EXHIBIT 2.4
PLEDGE AGREEMENT
THIS PLEDGE AGREEMENT (the "Agreement") is entered into December 16,
2004, by and between XXXXXXX X. XXXXXX, an individual ("Pledgor"), and SURGE
GLOBAL ENERGY, INC., a Delaware corporation (hereinafter referred to as
"Pledgee" and sometimes as "Seller"), with reference to the following facts:
RECITALS
--------
A. Pledgor is a shareholder of Seller, and is the owner of Two Hundred
Thousand (200,000) shares of common stock of Seller (the "Shares").
B. Pledgor is sole shareholder of ZENVESCO, INC., a Nevada corporation
("Buyer," and together with the Pledgor and Seller, the "Parties").
C. Concurrently with the execution of this Agreement, Seller and Buyer
have entered into (i) an Asset Purchase Agreement, whereby Seller agrees to sell
and Buyer agrees to buy all of the tobacco products and related assets of Seller
(the "Assets") and Seller agrees to assign and Buyer agrees to assume certain
liabilities of Seller (the "Liabilities"), and (ii) an Assignment and Assumption
Agreement with respect to the acquisition of the Assets and the assumption of
the Liabilities (the Assignment and Assumption Agreement, and together with the
Asset Purchase Agreement, the "Transfer Agreements").
D. Pledgee would not have accepted entered into the Transfer Agreements
but for the execution of this Agreement by Pledgor.
E. Capitalized terms used in this Agreement without definition shall
have the respective meanings given them in the Asset Purchase Agreement.
NOW, THEREFORE, the parties hereto mutually agree as follows:
1. PLEDGE.
1.1 IN GENERAL. Pledgor hereby delivers, pledges and grants a
continuing security interest in the Shares to Pledgee. Said pledge shall be
accomplished by an Assignment Separate From Certificate, in the form attached
hereto as Exhibit "A" (the "Assignment Document"). The Shares subject to this
pledge shall include any replacements or substitutions, and any issued under a
former name of Seller. The pledge and security interest effectuated hereby shall
secure all of the Buyer's obligations to Pledgee under the Transfer Agreements.
1.2 ESCROW AGENT. The Shares and the Assignment Document may
be held in the physical custody of an escrow agent selected by the Parties (an
"Escrow Agent"), which custody shall not affect the rights and remedies of the
Parties under this Agreement.
-1-
2. RIGHTS. Unless and until the Shares are sold pursuant to a
"commercially reasonable" sale in accordance with Section 3.1.3 below:
2.1 PLEDGOR'S RIGHT TO REPRESENT THE SHARES. Pledgor shall be
entitled to represent the Shares at any annual or special meeting of the
shareholders and to vote such Shares or give his written consent to the voting
of such Shares, unless Pledgor shall receive written notice of breach of or
default under the Asset Purchase Agreement; and
2.2 PLEDGOR'S RIGHT TO EXERCISE ALL RIGHTS RELATIVE TO THE
SHARES. Pledgor shall be entitled to exercise all other rights of ownership of
the Shares unless Pledgor shall receive written notice of breach of or default
under the Asset Purchase Agreement, except that Pledgor shall not be entitled to
sell, convey, transfer, or encumber such Shares, unless Pledgee shall first
consent in writing.
3. REMEDIES.
3.1 REMEDIES. For purposes of this Agreement, the term "Event
of Default" shall mean a material breach by the Buyer of any of its obligations
under the Asset Purchase Agreement, including, without limitation, the
obligation to faithfully pay, satisfy and/or discharge any of the Assumed
Liabilities. Upon and following an Event of Default, Pledgee may:
3.1.1 U.C.C. REMEDIES. Subject to the provisions of
this Agreement, exercise all rights and remedies available to a secured creditor
after default, including but not limited to the rights and remedies of secured
creditors under the California Uniform Commercial Code;
3.1.2 TRANSFER AND VOTE SHARES. At Pledgee's option
and without notice to Pledgor, transfer and register the Shares or any part of
the Shares in Pledgee's name or the name of Pledgee's nominees; collect and
enforce any payment with respect to the Shares; exercise all rights, options,
and privileges with respect to the Shares, and deliver the Shares in that
connection to any appropriate person or agency; and vote the Shares as Pledgor
and/or Pledgor's proxy, subject to any irrevocable proxy that may be in effect
prior to the date of this Agreement, that proxy to be irrevocable until this
Agreement is terminated; provided, however, that until such Event of Default,
Pledgor's right to vote the Shares will not be impaired by this Agreement; and
3.1.3 CONDUCT SALE. Conduct a "commercially
reasonable" private sale of the Shares. Any such sale shall be conducted in
accordance with applicable state and federal securities laws.
3.1.4 NOTICE OF SALE OR DISPOSITION. Pledgee's notice
of the time and place of sale of the Shares, or the time on or after which a
sale of the Shares will be made, is reasonable if sent to Pledgor in the manner
for giving notice set forth in the Asset Purchase Agreement at least fifteen
(15) calendar days before the sale or other disposition of the Shares.
-2-
3.2 DUTIES OF PLEDGOR UPON DEFAULT. If an Event of Default
occurs, Pledgor is hereby required to and shall take the following action:
3.2.1 ASSEMBLE RECORDS. Assemble all records relating
to the Shares and make them available to Pledgee as Pledgee directs;
3.2.2 EXECUTE NECESSARY DOCUMENTS. Execute and/or
issue all documents and instruments on Pledgee's request that Pledgee considers
necessary or advisable to exercise Pledgee's rights under this Agreement.
