PLEDGE AND SECURITY AGREEMENT
This
PLEDGE AND SECURITY AGREEMENT (the “Agreement”),
dated
as of March 31, 2006, is made by 360 Global Wine Company, a Nevada corporation
(the “Pledgor”),
in
favor of General Electric company, a New York corporation (the “Lender”).
RECITALS
A. As
of the
date of this Agreement, the Pledgor, as permitted assignee of Samson Investment
Company pursuant to that certain Stock Purchase Agreement dated March 9, 2006
by
and between General Electric Company and Samson Investment Company and the
First
Amendment dated March 31, 2006 (collectively the “Stock Purchase Agreement”) has
purchased from the Lender all of the issued and outstanding shares of capital
stock (the “Pledged
Interests”)
of
Springer Mining Company, a Nevada corporation (the “Company”).
Pursuant to the terms of that certain Straight Promissory Note of the Pledgor
in
favor of the Lender, dated of even date herewith (the “Note”),
the
Lender has agreed to make a loan to the Pledgor in the initial principal amount
of Two Million Four Hundred Thousand Dollars ($2,400,000.00) (the “Loan”).
B. In
order
to induce Lender to make the Loan, the Pledgor
has
agreed to grant to the Lender a security interest in the Pledged Interests
pursuant to the terms and conditions of this Agreement as additional security
for the performance of the Pledgor’s obligations under the Note.
NOW,
THEREFORE, in order to induce the Lender
to
make the Loan, and for other good and valuable consideration, the receipt and
sufficiency of which hereby are acknowledged, the Pledgor hereby agrees as
follows:
1.
Grant
of Security Interest.
The
Pledgor hereby pledges, assigns, transfers, and delivers to the Lender, as
security for the performance of the “Secured
Obligations”
(as
defined below), a continuing and first-priority security interest (“Security
Interest”)
in the
following (collectively, the “Collateral”):
(a)
all right, title, and interest of the Pledgor as a stockholder of the Company,
whether now owned or hereafter acquired; (b) all right, title and interest
of
the Pledgor in the Pledged Interests; (c) all payments, profits, or other
distributions, whether in cash, property or otherwise, at any time owing to
the
Pledgor on account of its interest as a stockholder of Company; (d) all
certificates and other documents that evidence the Pledged Interests and all
other rights as a stockholder of Company; (e) all other rights, interests and
claims to which the Pledgor may be entitled in its capacity as a stockholder
of
Company; and (f) all proceeds of any or all of the foregoing (in whatever form,
whether money,
instruments, documents, or other property).
2.
Security
for Obligations.
This
Agreement and the Security Interest secure, and the Collateral is security
for:
(a) the prompt and indefeasible
payment and performance in full when due, whether at stated maturity, by
acceleration or otherwise, of all amounts owing under the Note, whether for
principal, interest or fees, costs and expenses that are required to be paid
to
Lender under the Note; (b) the Pledgor’s performance of all of its obligations
under this Agreement; and (c) the performance of all of the Pledgor’s other
obligations under the Note (collectively, the “Secured
Obligations”).
3.
Delivery
to the Lender.
The
Pledgor agrees to execute and deliver to the Lender such other agreements,
instruments, and documents as the Lender may reasonably request from time to
time to effectuate the conveyance, transfer, assignment, and grant to the Lender
of the Security Interest in and to the Collateral. On or before the date hereof,
any and all certificates or instruments representing or evidencing the
Collateral shall be delivered to and held by or on behalf of the Lender pursuant
hereto and shall be in suitable form for transfer by delivery or, as applicable,
shall be accompanied by the Pledgor’s endorsement, where necessary, or duly
executed instruments of transfer, all in form and substance satisfactory to
the
Lender. During the continuance of an “Event
of Default”
(as
defined below), the Lender shall have the right, at any time in its discretion
and without notice to the Pledgor, to transfer to the Lender or to register
in
the name of the Lender or any of its nominees any or all of the
Collateral.
