Document:

exv10w2

 

Exhibit 10.2

SECURED PROMISSORY NOTE

	 	 	 
	$1,496,369.87	 	
November 1, 2003

     For value received, the undersigned, Blake Capital Partners, LLC, a
Minnesota limited liability company (“Blake”), hereby promises to pay to Entrx
Corporation, a Delaware corporation located at 800 Nicollet Mall, Suite 2690,
Minneapolis, Minnesota 55402, or its assigns (“Entrx”), the principal sum of
$1,496,369.87 plus interest accrued thereon, on October 31, 2007, or such other
date as may be set forth in the Security Agreement (the “Due Date”). Interest
shall accrue on the principal balance of this Note at the annual rate of 6%
through February 29, 2004, and on March 1 and September 1, 2004, and on March 1
and September 1 of each year thereafter, shall be adjusted to equal the prime
(or reference) rate of Wells Fargo Bank NA in Minneapolis, Minnesota, as
published by such bank on each such date, plus 2%. Interest accrued on the
principal balance of this Note shall be payable by Blake on March 1 and
September 1, 2004, and on each March 1 and September 1 thereafter, until the
Due Date.

     This Note replaces a Non-Recourse Secured Note dated December 10, 2001, in
the principal amount of $1,250,000, and is subject to the terms of an Amended
and Restated Security and Pledge Agreement dated as of November 1, 2003, a copy
of which is attached hereto and incorporated herein by this reference as
Exhibit “A” (the “Security Agreement”), which amends and restates a
Non-Recourse Security and Pledge Agreement dated December 10, 2001.

     Payment of principal and interest shall be made in lawful money of the
United States of America or pursuant to cancellation of the Pledged Securities
as provided for herein, at the principal office of Entrx at Minneapolis,
Minnesota, or at such other place as Entrx shall have designated for such
purpose in writing, or to the address or account designated by Entrx for such
purpose. The principal amount hereof, together with accrued, unpaid interest
hereon, may be prepaid at anytime without penalty.

     Payment of this Note and the accrued interest thereon is secured by
“Collateral” (as defined in the Security Agreement) which, on the date of this
Note includes securities traded on the NASDAQ System and over-the-counter (the
“Pledged Securities”) beneficially owned by Wayne W. Mills (“Mills”) and Blake,
and guaranteed by Mills.

     This Note is delivered in and shall be construed and enforced in
accordance with and governed by the laws of the State of Minnesota. If any
term, provision, covenant, or condition of this Note is held to be invalid,
void, or unenforceable, the rest of the Note shall remain in full force and
effect and shall in no way be affected, impaired, or invalidated. Blake hereby
waives presentment, demand, dishonor or notice of dishonor, protest or notice
of protest, or other formality at the Due Date, at which time this Note will be
unconditionally due and payable in the manner and with the effect provided in
the Security Agreement and this Note. Entrx shall be entitled to collect
reasonable attorneys’ fees from Blake, as well as other costs and expenses
reasonably incurred, in connection with any dispute related to the payment due
on this Note.

 

 

     IN WITNESS WHEREOF, Blake has executed and delivered this Note to Entrx on
November 1, 2003.

BLAKE:

Blake Capital Partners, LLC

Wayne W. Mills, Manager

GUARANTEE

     Wayne W. Mills, a resident of the State of Minnesota, and the principal
owner of Blake Capital Partners, LLC (“Blake”), hereby irrevocably and
unconditionally guarantees each and every obligation of Blake under this Note,
and hereby waives presentment, demand, dishonor or notice of dishonor, protest or
notice of protest, and any defense against his obligations hereunder, other
than the Note is not then due, or that of prior payment of the Note. On the
Due Date, Entrx will be entitled to enforce this guarantee against Mills
without having to demand or seek payment from Blake, or take any other action
of any kind against Blake for recovery under this Note. Any action which Entrx
may take against Blake shall not serve to mitigate or delay Mill’s obligations
under this Guarantee. Entrx will be entitled to collect reasonable attorneys’
fees from Mills, as well as other costs and expenses reasonably incurred, in
connection with any dispute related to the obligations of Mills in accordance
with this Guarantee.

