SHARE PLEDGE AGREEMENT
EXHIBIT
B
WITNESSETH:
WHEREAS,
pursuant to the promissory note or other financial instruments, including,
without limitation, (i) that certain Promissory Note dated June 26, 2007 from
Bedminster National
Corp. (the “Company”) in favor
of the
Secured Party (“Note”),
the Secured Party has agreed to make certain loans and other financial
accommodations to the Company
WHEREAS,
Pledgor is the record and beneficial owner of certain securities or options
to
purchase certain securities of the Company listed on Schedule I attached hereto
and as described herein, and Pledgor has agreed to enter into this Agreement
in
order to induce Secured Party to extend and/or continue the extension of credit
to the Company.
NOW,
THEREFORE, for and in consideration of any loan, advance or other financial
accommodation heretofore or hereafter made to or for the benefit of the Company
or any other obligor under or in connection with the Note, and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. Definitions. When
used herein, the following terms have the following meanings (such meanings
to
be applicable to both the singular and plural forms of such terms):
Collateral
- see
Section 2 of
this Agreement.
Issuer
- the issuer
of any of the shares of stock or other securities representing all or any of
the
Collateral.
Liens
- with respect
to any Person, any interest granted by such Person in any real or personal
property, asset or other right owned or being purchased or acquired by such
Person which secures payment or performance of any obligation and shall include
any mortgage, lien, encumbrance, charge or other security interest of any kind,
whether arising by contract, as a matter of law, by judicial process or
otherwise.
Person
- any
individual, corporation, limited liability company, partnership, joint venture,
firm, association, trust or other enterprise or entity or any governmental
authority.
“Secured
Obligations” All
indebtedness, liabilities and obligations which are now or may at any time
hereafter be due, owing or incurred in any manner whatsoever to Secured Party
by
the Company or of any subsidiary of the Company, whether under this Agreement,
any Note, any guaranty or any other documents executed in connection therewith,
in each case howsoever created, arising or evidenced, whether direct or
indirect, absolute or contingent, whether at stated maturity, by acceleration
or
otherwise (including, without limitation, the payment of interest and other
amounts which would accrue and become due but for the filing of a petition
in
bankruptcy or the operation of the automatic stay under Section 362(a) of the
Bankruptcy Code, 11 U.S.C. § 362(a)), including, without limitation, all
charges, fees, expenses, commissions, reimbursements, premiums, indemnities
and
other payments related to or in respect of such obligations.
1
“UCC”
means the
Uniform Commercial Code as in effect in the Commonwealth of
Massachusetts on the date of this Agreement, as may be amended or modified
from
time to time after the date hereof; provided that, "UCC"
shall also mean
the Uniform Commercial Code as in effect from time to time in any applicable
jurisdiction.
2. Pledge. As
security for the payment of the Secured Obligations, the Pledgor hereby pledges
to the Secured Party and grants to the Secured Party, a continuing security
interest in, all of the following:
A. All
of the shares of stock, ownership
interests and other securities described in Schedule I hereto,
all of the certificates and/or instruments representing such shares of stock,
ownership interests and other securities, and all cash, securities, dividends,
rights and other property at any time and from time to time received, receivable
or otherwise distributed in respect of or in exchange for any or all of such
shares, ownership interests or other securities; and all additional shares
of
stock or ownership interests of any of the Issuers listed in Schedule I hereto at
any time and from time to time acquired by the Pledgor in any manner, all of
the
certificates and/or instruments representing such additional shares or ownership
interests and all cash, securities, dividends, rights and other property at
any
time and from time to time received, receivable or otherwise distributed in
respect of or in exchange for any or all of such shares or ownership
interests;
B. All
other property hereafter delivered
to the Secured Party, in substitution for or in addition to any of the
foregoing, all certificates and instruments representing or evidencing such
property, and all cash, securities, interest, dividends, rights and other
property at any time and from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all thereof;
and
C. All
products and proceeds of all of the
foregoing.
All
of
the foregoing are herein collectively called the "Collateral".