4.
Representations
and Warranties.
The
Pledgor
hereby represents and warrants to the Lender as follows:
| 4.1 |
The
Pledgor has full power and lawful authority to enter into, deliver,
and
perform this Agreement, to assign, transfer and pledge the Collateral
to
the Lender and to grant to the Lender a first-priority security interest
therein as herein provided.
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| 4.2 |
The
execution, delivery and performance of this Agreement and the grant
of the
Security Interest hereunder do not and will not (i) violate any provision
of law applicable to the Pledgor, the organizational documents of
the
Pledgor, or any judgment, order, or decree of any court or other
agency of
government binding on the Pledgor, (ii) conflict with, result in
the
breach of or constitute (with due notice or lapse of time or both)
a
default under any contractual obligation of the Pledgor, or (iii)
result
in or require the creation or imposition of any material lien upon
any of
the properties or assets of the Pledgor (other than liens in favor
of the
Lender).
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5.
Covenants
of the Pledgor.
| 5.1 |
The
Pledgor covenants and agrees that it shall:
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(a)
Access to Books and Records. l Make and cause the Company to make any records
and books of account for the Pledgor and the Company available for the Lender’s
inspection and transcription at any time upon reasonable advance notice and
during business hours and (iii) permit representatives of the Lender to discuss
the business, operations, assets, Properties, prospects and financial condition
of the Pledgor and the Company with officers of each of the Pledgor and the
Company and with their independent certified public accountants and third party
lenders and creditors.
(b)
Conduct of Business and Maintenance of Existence.
Continue to engage in business of the same general type as is now conducted
by
it, and preserve, renew and keep in full force and effect its corporate
existence and take all reasonable action to maintain all rights, privileges
and
franchises necessary or desirable in the normal conduct of its business, comply
with all contractual obligations and Requirements of Law.
(c)
Maintenance of Property, Insurance.
Cause
the Company to: keep all Company Property useful and necessary in its business
in good working order and condition; and maintain with financially sound and
reputable insurance companies insurance on all of its Property in at least
such
amounts and against at least such risks as are usually insured against in the
same general area by companies engaged in the same or a similar
business.
(d)
Notices.
Promptly, and in any event within two days, give notice to the
Lender:
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(i)
of
the
occurrence of any default or event of default under any agreement or undertaking
of the Pledgor or the Company with any Person (including without limitation
the
Stock Purchase Agreement between the Lender and Pledgor) or of any event which
but for the requirement that notice be given or time elapse or both would
constitute a default or an event of default under any such agreement or
undertaking;
(ii)
of
any
litigation, investigation or proceeding which may exist at any time in which
the
amount involved is $25,000 or more; or involving a Governmental Authority;
or
any such matter, if adversely determined, could have a material adverse effect
upon the business, operations, assets, Property, prospects or financial
condition of the Pledgor or the Company or in which injunctive or similar relief
is sought;
(iv)
of
any
material adverse change in the business, operations, assets, Property, prospects
or financial condition of the Pledgor or the Company.
(e)
Comply with its covenants, agreements and undertakings set forth in the Stock
Purchase Agreement between the Lender and the Pledgor.
| 5.2 |
The
Pledgor covenants and agrees that it shall not:
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(a) Disposition
of Collateral. Voluntarily sell, assign (except by operation of law in the
event
of a death), or otherwise dispose of, or grant any option with respect to,
any
of the Collateral.
(b)
Transfer Pledged Interests. Pledge, assign, sell, or otherwise transfer the
Pledged Interests or any interest therein.