Wayne W. Millsexv10w3

 

Exhibit 10.3

AMENDED AND RESTATED SECURITY AND PLEDGE AGREEMENT

          This Amended and Restated Security and Pledge Agreement (this “Agreement”)
is entered into as of the 1st day of November, 2003, by and between Blake
Capital Partners, LLC, a Minnesota limited liability company (“Blake”), Wayne
W. Mills, a resident of the state of Minnesota (“Mills”), Entrx Corporation, a
Delaware corporation formerly known as Metalclad Corporation (the
“Corporation”), and Bruce H. Haglund, Esq., a resident of the state of
California (“Agent”). This Amended and Restated Security and Pledge Agreement
is intended to amend and restate, and take the place of, the Non-Recourse
Security and Pledge Agreement entered into by the parties hereto as of December
10, 2001 (the “Non-Recourse Security Agreement”).

Recitals

	A.	 	As of December 10, 2001, the Corporation loaned Blake $1,250,000 (the
“Loan”), under the terms of the Non-Recourse Security Agreement and a
Non-Recourse Secured Note dated as of the same date (the “Non-Recourse
Note”), collateralized by 500,000 shares of the Corporation’s common
stock, 350,000 shares of which are owned of record by Blake, and 150,000
shares of which are owned of record by Mills.
	 
	B.	 	Under the terms of the Non-Recourse Security Agreement and Non-Recourse
Note (together the “Non-Recourse Documents”), the Corporation had recourse
only to the 500,000 shares of the Corporation’s common stock which it
could cancel, and apply $2.50 to the principal balance of the Non-Recourse
Note for each share of the Corporation’s common stock cancelled.
	 
	C.	 	Under the terms of the Non-Recourse Note, Blake had the right to require
shares of the Corporation’s common stock to be cancelled, and a credit of
$2.50 per share of the Corporation’s common stock so cancelled to be
applied to the principal balance due under the Non-Recourse Note.
	 
	D.	 	The Corporation effected a stock dividend of a wholly-owned subsidiary,
Chiral Quest, Inc., to its stockholders of record as of October 11, 2002,
which provided for the receipt by each such stockholder of one share of
Chiral Quest, Inc. common stock for every two shares of the Corporation’s
common stock they held of record. As a result of the dividend, Blake and
Mills received 175,000 and 75,000 shares respectively, of Chiral Quest,
Inc. common stock. While 250,000 shares of Chiral Quest, Inc. common
stock received as a dividend by Blake and Mills was voluntarily delivered
to the Agent by Mills and Blake to be held as “Collateral” as defined
under the Non-Recourse Security Agreement, the terms of the Non-Recourse
Documents are not entirely clear as to the treatment of the Chiral Quest,
Inc. common stock as collateral, and the rights of the Corporation to
foreclose thereon, and the terms of the Non-Recourse Security Agreement
could be read as not requiring that the Chiral Quest, Inc. common stock
become part of the Collateral.
	 
	E.	 	The non-recourse nature of the Loan to Blake requires that the
Corporation value the Collateral held by the Agent at the end of each
accounting period, and report a gain or loss on its financial statements
based upon the fluctuating valuations of such Collateral, and the
ambiguous terms of the Non-Recourse Documents cause other accounting
difficulties.
	 
	F.	 	The Loan to Blake came due on September 8, 2002, and the principal and
accrued interest under the Note, which was $1,496,369.87 as of November 1,
2003, remains unpaid.
	 
	G.	 	The Board of Directors of the Corporation has determined that there is a
significant advantage to the Corporation to: convert the Loan to one
which is with recourse to Blake; permit the Corporation to sell as well as
cancel the Collateral held for the Loan; eliminate the requirement that
the shares of the Corporation be valued at $2.50 per share; eliminate the
ability of Mills to put the Shares to the Corporation at $2.50 per share;
obtain a personal guarantee of Wayne W. Mills for the repayment of the
Loan; and eliminate the ambiguities of the Non-Recourse Documents.
	 
