EXHIBIT 10.19
STOCK PLEDGE AGREEMENT
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This Stock Pledge Agreement (this "AGREEMENT"), dated as of May 31,
2006, between Laurus Master Fund, Ltd. (the "PLEDGEE"), and Carneros Acquisition
Corp., a Delaware corporation (the "PLEDGOR").
BACKGROUND
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Pledgor, Carneros Energy, Inc., a Delaware corporation ("CARNEROS"),
and Gotland Oil, Inc., a Texas corporation ("Gotland", and collectively with
Pledgor and Carneros, the "COMPANIES" and each a "COMPANY"), have entered into a
Securities Purchase Agreement with the Pledgee, dated as of the date hereof (as
amended, modified, restated or supplemented from time to time, the "SECURITIES
PURCHASE AGREEMENT"), pursuant to which the Pledgee provides or will provide
certain financial accommodations to the Companies.
In order to induce the Pledgee to provide or continue to provide the
financial accommodations described in the Securities Purchase Agreement and to
secure the Companies' obligations and indebtedness to Pledgee, Pledgor has
agreed to pledge and grant a security interest in the collateral described
herein to the Pledgee on the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the premises and for other good and
valuable consideration the receipt of which is hereby acknowledged, the parties
hereto agree as follows:
1. DEFINED TERMS. All capitalized terms used herein which are not
defined shall have the meanings given to them in the Securities Purchase
Agreement.
2. PLEDGE AND GRANT OF SECURITY INTEREST. To secure the full and
punctual payment and performance of (the following clauses (a) and (b),
collectively, the "OBLIGATIONS") (a) the obligations under the Securities
Purchase Agreement and the Related Agreements referred to in the Securities
Purchase Agreement (the Securities Purchase Agreement and the Related
Agreements, as each may be amended, restated, modified and/or supplemented from
time to time, collectively, the "DOCUMENTS") and (b) all other obligations and
liabilities of Carneros, Gotland and the Pledgor to the Pledgee whether now
existing or hereafter arising, direct or indirect, liquidated or unliquidated,
absolute or contingent, due or not due and whether under, pursuant to or
evidenced by a note, agreement, guaranty, instrument or otherwise (in each case,
irrespective of the genuineness, validity, regularity or enforceability of such
Obligations, or of any instrument evidencing any of the Obligations or of any
collateral therefor or of the existence or extent of such collateral, and
irrespective of the allowability, allowance or disallowance of any or all of
such in any case commenced by or against Carneros, Gotland and/or the Pledgor
under Xxxxx 00, Xxxxxx Xxxxxx Code, including, without limitation, obligations
of Carneros, Gotland and the Pledgor for post-petition interest, fees, costs and
charges that would have accrued or been added to the Obligations but for the
commencement of such case), the Pledgor hereby pledges, assigns, hypothecates,
transfers and grants a security interest to Pledgee in all of the following (the
"COLLATERAL"):
(a) the shares of stock set forth on SCHEDULE A annexed hereto
and expressly made a part hereof (together with any additional shares of stock
or other equity interests acquired by Pledgor, the "PLEDGED STOCK"), the
certificates representing the Pledged Stock and all dividends, cash, instruments
and other property or proceeds from time to time received, receivable or
otherwise distributed in respect of or in exchange for any or all of the Pledged
Stock;
(b) all additional shares of stock of any issuer (each, an
"ISSUER") of the Pledged Stock from time to time acquired by Pledgor in any
manner, including, without limitation, stock dividends or a distribution in
connection with any increase or reduction of capital, reclassification, merger,
consolidation, sale of assets, combination of shares, stock split, spin-off or
split-off (which shares shall be deemed to be part of the Collateral), and the
certificates representing such additional shares, and all dividends, cash,
instruments and other property or proceeds from time to time received,
receivable or otherwise distributed in respect of or in exchange for any or all
of such shares; and
(c) all options and rights, whether as an addition to, in
substitution of or in exchange for any shares of any Pledged Stock and all
dividends, cash, instruments and other property or proceeds from time to time
received, receivable or otherwise distributed in respect of or in exchange for
any or all such options and rights.