(c)
Liens. Permit or permit the Company to create, incur, assume or suffer to exist,
any Lien upon any of the Property of the Company except: (i) Liens for taxes,
assessments or governmental charges which are not yet due or delinquent or
which
are being contested in good faith by appropriate proceedings and provided
adequate reserves with respect thereto are maintained on the books of the
Company; (ii) easements, municipal and zoning ordinances, and rights of way
restrictions not interfering with the ordinary conduct of the business of the
Company; and(iii) any Liens existing on Property of the Company as of the
closing under the Stock Purchase Agreement between the Pledgor and the
Lender;
(d)
Prohibition of Fundamental Changes. Enter into or permit the Company to enter
into any transaction of merger, consolidation or amalgamation; liquidate, wind
up or dissolve itself (or suffer any liquidation or dissolution); convey, sell,
lease, transfer or otherwise dispose of, in one or a series of transactions,
any
of the Pledgor’s or the Company’s business or assets; acquire by purchase or
otherwise all or substantially all the business or assets of, or stock or other
evidences of beneficial ownership of, any Person; or make any material change
in
the nature of the Pledgor’s or the Company’s present business or their method of
conducting their present business. Sell, transfer, or otherwise dispose of
any
interest in the Company’s capital stock.
(e)
Dividends; Redemption of Stock. Permit or cause the Company to declare any
dividends on any shares of any class of its stock, whether now or hereafter
outstanding, make any payment on account of any shares of any class of its
stock, whether now or hereafter outstanding, set apart assets for a sinking
or
other analogous fund for the purchase, redemption, retirement or other
acquisition of any shares of any class of its stock, whether now or hereafter
outstanding, or make any other distribution either directly or indirectly,
whether in cash, property or obligations in respect of, or on account of, or
purchase or otherwise acquire any shares of, any class of its stock, whether
now
or hereafter outstanding, from any Person.
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(f)
Investments. Permit or cause the Company commit to make, any advance, loan,
extension of credit or capital contribution to, or purchase or commit to
purchase any stocks, bonds, notes, debentures or other securities of, or make
any other investment in, any Person or create or participate in the creation
of
any subsidiary.
(g)
Restriction of Indebtedness. Permit or cause the Company to create, incur,
assume or have outstanding any Indebtedness.
(h)
Sale
and Leaseback. Enter into any agreement or cause the Company to enter into
any
agreement providing for the leasing by the Company of property which has been
or
is to be sold or transferred by the Company to the lessor thereof, or which
is
substantially similar in purpose to property so sold or
transferred.
(i)
Company Affiliates. Suffer or permit the Company to enter into any transaction
with any Company Affiliate. Suffer or permit the Company to enter into or permit
any transaction with any Company Affiliate or any Person in control of,
controlled by or under common control with either of the foregoing in order
to
avoid the operation of any of the covenants hereof.
(j)
Partnerships; Joint Ventures. Permit the Company or cause the Company to become
a member of any partnership or joint venture.
(k)
Change in Control. Permit or cause a change in the power to direct or cause
the
direction of management and policies of the Pledgor, either directly or
indirectly, whether through the ownership of voting securities or by contract
or
otherwise. Notwithstanding the above, this prohibition shall not apply to 360
Investments, LLC, a Delaware limited liability company. Permit or cause the
Company to permit a change in the power to direct or cause the direction of
management and policies of the Company, either directly or indirectly, whether
through the ownership of voting securities or by contract or
otherwise.
| 5.3 |
As
used in this Agreement, the following terms shall have the meanings
set
forth below:
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(a)
“Company
Affiliate”
shall
mean any person, firm, or corporation which, directly or indirectly, controls
or
is controlled by or is under common control with the Company. For the purpose
of
this definition, “control” (including, with correlative meanings, the terms
“controlled by” and “under common control with”) means the possession, directly
or indirectly, of the power to direct or cause the direction of management
and
policies, either directly or indirectly, whether through the ownership of voting
securities or by contract or otherwise of any Person.
(b)
“Contingent
Obligation”
shall
mean, as to any Person, any guarantee of Indebtedness or any other obligation
of
any second Person or any assurance with respect to the financial condition
of
any second Person, whether direct, indirect or contingent, including without
limitation, any purchase or repurchase agreement or other arrangement of
whatever nature having the effect of assuring or holding harmless any third
Person against loss with respect to any obligation of such second
Person.