	H.	 	In exchange for such advantages to the Corporation, the Corporation
agrees to other modifications to this Agreement and the Note, including
extending the due date of the Loan to October 31, 2007, and changing the
rate of interest under the Loan from 12% to a prime rate plus 2%.

 

 

	I.	 	Concurrent with the execution of this Agreement by all parties hereto,
Blake has executed and delivered a Secured Promissory Note (the “Note”),
and Wayne W. Mills has executed and delivered a guarantee of the
obligations of Blake under the Note.

Agreement

          In consideration of the foregoing and other good and valuable
consideration, the parties hereto agree as follows:

1.     DEFINITIONS. For the purposes hereof unless the context otherwise
requires, the following terms shall have the meanings indicated:

          1.1 “Collateral” shall mean (i) the Pledged Securities, (ii) all monies
or other property at any time and from time to time received in exchange for or
with respect to any of the Pledged Securities, and (iii) other property
delivered to Agent and intended to become part of the Collateral.

          1.2 “Event of Default” shall mean the occurrence of any one of the
following events:

          (a) Blake shall fail to pay any principal or interest on the Note when due
in accordance with the terms of the Note; or

          (b) Any material representation or warranty made by Blake or Mills,
respectively, as applicable and as more fully set forth in Section 5 below, at
any time prior to payment in full of the Note with respect to ownership of the
Collateral shall prove to have been incorrect in any material respect on or as
of the date made or deemed made; or

          (c) Blake or Mills shall default in the observance or performance of any
covenant contained in this Agreement or the Note as the same may be applicable
to itself or himself respectively; or

          (d) Either of the Pledgors shall commence any case, proceeding or other
action (A) under any existing or future law of any jurisdiction, domestic or
foreign, relating to bankruptcy, insolvency, reorganization or relief of
debtors, seeking to have any order for relief entered with respect to it, or
seeking to adjudicate it a bankrupt or insolvent, or seeking reorganization,
arrangement, adjustment, winding-up, liquidation, dissolution, composition or
other relief with respect to it or its debts, or (B) seeking appointment of a
receiver, trustee, custodian, conservator or other similar official for it or
for all or any substantial part of its or his assets, or make a general
assignment for the benefit of its or his creditors; or

          (e) There shall be commenced against either of the Pledgors any case,
proceeding or other action of a nature referred to in clause (d) above which
(A) results in the entry of an order for relief or any such adjudication or
appointment or (B) remains undismissed, undischarged or unbonded for a period
of 30 days; or

          (f) There shall be commenced against either of the Pledgors any case,
proceeding or other action seeking issuance of a warrant of attachment,
execution, distraint or similar process against the Collateral which results in
the entry of an order for any such relief which shall not have been vacated,
discharged, or stayed or bonded pending appeal within 30 days from the entry
thereof; or

          (g) Either of the Pledgors shall take any action in furtherance of, or
indicate its or his consent to, approval of, or acquiescence in, any of the
acts set forth in clause (d), (e), or (f) above; or

          (h) Either of the Pledgors shall generally not, shall be unable to, or
shall admit in writing its or his inability to, pay its or his debts as they
become due.

          1.3 “Fair Market Value” of any property shall be (i) if a marketable
security, based upon the closing sale price of the Security (or the high bid
price if no closing sales price is quoted) on any national exchange registered
under the Securities and Exchange Act of 1934, the NASDAQ System, or as quoted
by NASD member broker/dealers on any system approved by the Corporation, and
(ii) for all other property, such amount as the Board of Directors, in its
discretion, deems to be the Fair Market Value.

          1.4 “Obligations” shall mean the obligations of Blake or Mills under the
Note and this Agreement that are specifically applicable to it or him,
respectively.

 

 

          1.5 “Pledged Securities” shall mean all securities pledged as Collateral
under this Agreement, as may be reduced increased or altered from time to time
pursuant to the terms of this Agreement, including initially 500,000 shares of
the common stock of the Corporation owned beneficially and of record by
Pledgors as evidenced by certificates numbered 815 (for 350,000 shares), 817
(for 100,000 shares) and 818 (for 50,000 shares), 250,000 shares of the common
stock of Chiral Quest, Inc. owned beneficially and of record by Pledgors as
evidenced by certificates numbered 6165 (for 75,000 shares) and 6167 (for
175,000 shares) (the “Certificates”), and all stock dividends issued to
Pledgors with respect to such securities.

