EXHIBIT 99.1
PLEDGE AND ESCROW AGREEMENT
THIS PLEDGE AND ESCROW AGREEMENT (this "Agreement") made this 10th day of
August, 2001, by and between Xxxxx X. Xxxxxx Xx. (hereinafter "Assignor"), Xxxx
& Xxxxx, LLP, having an office at 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000
("Escrowee") and SEBE Management Corp. Profit Sharing Trust having an office at
000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 (hereinafter "SEBE").
WITNESSETH:
WHEREAS, Assignor, as co-Maker, in consideration of a loan in the sum of
$50,000.00, made to Assignor/Maker by SEBE executed and delivered to SEBE as
Noteholder a note of even date herewith in the amount of Fifty Thousand and
00/100 ($50,000.00) Dollars (the "Note"); and
WHEREAS, Assignor has agreed to pledge , with Escrowee, as security for
repayment of Assignor's obligations pursuant to the Note, the shares of Alliance
Environmental Technologies, Inc. (the "Pledged Shares") owned by Assignor as
contemplated by this Agreement; and
WHEREAS, the parties have agreed to deposit the Pledged Shares with the
Escrowee.
NOW, THEREFORE, in consideration of the said loan by SEBE to Assignor, and
other good and valuable consideration, the parties stipulate and agree as
follows, to wit:
1. PLEDGE.
In consideration of said loan by SEBE to Assignor, Assignor hereby pledges
the Pledged Shares to Escrowee as security for the payment of Assignor's
obligations pursuant to the Note, (the "Indebtedness").
Assignor hereby appoints Escrowee (and SEBE hereby consents to Escrowee
being appointed) as the attorney-in-fact, for Assignor, which appointment is
irrevocable, with full right, power and authority to dispose of the Pledged
Shares, as provided in this Agreement. Escrowee shall hold the Pledged Shares,
as Pledged Shares for the purposes described herein, and shall not encumber or
dispose of the same except in accordance with the provisions of this Agreement.
The power of attorney granted pursuant to this Agreement and all authority
hereby conferred are granted and conferred solely to protect SEBE's interest in
the Pledged Shares and shall not impose any duty upon Escrowee to exercise any
power or rights as a shareholder of Alliance Environmental Technologies, Inc.
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2. REPRESENTATIONS OF ASSIGNOR.
Assignor represents and warrants to SEBE and Escrowee that:
a. Assignor is a duly organized and validly existing corporation under the
laws of the State of New York;
b. Assignor is the legal and beneficial owner of the Pledged Shares, free
and clear of all pledges, liens, security interests and other encumbrances;
c. Other than the restrictions which appear on the face of the
certificates, there are no outstanding pledges, assignments, options, warrants
or other similar agreements with respect to the Pledged Shares;
d. Assignor has the power and authority and has been duly authorized and
empowered by all necessary actions, to enter into, execute, deliver and perform
this Agreement;
e. The execution and delivery of this Agreement by Assignor, and the
performance by Assignor of its obligations hereunder, will not constitute a
breach of any provision contained in any certificate of incorporation,
agreement, instrument or document to which Assignor is or may become a party or
by which Assignor, or Assignor's assets, is or may become bound, nor result in a
violation of any contract, instrument, judgment, decree, order, statute, rule or
regulation to which Assignor is subject, except for such consents as have been
obtained;
3. DISTRIBUTIONS.
During the term of this pledge, all amounts distributed with respect to the
Pledged Shares may be retained by Assignor and applied to its own account for so
long as Assignor remains free of default with respect to the Indebtedness. In
the event of a default by Assignor pursuant to this Agreement or the Note, all
amounts distributed with respect to the Pledged Shares to which Assignor is
entitled shall be paid and distributed to SEBE until the Indebtedness is paid in
full. Said payments shall be applied first to the payment of interest and then
to principal.
4. RIGHTS OF ASSIGNOR.
So long as no default (as defined in Article 7 hereof) shall have occurred
and be continuing:
a. Assignor shall be entitled to exercise any and all voting and other
consensual rights pertaining to the Pledged Shares or any part thereof for any
purpose not inconsistent with the terms of this Agreement or any agreement
related hereto.
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b. Assignor shall be entitled to receive and retain, and to utilize free
and clear of the lien of this Agreement, any and all dividends paid in respect
of the Pledged Shares.