Pursuant
to the terms of the Escrow Agreement, the Pledgor agrees to immediately deliver
to the Escrow Agent, for the benefit of Secured Party, promptly upon receipt
and
in due form for transfer (i.e., endorsed in blank or accompanied by stock or
bond powers executed in blank), all shares of stock, ownership interests and
other securities described in Section 2A and Schedule I hereto and
any Collateral (other than dividends which the Pledgor is entitled to receive
and retain pursuant to Section 5 hereof)
which may at any time or from time to time come into the possession or control
of the Pledgor; and prior to the delivery thereof to the Escrow Agent, such
Collateral shall be held by the Pledgor separate and apart from its other
property and in express trust for the Secured Party.
2
3. Warranties;
Further
Assurances. The Pledgor warrants to the Secured Party
that: (a) the Pledgor is (or at the time of any future delivery,
pledge, assignment or transfer thereof will be) the legal and equitable owner
of
the Collateral free and clear of all Liens of every description whatsoever;
(b)
the pledge and delivery of the Collateral, pursuant to the terms of the Escrow
Agreement, will create a valid perfected security interest in the Collateral
in
favor of the Secured Party; (c) all shares of stock or ownership interests
referred to in Schedule I hereto are
duly authorized, validly issued, fully paid and non-assessable; (d) as to each
Issuer whose name appears in Schedule I hereto,
the Collateral represents on the date hereof not less than the applicable
percentage (as shown in Schedule I hereto)
of
the total shares of capital stock or ownership interests issued and outstanding
of such Issuer; and (e) the information contained in Schedule I hereto is
true and accurate in all respects.
So
long
as any of the Secured Obligations shall be outstanding or any commitment shall
exist on the part of the Secured Party with respect to the creation of any
Secured Obligations, the Pledgor: (i) shall not, without the express prior
written consent of the Secured Party, sell, assign, exchange, pledge or
otherwise transfer, encumber, or grant any option, warrant or other right to
purchase the stock of any Issuer which is pledged hereunder; (ii) shall deliver
to the Escrow Agent pursuant to the terms of the Escrow Agreement, all original
stock certificates relating to the Collateral, the stock powers with a signature
guarantee, and a transfer letter to the transfer agent, attached hereto as
Exhibit A, authorizing transfer of the Shares and stock powers to Dutchess
in
the Event of Default; (iii) will permit the Secured Party or any designee of
the
Secured Party, from time to time at reasonable times and on reasonable notice
(or at any time without notice during the existence of an Event of Default),
to
inspect, audit and make copies of and extracts from all records and all other
papers in the possession of the Escrow Agent which evidence the ownership of
the
Collateral, and will permit the Escrow Agent, upon request of the Secured Party
at any time when an Event of Default has occurred and is continuing, to deliver
to the Secured Party copies of all of such records and papers.
4. Holding
in Name of Secured
Party, etc. The Secured Party may from time to time after the
occurrence and during the continuance of an Event of Default (as hereinafter
defined), without notice to the Pledgor, take all or any of the following
actions: (a) transfer, in accordance with all applicable securities
laws and the UCC, as applicable, all or any part of the Collateral into the
name
of the Secured Party or any nominee or sub-agent for the Secured Party, with
or
without disclosing that such Collateral is subject to the Lien hereunder, (b)
appoint one or more sub-agents or nominees for the purpose of retaining physical
possession of the Collateral, (c) notify the parties obligated on any of the
Collateral to make payment to the Secured Party of any amounts due or to become
due thereunder, (d) endorse any checks, drafts or other writings in the name
of
the Pledgor to allow collection of the Collateral, (e) enforce any and all
rights and privileges of the Pledgor against any party with respect to the
Collateral by suit or otherwise, and surrender, release or exchange all or
any
part thereof, or compromise or renew for any period (whether or not longer
than
the original period) any obligations of any nature of any party with respect
thereto, and (f) take control of any proceeds of the Collateral.
5. Voting
Rights, Dividends,
etc. (a) Notwithstanding certain provisions of Section 4 hereof,
so
long as the Secured Party has not given the written notice referred to in paragraph (b)
below:
3
(i)
The Pledgor shall be entitled to exercise any and all voting or consensual
rights and powers and stock purchase, stockholder or subscription rights
relating or pertaining to the Collateral or any part thereof for any purpose;
provided that the Pledgor agrees that it will not exercise any such right or
power in any manner which would have an adverse effect on the
Collateral.
