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EXHIBIT 2.1f
PLEDGE AND PROXY
SECURITY AGREEMENT
THIS PLEDGE AND PROXY SECURITY AGREEMENT is made and entered into as of
October 21, 1999, by Scott Miller ("Pledgor"), in favor of CCEC Capital
Corporation, f/k/a Coach & Car Equipment Corporation, and its successors and
assigns (hereinafter called "Secured Party").
I. RECITALS
1.1 Secured Party has made a loan to Coach and Car Equipment
Corp., f/k/a Coach and Car Acquisition Corp. ("Coach and
Car"), which is an affiliated corporation with Beacon
Industries, Inc. ("Beacon"), represented by an Installment
Note and a Term Note both dated October 21, 1999
(collectively, the "Notes").
1.2 Secured Party's agreement to make this financial accommodation
to Pledgor is conditioned upon Secured Party's receiving a
pledge and security interest in certain stock and securities
issued by Coach and Car and Beacon (hereinafter when referred
to in this capacity collectively called the "Company"), now
owned or hereafter acquired by Pledgor.
1.3 Pledgor is the majority shareholder of the outstanding shares
of the common stock of Coach and Car of Beacon.
2. PLEDGE OF STOCK
2.1 Pledgor hereby assigns, transfers, pledges, and delivers to
Secured Party and grants Secured Party a security interest in
all issued and outstanding stock in the Company now owned or
hereafter acquired by Pledgor, including without limitation,
the stock described on Schedule "A."
2.2 Upon the execution of this Agreement, Pledgor shall deliver to
Secured Party certificates for the Pledged Securities,
together with appropriate stock transfer powers therefor duly
executed by Pledgor in blank.
3. OBLIGATION SECURED
This Agreement shall secure:
(a) Payment of the sum of $10,114,008 plus accrued
interest under the terms of the Notes; and
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(b) Payment, performance, and observance by Pledgor of
each covenant, condition, provision, and agreement
contained herein, in the Amended and Restated Asset
Purchase Agreement dated August 31, 1999, and in the
Note Refinancing Agreement between the parties dated
October 21, 1999 (the "Note Refinancing Agreement"),
and all of the agreements and arrangements entered
into as a part thereof, and of all monies expended or
advanced by Secured Party pursuant to the terms
hereof, or to preserve all right of Secured party
hereunder, or to protect or preserve the Collateral
or any part thereof.
All of the indebtedness and obligations secured by this Agreement are
hereinafter collectively called the "Obligations."
4. REPRESENTATIONS AND WARRANTIES OF PLEDGOR
Pledgor hereby represents and warrants that:
4.1 The Pledged Securities are and shall be duly and validly
issued and pledged in accordance with applicable law, and this
Agreement shall not contravene any law, agreement, or
commitment binding Pledgor or the Company, and Pledgor shall
defend the right, title, lien, and security interest of
Secured Party in and to the Pledged Securities against the
claims and demands of all persons and other entities
whatsoever.
4.2 Pledgor has the right, power, and authority to convey good and
marketable title to the Pledged Securities, and the Pledged
Securities and the proceeds thereof are and shall be free and
clear of all claims, mortgages, pledges, liens, encumbrances,
and security interest of every nature whatsoever other than as
imposed hereby.
4.3 As of the date of this Agreement, the Pledged Securities
represent in excess of fifty percent (50%) of the voting power
of all of the outstanding common stock of each of Coach and
Car and Beacon.
4.4 Pledgor shall not allow to be issued shares of common stock of
either Coach and Car or Beacon without first obtaining the
written consent of Secured Party, which consent shall not be
unreasonably withheld.
5. IRREVOCABLE PROXY
5.1 Upon an Event of Default as defined hereafter, Pledgor shall
and without further action by Pledgor hereby does irrevocably
constitute and appoint Secured Party, whether or not the
Pledged Securities have been transferred into the name of
Secured Party or its nominee, as Pledgor's proxy with full
power, in the same manner, to the same extent and with the
same effect as if Pledgor were to do the same, in the sole
discretion of Secured Party:
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(a) To consent to any and all actions by or with respect
to the Company for which consent of the stockholders
of the Company is or may be necessary or appropriate;
and
(b) Without limitation, to do all things that Pledgor can
do or could do as stockholder of the Company, giving
Secured Party full power of a substitution and
revocation.
6. EVENTS OF DEFAULT; REMEDIES; RECOURSE
6.1 "Event of Default" hereunder shall mean any "Event of Default"
as defined in the Notes.
6.2 Upon the occurrence of any Event of Default and at any time
while such Event of Default is continuing, Secured Party shall
have the following rights and remedies and may do one or more
of the following:
(a) Declare all or any part of the Obligation to be
immediately due and payable, and the same, with all
costs and charges, shall be collectible thereupon by
action at law;
(b) Transfer the Pledged Securities or any part thereof
into its own name or that of it nominee so that
Secured Party or its nominee may appear of record as
the sole owner thereof;
(c) Vote any or all of the Pledged Securities and give
all consents, waivers, and ratifications in respect
thereof and otherwise acting with respect thereto as
though it were the absolute owner thereof;
(d) Receive and retain any dividend or other distribution
on account of the Pledged Securities; and
(e) Sell any or all of the Pledged Securities in
accordance with the provisions hereof.
6.3 Upon an Event of Default, Secured Party, before exercise of
the rights and remedies described above, shall first exercise
its rights to recourse to the Collateral pledged under the
Security Agreement between Secured Party and Coach and Car
dated October 21, 1999 in connection with the Notes. Secured
Party shall seek recourse under Section 6.2 above only in the
event the proceeds of a liquidation or other disposition of
the Collateral is insufficient to repay the indebtedness and
then only to the extent of the amount of such deficiency.
Furthermore, in the event of recourse to the Pledged
Securities, Secured Party shall forbear from any of the
remedies for a reasonable time to allow Beacon the opportunity
to repay the indebtedness or, as necessary, to allow Pledgor
to manage an orderly liquidation of Beacon's assets in an
expeditious manner. Only after Pledgor's failure to repay the
deficiency after Secured Party's reasonable forbearance may
Secured Party exercise the remedies of Section 6.2.
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7. RELEASE OF PLEDGED SECURITIES
The Pledged Securities shall be released and this Agreement terminated
upon the payment of all outstanding indebtedness to Secured Party.
8. MISCELLANEOUS PROVISIONS
8.1 The terms herein shall have the meanings in and be construed
under the Uniform Commercial Code. This Agreement shall be
governed by and construed according to the internal laws of
the State of Arizona. Each provision of this Agreement shall
be interpreted in such manner as to be effective and valid
under applicable law, but if any provision of this Agreement
is held to be void or invalid, the same shall not affect the
remainder thereof which shall be effective as though the void
or invalid provision had not been contained herein;
8.2 No modification, recission, waiver, release, or amendment of
any provision of this Agreement shall be made except by a
written agreement executed by Pledgor and a duly authorized
officer of Secured Party.
IN WITNESS WHEREOF, these presents are executed as of the date
indicated above.
PLEDGOR
/s/ Scott Miller
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Scott Miller
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SCHEDULE A
1) Stock Certificate Number 1013-2 representing 12,740,000 shares of common
stock of Beacon Industries, Inc.
2) Stock Certificate Number 1 representing 655,000 shares of common stock of
Coach and Car Equipment Corp.
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