Exhibit 10.19
PLEDGE AGREEMENT
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THIS PLEDGE AGREEMENT ("Agreement") dated as of November ____, 2001, is
given by Xxxxx X. Xxxx, an individual ("Pledgor"), in favor of CORNELL CAPITAL
PARTNERS , LP, a Delaware limited partnership ("Cornell"). Capitalized terms
used herein and not otherwise defined herein shall have the respective meanings
set forth in a Non Negotiable Promissory Note of even date herewith given by
Safe Transportation Systems, Inc., a Florida corporation (the "Company"), to
Cornell (as amended, restated, supplemented or otherwise modified from time to
time, the "Promissory Note").
WHEREAS:
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A. The Company and Cornell wish to provide for the funding contemplated
under the Promissory Note in the amount of Forty Six Thousand (U.S.) Dollars
($46,000).
B. To induce Cornell to enter into the Promissory Note, the Pledgor has
agreed to provide to Cornell a full and unconditional guaranty of even date
herewith (the "Guaranty") of the payment and performance obligations of the
Company under the Promissory Note.
C. To induce Cornell to enter into the Promissory Note, the Pledgor has
also agreed to secure the Pledgor's obligations under the Guaranty by a pledge
to Cornell and grant a first-priority security interest to Cornell of one
million five hundred fifty thousand (1,550,000) shares of Common Stock of the
Company (the Common Stock") which are issued and outstanding and owned by the
Pledgor. The pledged stock is more fully described on EXHIBIT A attached hereto.
D. The Guarantors acknowledge that without the Guaranty and this
Agreement, Cornell would not be willing to enter into the Promissory Note.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
set forth herein, and for other good and valuable consideration the receipt and
sufficiency of which is hereby acknowledged, the parties hereby agree as
follows:
1. RECITALS. The above recitals are true and correct and same are
incorporated into this Agreement by this reference.
2. PLEDGE OF STOCK; GRANT OF SECURITY INTEREST. For value received and
pursuant to the Guaranty, the Pledgor hereby grants a first-priority security
interest in and to, and herewith delivers to Cornell stock certificates
representing, one million five hundred fifty thousand (1,550,000) shares of
Common Stock (said shares of Common Stock, together with any other shares and
securities from time to time receivable or otherwise distributed in respect of
or in exchange for any or all of such shares, being called the "PLEDGED STOCK"),
to secure the payment and performance of all obligations of the Pledgor to
Cornell under the Guaranty (the aforesaid obligations and liabilities of the
Pledgor being herein called the "SECURED OBLIGATIONS", and all of the documents,
agreements and instruments between the Pledgor and Cornell evidencing or
otherwise pertaining to, the Secured Obligations being herein collectively
called the "OPERATIVE DOCUMENTS"). The Pledgor unconditionally agrees that if
the Company fails for any reason or for no reason to repay Cornell all amounts
owed under the Promissory Note within the period of time provided in the
Promissory Note, that Cornell shall have the right to take and/or sell a number
of shares of the Pledged Stock equal to all amounts owed to Cornell under the
Promissory Note or the Guaranty, including, without limitation, any fees and
expenses.
3. REPRESENTATIONS AND WARRANTIES. The Pledgor represents and warrants
to, and agrees with, Cornell as follows:
(a) The Pledged Stock is represented by the stock certificate or
certificates described on EXHIBIT A attached hereto under the Pledgor's name,
and that such stock certificate or certificates, accompanied by an instrument of
assignment or transfer duly executed in blank by the Pledgor as the owner named
in such stock certificate or certificates, have been delivered to Cornell by the
Pledgor. The Pledged Stock was validly issued, fully paid and non-assessable.
The Pledged Stock is not subject to any voting agreement, voting trust or
similar agreement or arrangement. The Pledged Stock is free and clear of any and
all restrictions, liens and encumbrances other than those in favor of Cornell.
The Pledgor further covenants and agrees to keep the Pledged Stock free and
clear of any and all restrictions liens and encumbrances other than those in
favor of Cornell.
