EXHIBIT (d)(1)
PLEDGE AND SECURITY AGREEMENT
THIS PLEDGE AND SECURITY AGREEMENT ("Agreement"), dated December 28,
2000, by and between JOHN A. TWEED ("Pledgor") and SCOTT M. NISWONGER, a
Tennessee resident ("Lender");
WITNESSETH:
WHEREAS, Pledgor desires now and hereafter to obtain credit from
Lender; and
WHEREAS, Lender is willing to extend credit to Pledgor to such extent,
and only to such extent, as Lender may from time to time deem advisable upon
Pledgor executing this Agreement for the purpose of securing all present and
future obligations of Pledgor to Lender;
NOW THEREFORE, in consideration of the foregoing, and to enable
Pledgor to obtain an extension of credit from Lender and to induce Lender to
have transactions with Pledgor, Pledgor agrees as follows:
1. Pledge. As collateral security for the payment and
performance in full of the Obligations (as hereinafter defined), Pledgor hereby
pledges, hypothecates, assigns, transfers, sets over and delivers unto Lender,
and hereby grants to Lender a security interest in, the collateral described in
Schedule A hereto, together with the proceeds thereof and all cash, additional
securities or other property at any time and from time to time receivable or
otherwise distributable in respect of, in exchange for, or in substitution for
any and all such pledged securities (all such pledged securities, the proceeds
thereof, cash, dividends, additional securities and other property now or
hereafter pledged hereunder are hereinafter collectively called the "Pledged
Securities"); provided, however, that the proceeds thereof described above
shall be limited to the after-tax proceeds received with respect to the Pledged
Securities and Pledgor shall be entitled to receipt of the amount of proceeds
necessary to fund Pledgor's tax obligations with respect to any proceeds
received with respect to the Pledged Securities;
TO HAVE AND TO HOLD the Pledged Securities, together with all rights,
titles, interests, powers, privileges and preferences pertaining or incidental
thereto, unto Lender, its successors and assigns; subject, however, to the
terms, covenants and conditions herein set forth.
Upon delivery to Lender, the Pledged Securities shall be accompanied
by executed stock powers in blank and by such other instruments or documents as
Lender or its counsel may reasonably request. Each delivery of certificates for
such Pledged Securities shall be accompanied by a schedule showing the number
of shares and the numbers of the certificates theretofore and then pledged
hereunder, which schedule shall be attached hereto as Schedule
A and made a part hereof. Each schedule so delivered shall supersede any prior
schedule so delivered.
2. Obligations Secured. This Agreement is made, and the security
interest created hereby is granted to Lender, to secure full payment and
performance of any and all indebtedness and other obligations of Pledgor to
Lender, direct or contingent, however evidenced or denominated, and however or
whenever incurred, including without limitation indebtedness incurred pursuant
to that certain Secured Promissory Note (the "Note") by and between Pledgor and
Lender, dated of even date herewith, and any past, present or future commitment
of Lender to Pledgor (collectively the "Obligations").
3. Representations and Warranties. Pledgor hereby represents and
warrants to Lender (a) that Pledgor is the legal and equitable owner of the
Pledged Securities, that Pledgor has the complete and unconditional authority
to pledge the Pledged Securities being pledged by it, and holds the same free
and clear of all liens, charges, encumbrances and security interests of every
kind and nature; and (b) that no consent or approval of any governmental body
or regulatory authority, or of any other party, which was or is necessary to
the validity of this pledge, has not been obtained.
4. Voting Rights.
(a) Provided that no default or event of default shall
have occurred and be continuing hereunder:
(i) Pledgor shall be entitled to exercise or
refrain from exercising the voting rights attributable to the
Pledged Securities or any part thereof for any purpose not
inconsistent with the terms and conditions of this Agreement,
and
(ii) Lender will execute and deliver any proxies
or other instruments reasonably requested by Pledgor for the
purpose of enabling Pledgor to exercise the voting rights
that it is entitled to exercise pursuant to subparagraph
4(a)(i) hereof.
