Exhibit 2.3
PLEDGE AGREEMENT
This Pledge Agreement is entered into this 1st day of March, 2006, between
Sand Hills Partners, L.L.C., a Delaware Limited Liability Company with its
principal place of business at 12805 Burkhardt Dr. Tomball Texas, 77377
(hereinafter called "Debtor" or, and David M. Klausmeyer, an individual
residing in Houston, Texas (hereinafter referred to as the "Secured Party").
R E C I T A L S:
Reference is made to the Buyer's Note dated this date executed by Debtor
in favor of Holder (the " Note") which Note is further secured by the guaranty
and pledge of certain shares by Sand Hills General Partners, a Texas General
Partnership.
The Note, the Guaranty and Pledge Agreement and this Pledge Agreement
have each been issued pursuant to a Partnership Interest Purchase Agreement
between Debtor and Secured Party (the "Purchase Agreement").
NOW THEREFORE, for good and valuable consideration and to induce
Secured Party to enter into the Purchase Agreement, Debtor agrees as follows:
1. DEFINITIONS.
When used in this Agreement (the "Pledge Agreement" or "Agreement") the
following terms shall have the following meanings:
1.1 "Collateral" shall mean all property and interests in
property on or in which a lien or security interest is or has been granted by
the Debtor to Secured Party pursuant to Section 2 of this Agreement; and
1.2 "Default" shall mean the happening of either of the
following events: (a) the occurrence of a "Default" as such term is defined in
the Note, or any document or instrument executed and delivered pursuant
thereto or pursuant to the Purchase Agreement, or (b) the undersigned fails to
perform any covenant or agreement contained in the Purchase Agreement or this
Agreement or if any representation or warranty contained in the Purchase
Agreement or this Agreement is found to have been untrue, incomplete or
misleading in any material respect when furnished; and
1.3 "Indebtedness" shall mean any and all indebtedness,
obligations and liabilities of any kind of Debtor to Secured Party, arising
out of any document or instrument executed and delivered pursuant to the Note
or the Purchase Agreement.
2. Grant. For valuable consideration, receipt whereof is
acknowledged, Debtor hereby grants to Secured Party a security interest in,
and mortgages to Secured Party, the following described property and interests
in property of Debtor (hereinafter called the "Collateral"):
(a) any and all general partners interest in and to SHGP possessed by
Debtor, equaling a 63% interest,
(b) all proceeds of the property or from the sale of other disposition
or reorganization of the property described in this Section 2.
to secure payment of the following obligations of Debtor to Secured Party (all
hereinafter called the "Obligations"):
(i) All obligations and liabilities of Debtor to Secured Party
(including without limitation all debts, claims and indebtedness)
whether primary, secondary, direct, contingent, fixed or
otherwise, heretofore, now and/or from time to time hereafter
owing, due or payable, however evidenced, created, incurred,
acquired or owing and however arising, or by oral agreement or
operation of law or otherwise in connection with the Note or
arising out of any document or instrument executed and delivered
pursuant to the Purchase Agreement.