3. DELIVERY OF COLLATERAL. All certificates representing or evidencing
the Pledged Stock shall be delivered to and held by or on behalf of Pledgee
pursuant hereto and shall be accompanied by duly executed instruments of
transfer or assignments in blank, all in form and substance satisfactory to
Pledgee. Pledgor hereby authorizes the Issuer upon demand by the Pledgee to
deliver any certificates, instruments or other distributions issued in
connection with the Collateral directly to the Pledgee, in each case to be held
by the Pledgee, subject to the terms hereof. Upon the occurrence and during the
continuance of an Event of Default (as defined below), the Pledgee shall have
the right, during such time in its discretion and without notice to Pledgor, to
transfer to or to register in the name of the Pledgee or any of its nominees any
or all of Pledged Stock. In addition, the Pledgee shall have the right at such
time to exchange certificates or instruments representing or evidencing Pledged
Stock for certificates or instruments of smaller or larger denominations.
4. REPRESENTATIONS AND WARRANTIES OF PLEDGOR. Pledgor represents and
warrants to the Pledgee (which representations and warranties shall be deemed to
continue to be made until all of the Obligations have been paid in full and each
Document and each agreement and instrument entered into in connection therewith
has been irrevocably terminated) that:
(a) the execution, delivery and performance by Pledgor of this
Agreement and the pledge of the Collateral hereunder do not and will not result
in any violation of any agreement, indenture, instrument, license, judgment,
decree, order, law, statute, ordinance or other governmental rule or regulation
applicable to Pledgor;
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(b) this Agreement constitutes the legal, valid, and binding
obligation of Pledgor enforceable against Pledgor in accordance with its terms;
(c) (i) all Pledged Stock owned by Pledgor is set forth on
SCHEDULE A hereto and (ii) Pledgor is the direct and beneficial owner of each
share of the Pledged Stock;
(d) all of the shares of the Pledged Stock have been duly
authorized, validly issued and are fully paid and nonassessable;
(e) no consent or approval of any person, corporation,
governmental body, regulatory authority or other entity is or will be necessary
for (i) the execution, delivery and performance of this Agreement, (ii) the
exercise by the Pledgee of any rights with respect to the Collateral or (iii)
the pledge and assignment of, and the grant of a security interest in, the
Collateral hereunder;
(f) except as set forth on SCHEDULE B hereto, there are no
pending or, to the best of Pledgor's knowledge, threatened actions or
proceedings before any court, judicial body, administrative agency or arbitrator
which may materially adversely affect the Collateral;
(g) Pledgor has the requisite power and authority to enter
into this Agreement and to pledge and assign the Collateral to the Pledgee in
accordance with the terms of this Agreement;
(h) Pledgor owns each item of the Collateral and, except for
the pledge and security interest granted to Pledgee hereunder, the Collateral
shall be, immediately following the closing of the transactions contemplated by
the Documents, free and clear of any other security interest, pledge, claim,
lien, charge, hypothecation, assignment, offset or encumbrance whatsoever
(collectively, "LIENS");
(i) there are no restrictions on transfer of the Pledged Stock
contained in the certificate of incorporation or by-laws (or equivalent
organizational documents) of the Issuer or otherwise which have not otherwise
been enforceably and legally waived by the necessary parties;
(j) none of the Pledged Stock has been issued or transferred
in violation of the securities registration, securities disclosure or similar
laws of any jurisdiction to which such issuance or transfer may be subject;
(k) the pledge and assignment of the Collateral and the grant
of a security interest under this Agreement vest in the Pledgee all rights of
Pledgor in the Collateral as contemplated by this Agreement; and
(l) The Pledged Stock constitutes one hundred percent (100%)
of the issued and outstanding shares of capital stock of each Issuer.
