Exhibit 10.21
PLEDGE AND SECURITY AGREEMENT
THIS AGREEMENT ("Pledge Agreement") is made and entered into on this 31st
day of December, 1998 by and between ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ (the "Pledgor") and ABLE
ENERGY COMPANY, INC. (the "Pledgee").
W I T N E S S E T H:
WHEREAS, the Pledgee and the Pledgor entered into that certain Stock
Purchase Agreement (the "Stock Purchase Agreement") dated even date herewith,
whereby the Pledgee sold to Pledgor all of its stock (the "Stock") in Able Oil
Company ▇▇▇▇▇▇▇▇▇▇, Inc. (the "Company"); and
WHEREAS, as consideration for the Stock, Pledgor has made, executed and
delivered to the Pledgee that certain Promissory Note of even date herewith in
the principal amount of ONE HUNDRED AND FORTY THOUSAND DOLLARS AND 00/100
($140,000.00) (the "Note"); and
WHEREAS, in order to secure Pledgee's Indebtedness under the Promissory
Note, and as further inducement to the Pledgee to enter into the Stock Purchase
Agreement, the parties hereto each desire to enter into this Pledge Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
and agreements herein contained, the parties hereto agree as follows:
Section I. SECURITY INTEREST. As collateral security for the full payment and
performance of Pledgee's Indebtedness under the Note (the "Indebtedness") and
the due and punctual observance of each and every covenant and condition on the
part of Pledgor to be observed or performed under this Agreement the Pledgor
hereby grants to the Pledgee a security interest in (the "Security Interest"),
and pledges to the Pledgee the Stock and all of the assets of the Company
described in Appendix A hereto (the "Collateral").
Section II. CUSTODY OF COLLATERAL.
A. Delivery of Collateral. Simultaneously with the execution and
delivery of this Agreement, the ▇▇▇▇▇▇▇ has delivered the Stock to the Pledgee
to be held subject to the terms of this Pledge Agreement. The Pledgee shall have
no right in and to the Collateral nor any right to encumber or dispose of the
Collateral except in accordance with the provisions of this Pledge Agreement.
B. Financial Statements. The Pledgor agrees that simultaneously with
the execution and delivery of this Agreement it will execute and deliver to the
Pledgee one or more UCC-1 Uniform Commercial Code financing statements with
respect to the Collateral, and additional UCC forms at any subsequent time or
from time to time, upon the written request of
the Pledgee, in order to allow Pledgee to perfect its Security Interest and
protect its rights in the Collateral.
Section III. VOTING RIGHTS. So long as there shall exist no condition, event, or
act which constitutes an Event of Default as defined in the Note, the Pledgor
shall be entitled to exercise the voting power with respect to the Stock.
Section IV. COVENANTS OF PLEDGOR. So long as the Indebtedness remains unpaid the
Pledgor will perform and observe each of its covenants to the Pledgee as set
forth herein, and without limitation of the foregoing, the Pledgor, (a) will not
remove the Collateral from the Company address, without the prior written
consent of Pledgee (except in the ordinary course of business of the Company);
(b) will advise the Pledgee, in writing, immediately upon request, of any change
in the location of any Collateral; (c) will defend the Collateral against the
claims and demands of all other parties and will keep the Collateral free from
all other security interests or other encumbrances; (d) will keep accurate and
complete records concerning the Collateral and, at the Pledgee's request, will
▇▇▇▇ any such records and the Collateral to give notice of the Security
Interest; (e) will, upon demand, forthwith deliver to Pledgee any documents
relating to the Collateral or any part thereof, and any and all other schedules,
documents and statements which the Pledgee may from time to time request; (f)
will notify the Pledgee promptly in writing of any change in the Pledgor's or
the Company's address; (g) will notify the Pledgee in writing within five days
from the date of any loss, damage or theft of the Collateral, specifying in such
notice the exact nature and amount of such loss; (h) without the Pledgee's
written consent will not make or agree to make any alteration or modification to
the Collateral or permit anything to be done that may impair the value of the
Collateral or the security intended to be afforded by this Agreement; and (i) in
connection herewith will execute and deliver to the Pledgee such financing
statements and other documents, pay all costs of filing financing statements and
other documents in all public offices requested by the Pledgee and do such other
things as the Pledgee may request to protect the Collateral and Pledgee's
Security Interest.