3. Warranties and Covenants of Debtor. Debtor warrants and covenants
that:
(a) it is a Limited Liability Company duly organized and in good
standing under the laws of the State of Delaware;
(b) it is duly qualified to do business and is in good standing in
each jurisdiction in which the nature of the business transacted by it
or the character of the properties owned by it makes such qualification
necessary;
(c) it is not in default under any provisions of its charter
documents;
(d) it has corporate power under applicable laws and under its
charter documents to enter into and perform all agreements on its part;
(e) it has been authorized to enter into this Agreement by all
necessary and proper corporate action;
(f) the execution and delivery by it of the Note, this Agreement and
the agreements herein contained do not contravene or constitute a
default under any agreement, indenture, commitment, provision of its
charter documents or other requirement of law to which it is a party or
by which it is or may be bound;
(g) this Agreement constitute a valid, legal and binding obligation of
the Debtor enforceable against the undersigned in accordance with its
terms;
(h) Except for the security interest granted hereby, Debtor is the
owner of the Collateral free from any adverse lien, security interest or
encumbrance; and Debtor will defend the Collateral against all claims
and demands of all persons at any time claiming the same or any interest
therein;
(i) No Financing Statement or other Notice of outstanding grant of
collateral interests required under the Laws of the State of Texas
covering any of the Collateral or any proceeds thereof is on file in any
public office, except in favor of Secured Party. The Debtor shall
immediately notify the Secured Party in writing of any change in name,
address, identity or corporate structure from that shown in this
Agreement and shall also upon demand furnish to the Secured Party such
further information and shall execute and deliver to Secured Party such
financing statements and other documents in form satisfactory to Secured
Party and shall do all such acts and things as Secured Party may at any
time or from time to time reasonably request or as may be necessary or
appropriate to establish and maintain a perfected security interest in
the Collateral as security for the Obligations, subject to no adverse
liens or encumbrances; and Debtor will pay the cost of filing the same
or filing or recording this agreement in all public offices wherever
filing or recording is deemed by Secured Party to be necessary or
desirable. A carbon, photographic or other reproduction of this
agreement is sufficient as a financing statement;
(j) Debtor will not sell or offer to sell, assign, pledge, loan or
otherwise transfer or encumber the Collateral or any interest therein,
except in compliance with the terms of the Purchase Agreement;
(k) Debtor shall keep the Collateral at all times insured against
risks of loss or damage by fire (including so-called extended coverage),
theft and such other casualties as Secured Party may reasonably require,
including collision in the case of any motor vehicles, all in such
amounts, under such forms of policies, upon such terms, for such periods
and written by such companies or underwriters as Secured Party may
approve, losses in all cases to be payable to Secured Party and Debtor
as their interests may appear. All policies of insurance shall provide
that Secured Party's interest therein shall not be invalidated by the
act, omission or neglect of anyone other than Secured Party and for at
least ten days' prior written notice of cancellation to Secured Party.
Debtor shall furnish Secured Party with certificates of such insurance
or other evidence satisfactory to Secured Party as to compliance with
the provisions of this paragraph. Secured Party may act as attorney for
Debtor in making, adjusting and settling claims under and canceling such
insurance and endorsing Debtor's name on any drafts drawn by insurers of
the Collateral;
(l) Debtor will keep the Collateral free from any adverse lien,
security interest or encumbrance and in good order and repair, shall not
waste or destroy the Collateral or any part thereof, and shall not use
the Collateral in violation of any statute, ordinance or policy of
insurance thereon;
(m) Secured Party may examine and inspect the Collateral at any
reasonable time or times, wherever located;
(n) Debtor will pay promptly when due all taxes and assessments upon
the Collateral or for its use or operation or upon this Agreement or
upon any note or notes evidencing the Obligations.
3. Additional Rights of Parties. At its option, Secured Party may
discharge taxes, liens or security interests or other encumbrances at any time
levied or placed on the Collateral, may place and pay for insurance on the
Collateral upon failure by the Debtor, after having been requested to do so,
to provide insurance satisfactory to the Secured Party, and may pay for the
maintenance, repair, and preservation of the Collateral. To the extent
permitted by applicable law, Debtor agrees to reimburse Secured Party on
demand for any payment made, or any expense incurred by Secured Party pursuant
to the foregoing authorization. Until default Debtor may have possession of
the Collateral and use it in any lawful manner not inconsistent with this
agreement and not inconsistent with any policy of insurance thereon.
4. Events of Default. Debtor shall be in default under this Agreement
upon the occurrence of any of the following events or conditions, namely: (a)
default in the payment or performance of any of the Obligations or of any
covenants or liabilities contained or referred to herein or in any of the
Obligations; (b) any warranty, representation or statement made or furnished
to Secured Party by or on behalf of Debtor proving to have been false in any
material respect when made or furnished; (c) loss, theft, substantial damage,
destruction, sale or encumbrance to or any of the Collateral, or the making of
any levy, seizure or attachment thereof or thereon; (d) dissolution,
termination of existence, filing by Debtor or by any third party against
Debtor of any petition under any Federal bankruptcy statute, insolvency,
business failure, appointment of a receiver of any part of the property of, or
assignment for the benefit of creditors by, Debtor; or (e) the occurrence of
an event of default in the Note or in any document or instrument executed and
delivered pursuant to the Purchase Agreement, subject to any and all rights to
cure.