5. COVENANTS. Pledgor jointly and severally covenants that, until the
Obligations shall be indefeasibly satisfied in full and each Document and each
agreement and instrument entered into in connection therewith is irrevocably
terminated:
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(a) Pledgor will not sell, assign, transfer, convey, or
otherwise dispose of its rights in or to the Collateral or any interest therein;
nor will Pledgor create, incur or permit to exist any Lien whatsoever with
respect to any of the Collateral or the proceeds thereof other than that created
hereby.
(b) Pledgor will, at its expense, defend Pledgee's right,
title and security interest in and to the Collateral against the claims of any
other party.
(c) Pledgor shall at any time, and from time to time, upon the
written request of Pledgee, execute and deliver such further documents and do
such further acts and things as Pledgee may reasonably request in order to
effectuate the purposes of this Agreement including, but without limitation,
delivering to Pledgee, upon the occurrence and during the continuance of an
Event of Default, irrevocable proxies in respect of the Collateral in form
satisfactory to Pledgee. Until receipt thereof, upon an Event of Default that
has occurred and is continuing beyond any applicable grace period, this
Agreement shall constitute Pledgor's proxy to Pledgee or its nominee to vote all
shares of Collateral then registered in Pledgor's name.
(d) Pledgor will not consent to or approve the issuance of (i)
any additional shares of any class of capital stock or other equity interests of
the Issuer; or (ii) any securities convertible either voluntarily by the holder
thereof or automatically upon the occurrence or nonoccurrence of any event or
condition into, or any securities exchangeable for, any such shares, unless, in
either case, such shares are pledged as Collateral pursuant to this Agreement.
6. VOTING RIGHTS AND DIVIDENDS. In addition to the Pledgee's rights and
remedies set forth in Section 8 hereof, in case an Event of Default shall have
occurred and be continuing beyond any applicable cure period, the Pledgee shall
(i) be entitled to vote the Collateral, (ii) be entitled to give consents,
waivers and ratifications in respect of the Collateral (each Pledgor hereby
irrevocably constituting and appointing the Pledgee, with full power of
substitution, the proxy and attorney-in-fact of Pledgor for such purposes) and
(iii) be entitled to collect and receive for its own use cash dividends paid on
the Collateral. Pledgor shall not be permitted to exercise or refrain from
exercising any voting rights or other powers if, in the reasonable judgment of
the Pledgee, such action would have a material adverse effect on the value of
the Collateral or any part thereof; and, PROVIDED, FURTHER, that Pledgor shall
give at least five (5) days' written notice of the manner in which Pledgor
intends to exercise, or the reasons for refraining from exercising, any voting
rights or other powers other than with respect to any election of directors and
voting with respect to any incidental matters. Following the occurrence and
during the continuance of an Event of Default, all dividends and all other
distributions in respect of any of the Collateral shall be delivered to the
Pledgee to hold as Collateral and shall, if received by Pledgor, be received in
trust for the benefit of the Pledgee, and be forthwith delivered to the Pledgee
as Collateral in the same form as so received (with any necessary endorsement).
7. EVENT OF DEFAULT. An Event of Default shall be deemed to have
occurred and may be declared by the Pledgee upon the happening of any of the
following events:
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(a) An "Event of Default" under any Document or any agreement
or note related to any Document shall have occurred and be continuing beyond any
applicable cure period;
(b) Pledgor shall default in the performance of any of its
obligations under any agreement between Pledgor and Pledgee, including, without
limitation, this Agreement, and such default shall not be cured during any
applicable cure period;
(c) Any representation or warranty of Pledgor made herein, in
any Document or in any agreement, statement or certificate given in writing
pursuant hereto or thereto or in connection herewith or therewith shall be false
or misleading in any material respect;
(d) Any portion of the Collateral is subjected to a levy of
execution, attachment, distraint or other judicial process or any portion of the
Collateral is the subject of a claim (other than by the Pledgee) of a Lien or
other right or interest in or to the Collateral and such levy or claim shall not
be cured, disputed or stayed within a period of fifteen (15) business days after
the occurrence thereof; or
(e) Pledgor shall (i) apply for, consent to, or suffer to
exist the appointment of, or the taking of possession by, a receiver, custodian,
trustee, liquidator or other fiduciary of itself or of all or a substantial part
of its property, (ii) make a general assignment for the benefit of creditors,
(iii) commence a voluntary case under any state or federal bankruptcy laws (as
now or hereafter in effect), (iv) be adjudicated a bankrupt or insolvent, (v)
file a petition seeking to take advantage of any other law providing for the
relief of debtors, (vi) acquiesce to, or fail to have dismissed, within
forty-five (45) days, any petition filed against it in any involuntary case
under such bankruptcy laws, or (vii) take any action for the purpose of
effecting any of the foregoing.