Section V. EVENTS OF DEFAULT. If any of the following events ("Events of
Default") shall occur and be continuing the Pledgee may, subject to any
applicable grace, cure or notice periods as set forth in the Note at its option,
by notice in writing to the Pledgor, declare all of the Indebtedness to be
immediately due and payable together with interest accrued thereon:
(a) if Pledgor defaults in the payment of any principal or interest
due under the Note;
(b) if any representation or warranty made by the Pledgor herein or
in the Stock Purchase Agreement or any other agreement entered into with Pledgee
or writing furnished in connection with or pursuant to this Agreement shall be
false;
(c) if there is any material loss, theft, substantial damage or
destruction to or of any of the Collateral or like collateral of any subsidiary
of the Pledgor, or the making of any levy, seizures, or attachment thereof or
thereon;
(d) if Pledgor shall default in the performance or observance of the
Stock Purchase Agreement, the Franchise Agreement, or any other material
agreement, covenant, term or condition to which the Pledgor is a party, or
whether contained herein, in the Note, or in any other instrument or documents
evidencing or securing any of the Indebtedness;
(e) if Pledgor makes an assignment for the benefit of creditors;
(f) if Pledgor petitions or applies to any tribunal for the
appointment of a trustee or receiver for itself or of any substantial part of
its assets, or commences any proceedings relating to itself under any
insolvency, reorganization, arrangement, readjustment of debts, dissolution or
liquidation law of any jurisdiction, whether now or hereafter in effect;
(g) if any such petition or application is filed, or any such
proceedings are commenced, against Pledgor, and Pledgor by any act indicates its
approval thereof, consent thereto, or acquiescence therein, or any order is
entered appointing any such trustee or receiver, or adjudicating Pledgor
bankrupt or insolvent, or approving the petition in any proceedings, and such
order remains in effect for more than 30 days; or,
(h) if any order is entered in any proceeding against Pledgor
decreeing the dissolution, winding up or split-up of that entity.
Section VI. REMEDIES. Upon the happening of any Event of Default:
(a) The Pledgee's rights with respect to the Collateral shall be
those of a Pledgee under the Pennsylvania Uniform Commercial Code as now in
effect or hereinafter amended. The Pledgee shall also have any additional rights
granted herein and in any other agreement now or hereafter in effect between
Pledgor and the Pledgee. If requested by the Pledgee, the Pledgor will
immediately assemble its Collateral and make it available to the Pledgee at a
place to be designated by the Pledgee.
(b) The Pledgee shall have the right, without notice to Pledgor, to
enter upon any premises where the Collateral may be located for the purpose of
taking possession of the Collateral.
(c) The Pledgee shall have the right, at its option, to demand,
collect and ▇▇▇ for all proceeds from the Collateral (either in the Pledgor's
name or the Pledgee's name at the latter's option) with the right to enforce,
compromise, settle or discharge any such proceeds. The Pledgor appoints the
Pledgee Pledgor's attorney-in-fact to endorse Pledgor's name on all checks,
commercial paper and other instruments pertaining to the proceeds, after any
Event of Default. This power of attorney, being coupled with an interest, is
irrevocable and shall not be terminated until this Agreement is discharged and
released in full by the Pledgee.
(d) The Pledgor agrees that any notice by the Pledgee of the sale or
disposition of the Collateral or any other intended action hereunder, whether
required by the Pennsylvania Uniform Commercial Code or otherwise, shall
constitute reasonable notice to the
Pledgor if the notice is mailed by regular or certified mail, postage prepaid,
at least five (5) days before the action to the Pledgor's address as specified
in this Agreement or to any other address which the Pledgor has specified in
writing to the Pledgee as the address to which notices shall be given to the
Pledgor. The Pledgor further agrees that the Pledgee may be the purchaser of the
Collateral at any public or private sale.