(ii)
The Pledgor shall be entitled to receive and retain any and all lawful dividends
payable in respect of the Collateral which are paid in cash, but all dividends
and distributions in respect of the Collateral or any part thereof made in
shares of stock or other ownership interests, whether resulting from a
subdivision, combination or reclassification of Collateral or any part thereof
or received in exchange for Collateral or any part thereof or as a result of
any
merger, consolidation, acquisition or other exchange of assets to which any
Issuer may be a party or otherwise or as a result of any exercise of any stock
purchase or subscription right, shall be and become part of the Collateral
hereunder and, if received by the Pledgor, shall be forthwith delivered to
the
Secured Party in due form for transfer (i.e., endorsed in blank or accompanied
by stock or bond powers executed in blank) to be held for the purposes of this
Agreement.
(iii)
The Secured Party shall promptly upon request from the Pledgor execute and
deliver, or cause to be executed and delivered, to the Pledgor all such proxies,
powers of attorney, dividend orders and other instruments as the Pledgor may
request for the purpose of enabling the Pledgor to exercise the rights and
powers which it is entitled to exercise pursuant to clause (i) above and
to receive the dividends which it is authorized to retain pursuant to clause (ii)
above.
(b)
Upon written notice from the Secured Party during the existence of an Event
of
Default, and so long as the same shall be continuing, all rights and powers
which the Pledgor is entitled to exercise pursuant to Section 5(a)(i)
hereof, and all rights of the Pledgor to receive and retain dividends pursuant
to Section
5(a)(ii) hereof, shall forthwith cease until such Event of Default has
been cured or waived in writing, and all such rights and powers shall thereupon
become vested in the Secured Party which shall have, during the continuance
of
such Event of Default, the sole and exclusive authority to exercise such rights
and powers and to receive such dividends. Any and all money and other
property paid over to or received by the Pledgor pursuant to this paragraph (b) shall
be retained by the Secured Party, as additional Collateral hereunder and applied
in accordance with the provisions hereof.
6. Event
of Default;
Remedies.
(a)
Any one or more of the following events (regardless of the reason therefor)
shall constitute an "Event of Default" hereunder:
(i)
Any default or event of default shall occur under any of the Note or any of
the
Transaction Documents associated with the Note, including the
Amendment.
(ii)
Pledgor shall fail or neglect to perform, keep or observe any provision of
this
Agreement and the same shall remain unremedied for a period of two (2) days
after notice is given to Pledgor by the Secured Party.
4
(iii)
The Secured Party shall fail to have an enforceable first priority lien on
and
security interest in the Collateral.
(iv)
Pledgor files a bankruptcy petition, a bankruptcy petition is filed against
Pledgor which remains undismissed or unstayed for 30 consecutive
days.
(b)
Whenever an Event of Default shall exist and be continuing, the Secured Party
may exercise from time to time any rights and remedies available to it under
the
UCC or otherwise available to it by applicable law. Without limiting the
foregoing, whenever an Event of Default shall exist and be continuing, the
Secured Party (a) may, to the fullest extent permitted by applicable law,
without notice, advertisement, hearing or process of law of any kind, subject
to
applicable securities laws and the UCC, as applicable, (i) sell any or all
of
the Collateral, free of all rights and claims of the Pledgor therein and
thereto, at any public or private sale or brokers' board and (ii) bid for and
purchase any or all of the Collateral at any such public sale and (b) shall
have
the right, for and in the name, place and stead of the Pledgor, to execute
endorsements, assignments, stock powers and other instruments of conveyance
or
transfer with respect to all or any of the Collateral. Any notification of
intended disposition of any of the Collateral shall be deemed reasonably and
properly given if given at least ten (10) days before such disposition. Any
proceeds of any of the Collateral shall be applied by the Secured Party to
the
payment of expenses in connection with the Collateral, including, without
limitation, reasonable attorneys' fees and legal expenses, and any balance
of
such proceeds shall be applied by the Secured Party toward the payment of such
of the Secured Obligations (and, after payment in full of all Secured
Obligations, any excess shall be delivered to the Pledgor or as a court of
competent jurisdiction shall direct).
