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PLEDGE AGREEMENT THIS PLEDGE AGREEMENT (the
“Agreement”) is made and entered into as of August ___,
2008 (the “Effective Date”) by and among PLATINA ENERGY
GROUP, INC., a corporation organized and existing under the laws of
Delaware (the “Company” or “Pledgor”),
TRAFALGAR CAPITAL SPECIALIZED INVESTMENT FUND, LUXEMBOURG, (the
“Pledgee”), and JAMES G. DODRILL II, P.A., as escrow
agent (“Escrow Agent”). RECITALS:
WHEREAS, in order to secure the full and prompt payment when
due (whether at the stated maturity, by acceleration or otherwise)
of all of the Company’s obligations (the
“Obligations”) to the Pledgee or any successor to the
Pledgee under this Agreement, the Securities Purchase Agreement of
even date herewith between the Company and the Pledgee (the
“Securities Purchase Agreement”), the Convertible
Debentures (the “Convertible Debentures”) issued or to
be issued by the Company to the Pledgee, either now or in the
future, up to a total of One Million Two Hundred Thousand Dollars
($1,200,000) of principal, plus any interest, costs, fees, and
other amounts owed to the Pledgee thereunder, the Security
Agreement of even date herewith between the Company and the Pledgee
(the “Security Agreement”), and all other contracts
entered into between the Company and Pledgor in connection with
Securities Purchase Agreement (collectively, the “Transaction
Documents”), the Company has agreed to irrevocably pledge to
the Pledgee __________________________ restricted shares of the
Company’s Series E Preferred Stock (the “Pledged
Shares”) in the denominations set forth in Schedule 1
hereto. The parties acknowledge and agree that all of
such shares are unrestricted, freely transferable shares and the
remaining shares may be restricted. NOW, THEREFORE,
in consideration of the mutual covenants, agreements, warranties,
and representations herein contained, and for other good and
valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the parties hereto agree as follows:
TERMS AND CONDITIONS 1. Pledge and
Transfer of Pledged Shares. 1.1. The Pledgor hereby
grants to Pledgee a security interest in all Pledged Shares as
security for the Company’s obligations under the Convertible
Debentures. Simultaneously with the execution of the Transaction
Documents, the Pledgor shall deliver to the Escrow Agent stock
certificates representing the Pledged Shares, in such denominations
as requested by the Pledgee, together with duly executed stock
powers or other appropriate transfer documents executed in blank by
the Pledgor (the “Transfer Documents”), and such stock
certificates and Transfer Documents shall be held by the Escrow
Agent until the full payment of all amounts due to the Pledgee
under the
Pledge Agreement
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Convertible Debentures and through repayment in accordance
with the terms of the Convertible Debentures, or the termination or
expiration of this Agreement. 2. Rights Relating
to Pledged Shares. Upon the occurrence and during the continuance
of an Event of Default (as defined herein), the Pledgee shall be
entitled to vote the Pledged Shares, to receive dividends and other
distributions thereon, and to enjoy all other rights and privileges
incident to the ownership of the Pledged Shares.
3. Release of Pledged Shares from Pledge. Upon the payment of
all amounts due to the Pledgee under the Convertible Debentures by
repayment in accordance with the terms of the Convertible
Debentures, the parties hereto shall notify the Escrow Agent to
such effect in writing. Upon receipt of such written notice for
payment of the amounts due to the Pledgee under the Convertible
Debentures, the Escrow Agent shall return to the Pledgor the
Transfer Documents and the certificates representing the Pledged
Shares, (collectively the “Pledged Materials”),
whereupon any and all rights of Pledgee in the Pledged Materials
shall be terminated. Notwithstanding anything to the contrary
contained herein, upon full payment of all amounts due to the
Pledgee under the Convertible Debentures, by repayment in
accordance with the terms of the Convertible Debentures, this
Agreement and Pledgee’s security interest and rights in and
to the Pledged Shares shall terminate. 4. Event
of Default. An “Event of Default” shall be deemed to
have occurred under this Agreement upon an Event of Default under
the Transaction Documents. 5. Remedies. Upon and
anytime after the occurrence of an Event of Default, the Pledgee
shall have the right to provide written notice of such Event of
Default (the “Default Notice”) to the Escrow Agent,
with a copy to the Pledgor. As soon as practicable after receipt of
the Default Notice, the Escrow Agent shall deliver to Pledgee the
Pledged Materials held by the Escrow Agent hereunder. Upon receipt
of the Pledged Materials, the Pledgee shall have the right to
(i) sell the Pledged Shares and to apply the proceeds of such
sales, net of any selling commissions, to the Obligations owed to
the Pledgee by the Pledgor under the Transaction Documents,
including, without limitation, outstanding principal, interest,
legal fees, and any other amounts owed to the Pledgee, and exercise
all other rights and (ii) any and all remedies of a secured
party with respect to such property as may be available under the
Uniform Commercial Code as in effect in the State of Florida. The
Pledgee shall have the absolute right to sell or dispose of the
Pledged Shares in any manner it sees fit and shall have no
liability to the Pledgor or any other party for selling or
disposing of such Pledged Shares even if other methods of sales or
dispositions would or allegedly would result in greater proceeds
than the method actually used. The Escrow Agent shall have the
absolute right to disburse the Pledged Shares to the Pledgee in
batches not to exceed 9.9% of the outstanding capital of the
Pledgor (which limit may be waived by the Pledgee providing not
less than 65 days’ prior written notice to the Escrow
Agent). The Pledgee shall return any Pledged Shares released to it
and remaining after the Pledgee has applied the net proceeds to all
amounts owed to the Pledgee.
Pledge Agreement
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5.1. Each right, power and remedy of the Pledgee provided
for in this Agreement or any other Transaction Document shall be
cumulative and concurrent and shall be in addition to every other
such right, power or remedy. The exercise or beginning of the
exercise by the Pledgee of any one or more of the rights, powers or
remedies provided for in this Agreement or any other Transaction
Document or now or hereafter existing at law or in equity or by
statute or otherwise shall not preclude the simultaneous or later
exercise by the Pledgee of all such other rights, powers or
remedies, and no failure or delay on the part of the Pledgee to
exercise any such right, power or remedy shall operate as a waiver
thereof. No notice to or demand on the Pledgor in any case shall
entitle it to any other or further notice or demand in similar or
other c
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