Upon the occurrence and during the continuance of a default:
a. Upon written notice from SEBE to Assignor, all rights of Assignor to
exercise the voting and other consensual rights which it would otherwise be
entitled to exercise shall cease, and all such rights shall thereupon become
vested in SEBE who shall thereupon have the sole right to exercise such voting
and other consensual rights during the continuance of a default.
b. All rights of Assignor to receive any dividend payments which it would
otherwise be authorized to receive and retain shall cease, and all such rights
shall thereupon become vested in SEBE who shall thereupon have the sole right to
receive and hold such dividend payments during the continuance of a default.
c. All dividends which are received by Assignor contrary to the provisions
hereof, shall be received in trust for the benefit of SEBE, shall be segregated
from other funds of Assignor and shall forthwith be paid over to SEBE in the
same form as so received (with any necessary endorsements) during the
continuance of a default.
5. OBLIGATIONS OF ASSIGNOR.
Assignor further represents, warrants and covenants to SEBE that:
a. Assignor will not sell, transfer or convey any interest in, or suffer or
permit any lien or encumbrance to be created upon or with respect to the Pledged
Shares (other than as created under this Agreement) during the term of the
pledge established hereby;
b. Assignor will, at its own expense, at any time and from time to time at
SEBE's request, do, make, procure, execute and deliver all acts, things,
writings, assurances and other documents as may be reasonably proposed by SEBE
to further enhance, preserve, establish, demonstrate or enforce SEBE's rights,
interests and remedies created by, provided in, or emanating from this
Agreement; and
c. Simultaneously with the execution of this Agreement, Assignor will
deliver the certificates representing the Pledged Shares and a Stock Power in
blank suitable for transfer in the event of default of Assignor under this
Agreement and/or the Note to Escrowee.
6. DISCHARGE OF OBLIGATIONS.
Upon payment in full of the Indebtedness, the pledge of the Pledged Shares
shall be deemed cancelled and this Agreement shall terminate forthwith upon
return to Assignor of the
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certificate(s) evidencing the Pledged Shares. SEBE and Escrowee shall execute
such documents as are required to effect such cancellation.
7. DEFAULT.
a. In the event that Assignor defaults in the performance of any of the
terms of (or suffers a breach or failure of warranty in) this Agreement or
Assignor defaults in any of the terms contained in the Note, then Escrowee
shall, after written demand by SEBE to the Escrowee and the Assignor, proceed
forthwith (using commercially reasonable efforts) to collect, receive,
appropriate and realize upon the Pledged Shares and sell, or otherwise dispose
of and deliver the Pledged Shares or some part in such manner and for such price
as Escrowee deems appropriate without any liability for any loss due to decrease
in the market value of the Pledged Shares. SEBE shall be free to purchase all or
any portion of the Pledged Shares, free of any equity or right of redemption in
the Assignor, which right or equity is, to the extent permitted by applicable
law, hereby expressly waived or released by the Assignor.
b. Escrowee may elect to obtain the advice of SEBE and/or any other party
selected by Escrowee with respect to the method and manner of sale or other
disposition of any of the Pledged Shares, the best price reasonably obtainable
therefor, the consideration of cash terms, or any other details concerning such
sale or disposition. All payments received by Escrowee in respect of a sale of
Pledged Shares shall be applied in the manner provided in Section 8 of this
Agreement, as and when such payments are received.
c. Assignor recognizes that the Escrowee may be unable to effect a public
sale of all or a part of the Pledged Shares, but may be compelled to resort to
one or more private sales to a restricted group of purchasers who will be
obliged to agree, among other things, to acquire the Pledged Shares for their
own account, for investment and not with a view to the distribution or resale
thereof. Assignor agrees that private sales so made may be at prices and on
other terms less favorable to the seller than if the Pledged Shares were sold at
public sale.
d. If any consent, approval or authorization of any state, municipal or
other governmental department, agency or authority should be necessary to
effectuate any sale or other disposition of the Pledged Shares, or any partial
disposition of the Pledged Shares, Assignor will use commercially reasonable
efforts to execute all such applications and other instruments as may be
required in connection with securing any such consent, approval or
authorization, and will otherwise use its best efforts to secure the same.
8. DISPOSITION OF PROCEEDS.
The proceeds of any sale or disposition of all or any part of the Pledged
Shares shall be applied in the following order of Property:
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(i) to the payment in full of the costs and expenses of such sale or
sales including reasonable attorney fees and expenses of the
attorney for Thylan and Escrowee;
(ii) to the payment of the Indebtedness; and
(iii) the balance of the proceeds or of the Pledged Shares, if any, to
Assignor.