5. Remedies. SECURED PARTY MAY DECLARE ALL OBLIGATIONS SECURED
HEREBY IMMEDIATELY DUE AND PAYABLE AND SHALL HAVE THE REMEDIES OF A SECURED
PARTY UNDER THE LAWS OF THE STATE OF TEXAS, including without limitation the
right to take immediate and exclusive possession of the Collateral, or any
part thereof, and for that purpose may, so far as Debtor can give authority
therefor, with or without judicial process, enter (if this can be done without
breach of the peace), upon any premises on which the Collateral or any part
thereof may be situated and remove the same therefrom (provided that if the
Collateral is affixed to real estate, such removal shall be subject to the
conditions stated in local Texas Law); and the Secured Party shall be entitled
to hold, maintain, preserve and prepare the Collateral for sale, until
disposed of, or may propose to retain the Collateral subject to Debtor's right
of redemption in satisfaction of the Debtor's Obligations as provided in Texas
Law. Secured Party without removal may render the Collateral unusable and
dispose of the Collateral on the Debtor's premises. Secured Party may require
Debtor to assemble the Collateral and make it available to Secured Party for
possession at a place to be designated by Secured Party, which is reasonably
convenient to both parties. Unless the Collateral is perishable or threatens
to decline speedily in value or is of a type customarily sold on a recognized
market, Secured Party will give Debtor at least 5 days' notice of the time and
place of any public sale thereof or of the time after which any private sale
or any other intended disposition thereof is to be made. The requirements of
reasonable notice shall be met if such notice is mailed, postage prepaid, to
the address of Debtor shown at the beginning of this agreement at least ten
days before the time of the sale or disposition. Secured Party may buy at any
public sale. The net proceeds realized upon any such disposition, after
deduction for the expenses of retaking, holding, preparing for sale or lease,
selling, leasing and the like and the reasonable attorney's fees and legal
expenses incurred by Secured Party, shall be applied in satisfaction of the
Obligations secured hereby. The Secured Party will account to the Debtor for
any surplus realized on such disposition and the Debtor shall remain liable
for any deficiency.
The remedies of the Secured Party hereunder are cumulative and the
exercise of any one or more of the remedies provided for herein or under the
Texas Law shall not be construed as a waiver of any of the other remedies of
the Secured Party so long as any part of the Debtor's Obligation remains
unsatisfied.
6. General. No waiver by Secured Party of any default shall operate
as a waiver of any other default or of the same default on a future occasion.
All rights of Secured Party hereunder shall inure to the benefit of its
successors and assigns; and all obligations of Debtor shall bind its
successors or assigns. If there be more than one Debtor, their obligations
hereunder shall be joint and several. This Agreement shall become effective
when it is signed by Debtor.
All rights of the Secured Party in, to and under this Agreement and in
and to the Collateral shall pass to and may be exercised by any assignee
thereof. The Debtor agrees that if the Secured Party gives notice to the
Debtor of an assignment of said rights, upon such notice the liability of the
Debtor to the assignee shall be immediate and absolute. The Debtor will not
set up any claim against the Secured Party as a defense, counterclaim or set-
off to any action brought by any such assignee for the unpaid balance owed
hereunder or for the possession of the Collateral, provided that Debtor shall
not waive hereby any right of action to the extent that waiver thereof is
expressly made unenforceable under applicable law.
If any provision of this agreement shall be prohibited by or invalid
under applicable law, such provision shall be ineffective to the extent of
such prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this agreement.
Debtor:
Sand Hills Partners, L.L.C., a
Delaware Limited Liability Company
/s/George Jarkesy
George Jarkesy, Managing Member
Secured Party
Affirmed and Agreed to by
/s/David M. Klausmeyer
David M. Klausmeyer