8. REMEDIES. In case an Event of Default shall have occurred and been
declared by the Pledgee, the Pledgee may:
(a) Transfer any or all of the Collateral into its name, or
into the name of its nominee or nominees;
(b) Exercise all corporate rights with respect to the
Collateral including, without limitation, all rights of conversion, exchange,
subscription or any other rights, privileges or options pertaining to any shares
of the Collateral as if it were the absolute owner thereof, including, but
without limitation, the right to exchange, at its discretion, any or all of the
Collateral upon the merger, consolidation, reorganization, recapitalization or
other readjustment of the Issuer thereof, or upon the exercise by the Issuer of
any right, privilege or option pertaining to any of the Collateral, and, in
connection therewith, to deposit and deliver any and all of the Collateral with
any committee, depository, transfer agent, registrar or other designated agent
upon such terms and conditions as it may determine, all without liability except
to account for property actually received by it; and
(c) Subject to any requirement of applicable law, sell, assign
and deliver the whole or, from time to time, any part of the Collateral at the
time held by the Pledgee, at any private sale or at public auction, with or
without demand, advertisement or notice of the time or place of sale or
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adjournment thereof or otherwise (all of which are hereby waived, except such
notice as is required by applicable law and cannot be waived), for cash or
credit or for other property for immediate or future delivery, and for such
price or prices and on such terms as the Pledgee in its sole discretion may
determine, or as may be required by applicable law.
Pledgor hereby waives and releases any and all right or equity
of redemption, whether before or after sale hereunder. At any such sale, unless
prohibited by applicable law, the Pledgee may bid for and purchase the whole or
any part of the Collateral so sold free from any such right or equity of
redemption. All moneys received by the Pledgee hereunder, whether upon sale of
the Collateral or any part thereof or otherwise, shall be held by the Pledgee
and applied by it as provided in Section 10 hereof. No failure or delay on the
part of the Pledgee in exercising any rights hereunder shall operate as a waiver
of any such rights nor shall any single or partial exercise of any such rights
preclude any other or future exercise thereof or the exercise of any other
rights hereunder. The Pledgee shall have no duty as to the collection or
protection of the Collateral or any income thereon nor any duty as to
preservation of any rights pertaining thereto, except to apply the funds in
accordance with the requirements of Section 10 hereof. The Pledgee may exercise
its rights with respect to property held hereunder without resort to other
security for or sources of reimbursement for the Obligations. In addition to the
foregoing, Pledgee shall have all of the rights, remedies and privileges of a
secured party under the Uniform Commercial Code of New York (the "UCC")
regardless of the jurisdiction in which enforcement hereof is sought.
9. PRIVATE SALE. Pledgor recognizes that the Pledgee may be unable to
effect (or to do so only after delay which would adversely affect the value that
might be realized from the Collateral) a public sale of all or part of the
Collateral by reason of certain prohibitions contained in the Securities Act,
and may be compelled to resort to one or more private sales to a restricted
group of purchasers who will be obliged to agree, among other things, to acquire
such Collateral for their own account, for investment and not with a view to the
distribution or resale thereof. Pledgor agrees that any such private sale may be
at prices and on terms less favorable to the seller than if sold at public sales
and that such private sales shall be deemed to have been made in a commercially
reasonable manner. Pledgor agrees that the Pledgee has no obligation to delay
sale of any Collateral for the period of time necessary to permit the Issuer to
register the Collateral for public sale under the Securities Act.
