANEOUS
2.1. Entire Agreement; Amendments. This Agreement, together with the
Note and the Purchase Agreement, constitute the entire understanding among the
parties hereto with respect to the subject matter contained herein and
supersedes any prior understandings and agreements among them respecting such
subject matter. In the event of any inconsistency between this Agreement shall
control.
2.2. Headings. The headings in this Agreement are for convenience of
reference only and shall not affect its interpretation.
2.3. Gender; Number. Words of gender may be read as masculine,
feminine, or neuter, as required by context. Words of number may be read as
singular or plural, as required by context.
2.4. Severability. If any provision of this Agreement is held illegal,
invalid, or unenforceable, such illegality, invalidity, or unenforceability will
not affect any other provision hereof. This Agreement shall, in such
circumstances, be deemed modified to the extent necessary to render enforceable
the provisions hereof.
2.5. Waiver. The failure of any party hereto to insist upon strict
performance of any of the terms or conditions of this Agreement will not
constitute a waiver of any of its rights hereunder.
2.6. Assignment. No party hereto may assign any of its rights or
delegate any of its obligations hereunder without the prior written consent of
the other parties hereto.
2.7. Successors and Assigns. This Agreement binds, inures to the
benefit of, and is enforceable by the successors and assigns of the parties
hereto, and does not confer any rights on any other persons or entities.
2.8. Governing Law. This Agreement shall be construed and enforced in
accordance with the law of the Commonwealth of Pennsylvania.
2.9. Counterparts. This Agreement may be executed in any number of
counterparts and any party hereto may execute any such counterpart, each of
which when executed and delivered shall be
deemed to be an original and all of which counterparts taken together shall
constitute but one and the same instrument.
2. 10. Personal Liability. Notwithstanding anything herein contained to
the contrary, Employee shall only be personally liable under the Note and this
Agreement to the extent set forth in Paragraph 5 of the Note.
IN WITNESS WHEREOF, the parties have executed this Agreement on
the date first above written.
ATTEST: CHEMICAL LEAMAN CORPORATION
By: By: /s/ Eugene C. Parkerson
--------------------------- -----------------------------
Title: Title:
Witness:
/s/ David M. Boucher /s/ REUBAN M. ROSENTHAL
- ------------------------------- ---------------------------------
REUBAN M. ROSENTHAL