          1.6 “Pledgors” shall mean Mills and Blake.

2.     PLEDGE OF COLLATERAL.

          2.1 As security for the payment and performance in full of all of the
Obligations, Pledgors hereby grant and pledge to the Agent, for the benefit of
the Corporation, and hereby grant to the Agent, a security interest in the
Collateral to the extent of their respective interests in the Collateral.

          2.2 If Collateral has been previously released to Mills or Blake, then at
such time as the Fair Market Value of the Collateral has equaled less than 70%
of the amount due under the Note, including accumulated interest, for a period
of 40 consecutive trading days, within 20 business days following notification
given by the Corporation to Mills, Mills or Blake will be jointly and severally
obligated to deliver to and deposit with the Agent, additional assets, to be
held and treated as Collateral hereunder, such that the Fair Market Value of
the Collateral upon such delivery and deposit, when added to the Fair Market
Value of the Collateral held by the Agent immediately prior to such delivery
and deposit, equals not less than 100% of the amount due under the Note.
Notwithstanding the foregoing, the aggregate Fair Market Value (as of the time
of deposit) of the property which Mills and Blake are required to deposit
hereunder shall not exceed the aggregate Fair Market Value of the Collateral
previously released to Mills and Blake as determined on the date of such
release.

3.     DELIVERY OF COLLATERAL TO THE AGENT. The Agent hereby acknowledges the
delivery of the Certificates to him, accompanied by stock powers or instruments
of transfer with medallion signature guarantees, as the case may be, duly
executed in blank by Pledgors (the “Stock Powers”).

4.     CHANGE OF DENOMINATION. The Agent shall have the right (in his sole and
absolute discretion) upon the occurrence and during the continuation of an
Event of Default, following the expiration of the applicable Cure Period as
defined in Section 7.1 or 7.3 hereof, respectively, to exchange the
Certificates or other instruments or documents representing the Collateral for
certificates of smaller or larger denominations for any purpose consistent with
this Agreement and in accordance with the Uniform Commercial Code.

5.     REPRESENTATIONS, WARRANTIES AND COVENANTS OF BLAKE. Blake and/or Mills
hereby represent and warrant to, and/or covenant and agree with, the
Corporation and the Agent as follows:

          5.1 Blake and Mills are respectively the record and beneficial owners of
the Pledged Securities and have the absolute right to pledge to the Agent and
to grant to the Corporation a security interest in the Collateral.

          5.2 To the best of Pledgors’ knowledge, the execution, delivery and
performance of this Agreement and the Note, the pledge to the Agent, and the
grant to the Corporation of a security interest in the Collateral (i) will not
violate, or involve the Agent or the Corporation in a violation of, any
provision of any law or regulation or any order of any governmental authority
or any judgment of any court applicable to Blake or its properties and assets,
(ii) will not violate any agreement for borrowed money, any bond, note or other
similar instrument or any other material agreement to which Pledgors are a
party or by which Pledgors or any of their property is bound or affected, (iii)
will not be in conflict with, result in a breach of or constitute (with due
notice or lapse of time or both) a default under any indenture, agreement for
borrowed money, bond, note, instrument or other agreement, and (iv) will not
result in the creation, or imposition of any lien, charge or encumbrance of any
nature whatsoever upon any property or assets of Pledgors other than pursuant
to this Agreement.

          5.3 This Agreement constitutes the legal, valid and binding obligation of
Blake and Mills with respect to their respective securities pledged hereunder,
and is enforceable in accordance with its terms, subject (i) to the enforcement
of remedies, to applicable bankruptcy, reorganization, insolvency and other
laws affecting creditors rights generally and to moratorium laws from time to
time in effect, and (ii) to general equitable principles.

