PLEDGE AND ESCROW AGREEMENT
Exhibit 10.11
THIS PLEDGE AND ESCROW
AGREEMENT (the “Agreement”) is made
and entered into as of September 24, 2009 (the “Effective Date”) by
and among ATLAS CAPITAL
PARTNERS, LLC (the “Pledgee”) and ADVENTURE ENERGY, INC., a
corporation organized and existing under the laws of the State of Florida (the
“Pledgor”) and
the escrow agent agreed to and designated by the parties hereto (“Escrow
Agent”).
RECITALS:
WHEREAS, in order to secure
the full and prompt payment when due (whether at the stated maturity, by
acceleration or otherwise) of all of the Company’s obligations (the “Obligations”) to the
Pledgee or any successor to the Pledgee under this Agreement, the
Debenture Securities Purchase Agreement of even date herewith for the purchase
of Fifty Thousand Dollars ($50,000) of secured convertible debentures plus any
interest, costs, fees, and other amounts owed to the Pledgee thereunder issued
or to be issued by the Company to the Pledgee, either now or in the future, the
Security Agreement of even date herewith between the Company and the Pledgee
(the “Security
Agreement”), and all other contracts entered into between the parties
hereto (collectively, the “Transaction
Documents”), the Pledgor has agreed to irrevocably pledge to the Pledgee
the aggregate amount of 1,209,628 shares (the “Pledged Shares”) of
the Company’s common stock.
NOW, THEREFORE, in
consideration of the mutual covenants, agreements, warranties, and
representations herein contained, and for other good and valuable consideration,
the receipt and sufficiency of which is hereby acknowledged, the parties hereto
agree as follows:
TERMS AND
CONDITIONS
1.Pledge
and Transfer of Pledged Shares.
1.1.The Pledgor hereby grants to Pledgee a
security interest in all Pledged Shares as security for Company’s obligations
under the Convertible Debentures. Simultaneously with the execution of the
Transaction Documents, the Pledgor shall deliver to the Escrow Agent stock
certificates representing the Pledged Shares, together with duly executed stock
powers or other appropriate transfer documents executed in blank by the Pledgor
(the “Transfer
Documents”), and such
stock certificates and Transfer Documents shall be held by the Escrow Agent
until the full payment of all amounts due to the Pledgee under the Convertible
Debentures and through repayment in accordance with the terms of the Convertible
Debentures, or the termination or expiration of this
Agreement.
2.Rights
Relating to Pledged Shares. Upon the occurrence of an Event of
Default (as defined herein), the Pledgee shall be entitled to vote the Pledged
Shares, to receive dividends and other distributions thereon, and to enjoy all
other rights and privileges incident to the ownership of the Pledged
Shares.
3.Release
of Pledged Shares from Pledge. Upon the payment of all amounts due
to the Pledgee under the Convertible Debentures by repayment in accordance with
the terms of the Note, the parties hereto shall notify the Escrow Agent to such
effect in writing. Upon receipt of such written notice for payment of the
amounts due to the Pledgee under the Convertible Debentures, the Escrow Agent
shall return to the Pledgor the Transfer Documents and the certificates
representing the Pledged Shares, (collectively the “Pledged
Materials”), whereupon any
and all rights of Pledgee in the Pledged Materials shall be terminated.
Notwithstanding anything to the contrary contained herein, upon full payment of
all amounts due to the Pledgee under the Convertible Debentures, by repayment in
accordance with the terms of the Note, this Agreement and Pledgee’s security
interest and rights in and to the Pledged Shares shall
terminate.
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4.Event
of Default. An
“Event of
Default” shall be deemed
to have occurred under this Agreement upon an Event of Default under the
Transaction Documents.
5.Remedies. Upon and anytime after the occurrence
of an Event of Default, the Pledgee shall have the right to provide written
notice of such Event of Default (the “Default
Notice”) to the Escrow
Agent, with a copy to the Pledgor. As soon as practicable after receipt of the
Default Notice, the Escrow Agent shall deliver to Pledgee the Pledged Materials
held by the Escrow Agent hereunder. Upon receipt of the Pledged Materials, the
Pledgee shall have the right to (i) sell the Pledged Shares and to apply the
proceeds of such sales, net of any selling commissions, to the Obligations owed
to the Pledgee by the Pledgor under the Transaction Documents, including,
without limitation, outstanding principal, interest, legal fees, and any other
amounts owed to the Pledgee, and exercise all other rights and (ii) any and all
remedies of a secured party with respect to such property as may be available
under the Uniform Commercial Code as in effect in the State of California. To
the extent that the net proceeds received by the Pledgee are insufficient to
satisfy the Obligations in full, the Pledgee shall be entitled to a deficiency
judgment against the Pledgor for such amount. The Pledgee shall have the
absolute right to sell or dispose of the Pledged Shares in any manner it sees
fit and shall have no liability to the Pledgor or any other party for selling or
disposing of such Pledged Shares even if other methods of sales or dispositions
would or allegedly would result in greater proceeds than the method actually
used. The Escrow Agent shall have the absolute right to disburse the Pledged
Shares to the Pledgee in batches not to exceed 9.9% of the outstanding capital
of the Pledgor (which limit may be waived by the Pledgee providing not less than
65 days’ prior written notice to the Escrow Agent). The Pledgee shall return any
Pledged Shares released to it and remaining after the Pledgee has applied the
net proceeds to all amounts owed to the Pledgee.
