PLEDGE AND SECURITY AGREEMENT
THIS PLEDGE AND SECURITY AGREEMENT ("Agreement") is made and entered
into as of the 12{th} day of September 2000, by and between Americas Power
Partners, Inc. (the "Secured Party"), and Thomas A. Casten (the "Pledgor").
RECITALS
A. The Pledgor has entered into that certain subscription agreement
dated of even date herewith ("Subscription Agreement") subscribing for One
Million Two Hundred Thousand (1,200,000) shares of common stock in Secured
Party for the aggregate principal amount of One Million Five Thousand
Dollars ($1,500,000).
B. The Pledgor has entered into that certain promissory note dated of
even date herewith ("Promissory Note") promising to pay Secured Party One
Million Dollars ($1,000,000) plus interest and providing for a pledge of
One Million Two Hundred Thousand (1,200,000) shares of common stock in
Secured Party ("Pledged Shares").
C. It is a condition precedent to the obligation of Secured Party to
enter into the Subscription Agreement that the Pledgor shall have executed
and delivered this Agreement to Secured Party.
CLAUSES
NOW THEREFORE, in consideration of the premises and in order to induce
Secured Party to enter into the Subscription Agreement and for other good
and valuable consideration, the receipt and sufficiency of which the
Pledgor hereby acknowledges, the Pledgor hereby agrees for the benefit of
the Secured Party as follows:
1. Pledge. Pledgor hereby pledges, assigns, hypothecates, transfers
and delivers to Secured Party all the Pledged Shares owned by Pledgor and
hereby grants to Secured Party a first lien on, and security interest in,
the Pledged Shares, and in all proceeds thereof, as collateral for: (a) the
prompt and complete payment when due (whether at the stated maturity, by
acceleration or otherwise) of the unpaid principal of and interest on the
Promissory Note; and (b) the performance by Pledgor of its obligations
under this Agreement (all the foregoing obligations and liabilities
described in clauses (a) and (b) being hereinafter called the
"Obligations"). Pledgor shall deliver the Pledged Shares to Secured Party
upon the execution hereof, and Secured Party shall hold the Pledged Shares
so long as any of the Obligations shall remain outstanding; provided that
for each dollar of principal of the Promissory Note paid by Pledgor,
Secured Party shall release to Pledgor one and one half (1 1/2 ) Pledged
Shares.
2. Secured Party Shares Rights. Any sums paid upon or in respect of
the Pledged Shares upon the liquidation or dissolution of the issuer
thereof shall be paid over to Secured Party to be held by Secured Party in
trust as additional collateral security for the Obligations; and in case
any distribution of capital shall be made on or in respect of the Pledged
Shares or any property shall be distributed upon or with respect to the
Pledged Shares pursuant to the recapitalization or reclassification of the
capital of the issuer thereof or pursuant to the recapitalization thereof,
the property so distributed shall be delivered to Secured Party to be held
by Secured Party as additional collateral security for the Obligations.
Any sums of money and property so paid or distributed in respect of the
Pledged Shares which are received by Pledgor shall, until paid or delivered
to Secured Party, be held by Pledgor in trust as additional collateral
security for the Obligations.
3. Pledgor Shares Rights. Unless an Event of Default (as defined in
the Promissory Note) shall have occurred and be continuing, Pledgor shall
be entitled to receive any cash distributions paid in respect of the
Pledged Shares, to vote the Pledged Shares, and to give consents, waivers
and ratifications in respect of the Pledged Shares.
4. Rights of Secured Party. Secured Party shall not be liable for
failure to collect or realize upon the Obligations or any collateral
security, or for any delay in so doing nor shall Secured Party be under any
obligation to take any action whatsoever with regard thereto. Any or all
of the Pledged Shares held by Secured Party hereunder may, if an Event of
default has occurred and is continuing, without notice, exercise all voting
and shareholder rights at any meeting of any corporation for any of the
stock included in the Pledged Shares and exercise any and all rights of
conversion, exchange, subscription or any other rights, privileges or
options pertaining to any stock of the Pledged Shares as if Secured Party
were the absolute owner, all without liability except to account for
property actually received by Secured Party, but Secured Party shall have
no duty to exercise any of the aforesaid rights, privileges or options and
shall not be responsible for any failure to do so or delay in so doing.
5. Remedies.
a. In the event of the occurrence of an Event of Default (as defined
in the Promissory Note), Secured Party may, without demand of performance
or notice of any kind to or upon Pledgor or any other person, from time to
time exercise any rights and remedies available to Secured Party, under the
Uniform Commercial Code as in effect at that time in the State of Illinois
or otherwise, and (without limitation) may forthwith collect, receive
appropriate and realize upon the Pledged Shares, or any part thereof, and
/or may forthwith sell, assign, give option or options to purchase,
contract to sell or otherwise dispose of and deliver said Pledged Shares,
or any part thereof.
b. Secured Party shall apply the net proceeds of any such collection,
recovery, receipt, appropriation, realization or sale, after deducting all
reasonable costs and expenses of every kind incurred therein or incidental
to the care, safekeeping or otherwise of any and all of the Pledged Shares
or in any way relating to the rights of the Secured Party hereunder, to the
payment in whole or in part, of the Obligations.
c. Pledgor shall not remain liable for any deficiency remaining
unpaid after such application of proceeds to the Obligations, and only
after so paying over such net proceeds and after the payment by Secured
Party of any other amount required by any provision of law, including,
without limitation, Section 9-504(1)(c) of the Uniform Commercial Code as
in effect at that time in the State of Illinois, need Secured Party account
for the surplus, if any, to Pledgor.
d. Pledgor furhter agrees to waive and agrees not to assert any
rights or privileges which Pledgor may acquire under Section 9-112(a), (b),
(c) and (e) of the Uniform Commercial Code as in effect at that time in the
State of Illinois.