10. PROCEEDS OF SALE. The proceeds of any collection, recovery,
receipt, appropriation, realization or sale of the Collateral shall be applied
by the Pledgee as follows:
(a) First, to the payment of all reasonable costs, expenses
and charges of the Pledgee and to the reimbursement of the Pledgee for the prior
payment of such reasonable costs, expenses and charges incurred in connection
with the care and safekeeping of the Collateral (including, without limitation,
the reasonable expenses of any sale or any other disposition of any of the
Collateral), reasonable attorneys' fees and expenses, court costs, any other
fees or expenses incurred or expenditures or advances made by Pledgee in the
protection, enforcement or exercise of its rights, powers or remedies hereunder;
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(b) Second, to the payment of the Obligations, in whole or in
part, in such order as the Pledgee may elect, whether or not such Obligations
are then due;
(c) Third, to such persons, firms, corporations or other
entities as required by applicable law including, without limitation, Section
9-615(a)(3) of the UCC; and
(d) Fourth, to the extent of any surplus to the Pledgor or as
a court of competent jurisdiction may direct.
In the event that the proceeds of any collection, recovery,
receipt, appropriation, realization or sale are insufficient to satisfy the
Obligations, Pledgor shall be liable for the deficiency plus the reasonable
costs and fees of any attorneys employed by Pledgee to collect such deficiency.
11. WAIVER OF MARSHALING. Pledgor hereby waives any right to compel any
marshaling of any of the Collateral.
12. NO WAIVER. Any and all of the Pledgee's rights with respect to the
Liens granted under this Agreement shall continue unimpaired, and Pledgor shall
be and remain obligated in accordance with the terms hereof, notwithstanding (a)
the bankruptcy, insolvency or reorganization of Pledgor, (b) the release or
substitution of any item of the Collateral at any time, or of any rights or
interests therein, or (c) any delay, extension of time, renewal, compromise or
other indulgence granted by the Pledgee in reference to any of the Obligations.
Pledgor hereby waives all notice of any such delay, extension, release,
substitution, renewal, compromise or other indulgence, and hereby consents to be
bound hereby as fully and effectively as if Pledgor had expressly agreed thereto
in advance. No delay or extension of time by the Pledgee in exercising any power
of sale, option or other right or remedy hereunder, and no failure by the
Pledgee to give notice or make demand, shall constitute a waiver thereof, or
limit, impair or prejudice the Pledgee's right to take any action against any
Pledgor or to exercise any other power of sale, option or any other right or
remedy.
13. EXPENSES. The Collateral shall secure, and Pledgor shall pay to
Pledgee on demand, from time to time, all reasonable costs and expenses,
(including but not limited to, reasonable attorneys' fees and costs, taxes, and
all transfer, recording, filing and other charges) of, or incidental to, the
custody, care, transfer, administration of the Collateral or any other
collateral, or in any way relating to the enforcement, protection or
preservation of the rights or remedies of the Pledgee under this Agreement or
with respect to any of the Obligations.
14. THE PLEDGEE APPOINTED ATTORNEY-IN-FACT AND PERFORMANCE BY THE
PLEDGEE. Upon the occurrence and during the continuance of an Event of Default,
Pledgor hereby irrevocably constitutes and appoints the Pledgee as Pledgor's
true and lawful attorney-in-fact, with full power of substitution, to execute,
acknowledge and deliver any instruments and to do in Pledgor's name, place and
stead, all such acts, things and deeds for and on behalf of and in the name of
Pledgor, which Pledgor could or might do or which the Pledgee may deem
necessary, desirable or convenient to accomplish the purposes of this Agreement,
including, without limitation, to execute such instruments of assignment or
transfer or orders and to register, convey or otherwise transfer title to the
Collateral into the Pledgee's name. Pledgor hereby ratifies and confirms all
that said attorney-in-fact may so do and hereby declares this power of attorney
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to be coupled with an interest and irrevocable. If Pledgor fails to perform any
agreement herein contained, the Pledgee may itself perform or cause performance
thereof, and any costs and expenses of the Pledgee incurred in connection
therewith shall be paid by Pledgor as provided in Section 10 hereof.