5.1.Each right, power and remedy of the
Pledgee provided for in this Agreement or any other Transaction Document shall
be cumulative and concurrent and shall be in addition to every other such right,
power or remedy. The exercise or beginning of the exercise by the Pledgee of any
one or more of the rights, powers or remedies provided for in this Agreement or
any other Transaction Document or now or hereafter existing at law or in equity
or by statute or otherwise shall not preclude the simultaneous or later exercise
by the Pledgee of all such other rights, powers or remedies, and no failure or
delay on the part of the Pledgee to exercise any such right, power or remedy
shall operate as a waiver thereof. No notice to or demand on the Pledgor in any
case shall entitle it to any other or further notice or demand in similar or
other circumstances or constitute a waiver of any of the rights of the Pledgee
to any other further action in any circumstances without demand or notice. The
Pledgee shall have the full power to enforce or to assign or contract is rights
under this Agreement to a third party.
0.0.Xx addition to all other remedies
available to the Pledgee, upon an Event of Default, the Pledgor shall promptly,
but in no event more than thirty (30) days after the date of the Default Notice,
file a registration statement to register with the Securities and Exchange
Commission the Pledged Shares for the resale by the Pledgee. The Pledgor shall
cause the registration statement to remain in effect until all of the Pledged
Shares have been sold by the Pledgee.
6.Concerning
the Escrow Agent.
6.1.The Escrow Agent undertakes to perform
only such duties as are expressly set forth herein and no implied duties or
obligations shall be read into this Agreement against the Escrow
Agent.
6.2.The Escrow Agent may act in reliance
upon any writing or instrument or signature which it, in good faith, believes to
be genuine, may assume the validity and accuracy of any statement or assertion
contained in such a writing or instrument, and may assume that any person
purporting to give any writing, notice, advice or instructions in connection
with the provisions hereof has been duly authorized to do so. The Escrow Agent
shall not be liable in any manner for the sufficiency or correctness as to form,
manner, and execution, or validity of any instrument deposited in this escrow,
nor as to the identity, authority, or right of any person executing the same;
and its duties hereunder shall be limited to the safekeeping of such
certificates, monies, instruments, or other document received by it as such
escrow holder, and for the disposition of the same in accordance with the
written instruments accepted by it in the escrow.
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6.3.Pledgee and the Pledgor hereby agree,
to defend and indemnify the Escrow Agent and hold it harmless from any and all
claims, liabilities, losses, actions, suits, or proceedings at law or in equity,
or any other expenses, fees, or charges of any character or nature which it may
incur or with which it may be threatened by reason of its acting as Escrow Agent
under this Agreement; and in connection therewith, to indemnify the Escrow Agent
against any and all expenses, including attorneys’ fees and costs of defending
any action, suit, or proceeding or resisting any claim (and any costs incurred
by the Escrow Agent pursuant to Sections 6.4 or 6.5 hereof). The Escrow Agent
shall be vested with a lien on all property deposited hereunder, for
indemnification of attorneys’ fees and court costs regarding any suit,
proceeding or otherwise, or any other expenses, fees, or charges of any
character or nature, which may be incurred by the Escrow Agent by reason of
disputes arising between the makers of this escrow as to the correct
interpretation of this Agreement and instructions given to the Escrow Agent
hereunder, or otherwise, with the right of the Escrow Agent, regardless of the
instructions aforesaid, to hold said property until and unless said additional
expenses, fees, and charges shall be fully paid. Any fees and costs charged by
the Escrow Agent for serving hereunder shall be paid by the
Pledgor.
6.4.If any of the parties shall be in
disagreement about the interpretation of this Agreement, or about the rights and
obligations, or the propriety of any action contemplated by the Escrow Agent
hereunder, the Escrow Agent may, at its sole discretion deposit the Pledged
Materials with the Clerk of the United States District Court of New Jersey,
sitting in Newark, New Jersey, and, upon notifying all parties concerned of such
action, all liability on the part of the Escrow Agent shall fully cease and
terminate. The Escrow Agent shall be indemnified by the Pledgor, the Company and
Pledgee for all costs, including reasonable attorneys’ fees in connection with
the aforesaid proceeding, and shall be fully protected in suspending all or a
part of its activities under this Agreement until a final decision or other
settlement in the proceeding is received.
6.5.The Escrow Agent may consult with
counsel of its own choice (and the costs of such counsel shall be paid by the
Pledgor and Pledgee) and shall have full and complete authorization and
protection for any action taken or suffered by it hereunder in good faith and in
accordance with the opinion of such counsel. The Escrow Agent shall not be
liable for any mistakes of fact or error of judgment, or for any actions or
omissions of any kind, unless caused by its willful misconduct or gross
negligence.