6. Representations, Warranties and covenants of the Pledgor. Pledgor
represents and warrants that:
a. Pledgor is the legal record and beneficial owner of, and has good
unencumbered title to, the Pledged Shares, subject to no pledge, lien,
mortgage, hypothecation, security interest, charge, option or other
encumbrance whatsoever, except the lien and security interest created by
this Agreement;
b. Pledgor has full legal right to pledge all the Pledged Shares
pursuant to this Agreement;
c. This Agreement has been duly executed and delivered by Pledgor and
constitutes a legal, valid and binding obligation of Pledgor enforceable in
accordance with its terms, except as such enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium or other laws or
equitable principles relating to creditors' rights generally;
d. The execution, delivery and performance of this Agreement will not
violate an provision of any applicable law or regulation or of any order,
judgment, writ, award or decree of any court, arbitrator or governmental
authority, domestic or foreign, or of any mortgage, indenture, lease,
contract or other agreement, instrument or undertaking to which the Pledgor
is a party or which purports to be binding upon Pledgor or upon any of its
assets and will not result in the creation or imposition of any lien,
charge or encumbrance on or security interest in any of the assets of
Pledgor except as contemplated by this Agreement;
e. The pledge, assignment and delivery of such Pledged Shares
pursuant to this Agreement creates a valid first lien on and a first
perfected security interest in such Pledged Shares, and the proceeds
thereof, subject to no prior pledge, lien, mortgage, hypothecation,
security interest, charge, option or encumbrance or to any agreement
purporting to grant to any third party a security interest in the property
or assets of Pledgor which include the Pledged Shares.
f. Pledgor will defend Secured Party's right and security interest in
and to the Pledged Shares and the proceeds thereof against the claims and
demands of all persons whomsoever; and covenants and agrees that Pledgor
will have title to and the right to pledge any other property at any time
hereafter pledged to Secured Party as Pledged Shares hereunder and will
likewise defend Secured Party's right thereto and security interest
therein.
g. Pledgor represents and warrants that the representations,
warranties and covenants made in this Agreement are true and correct and
shall remain true and correct and shall be deemed to be remade each day
until this Agreement is terminated.
7. Disposition of Pledged Shares. Without the prior written consent
of Secured Party, Pledgor agrees not to sell, assign, transfer, exchange or
otherwise dispose of, or grant any option with respect to and interest in
the Pledged Shares, nor will Pedgor create, incur or permit to exist any
pledge, lien, mortgage, hypothecation, security interest, charge, option or
encumbrance with respect to any interest in the Pledged Shares, or any
proceeds thereof, except for the lien and security interest provided for by
this Agreement. Without the prior written consent of Secured Party,
Pledgor agrees that it will not vote to enable, and will not otherwise
permit, the Corporation to issue or cause any stock or other securities of
any nature in addition to or in exchange or substitution for the Pledged
Shares.
8. Further Assurances. Pledgor agrees that at any time and from time
to time upon the written request of Secured Party, Pledgor will execute and
deliver such further documents and do such further acts and things as
secured Party may reasonably request in order to effect the purposes of
this Agreement.
9. Severability. Any provision of this Agreement which is prohibited
or unenforceable in any jurisdiction shall, as to such jurisdiction be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
10. No Waiver; Cumulative Remedies. Secured Party shall not by any
act, delay, omission or otherwise be deemed to have waived any rights or
remedies hereunder, and no waiver shall be valid unless in writing and
signed by Secured Party, and then only to the extent therein set forth. A
waiver by Secured Party of any right or remedy hereunder on any one
occasion shall not be construed as a bar to any right or remedy which
Secured Party would otherwise have on any future occasion. No failure by
Secured Party to exercise nor any delay by Secured Party in exercising any
right, power or privilege hereunder, shall operate as a waiver thereof; nor
shall any single or partial exercise by Secured Party of any right, power
or privilege hereunder preclude any other or further exercise thereof or
the exercise of any other right, power or privilege. The rights and
remedies herein provided and otherwise provided by the Subscription
Agreement, Promissory Note, or Agreement are cumulative and may be
exercised singly or concurrently, and are not exclusive of any rights or
remedies provided by law, or by any other instrument or agreement securing,
evidencing or relating to any of the Obligations.
11. Amendments. None of the terms or provisions of this Agreement
may be altered, modified or amended except by an instrument in writing,
duly executed by Pledgor and Secured Party. This Agreement and all
obligations of the Pledgor hereunder shall be binding upon the successors
and assigns of the Pledgor, and shall, together with the rights and
remedies of Secured Party hereunder, inure to the benefit of Secured Party
and Secured Party's respective successors and assigns.
12. Applicable law. This Agreement shall be governed by, and be
construed and interpreted in accordance with, the internal laws of the
State of Illinois.
13. Incorporation of Recitals. The Recitals contained herein are
hereby incorporated and made a part of the terms and mutual covenants and
agreements contained in this Agreement.
14. Counterparts. This Agreement may be executed in multiple
counterparts, each of which shsll be deemed an original, but all of which
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties have caused this Pledge and Security
Agreement to be duly executed as of the date first above written.
PLEDGOR: SECURED PARTY:
THOMAS R. CASTEN AMERICAS POWER PARTNERS, INC.
/s/ Thomas R. Casten By: /s/ David Pequet
THOMAS R. CASTEN DAVID PEQUET