          5.4 Blake and Mills have good title to their respective securities
pledged hereunder.

 

 

          5.5 The Collateral is not subject to any other financial liens, security
interests or encumbrances, other than restrictions, which may be imposed under
the Securities Act of 1933 or applicable state securities laws.

          5.6 There is no material pending legal or governmental proceeding to
which Pledgors are a party or to which any of their properties is subject,
which proceeding will materially affect (i) Pledgors’ ability to perform their
obligations hereunder, or (ii) the Collateral.

          5.7 This Agreement creates in favor of the Corporation a valid, binding
and enforceable security interest in, and lien upon, all right, title and
interest of Blake and/or Mills, respectively, in the Collateral and, upon
delivery of the Collateral to the Agent, the Corporation will have a fully
perfected first and prior security interest in and lien upon all right, title
and interest of Blake and Mills in the Collateral.

          5.8 Blake will not create or permit to exist any financial lien, security
interest or encumbrance on the Collateral except as permitted by this
Agreement.

6.     VOTING RIGHTS; DIVIDENDS; ETC.

          6.1 Pledgors shall be entitled to exercise any and all voting and
consensual rights and powers accruing to owners of the Pledged Securities or
any part thereof for any purpose not inconsistent with the terms hereof, at all
times.

          6.2 Any dividends or distributions of any kind whatsoever (in cash or
otherwise) received by Pledgors, including any dividends resulting from a
subdivision, combination, or reclassification of the outstanding capital stock
of the issuer, which are received in exchange for or with respect to the
Pledged Securities, or as a result of any merger, consolidation, acquisition,
or other exchange of assets to which the issuer of the Pledged Securities may
be a party, shall be and become part of the Collateral pledged hereunder.

7.     NOTICE OF DEFAULT; CURE PERIOD. In the Event of Default, the Corporation
shall provide Pledgors Notice of the Event of Default pursuant to paragraph 12
hereof and of its intention, if any, to seek its remedies pursuant to paragraph
8 hereof. Upon receipt of Notice of an Event of Default, Pledgors shall have 30
days within which to cure said default (the “Cure Period”), provided, however,
that in no event shall such Cure Period extend more than 5 days beyond Due
Date.

8.     REMEDIES. Whenever an Event of Default shall exist, and following the
expiration of any Cure Period with respect to such Event of Default, Agent
shall, on behalf of and as directed by the Corporation, exercise any of the
rights and remedies of a secured party under the Uniform Commercial Code as
adopted in Minnesota or any other applicable law with respect to the
Collateral. The Corporation’s remedies provided herein shall be in addition to
all other rights and remedies the Corporation may have under the Note, at law
or in equity. If any notification of intended disposition of the Collateral is
required by law, such notification shall be deemed reasonable and proper if
given at least ten days before such disposition. Pledgor agrees, in the Event
of Default, to pay all costs, including reasonable attorneys’ fees incurred by
The Corporation or Agent in securing enforcement of any of his rights
hereunder.

9.     THE AGENT APPOINTED ATTORNEY-IN-FACT. Upon the occurrence and during the
continuance of an Event of Default, and following any applicable Cure Period,
Pledgors hereby appoint the Agent as their attorney-in-fact for the purpose of
carrying out the provisions of this Agreement and the pledge of, and the grant
of a security interest in, the Collateral hereunder and the taking of any
action and the execution of any instrument which the Agent may deem necessary
or advisable to accomplish the purposes hereof, which appointment is
irrevocable and coupled with an interest.

10.     FURTHER ASSURANCES. Upon the request of the Agent, Pledgors hereby agree
to promptly execute and deliver, or cause to be duly executed and delivered,
from time to time, such further instruments as may be necessary or proper, in
the reasonable judgment of the Agent, to carry out the provisions and purposes
of this Agreement, and to do all things necessary or advisable, in the judgment
of the Agent, to perfect and preserve the pledge and the security interests of
the Agent hereunder and in the Collateral or any portion thereof.