15. WAIVERS. THE PARTIES HERETO DESIRE THAT THEIR DISPUTES BE RESOLVED
BY A JUDGE APPLYING SUCH APPLICABLE LAWS. THEREFORE, TO ACHIEVE THE BEST
COMBINATION OF THE BENEFITS OF THE JUDICIAL SYSTEM AND OF ARBITRATION, THE
PARTIES HERETO WAIVE ALL RIGHTS TO TRIAL BY JURY IN ANY ACTION, SUIT, OR
PROCEEDING BROUGHT TO RESOLVE ANY DISPUTE, WHETHER ARISING IN CONTRACT, TORT, OR
OTHERWISE BETWEEN PLEDGEE AND/OR ANY PLEDGOR ARISING OUT OF, CONNECTED WITH,
RELATED OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED BETWEEN THEM IN CONNECTION
WITH THIS AGREEMENT, ANY OTHER DOCUMENT OR THE TRANSACTIONS RELATED HERETO OR
THERETO.
16. RECAPTURE. Notwithstanding anything to the contrary in this
Agreement, if the Pledgee receives any payment or payments on account of the
Obligations, which payment or payments or any part thereof are subsequently
invalidated, declared to be fraudulent or preferential, set aside and/or
required to be repaid to a trustee, receiver, or any other party under the
United States Bankruptcy Code, as amended, or any other federal or state
bankruptcy, reorganization, moratorium or insolvency law relating to or
affecting the enforcement of creditors' rights generally, common law or
equitable doctrine, then to the extent of any sum not finally retained by the
Pledgee, each Pledgor's obligations to the Pledgee shall be reinstated and this
Agreement shall remain in full force and effect (or be reinstated) until payment
shall have been made to Pledgee, which payment shall be due on demand.
17. CAPTIONS. All captions in this Agreement are included herein for
convenience of reference only and shall not constitute part of this Agreement
for any other purpose.
18. MISCELLANEOUS.
(a) This Agreement constitutes the entire and final agreement
among the parties with respect to the subject matter hereof and may not be
changed, terminated or otherwise varied except by a writing duly executed by the
parties hereto.
(b) No waiver of any term or condition of this Agreement,
whether by delay, omission or otherwise, shall be effective unless in writing
and signed by the party sought to be charged, and then such waiver shall be
effective only in the specific instance and for the purpose for which given.
(c) In the event that any provision of this Agreement or the
application thereof to Pledgor or any circumstance in any jurisdiction governing
this Agreement shall, to any extent, be invalid or unenforceable under any
applicable statute, regulation, or rule of law, such provision shall be deemed
inoperative to the extent that it may conflict therewith and shall be deemed
modified to conform to such statute, regulation or rule of law, and the
remainder of this Agreement and the application of any such invalid or
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unenforceable provision to parties, jurisdictions, or circumstances other than
to whom or to which it is held invalid or unenforceable shall not be affected
thereby, nor shall same affect the validity or enforceability of any other
provision of this Agreement.
(d) This Agreement shall be binding upon Pledgor, and
Pledgor's successors and assigns, and shall inure to the benefit of the Pledgee
and its successors and assigns.
(e) Any notice or other communication required or permitted
pursuant to this Agreement shall be given in accordance with the Securities
Purchase Agreement.
(f) This Agreement and the other Documents shall be governed
by and construed and enforced in accordance with the laws of the State of New
York applicable to contracts made and performed in such State, without regard to
principles of conflicts of law.