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(d)
“Governmental
Authority”
shall
mean any nation or government, any state or other political subdivision thereof,
and any entity exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government and any corporation
or
other entity owned or controlled (through stock or capital ownership or
otherwise) by any of the foregoing.
(e)
“Indebtedness”
shall
mean, and shall include, as to any Person, at a particular time, (a) all
indebtedness for borrowed money or for the deferred purchase price of Property
or services in respect of which such Person is liable, contingently or
otherwise, as obligor, guarantor or otherwise, or in respect of which such
Person otherwise assures a creditor against loss, (b) obligations of such
Person, contingently or otherwise, as obligor, guarantor or otherwise under
leases of real or personal property or any comparable arrangement with respect
to use or title which are, shall have been, or should be, in accordance with
generally accepted accounting principles, capitalized, (c) indebtedness arising
under acceptance facilities and the face amount of all letters of credit issued
for the account of such Person and, without duplication, all drafts drawn
thereunder, (d) all liabilities secured by any Lien on any Property owned by
such Person even if such Person has not assumed or otherwise become liable
for
the payment thereof, and (e) any other obligations (other than deferred taxes)
which are required by generally accepted accounting principles to be shown
as
liabilities in its balance sheet and which are payable or remain
unpaid.
(f)
“Liabilities”
shall
mean, as to any Person, at any date, all items which would be classified as
liabilities on a balance sheet of such Person at such time.
(g)
“Lien”
shall
mean any mortgage, pledge, hypothecation, assignment, deposit arrangement,
encumbrance, lien (statutory or other), preference, priority or other security
agreement or preferential arrangement of any kind or nature whatsoever
(including, without limitation, any conditional sale or other title retention
agreement, any financing lease having substantially the same economic effect
as
any of the foregoing and the filing of any financing statement under the Uniform
Commercial Code or comparable law of any jurisdiction).
(h)
“Person”
shall
mean an individual, partnership, joint venture, corporation, business trust,
joint stick company, trust, unincorporated organization, Governmental Authority
or other entity of whatever nature.
(i)
“Requirement
of Law”
shall
mean, as to any Person the Articles of Incorporation and By-Laws or other
organizational or governing documents of such Person, and any law, treaty,
rule
or regulation, determination of an arbitrator or a court or other Governmental
Authority, in each case applicable to or binding upon such Person or any of
its
Property or to which such Person or any of its Property is subject.
6.
Event
of Default.
The
failure of the Pledgor to pay any sums due an owing under the Note or hereunder
shall constitute an “Event
of Default”
under
this Agreement.
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7.
Remedies.
Upon
the
occurrence of an Event of Default hereunder, the Lender may, at its option,
do
anyone or more of the following:
| 7.1 |
The
Lender may exercise, in respect of the Collateral, in all rights
and
remedies provided for herein or otherwise available to it, all the
rights
and remedies as a secured party on default under the New York Uniform
Commercial Code.
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| 7.2 |
The
Lender may exercise any and all rights of collection, conversion,
or
exchange and any and all other rights, privileges, options, or powers
of
the Pledgor pertaining to or relating to the Collateral as if the
Lender
were the absolute owner of all of the Collateral. Without limiting
the
foregoing, the Lender may exercise all voting and management rights
of the
Pledgor as a stockholder of the Company, and the Lender may exercise
all
other rights that pertain to the Pledged
Interests.
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| 7.3 |
The
Pledgor recognizes that, by reason of certain prohibitions contained
in
the Securities Act of 1933, as amended (the “Securities
Act”),
and applicable state securities laws, the Lender may be compelled,
with
respect to any sale of all or any part of the Collateral conducted
without
prior registration or qualification of such Collateral under the
Securities Act and/for such state securities laws, to limit purchasers
to
those who will agree, among other things, to acquire the Collateral
for
their own account, for investment and not with a view to the distribution
or resale thereof. The Pledgor acknowledges that any such private
sales
may be at prices and on terms less favorable to the Lender than those
obtainable through a public sale without such restrictions (including
a
public offering made pursuant to a registration statement under the
Securities Act), and the Pledgor agrees that any such private sale
shall
be deemed to have been made in a commercially reasonable manner and
that
the Lender shall have no obligation to engage in public sales and
no
obligation to delay the sale of any Collateral for the period of
time
necessary to permit the issuer thereof to register it for a form
of public
sale requiring registration under the Securities Act or under applicable
state securities laws, even if such issuer would, or should, agree
to so
register it.