6.6.The Escrow Agent may resign upon ten
(10) days’ written notice to the parties in this Agreement. If a successor
Escrow Agent is not appointed within this ten (10) day period, the Escrow Agent
may petition a court of competent jurisdiction to name a
successor.
6.7Conflict
Waiver. The Pledgor hereby acknowledges that
the Escrow Agent is general counsel to the Pledgee, a partner in the general
partner of the Pledgee, and counsel to the Pledgee in connection with the
transactions contemplated and referred herein. The Pledgor agrees that in the
event of any dispute arising in connection with this Agreement or otherwise in
connection with any transaction or agreement contemplated and referred herein,
the Escrow Agent shall be permitted to continue to represent the Pledgee and the
Pledgor will not seek to disqualify such counsel and waives any objection
Pledgor might have with respect to the Escrow Agent acting as the Escrow Agent
pursuant to this Agreement.
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6.8Notices. Unless otherwise provided herein, all
demands, notices, consents, service of process, requests and other
communications hereunder shall be in writing and shall be delivered in person or
by overnight courier service, or mailed by certified mail, return receipt
requested, addressed:
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If
to the Pledgor, to:
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000xx
Xxxxxx Xxxxx,
Xxxxx
000,
Xx
Xxxxxxxxxx, XX 00000
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Attn:
Xxxxx Xxxxxxxx
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| Phone: 000-000-0000 | |
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Fax:
000-000-0000
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| If to the Pledgee: | Atlas
Capital Partners, LLC
00000
Xxxxxxxx Xxxxxxx
Xxxx
Xxxxx, XX 00000
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Any such
notice shall be effective (a) when delivered, if delivered by hand delivery
or overnight courier service, or (b) five (5) days after deposit in the
United States mail, as applicable.
7.Binding
Effect. All of the
covenants and obligations contained herein shall be binding upon and shall inure
to the benefit of the respective parties, their successors and
assigns.
8.Governing
Law; Venue; Service of Process. The validity, interpretation and
performance of this Agreement shall be determined in accordance with the laws of
the State of California applicable to contracts made and to be performed wholly
within that state except to the extent that Federal law applies. The parties
hereto agree that any disputes, claims, disagreements, lawsuits, actions or
controversies of any type or nature whatsoever that, directly or indirectly,
arise from or relate to this Agreement, including, without limitation, claims
relating to the inducement, construction, performance or termination of this
Agreement, shall be brought in the state superior courts located in California
or Federal district courts located in California, and the parties hereto agree
not to challenge the selection of that venue in any such proceeding for any
reason, including, without limitation, on the grounds that such venue is an
inconvenient forum. The parties hereto specifically agree that service of
process may be made, and such service of process shall be effective if made,
pursuant to Section 8 hereto.
9.Enforcement
Costs. If any legal action or other
proceeding is brought for the enforcement of this Agreement, or because of an
alleged dispute, breach, default or misrepresentation in connection with any
provisions of this Agreement, the successful or prevailing party or parties
shall be entitled to recover reasonable attorneys’ fees, court costs and all
expenses even if not taxable as court costs (including, without limitation, all
such fees, costs and expenses incident to appeals), incurred in that action or
proceeding, in addition to any other relief to which such party or parties may
be entitled.
10.Remedies
Cumulative. No remedy herein conferred upon any
party is intended to be exclusive of any other remedy, and each and every such
remedy shall be cumulative and shall be in addition to every other remedy given
hereunder or now or hereafter existing at law, in equity, by statute, or
otherwise. No single or partial exercise by any party of any right, power or
remedy hereunder shall preclude any other or further exercise
thereof.
11.Counterparts. This Agreement may be executed in one
or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute the same instrument.
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00.Xx
Penalties. No provision of this Agreement is to
be interpreted as a penalty upon any party to this
Agreement.
13.JURY
TRIAL. EACH OF THE PLEDGEE
AND THE PLEDGOR HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES THE RIGHT
WHICH IT MAY HAVE TO A TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF
ACTION BASED HEREON, OR ARISING OUT OF, UNDER OR IN ANY WAY CONNECTED WITH THE
DEALINGS BETWEEN PLEDGEE AND PLEDGOR, THIS PLEDGE AND ESCROW AGREEMENT OR ANY
DOCUMENT EXECUTED IN CONNECTION HEREWITH, OR ANY COURSE OF CONDUCT, COURSE OF
DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTIONS OF ANY PARTY HERETO OR
THERETO IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER IN
CONTRACT, TORT, EQUITY OR OTHERWISE.
[Signatures
Attached]
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IN WITNESS WHEREOF, the
parties hereto have duly executed this Amended and Restated Pledge and Escrow
Agreement as of the date first above written.
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ATLAS CAPITAL PARTNERS,
LLC
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By:
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Xxxxxxxxxxx Xxxxxx | |
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Name:
Xxxxxxxxxxx Xxxxxx
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Title:
Principal
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ADVENTURE
ENERGY, INC.
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By:
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Xxxxx Xxxxxxxx | |
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Name: Xxxxx
Xxxxxxxx
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Title: President
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ESCROW AGENT
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By:
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Name:
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