4. REPRESENTATIONS AND WARRANTIES OF PLEDGOR.
Pledgor hereby warrants and represents as follows:
4.1 PLEDGOR IS DULY AUTHORIZED. Pledgor is an individual, duly
authorized to enter into this Agreement.
4.2 STATUS OF SHARES. All issued and outstanding stock in
Seller owned by Pledgor is duly authorized and validly issued.
4.3 OWNERSHIP OF SHARES. Except for the pledge of the Shares
hereunder, Pledgor owns the Shares free and clear of any liens, charges,
pledges, or encumbrances.
4.4 REPRESENTATIONS AND WARRANTIES SURVIVE. The
representations and warranties contained in this Agreement shall survive the
closing of this transaction and shall remain in full force and effect at all
times that an obligation of the part of Buyer remains under the Asset Purchase
Agreement, including, without limitation, the obligation faithfully to pay,
satisfy or discharge an assumed Liability.
5. TERMINATION.
5.1 TERMINATION AND RETURN OF PLEDGED SHARES. This Agreement
shall terminate and the Shares shall be released from the lien of this pledge at
such time as all the obligations of Buyer under the Asset Purchase Agreement,
including payment of the Assumed Liabilities, have been paid, discharged or
otherwise satisfied. The Pledgee (or any Escrow Agent holding the Shares) shall
then deliver possession of the Shares to Pledgor. In the event of the discharge
or satisfaction of less than all of the Assumed Liabilities, the Pledgor and
Pledgee shall meet and confer to determine how many of the Shares should be
released from this Agreement.
6. INDEMNIFICATION. Pledgor shall indemnify, defend, and hold harmless
the Pledgee against loss of any kind, including reasonable attorneys' fees,
caused to Pledgee by reason of Pledgee's interest in the Shares, or by reason of
Pledgee exercising any right under this Agreement.
-3-
7. GENERAL PROVISIONS.
7.1 ENTIRE AGREEMENT; AMENDMENT. Other than any agreement with
an Escrow Agent with respect to the physical custody of the Shares, this
Agreement constitutes the entire agreement between the parties pertaining to the
subject matter contained herein and supersedes all prior and contemporaneous
agreements, representations and understandings of the parties. There are no
representations, warranties, agreements or understandings, express or implied,
written or oral between the parties hereto relating to the subject matter of
this Agreement which are not fully expressed herein. No supplement, amendment or
modification of this Agreement shall be binding unless executed in writing by
all of the parties. No waiver of any of the provisions of this Agreement shall
be deemed, or shall constitute, a waiver of any other provision, whether or not
similar, nor shall any waiver constitute a continuing waiver. No waiver shall be
binding unless executed in writing by the party making the waiver.
7.2 BINDING AGREEMENT. This Agreement shall be binding on, and
shall inure to the benefit of, the parties to it and their respective heirs,
legal representatives, successors and assigns.
7.3 GOVERNING LAW. This Agreement shall be governed by,
construed and enforced in accordance with the laws of the State of California.
7.4 NECESSARY ACTS. Each party to this Agreement agrees to
perform any further acts and execute and deliver any further documents that may
be reasonably necessary to carry out the provisions of this Agreement.
7.5 GENDER; NUMBER. The use of the singular in this Agreement
includes the plural and the use of one gender includes the others whenever the
context thereof so requires.
7.6 SEVERABILITY. If any of the provisions, or portions
thereof, of this Agreement are held to be unenforceable or invalid by any court
of competent jurisdiction, the validity and enforceability of the remaining
provisions, or portions thereof, will not be affected.
[rest of page intentionally left blank; signature page follows]
-4-
IN WITNESS WHEREOF, the parties have executed this Pledge Agreement on
the day and year first above written.
Pledgee: Pledgor:
SURGE GLOBAL ENERGY, INC.,
a Delaware corporation
By: /s/ Xxxx X. Xxxxx /s/ Xxxxxxx X. Xxxxxx
------------------------------------ ------------------------------------
Xxxx X. Xxxxx, CEO Xxxxxxx X. Xxxxxx, an Individual
ACKNOWLEDGED BY:
----------------
ZENVESCO, INC., a NEVADA corporation
By: /s/ Xxxxxxx X. Xxxxxx
---------------------------------
Xxxxxxx X. Xxxxxx, President
-5-
EXHIBIT A
---------
ASSIGNMENT SEPARATE FROM CERTIFICATE
FOR VALUE RECEIVED, XXXXXXX X. XXXXXX, an individual (hereinafter referred to as
"Pledgor"), hereby assigns and transfers unto SURGE GLOBAL ENERGY, INC., a
Delaware corporation, as Pledgee, in accordance with the terms of that certain
Pledge Agreement dated December 16, 2004, Two Hundred Thousand (200,000) shares
of capital stock of SURGE GLOBAL ENERGY, INC., a Delaware corporation, (here,
the "Corporation") standing in Pledgor's name on the books of the Corporation
and represented by share certificate number _______________________ herewith,
and does hereby irrevocably constitute and appoint the Secretary of Pledgee, as
Pledgor's attorney-in-fact, to transfer the said stock on the books of the
Corporation with full power of substitution in the premises.
Dated: December 16, 2004
In the presence of:
/s/ Xxxxxx X. Xxxxxx XX /s/ Xxxxxxx X. Xxxxxx
--------------------------------------- ---------------------------------------
Witness Xxxxxxx X. Xxxxxx, an Individual
"Pledgor"