(b) The Pledgor has full power, right and authority to enter into and
perform his obligations under this Agreement, and this Agreement has been duly
executed and delivered by the Pledgor and constitutes the valid and binding
obligations of the Pledgor and is enforceable against the Pledgor in accordance
with its terms. No permits, approvals or consents of or notifications to (1) any
governmental entities or (2) any other persons or entities are necessary in
connection with the execution, delivery and performance by the Pledgor of this
Agreement and the consummation by the Pledgor of the actions contemplated
hereby. Neither the execution and delivery of this Agreement by the Pledgor nor
the performance by any of them of the actions contemplated hereby will:
(i) violate or conflict with or result in a breach of any provision
of any law, statute, rule, regulation, order, permit, judgment, ruling,
injunction, decree or other decision (collectively, "RULES") of any court
or other tribunal or any governmental entity or agency binding on the
Pledgor or his properties, or conflict with or cause an event of default
under any contract or agreement of the Pledgor; or
(ii) require any authorization, consent, approval, exemption or
other action by or notice to any court, administrative or governmental
body, person, entity or any other third party.
4. TITLE; STOCK RIGHTS, DIVIDENDS, ETC. The Pledgor will warrant and
defend Cornell's title to the Pledged Stock, and the lien herein created,
against all claims of all persons, and will maintain and preserve such security
interest. It is understood and agreed that the collateral hereunder includes any
stock rights, stock dividends, liquidating dividends, new securities, payments,
distributions and proceeds (including cash dividends and sale proceeds) and
other property to which the Pledgor may become entitled by reason of the
ownership of the Pledged Stock during the existence of this Agreement, and any
such property received by the Pledgor shall be held in trust and forthwith
delivered to Cornell to be held hereunder in accordance with the terms of this
Agreement.
5. EVENTS OF DEFAULT; REMEDIES. Upon the occurrence of any event of
default under the Guaranty, Cornell shall have all of the rights and remedies
provided by law and/or by this Agreement, including but not limited to all of
the rights and remedies of a secured party under the New Jersey Uniform
Commercial Code, and the Pledgor hereby authorizes Cornell to sell all or any
part of the Pledged Stock at public or private sale and to apply the proceeds of
such sale to the costs and expenses thereof (including the reasonable attorneys'
fees and disbursements incurred by Cornell) and then to the payment of the other
Secured Obligations as set forth below. Any requirement of reasonable notice
shall be met if Cornell sends such notice to the Pledgor within one (1) Trading
Day of the date of sale, disposition or other event giving rise to the required
notice. The Pledgor expressly authorizes such sale or sales of the Pledged Stock
in advance of and to the exclusion of any sale or sales of or other realization
upon owed to Cornell. Cornell shall be under no obligation to reserve rights
against prior parties.
6. ADDITIONAL REMEDIES. Upon the occurrence of an event of default
under the Guaranty, Cornell shall have also the right pursuant to the Assignment
Separate from Certificate attached hereto as EXHIBIT B to transfer into its
name, or into the name of its nominee or nominees, any or all of the Pledged
Stock and may otherwise act with respect thereto as though Cornell is the
outright owner thereof, and the Pledgor hereby irrevocably constitutes and
appoints Cornell as its proxy and attorney-in-fact, with full power of
substitution, to do so.
7. TERMINATION. This Agreement shall terminate upon the performance and
satisfaction of the Secured Obligations, and upon such termination Cornell shall
assign, transfer and deliver without recourse and without warranty the Pledged
Stock to the Pledgor (and any property received in respect thereof) as has not
theretofore been sold or otherwise applied pursuant to the provisions of this
Agreement. Notwithstanding anything to the contrary herein, so long as the
Secured Obligations is zero or would be made zero simultaneously with the
termination hereof, the Pledgor shall have the right to terminate this Agreement
at any time by providing written notice of such termination to Cornell and upon
such termination, Cornell shall assign, transfer and deliver without recourse or
without warranties any remaining Pledged Stock to the Pledgor or any property
received in respect thereof and has not been sold or otherwise applied under
this agreement to satisfy the Secured Obligations.
8. SEVERABILITY. If any provision of this Agreement is, for any reason,
invalid or unenforceable, the remaining provisions of this Agreement will
nevertheless be valid and enforceable and will remain in full force and effect.
Any provision of this Agreement that is held invalid or unenforceable by a court
of competent jurisdiction will be deemed modified to the extent necessary to
make it valid and enforceable and as so modified will remain in full force and
effect.