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8.
Further
Documentation.
The
Pledgor agrees to execute and deliver promptly all further instruments and
documents and to take all further action that may be necessary or desirable,
or
that the Lender may reasonably request, in order to perfect and protect any
security interest granted or purported to be granted hereby or to enable the
Lender to exercise and enforce the rights and remedies of the Lender to exercise
and enforce the rights and remedies of the Lender hereunder with respect to
any
Collateral or to carry out the provisions and purposes hereof.
9.
Choice
of Law.
The
provisions hereof and the transactions contemplated hereunder shall be governed
by and construed in accordance with the laws of the State of New York. The
Lender and the Pledgor
agree
than any claim, lawsuit or action, at law or in equity (including an application
for provisional, interim or injunctive relief), arising from or related to
this
Agreement, the Loan or the Note shall be brought in the Jefferson Circuit Court
in Louisville, Kentucky (the “Forum Court”). The Pledgor and the Lender hereby
irrevocably consent and submit to the sole and exclusive jurisdiction and venue
of the Forum Court and each specifically waives any objections based upon lack
of jurisdiction, improper venue or forum non conveniens.
10.
Severability.
If any
court or other judicial authority of competent jurisdiction determines that
any
provision hereof, or the application thereof to any person or circumstance,
to
be invalid, illegal or unenforceable to any extent, the remaining provisions
hereof, or the application of such provision to persons or circumstances other
than those as to which it is held invalid or unenforceable, shall not be
affected thereby, and each such provision hereof shall be valid and enforceable
to the fullest extent permitted by law as though the invalid, illegal or
unenforceable provision had never been a part hereof, or applicable to such
person or circumstance.
-6-
11.
Waiver.
The
parties agree that if and to the extent that any party does not require strict
compliance with the provisions hereof, such action or inaction shall not
constitute a waiver of, or otherwise affect or prejudice in any manner, such
party’s future rights, remedies, benefits, or powers hereunder, including the
right to require strict performance of such provisions. No course of dealing
on
the part of any party and no delay or failure by any party to exercise any
right
which it may have hereunder shall be deemed a waiver thereof or otherwise
prejudice any of its rights, remedies, or power hereunder unless so agreed
in
writing by such party. No waiver by any party of any breach hereof by any other
party shall be deemed to be a waiver of any other breach by such other party
(whether preceding or succeeding and whether or not of the same or similar
nature), and no acceptance of payment or performance by any party after any
breach by any other party shall be deemed to be a waiver of any breach hereof
by
such other party, whether or not the first party knows of such breach at the
time it accepts such payment or performance. No failure or delay by any party
to
exercise any right or remedy it may have hereunder, at law, in equity or
otherwise by reason of the default of any other party hereunder shall operate
as
a waiver of such default or as a modification hereof or shall prevent the
exercise of any such right or remedy by the first party while the other party
continues to be so in default. No extension of time for performance of any
obligation shall be deemed to be an extension of the time for performance of
any
other obligation. The consent or approval of one act shall not be deemed to
waive or render unnecessary the consent or approval to or of any subsequent
similar act.
IN
WITNESS WHEREOF, the parties have executed and delivered this Agreement as
of
the date first above written.
360
GLOBAL WINE COMPANY
| By: | ||||
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Xxxx Xxxxxxx, Chief Executive Officer |
GENERAL
ELECTRIC COMPANY
| By: | ||||
|
Xxxx
Xxxxxxxx,
authorized signatory
|
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