9. ESCROWEE.
a. Escrowee shall hold the Pledged Shares in escrow until a default by
Assignor or Borrower under the Note or this Agreement and written notice by SEBE
to Escrowee stating that Assignor has defaulted in performance under this
Agreement and/or the Note.
b. The parties acknowledge that Escrowee is acting at their request and for
their convenience and that Escrowee shall not be liable to either party for any
act or omissions on his part unless taken or suffered in bad faith or involving
gross negligence on the part of the Escrowee.
c. Assignor and SEBE agree to defend, indemnify and hold Escrowee harmless
from and against all liabilities of any nature, whether accrued, absolute,
contingent or otherwise, any misrepresentation, breach of warranty or
nonfulfillment of any agreement on the part of Assignor or SEBE, costs, claims
and expenses (including reasonable attorneys' fees) incurred in connection with
the performance of Escrowee's duties hereunder, except with respect to actions
or omissions taken or suffered by Escrowee in bad faith or involving gross
negligence on the part of Escrowee.
d. Escrowee may act or refrain from acting in respect to any matter
referred to herein in full reliance upon and with the advice of counsel, which
may be selected by him (including any member of his firm) and shall absent
willful misconduct or gross negligence fully protected in so acting or
refraining from action upon the advice of such counsel.
e. Escrowee shall not receive any compensation for its services as
Escrowee.
f. In the performance of its duties hereunder, the Escrowee shall be
entitled to rely upon any document, instrument or signature believed by it to be
genuine and signed by either of the other parties or their successors;
g. The Escrowee may assume that any person purporting to give any notice of
instruction on behalf of Assignor or SEBE in accordance with the provisions of
this Agreement has been duly authorized to do so;
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h. The Escrowee shall not be bound by any modification, cancellation or
recission of this Agreement unless in writing and signed by it, Assignor and
SEBE;
i. The Escrowee shall not be responsible or liable in any manner whatsoever
for the sufficiency, correctness, genuineness or validity of any documents or
for the identity, authority or rights of any of parties thereto; and
j. Assignor acknowledges that the Escrowee represents SEBE in the
transactions contemplated by this Agreement and, accordingly, agrees and
consents to the continued representations of SEBE in the event of any dispute
hereunder.
k. The Escrowee has executed this Agreement solely to evidence the receipt
of the Pledged Shares and its agreement to hold the Pledged Shares, in escrow,
and to deliver same pursuant to and in accordance with provisions of this
Agreement.
10. SUCCESSION.
This Agreement shall be binding upon the parties hereto, their heirs,
assigns and successors in interest.
11. TERMINATION.
This Agreement shall continue in full force and effect until the
Indebtedness is fully satisfied.
12. MISCELLANEOUS.
a. The provisions of this Agreement shall be construed, administered and
enforced according to the internal laws of the State of New York. Assignor
agrees that any action hereunder or related hereto may be maintained in a court
of competent jurisdiction located within that state, and consents to the
jurisdiction of any such court for all purposes connected herewith.
b. This Agreement may be modified by consent of all parties in a written
instrument executed with all of the formalities hereof.
c. This Agreement may be executed in several counterparts and all so
executed shall constitute one agreement, binding on the parties hereto, even
though all the parties are not signatory to the original or to the same
counterpart.
d. Escrowee absent willful misconduct r gross negligence shall be under no
duty to take affirmative steps to protect the Pledged Shares, or to abstain from
taking any action with respect thereto.
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e. All notices, requests, demands and other communications hereunder shall
be in writing, and shall be deemed to have been given if delivered or mailed by
certified mail, return receipt requested to the parties at the addresses set
forth above unless another address is furnished in writing by any party.
f. After default, if the Note or this Agreement is placed in the hands of
an attorney for collection or enforcement for any reason, then all costs,
expenses and reasonable attorneys' fees (if and to the extent permitted by law),
whether suit be brought or not, including all costs and reasonable attorneys'
fees incurred by virtue of any appeal or appeals from any such proceedings,
shall be added hereto and shall be collectible as the Indebtedness.
IN WITNESS WHEREOF, the parties have caused their hands and seals to be
affixed this 10th day of August, 2001
ASSIGNOR:
By: /s/ Xxxxx X.Xxxxxx, Xx.
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Xxxxx X. Xxxxxx
ASSIGNEE:
SEBE MANAGEMENT CORP. PROFIT
SHARING TRUST
By:
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Xxxxxxx Xxxxxxxx, Trustee
ESCROWEE:
XXXX & XXXXX, LLP
By:
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State of New York )
)ss.:
County of ________ )
On this 10th day of August, in the year 2001, before me, the undersigned,
personally appeared Xxxxx Xxxxxx, personally known to me or proved to me on the
basis of satisfactory evidence to be the individual whose name is subscribed to
the within instrument and acknowledged to me that he executed the same in his
capacity, and that by his signature on the instrument, the individuals, or the
persons upon behalf of which the individual acted, executed the instrument.
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Notary Public
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