9. AMENDMENT AND WAIVER. This Agreement may be amended, or any
provision of this Agreement may be waived, provided that any such amendment or
waiver will be binding on a party hereto only if such amendment or waiver is set
forth in a writing executed by the parties hereto. The waiver by any such party
hereto of a breach of any provision of this Agreement shall not operate or be
construed as a waiver of any other breach.
10. SUCCESSORS. Except as otherwise provided herein, this Agreement
shall bind and inure to the benefit of and be enforceable by the parties and
their successors and assigns.
11. ASSIGNMENT. This Agreement shall not be directly or indirectly
assignable or delegable by the Pledgor.
12. NO STRICT CONSTRUCTION. The language used in this Agreement will be
deemed to be the language chosen by the parties to express their mutual intent,
and no rule of strict construction will be applied against any party.
13. FURTHER ASSURANCES. Each party hereto will execute all documents and
take such other actions as the other parties may reasonably request in order to
consummate the transactions provided for herein and to accomplish the purposes
of this Agreement.
14. NOTICES, CONSENTS, ETC. Any notices, consents, waivers or other
communications required or permitted to be given under the terms hereof must be
in writing and will be deemed to have been delivered: (i) upon receipt, when
delivered personally; (ii) upon receipt, when sent by facsimile (provided
confirmation of transmission is mechanically or electronically generated and
kept on file by the sending party); or (iii) one (1) trading day after deposit
with a nationally recognized overnight delivery service, in each case properly
addressed to the party to receive the same. The addresses and facsimile numbers
for such communications shall be:
If to Pledgor: Xx. Xxxxx X. Xxxx
c/o Safe Transportation Systems, Inc.
000 Xxxxxxx Xxxxx, Xxxxx 000
Xxxxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxx Xxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
With Copy to: Xxxxxxxxxxx & Xxxxxxxx LLP
Miami Center - 20th Floor
000 Xxxxx Xxxxxxxx Xxxx.
Xxxxx, Xx 00000-0000
Attention: Xxxxxxx X. Xxxxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to Cornell: Cornell Capital Partners, LP
00 Xxxxxxxx Xxxxx, Xxxxx 0000
Xxxxxx Xxxx, Xxx Xxxxxx 00000
Attention: Xxxx X. Xxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000 0000
With Copy to: Xxxxxx Xxxxxxxx LLP
0000 Xxxxxxxxxx Xxxxxx - Xxxxx 0
Xxxxx, XX 00000
Attention: Xxxxx Xxxxxxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
or at such other address and/or facsimile number and/or to the attention of such
other person as the recipient party has specified by written notice given to
each other party three (3) trading days prior to the effectiveness of such
change. Written confirmation of receipt (A) given by the recipient of such
notice, consent, waiver or other communication, (B) mechanically or
electronically generated by the sender's facsimile machine containing the time,
date, recipient facsimile number and an image of the first page of such
transmission or (C) provided by a nationally recognized overnight delivery
service, shall be rebuttable evidence of personal service, receipt by facsimile
or receipt from a nationally recognized overnight delivery service in accordance
with clause (i), (ii) or (iii) above, respectively.
15. REMEDIES, OTHER OBLIGATIONS, BREACHES AND INJUNCTIVE RELIEF.
Cornell's remedies provided in this Agreement shall be cumulative and in
addition to all other remedies available to Cornell under this Agreement, at law
or in equity (including a decree of specific performance and/or other injunctive
relief), no remedy of Cornell contained herein shall be deemed a waiver of
compliance with the provisions giving rise to such remedy and nothing herein
shall limit Cornell's right to pursue actual damages for any failure by a
Pledgor to comply with the terms of this Agreement. Every right and remedy of
Cornell under any Operative Document, the Guaranty or under applicable law may
be exercised from time to time and as often as may be deemed expedient by
Cornell. Pledgor acknowledges that a breach by it of its obligations hereunder
will cause irreparable harm to Cornell and that the remedy at law for any such
breach may be inadequate. Pledgor therefore agrees that, in the event of any
such breach or threatened breach, Cornell shall be entitled, in addition to all
other available remedies, to an injunction restraining any breach, or specific
performance without the necessity of showing economic loss and without any bond
or other security being required.