The
Secured Party is hereby authorized
to comply with any limitation or restriction in connection with any sale of
Collateral as it may be advised by counsel is necessary in order to (a) avoid
any violation of applicable law (including, without limitation, compliance
with
such procedures as may restrict the number of prospective bidders or purchasers
and/or further restrict such prospective bidders or purchasers to persons or
entities who will represent and agree that they are purchasing for their own
account for investment and not with a view to the distribution or resale of
such
Collateral) or (b) obtain any required approval of the sale or of the purchase
by any governmental regulatory authority or official, and the Pledgor agrees
that such compliance shall not result in such sale being considered or deemed
not to have been made in a commercially reasonable manner and that the Secured
Party shall not be liable or accountable to the Pledgor for any discount allowed
by reason of the fact that such Collateral is sold in compliance with any such
limitation or restriction.
7. Notice.
Any notices,
consents, waivers or other communications required or permitted to be given
under the terms of this Agreement must be in writing and will be deemed to
have
been delivered (i) upon delivery, when delivered personally; (ii) upon receipt,
when sent by facsimile or email (provided a confirmation of transmission is
mechanically or electronically generated and kept on file by the sending party);
or (iii) one (1) day after deposit with a nationally recognized overnight
delivery service, so long as it is properly addressed. The addresses
and facsimile numbers for such communications shall be:
5
If
to
Pledgor:
Attn:
Xxxx
Xxxxxxxx
00
Xxxxxxxxxx Xxxxxx
Xxxx
Xxxxxxxxxx XX 00000
Telephone:
000-000-0000
Facsimile:
000-000-0000
Email: xxxx@xxxxxxxxxxxxxx.xxx
If
to the
Company:
Attn:
Xxxx
Xxxxxxxx
00
Xxxxxxxxxx Xxxxxx
Xxxx
Xxxxxxxxxx XX 00000
Telephone:
000-000-0000
Facsimile:
000-000-0000
Email: xxxx@xxxxxxxxxxxxxx.xxx
With
a copy to:
Xxxxxx
&
Xxxxxx,
LLP
Attn:
Xxxxx X. Xxxxxx,
Esq.
000
Xxxxx 0, Xxxxx000
Xxxxxxxxx,
XX 00000
Telephone:
000-000-0000
Facsimile:
(000)000-0000
Email: xxxxxxx@xxxxxxxxx.xxx
Xxxxxx
X.
Xxxxxxx, Esq.
Law
Offices of Xxxxxx X. Xxxxxxx
00
Xxxxx
Xxxxxx
Xxxxxxxxxx,
XX 00000
Telephone: 000-000-0000
Facsimile: 973-451-1115
Email: xxx@xxx-xxxx.xxx
If
to the
Secured Party:
Dutchess
Capital Management, LLC
Xxxxxxx
Xxxxxxxx
00
Xxxxxxxxxxxx Xxx, Xxxxx 0
Xxxxxx,
XX 00000
Telephone:
(000) 000-0000
Facsimile:
(000) 000-0000
Email: xxxxxx@xxxx.xxx
6
8. General. The
Secured Party shall be deemed to have exercised reasonable care in the custody
and preservation of the Collateral if it takes such action for that purpose
as
the Pledgor shall request in writing, but failure of the Secured Party to comply
with any such request shall not of itself be deemed a failure to exercise
reasonable care, and no failure of the Secured Party to preserve or protect
any
rights with respect to the Collateral against prior parties, or to do any act
with respect to preservation of the Collateral not so requested by the Pledgor,
shall be deemed a failure to exercise reasonable care in the custody or
preservation of any Collateral.
No
delay
on the part of the Secured Party in exercising any right, power or remedy shall
operate as a waiver thereof, and no single or partial exercise of any such
right, power or remedy shall preclude any other or further exercise thereof,
or
the exercise of any other right, power or remedy. No amendment,
modification or waiver of, or consent with respect to, any provision of this
Agreement shall be binding against the Secured Party unless the same shall
be in
writing and signed and delivered by the Secured Party and the Pledgor, and
then
such amendment, modification, waiver or consent shall be effective as against
the Secured Party or the Pledgor, as the case may be, only in the specific
instance and for the specific purpose for which given.