(b) Upon the occurrence and during the continuance of a
default or event of default hereunder, all rights of Pledgor to
exercise or refrain from exercising the voting rights attributable to
the Pledged Securities or any part thereof pursuant to subparagraph
4(a)(i) hereof or otherwise shall cease, and Lender and its successors
and assigns shall have the sole right to exercise or refrain from
exercising such rights. In furtherance of the foregoing, Pledgor
hereby makes, constitutes and appoints Lender as the proxy and
attorney-in-fact of and for Pledgor, with full power to exercise or to
refrain from exercising any and all voting rights attributable to the
Pledged Securities upon the occurrence and during the continuance of
any such default or event of
default. The foregoing appointment and power, being coupled with an
interest, are irrevocable until the Obligations have been fully and
irreversibly satisfied.
5. Remedies Upon Default.
(a) Upon the occurrence of a default in the payment or
performance of any of the Obligations, or upon the occurrence of a
default or event of default under any other instrument or document now
or hereafter further evidencing, securing or otherwise related to any
of the Obligations, or in the event that any representation or
warranty herein shall prove to have been untrue when made, or in the
event that Pledgor shall default in the performance of any of its
obligations hereunder, or in the event that any bankruptcy or other
insolvency proceedings are instituted by or against Pledgor; then, and
in any such event, Lender shall have all of the rights, powers,
privileges, options and remedies of a secured party under the Uniform
Commercial Code as in effect in the State of Tennessee, and without
limiting the foregoing, Lender may (i) collect any and all amounts
payable in respect of the Pledged Securities and exercise any and all
rights, powers, privileges, options and remedies of the holder and
owner thereof, and (ii) sell, transfer and/or negotiate the Pledged
Securities, or any part thereof, at public or private sale, for cash,
upon credit or for future delivery as Lender shall deem appropriate,
including without limitation, at Lender's option, the purchase of all
or any part of the Pledged Securities at any public sale by Lender.
Upon consummation of any sale, Lender shall have the right to assign,
transfer and deliver to the purchaser or purchasers thereof the
Pledged Securities so sold. Each such purchaser at any such sale shall
hold the property sold absolutely, free from any claim or right on the
part of Pledgor, and Pledgor hereby waives (to the extent permitted by
law) all rights of redemption, stay or appraisal that Pledgor now has
or may at any time in the future have under any rule of law or statute
now existing or hereinafter enacted. Pledgor hereby expressly waives
notice to redeem and notice of the time, place and manner of such
sale.
(b) Pledgor recognizes that, by reason of certain
prohibitions contained in the Securities Act of 1933, as amended (the
"Securities Act"), and applicable state securities laws, Lender may be
compelled, with respect to any sale of all or any part of the Pledged
Securities, to limit purchasers to those who agree, among other
things, to acquire such Pledged Securities for their own account, for
investment and not with a view to the distribution or resale thereof.
Pledgor acknowledges that any such private sales may be at prices and
on terms less favorable than those obtainable through a public sale
without such restrictions (including, without limitation, a public
offering made pursuant to a registration statement under the
Securities Act), and, notwithstanding such circumstances, Pledgor
agrees that any such private sale shall be deemed to have been made in
a commercially reasonable manner and that Lender shall have no
obligation to engage in public sales and no obligation to delay the
sale of any of the Pledged Securities for the period of time necessary
to permit the issuer thereof
to register such sale under the Securities Act or under applicable
state securities laws, even if Pledgor would agree to do so.
(c) If Lender determines to exercise its right to sell
any or all of the Pledged Securities, upon written request, Pledgor
from time to time shall, and shall cause each issuer of the Pledged
Securities to be sold hereunder to, furnish to Lender all such
information as Lender may request in order to determine the number of
shares and other instruments included in the Pledged Securities that
may be sold by Lender as exempt transactions under the Securities Act
and the rules of the Securities and Exchange Commission thereunder, as
the same are from time to time in effect.
6. Sale of Pledged Securities by Pledgor. Pledgor may sell or
otherwise transfer the Pledged Securities without the consent of the Lender
during the term hereof; provided, however, that upon the consummation of such
sale or other transfer, Pledgor will utilize the after-tax proceeds of such
sale or other transfer to satisfy the Obligations.
7. Application of Proceeds. The proceeds of the sale of Pledged
Securities sold pursuant to Section 5 hereof, and the proceeds of the exercise
of any of Lender's other remedies hereunder, shall be applied by Lender as
follows:
First: To the payment of all costs and expenses incurred by Lender in
connection with any such sale, including, but not limited to, all court costs
and the reasonable fees and expenses of counsel for Lender in connection
therewith, and
Second: To the payment in full of the Obligations, in such order of
priority as Lender shall determine, in its sole discretion, and
Third: The excess, if any, shall be paid to Pledgor or any other
person lawfully thereunto entitled.