16. GOVERNING LAW; JURISDICTION. All questions concerning the
construction, validity, enforcement and interpretation of this Agreement shall
be governed by the internal laws of the State of New Jersey, without giving
effect to any choice of law or conflict of law provision or rule (whether of the
State of New Jersey or any other jurisdictions) that would cause the application
of the laws of any jurisdictions other than the State of New Jersey. Each party
hereby irrevocably submits to the exclusive jurisdiction of the state and
federal courts sitting in Xxxxxx County and the United States District Court for
the District of New Jersey, for the adjudication of any dispute hereunder or in
connection herewith or therewith, or with any transaction contemplated hereby or
discussed herein, and hereby irrevocably waives, and agrees not to assert in any
suit, action or proceeding, any claim that it is not personally subject to the
jurisdiction of any such court, that such suit, action or proceeding is brought
in an inconvenient forum or that the venue of such suit, action or proceeding is
improper. Each party hereby irrevocably waives personal service of process and
consents to process being served in any such suit, action or proceeding by
mailing a copy thereof to such party at the address for such notices to it under
this Agreement and agrees that such service shall constitute good and sufficient
service of process and notice thereof. Nothing contained herein shall be deemed
to limit in any way any right to serve process in any manner permitted by law.
17. COSTS AND EXPENSES. Without limiting any obligation of the Pledgor
hereunder, the Pledgor agrees to pay all reasonable fees and costs incurred by
Cornell in enforcing its rights hereunder, including, without limitation,
reasonable attorneys' fees and expenses, whether or not involving litigation
and/or appellate or bankruptcy proceedings.
18. NO INCONSISTENT AGREEMENTS. None of the parties hereto will
hereafter enter into any agreement which is inconsistent with the rights granted
to the parties in this Agreement.
19. THIRD PARTIES. Nothing herein expressed or implied is intended or
shall be construed to confer upon or give to any person or entity, other than
the parties to this Agreement and their respective permitted successor and
assigns, any rights or remedies under or by reason of this Agreement.
20. WAIVER OF JURY TRIAL. AS A MATERIAL INDUCEMENT FOR CORNELL TO LOAN
TO THE COMPANY THE MONIES UNDER THE PROMISSORY NOTE AND TO ACCEPT THIS GUARANTY,
THE GUARANTOR HEREBY WAIVES ANY RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
RELATED IN ANY WAY TO THIS AGREEMENT AND/OR ANY AND ALL OF THE OTHER DOCUMENTS
ASSOCIATED WITH THIS TRANSACTION.
21. ENTIRE AGREEMENT. This Agreement (including the recitals and
exhibits hereto), and the Guaranty of even date among the parties hereto, set
forth the entire understanding of the parties with respect to the subject matter
hereof, and shall not be modified or affected by any offer, proposal, statement
or representation, oral or written, made by or for any party in connection with
the negotiation of the terms hereof, and may be modified only by instruments
signed by all of the parties hereto.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the parties have caused this Pledge Agreement to be
duly executed as of the day and year first above written.
By: _________________________________
Name: Xxxxx X. Xxxx
CORNELL CAPITAL PARTNERS, LP
By: Yorkville Advisors LLC
Its: General Partner
By: ________________________________
Name: Xxxx X. Xxxxxx
Title: Portfolio Manager
EXHIBIT A
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DESCRIPTION OF PLEDGED SHARES
SHARES PLEDGED BY PLEDGOR
NUMBER OF SHARES CERTIFICATE NUMBER
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500,000 1725
500,000 1726
320,000 1727
230,000 1728
EXHIBIT B
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ASSIGNMENT SEPARATE FROM CERTIFICATE
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FOR VALUE RECEIVED, ________________________ hereby sells, assigns and
transfers onto CORNELL CAPITAL PARTNERS, LP, _______________________________
(_____________) shares of Common Stock of SAFE TRANSPORTATION SYSTEMS, INC., a
Florida corporation standing in its name on the books of said corporation,
represented by Certificate No. _____ herewith and does hereby irrevocably
constitute and appoint ________________________________ attorney to transfer the
said stock on the books of the within named company with full power of
substitution in the premises.
DATED: ______________, 2001
[FULL NAME]
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