(e) The Pledgor shall pay all costs and expenses incurred by the
Pledgee in enforcing this Agreement, realizing upon any Collateral and
collecting any Indebtedness, including reasonable attorney's fees (on the basis
of a solicitor and his or her own client) whether suit is brought or not and
whether incurred in connection with collection, trial, appeal or otherwise, and
shall be liable for any deficiencies in the event the proceeds of disposition of
the Collateral does not satisfy the Indebtedness in full.
Section V. RELEASE UPON PAYMENT IN FULL. Upon payment of the Indebtedness as
required and represented by the Note, the Pledgee shall (a) execute a
satisfaction and termination of this Pledge Agreement and the Collateral
Agreement; (b) return the Stock; (c) file any necessary UCC-3 Release and
Termination Statements; and (d) return to the Pledgor the Promissory Note marked
"Paid in Full."
Section VI. MISCELLANEOUS PROVISIONS.
(a) Any communications, requests or notices required or appropriate
to be given under this Agreement or the Collateral Agreement shall be in writing
and shall be delivered in person by commercial courier or mailed by certified
mail, return receipt requested, deposited in the United States mail postage
prepaid, addressed to the party to which the notice is intended, or sent by
facsimile transmission to the number indicated for the party to which the notice
is intended, as follows:
Pledgor: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇-▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Pledgee: Able Energy Company, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Notice given by personal delivery, commercial courier, or facsimile transmission
shall be deemed given when received by the party to which such notice is
intended to be given. Notice given by mail shall be deemed given three days
after it is deposited in the mails addressed as provided herein. These addresses
and facsimile numbers may be changed by notice as provided herein.
(b) No failure by the Pledgee to exercise, or delay by the Pledgee
in exercising, any right, power or privilege hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any right, power or
privilege hereunder preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. No notice to or demand on the
Pledgor in any case shall, in itself, entitle the Pledgor to any other or
further notice or demand in similar or other circumstances or constitute a
waiver of the rights of the Pledgor to any other or further action in any
circumstances without notice or demand.
(c) This Agreement shall be binding upon and inure to the benefit of
the respective parties hereto and their respective successors and assigns. This
Agreement is made for the sole benefit of the Pledgor and the Pledgee and no
other person or persons shall have any benefits, rights or remedies under or by
reason of this Agreement.
(d) This Agreement constitutes the entire agreement between the
parties hereto and may not be modified or amended in any manner other than by
supplemental written agreement executed by the parties hereto.
(e) The Pledgor authorizes the Pledgee at the Pledgor's expense to
file any financing statement or other documents or statements relating to the
Collateral (without the Pledgor's signature thereon) which the Pledgee deems
appropriate, and the Pledgor appoints the Pledgee as the Pledgor's
attorney-in-fact to execute any such financing statement or statements in
Pledgor's name and to perform all other acts which the Pledgee deems appropriate
to perfect and to continue perfection of the Security Interest.
(f) The Security Interest in the Collateral shall continue after the
payment of the Indebtedness if at the time of such payment the Pledgor shall be
liable to Pledgee on any promissory note, draft, ▇▇▇▇ of exchange, or other
instrument or agreement.
(g) The Pledgor hereby irrevocably consents to any act by the
Pledgee or its agents in entering and reentering upon any premises for the
purpose of either: (1) inspecting the Collateral, which inspection in the
absence of an Event of Default shall be during normal business hours and upon
two days' notice; or (2) taking possession of the Collateral after any Event of
Default; and the Pledgor waives its rights to assert against the Pledgee or its
agents any claim based upon trespass or any similar cause of action for entering
upon any premises where the Collateral may be located.