All
obligations of the Pledgor and all rights, powers and remedies of the Secured
Party expressed herein are in addition to all other rights, powers and remedies
possessed by them, including, without limitation, those provided by applicable
law or in any other written instrument or agreement relating to any of the
Secured Obligations or any security therefor. When all of the Secured
Obligations have been paid in full and all of the conditional obligations,
if
any, of the Pledgor shall have expired or been sooner terminated, this Agreement
shall terminate and the security interest granted herein shall be automatically
released without any further action on the part of any Person. Upon termination
of this Agreement or any release of Collateral, Secured Party shall, upon the
request and at the sole cost and expense of the Pledgor, forthwith assign,
transfer and deliver to Pledgor, against receipt and without recourse to or
warranty by Secured Party, such of the Collateral to be released as may be
in
the possession of Secured Party and as shall not have been sold or otherwise
applied pursuant to the terms hereof, and, with respect to any other Collateral,
proper documents and instruments (including, without limitation, UCC-3
termination statements) acknowledging the termination of this Agreement or
the
release of such Collateral, as the case may be.
This
Agreement and all related instruments and documents and the rights and
obligations of the parties hereunder and thereunder shall, in all respects,
be
governed by, and construed in accordance with, the internal laws of the
Commonwealth of Massachusetts, without regard to conflicts of law principles,
regardless of the location of the Collateral, excepting, however, that the
UCC
(or decisional law) of a jurisdiction other than Massachusetts may provide
the
method of perfection, the effect of perfection or non-perfection, or the
priority of liens and security interests created under this
Agreement. Wherever possible each provision of this Agreement shall
be interpreted in such manner as to be effective and valid under applicable
law,
but if any provision of this Agreement shall be prohibited by or invalid under
such law, such provision shall be ineffective to the extent of such prohibition
or invalidity, without invalidating the remainder of such provision or the
remaining provisions of this Agreement.
7
This
Agreement shall be binding upon the Pledgor and the Secured Party and their
respective successors and assigns, and shall inure to the benefit of the
Pledgor, the Secured Party and its respective successors and
assigns.
This
Agreement may be executed in any number of counterparts and by the different
parties hereto on separate counterparts, and each such counterpart shall be
deemed an original but all such counterparts shall together constitute but
one
and the same Agreement.
The
parties to this Agreement will submit all disputes arising under it to
arbitration in Boston, Massachusetts before a single arbitrator of the American
Arbitration Association (“AAA”). The arbitrator shall be selected by
application of the rules of the AAA, or by mutual agreement of the parties,
except that such arbitrator shall be an attorney admitted to practice law in
the
Commonwealth of Massachusetts. No party to this agreement will
challenge the jurisdiction or venue provisions as provided in this
section. Nothing in
this section shall limit the Secured Party’s
right to obtain an injunction for a
breach of this Agreement from a court of law. Any injunction obtained
shall remain in full force and effect until the arbitrator, as set forth in
this
section fully adjudicates the dispute.
This
agreement between the Pledgor and the Holder with respect to the terms and
conditions set forth herein, and, the terms of this Agreement may not be
contradicted by evidence of prior, contemporaneous, or subsequent oral
agreements of the Parties.
[Remainder
of this page intentionally blank]
8
IN
WITNESS WHEREOF, this Agreement has been duly executed and delivered as of
the
day and year first written above.
________________________________
XXXX
XXXXXXXX, as Pledgor
DUTCHESS
PRIVATE EQUITIES FUND,
LTD,
as
Secured Party
Name: Xxxxxxx
Xxxxxxxx
Title: Director
9
SCHEDULE
I
TO
PLEDGE AGREEMENT
|
Issuer
|
Class
of Stock
|
Certificate
No(s).
|
Number
of
Shares
|
Percentage
Ownership
|
|
Bedminster
National
Class A
|
Common |
5
million
|
~55.5%
|
|
|
Bedminster
National
Class B
|
Common |
2.0
million
|
~92.9%
|
|
10
EXHIBIT
A
January
14, 2008
Continental
Stock Transfer
00
Xxxxxxx Xxxxx
Xxx
Xxxx,
XX 00000
To
whom
it may concern:
I
hereby
authorize Continental Stock Transfer to transfer the following certificates
of
Bedminster National Corp. stock to Dutchess Private Equities Fund,
Ltd.:
|
·
|
5
million shares of Class A Common Stock;
and
|
|
·
|
2.0
million shares of Class B Common
Stock
|
Sincerely
yours,
Xxxx
Xxxxxxxx
Chief
Executive Officer
11