11.     RELEASE OF COLLATERAL.

          11.1 The pledge and grant of the security interest in all of the
Collateral hereunder shall terminate upon payment in full of the principal
balance of the Note together with any interest owing thereon. Agent hereby
acknowledges that his authority is limited to disposition and cancellation of
the Collateral only to the extent of the Obligations.

 

 

          11.2 At such time as the pledge and security interest hereunder shall
terminate, the Agent shall, if requested by Blake or Mills, execute such
documents as Blake or Mills may reasonably request, and assign and deliver to
Blake or Mills, or to such person or persons as Blake or Mills shall designate,
such of the Collateral (if any) as shall not have been sold or cancelled
pursuant to the terms hereof, together with appropriate instruments of
reassignment and release and share certificates representing the Collateral and
any Stock Powers then remaining in the possession or under the control of the
Agent. Any such reassignment shall be without recourse upon or warranty by the
Agent (other than as to such Collateral being free of any lien or encumbrance
created by the Agent).

          11.3 At the request (the “Release Request”) of Mills given to Agent, with
a copy to the Corporation, Agent shall release from the Collateral and deliver
to Mills or Blake, as the case may be, such portion of the Collateral, the Fair
Market Value of which exceeds 110% of the amount due under the Note (including
accumulated interest) as of the date the Release Request is given. The Fair
Market Value of the Collateral shall be determined and the amount due under the
Note shall be reduced by any payment made on the Note, as of the date the
Release Request is given. The Agent shall not release or deliver any of the
Collateral to Blake or Mills unless (i) the Release Request is accompanied by
the payment of an amount to the Corporation equal to at least 25% of the Fair
Market Value of the portion of the Collateral for which release and delivery is
requested under the Release Request, which payment is to be applied first to
the accumulated interest due under the Note, and next to the principal due
under the Note, and (ii) the Fair Market Value of the Collateral has equaled or
exceeded 110% of the amount due under the Note for each of the 45 trading days
prior to the date the Release Request is given. The Agent shall not be
required to honor any Release Request permitted under this provision more than
once each calendar quarter. No value shall be assigned to Pledged Securities
or other Collateral for which there is no active or reliable market.

12.     NOTICES. All notices, deliveries and other communications given in
connection with this Agreement shall be in writing and shall be deemed to have
been given (i) when delivered in hand to the party to be notified, (ii) if sent
by U.S. Certified Mail, on the date received as noticed on the return receipt,
or (iii) if sent by facsimile or email on the first business day following the
date of transmission. Except as may be provided in any notice subsequently
given in the manner set forth above, all notices, deliveries and other
communications shall be addressed as follows:

	 	 	 	 	 
	If to Blake or Mills:	 	 	 	Wayne W. Mills

Blake Capital Partners, LLC

5020 Blake Road

Edina, Minnesota 55436

Facsimile No. (952) 930-9553

E-mail: blakecap@hotmail.com
	 	 	 	 	 
	If to Corporation:	 	 	 	Entrx Corporation

Suite 2690

800 Nicollet Mall

Minneapolis, MN 55402

Facsimile No. (612) 338-7332
	 	 	 	 	 
	
Copy to:
	 	 	 	Roger Frommelt, Esq.

Felhaber, Larson, Fenlon & Vogt

225 S. Sixth Street

Suite 4200

Minneapolis, Minnesota 55402

Facsimile No. (612) 338-0535

E-mail: rfrommelt@felhaber.com
	 	 	 	 	 
	If to Agent:	 	 	 	Bruce H. Haglund, Esq.

20 Foxboro

Irvine, CA 92614

Facsimile No. _______

E-mail: bhaglund@bhp-law.com

13.     SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All covenants, agreements,
representations and warranties made herein and in any certificates delivered
pursuant hereto shall survive the loan by the Corporation, and the execution
and delivery, of the Note pursuant to the Loan Agreement, and shall continue in
full force and effect until the

 

 

payment in full of the Obligations or the, conversion, redemption or prepayment
of all of the Note, regardless of the release of part or all of the Collateral
pursuant to the provisions of Section 11 hereof.