(h) After any Event of Default, the Pledgee may notify any party
obligated to pay proceeds, of the existence of the Secured Interests and may
also direct them to make payments of all proceeds to the Pledgee.
(i) No delay or omission by the Pledgee in exercising any right
hereunder or with respect to any Indebtedness shall operate as a waiver of that
or any other right, and no single or partial exercise of any right shall
preclude the Pledgee from any other or future exercise of the right or the
exercise of any other right or remedy. The Pledgee may cure any Event of Default
by Pledgor in any reasonable manner without waiving the Event of Default so
cured and without
waiving any other prior or subsequent default by Pledgor. All rights and
remedies of the Pledgee under this Agreement and under the Pennsylvania Uniform
Commercial Code shall be deemed cumulative.
(j) The Pledgee shall have no obligation to take and Pledgor shall
have the sole responsibility for taking any steps to preserve rights against all
prior parties to the Collateral.
(k) The rights and benefits of the Pledgee under this Agreement
shall, if the Pledgee agrees, inure to any party acquiring an interest in the
Indebtedness or any part thereof.
(l) At its option, Pledgee may discharge taxes, liens, security
interests or other encumbrances at any time levied or placed on the Collateral,
and may pay for insurance on the Collateral and any such payment shall be added
to the Indebtedness. Pledgor shall reimburse Pledgee on demand for any such
payments made or expenses incurred by Pledgee.
(m) The terms "Pledgee," and "Pledgor" as used in this Agreement
include the heirs, executors, personal representatives, and successors or
assigns of those parties.
(n) This Agreement may not be modified or amended nor shall any
provision of it be waived except in a writing signed by the Pledgor and by an
authorized officer of the Pledgee.
(o) This Agreement shall be construed under the Pennsylvania Uniform
Commercial Code and any other applicable Pennsylvania laws in effect from time
to time.
(p) The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of the remaining
provisions.
(q) All sections and descriptive headings in this Agreement are
inserted for convenience only, and shall not affect the construction or
interpretation hereof.
(r) This Agreement is a continuing agreement which shall remain in
force and effect until all of the Indebtedness and any extensions or renewals
together with all interest thereon shall be paid in full.
(s) The Note is by this reference, made a part of, and incorporated
into this Agreement as if set out in full herein.
(t) This Agreement may be executed in counterparts, each of which
shall be an original, but all of which shall together constitute one document.
IN WITNESS WHEREOF, the parties hereto caused this Agreement to be
executed as of the day and year first written above.
Pledgor: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Pledgee: ABLE ENERGY COMPANY, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, President
-2-
APPENDIX A
COLLATERAL OF ABLE OIL ▇▇▇▇▇▇▇▇▇▇, INC.
(THE "PLEDGOR")
The collateral consists of the following described accounts receivable,
intellectual property, inventory, fixtures, furniture, equipment and contract
rights, whether now or hereafter existing, created or acquired, together with
all proceeds and products thereof in any form, and all records relating thereto
(the "Collateral"):
(a) all accounts owned by Pledgor as of the date of this Agreement
or acquired by Pledgor at any time hereafter;
(b) all inventory now owned by Pledgor or acquired by Pledgor at any
time hereafter, including, without limitation, all goods held for sale or
lease or to be furnished under contracts of service, raw materials, and
goods and materials to be used or consumed in Pledgor's business;
(c) all equipment, fixtures and furniture now owned or hereafter
acquired by Pledgor;
(d) all contract rights, general intangibles, instruments,
securities (other than securities of the Pledgor), chattel paper, notes,
drafts, acceptances, money, documents, credits and deposits (general or
special) and other assets, tangible or intangible of Pledgor now or
hereafter existing or acquired;
(e) all trademarks, tradenames, patents, copyrights and all other
forms of intellectual property now owned or hereafter developed or
acquired by Pledgor; and
(f) all proceeds, products, replacements, additions, substitutions,
renewals and accessions of any of the foregoing.