8. Reimbursement of Lender. Pledgor agrees to reimburse Lender,
upon demand, for all expenses, including without limitation reasonable
attorney's fees, incurred by it in connection with the administration and
enforcement of this Agreement, and agrees to indemnify Lender and hold it
harmless from and against any and all liability incurred by it hereunder or in
connection herewith, unless such liability shall be due to willful misconduct
or gross negligence on the part of Lender.
9. No Waiver. No failure on the part of Lender to exercise, and
no delay in exercising, any right, power or remedy hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise of any such right,
power or remedy by Lender preclude any other or further exercise thereof or the
exercise of any other right, power or remedy. All remedies are cumulative and
are not exclusive of any other remedies provided by law.
10. Limitation of Liability. The powers conferred on Lender
hereunder are solely to protect its interests in the Pledged Securities, and
shall not impose any duty upon Lender to exercise any such powers. Except for
the exercise of reasonable care in the custody and preservation of the
certificates or other instruments representing Pledged Securities in its
possession and the accounting for monies actually received by it hereunder,
Lender shall have no duty as to any Pledged Securities. Without limiting the
generality of the foregoing, Lender shall have no responsibility for (a)
ascertaining or taking action with respect to calls, conversions, exchanges,
maturities, tenders or other matters relating to any Pledged Securities,
regardless of whether Lender has or is deemed to have knowledge of such
matters, (b) taking any necessary steps (other than steps in accordance with
the standard of care set forth above to maintain possession of the certificates
or other instruments representing Pledged Securities in its possession) to
preserve rights against any parties with respect to the Pledged Securities, (c)
taking any necessary steps to collect or realize upon any of the Obligations or
any of the Pledged Securities, or (d) initiating any action to protect the
Pledged Securities against the possibility of a decline in market value. Lender
shall be deemed to have exercised reasonable care in the custody and
preservation of the certificates or other instruments representing Pledged
Securities in its possession if such items are accorded treatment substantially
equal to that which Lender accords its own property consisting of negotiable
securities.
11. Binding Agreement. This Agreement and the terms, covenants
and conditions hereof shall be binding upon and inure to the benefit of the
parties hereto and to all holders of indebtedness secured hereby and their
respective successors and assigns.
12. Governing Law; Amendments. This Agreement shall in all
respects be construed in accordance with and governed by the laws of the State
of Tennessee. This Agreement may not be amended or modified, nor may any of the
Pledged Securities be released except in a writing signed by the party to be
charged therewith. Time is of the essence with respect to the obligations of
Pledgor pursuant to this Agreement.
13. Further Assurances. Pledgor agrees to do such further acts
and things, and to execute and deliver such additional conveyances,
assignments, agreements and instruments (including but not limited to the
execution and delivery and filing of UCC financing statements with respect to
the security interests of this Agreement), as Lender at any time may request in
connection with the administration and enforcement of this Agreement or
relative to the Pledged Securities or any part thereof or in order to assure
and confirm unto Lender its rights and remedies hereunder.
14. Severability. If any provision of this Agreement or the
application thereof to any person or circumstance shall be invalid or
unenforceable to any extent, the remainder of this Agreement and/or the
application of such provision to other persons or circumstances shall not be
affected thereby and shall be enforceable to the greatest extent permitted by
law.
15. Miscellaneous. Section numbers and headings used herein are
for convenience only and are not to affect the construction of or to be taken
into consideration in interpreting
this Agreement. When used herein, the singular shall include the plural, and
vice versa, and the use of the masculine, feminine or neuter gender shall
include all other genders, as the context may require.
IN WITNESS WHEREOF, Pledgor and Lender have executed this Agreement,
or have caused this Agreement to be duly executed by a duly authorized officer,
all as of the day first above written.
PLEDGOR:
/s/ John A. Tweed
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John A. Tweed
LENDER:
/s/ Scott M. Niswonger
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Scott M. Niswonger
SCHEDULE A
PLEDGED SECURITIES
No. of Certificate
Issuer Shares Class No.
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Landair Corporation 500,000 Common