14.     SUCCESSORS. Whenever in this Agreement any of the parties hereto is
referred to such reference shall be deemed to include the successors and
assigns of such party, and all covenants, promises and agreements by or on
behalf of the parties which are contained in this Agreement shall bind and
inure to the benefit of the successors and assigns of all other parties.

15.     THE AGENT’S FEES. The Corporation agrees to pay the Agent $300 per hour
expended by the Agent in connection with Agent’s duties under this Agreement
and the Note, promptly upon receipt of a statement therefor.

16.     INDEMNIFICATION BY THE CORPORATION. The Corporation hereby indemnifies
and holds harmless the Agent from and against all claims, demands, losses,
judgments, liabilities, penalties and expenses (including, without limitation,
reasonable attorneys’ fees and disbursements) of any nature whatsoever, arising
out of or related to this Agreement. This indemnity shall survive the
termination of this Agreement.

17.     GOVERNING LAW. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of Minnesota.

18.     FAILURE TO ACT NOT A WAIVER. Neither any failure to exercise, nor any
delay on the part of the Agent, Blake or Mills in exercising, any right, power
or privilege hereunder shall operate as a waiver thereof, nor shall a single or
partial exercise thereof preclude any other or further exercise of any right,
power or privilege.

19.     MODIFICATION. No modification, amendment or waiver of any provision of
this Agreement, and no consent to any departure from the terms hereof, shall in
any event be effective unless the same shall be in writing and signed by the
parties hereto, and then such waiver or consent shall be effective only in the
specific instance and for the purpose for which given.

20.     SEVERABILITY. In case any one or more of the provisions contained in this
Agreement should be invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions contained
herein shall not in any way be affected or impaired thereby. To the extent
permitted by applicable law, the parties hereby waive any provision of law that
may render any provision hereof invalid, illegal or unenforceable in any
respect.

21.     COUNTERPARTS. This Agreement may be executed by the parties hereto in
separate counterparts, each of which, when so executed and delivered, shall be
an original, but all such counterparts shall together constitute one and the
same instrument, and all signatures need not appear on any one counterpart.

22.     HEADINGS. The headings and captions of this Agreement are for convenience
of reference only and shall not define, limit or otherwise affect any of the
terms or provisions hereof.

23.     ARBITRATION. Any dispute relating to this Agreement shall be resolved by
final and binding arbitration conducted in accordance with the commercial
arbitration rules of the American Arbitration Association (the “AAA”). A copy
of any demand for arbitration shall be filed with the Minneapolis, Minnesota
office of the AAA; and such arbitration shall be conducted in Hennepin County,
Minnesota, unless all parties expressly agree in writing otherwise. Any award
or decision issued by the arbitrator shall be a final and binding determination
of the dispute without appeal or review except as permitted by the laws of the
State of Minnesota. In addition to any damages awarded in any such arbitration,
the prevailing party therein shall be entitled to receive its reasonable
attorneys’ fees and costs incurred in prosecuting such arbitration and
enforcing any judgment thereon.

24.     WAIVER OF POTENTIAL CONFLICT OF INTEREST. The parties hereto acknowledge
that the Agent has acted, and may in the future act, as a legal counsel for the
Corporation. The parties agree to waive any potential conflict of interest that
may exist as a result of such representation and acknowledge that they have
consulted with independent counsel with respect to such potential conflict of
interest or have waived such right. In the event of a dispute between Pledgors
and the Corporation in connection with this Agreement, the Agent agrees that
neither he nor any member of his firm will act as counsel to the Corporation in
connection with the resolution of such dispute.

IN WITNESS WHEREOF, Blake, Mills, the Corporation, and the Agent have caused
this Agreement to be executed by their respective duly authorized officers, all
as of day and year first above written.

 

 

BLAKE CAPITAL PARTNERS, LLC

	 	 	 
	
	 	

	By: Wayne W. Mills, Manager	 	
By: Wayne W. Mills, Individually
	 	 	 
	ENTRX CORPORATION	 	 
	 	 	 
	
	 	 
	By: Kenneth W. Brimmer, Chairman of the Board	 	 
	 	 	 
	Agent:	 	 
	 	 	 
	

Bruce H. Haglund, as Agent

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