(g) PLEDGOR HEREBY CONSENTS AND AGREES THAT THE STATE OR
FEDERAL COURTS LOCATED IN THE COUNTY OF NEW YORK, STATE OF NEW YORK SHALL HAVE
EXCLUSIVE JURISDICTION TO HEAR AND DETERMINE ANY CLAIMS OR DISPUTES BETWEEN
PLEDGOR, ON THE ONE HAND, AND THE PLEDGEE, ON THE OTHER HAND, PERTAINING TO THIS
AGREEMENT OR ANY OF THE OTHER DOCUMENTS OR TO ANY MATTER ARISING OUT OF OR
RELATED TO THIS AGREEMENT OR ANY OF THE OTHER DOCUMENTS, PROVIDED, THAT PLEDGOR
ACKNOWLEDGES THAT ANY APPEALS FROM THOSE COURTS MAY HAVE TO BE HEARD BY A COURT
LOCATED OUTSIDE OF THE COUNTY OF NEW YORK, STATE OF NEW YORK; AND FURTHER
PROVIDED, THAT NOTHING IN THIS AGREEMENT SHALL BE DEEMED OR OPERATE TO PRECLUDE
THE PLEDGEE FROM BRINGING SUIT OR TAKING OTHER LEGAL ACTION IN ANY OTHER
JURISDICTION TO COLLECT THE INDEBTEDNESS, TO REALIZE ON THE COLLATERAL OR ANY
OTHER SECURITY FOR THE INDEBTEDNESS, OR TO ENFORCE A JUDGMENT OR OTHER COURT
ORDER IN FAVOR OF THE PLEDGEE. PLEDGOR EXPRESSLY SUBMITS AND CONSENTS IN ADVANCE
TO SUCH JURISDICTION IN ANY ACTION OR SUIT COMMENCED IN ANY SUCH COURT, AND
PLEDGOR HEREBY WAIVES ANY OBJECTION WHICH IT MAY HAVE BASED UPON LACK OF
PERSONAL JURISDICTION, IMPROPER VENUE OR FORUM NON CONVENIENS. PLEDGOR HEREBY
WAIVES PERSONAL SERVICE OF THE SUMMONS, COMPLAINT AND OTHER PROCESS ISSUED IN
ANY SUCH ACTION OR SUIT AND AGREES THAT SERVICE OF SUCH SUMMONS, COMPLAINT AND
OTHER PROCESS MAY BE MADE BY REGISTERED OR CERTIFIED MAIL ADDRESSED TO PLEDGOR
AT THE ADDRESS SET FORTH IN THE SECURITIES PURCHASE AGREEMENT AND THAT SERVICE
SO MADE SHALL BE DEEMED COMPLETED UPON THE EARLIER OF SUCH PLEDGOR'S ACTUAL
RECEIPT THEREOF OR THREE (3) DAYS AFTER DEPOSIT IN THE U.S. MAILS, PROPER
POSTAGE PREPAID.
(h) It is understood and agreed that any person or entity that
desires to become a Pledgor hereunder, or is required to execute a counterpart
of this Agreement after the date hereof pursuant to the requirements of any
Document, shall become a Pledgor hereunder by (x) executing a Joinder Agreement
in form and substance satisfactory to the Pledgee, (y) delivering supplements to
such exhibits and annexes to such Documents as the Pledgee shall reasonably
request and (z) taking all actions as specified in this Agreement as would have
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been taken by such Pledgor had it been an original party to this Agreement, in
each case with all documents required above to be delivered to the Pledgee and
with all documents and actions required above to be taken to the reasonable
satisfaction of the Pledgee.
(i) This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original and all of which when
taken together shall constitute one and the same agreement. Any signature
delivered by a party by facsimile transmission shall be deemed an original
signature hereto.
[Remainder of Page Intentionally Left Blank]
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IN WITNESS WHEREOF, the parties have duly executed this Agreement as of
the day and year first written above.
CARNEROS ACQUISITION CORP.
By: /S/ Xxxxxx Xxxxx
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Name: Xxxxxx Xxxxx
Title: President
LAURUS MASTER FUND, LTD.
By: /S/ Xxxxxx Grin
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Name: Xxxxxx Grin
Title: Director
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