exhibit10_3.htm


    
      

      

    



    PLEDGE
AGREEMENT

     

     

    THIS PLEDGE AGREEMENT (the
“Agreement”) is
made and entered into as of May 21, 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 Four Million Six Hundred Thousand Dollars
($4,600,000) 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
Fifty Seven Thousand Five Hundred (57,500) 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
Convertible Debentures and through repayment in accordance with the terms of the
Convertible Debentures, or the termination or expiration of this
Agreement.

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

     

    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.

     

    
      
        
        

      

      
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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 circumstances or constitute a
waiver of any of the rights of the Pledgee to any other further action in any
circumstances without demand or notice. The Pledgee shall have the full power to
enforce or to assign or contract is rights under this Agreement to a third
party.

     

        5.2. Demand
Registration Rights. In addition to all other remedies available to the
Pledgee, upon an Event of Default, the Pledgor shall promptly, but in no event
more than sixty (60) days after the date
of the Default Notice, file a registration statement to register with the
Securities and Exchange Commission the Pledged Shares for the resale by the
Pledgee. The Pledgor shall cause the registration statement to remain in effect
until all of the Pledged Shares have been sold by the Pledgee.

     

    6. Concerning
the Escrow Agent.

     

        6.1. The
Escrow Agent undertakes to perform only such duties as are expressly set forth
herein and no implied duties or obligations shall be read into this Agreement
against the Escrow Agent.

     

        6.2. The
Escrow Agent may act in reliance upon any writing or instrument or signature
which it, in good faith, believes to be genuine, may assume the validity and
accuracy of any statement or assertion contained in such a writing or
instrument, and may assume that any person purporting to give any writing,
notice, advice or instructions in connection with the provisions hereof has been
duly authorized to do so. The Escrow Agent shall not be liable in any manner for
the sufficiency or correctness as to form, manner, and execution, or validity of
any instrument deposited in this escrow, nor as to the identity, authority, or
right of any person executing the same; and its duties hereunder shall be
limited to the safekeeping of such certificates, monies, instruments, or other
document received by it as such escrow holder, and for the disposition of the
same in accordance with the written instruments accepted by it in the
escrow.

     

        6.3. Pledgee
and the Pledgor hereby agree, to defend and indemnify the Escrow Agent and hold
it harmless from any and all claims, liabilities, losses, actions, suits, or
proceedings at law or in equity, or any other expenses, fees, or charges of any
character or nature which it may incur or with which it may be threatened by
reason of its acting as Escrow Agent under this Agreement, except for Escrow Agent’s gross
negligence or willful misconduct; and in connection therewith, to
indemnify the Escrow Agent against any and all expenses, including attorneys’
fees and costs of defending any action, suit, or proceeding or resisting any
claim (and any costs incurred by the Escrow Agent pursuant to Sections 6.4
or 6.5 hereof). The Escrow Agent shall be vested with a lien on all property
deposited hereunder, for indemnification of attorneys’ fees and court costs
regarding any suit, proceeding or otherwise, or any other expenses, fees, or
charges of any character or nature, which may be incurred by the Escrow Agent by
reason of disputes arising between the makers of this escrow as to the correct
interpretation of this Agreement and instructions given to the Escrow Agent
hereunder, or otherwise, with the right of the Escrow Agent, regardless of the
instructions aforesaid, to hold said property until and unless said additional
expenses, fees, and charges shall be fully paid. Any fees and costs charged by
the Escrow Agent for serving hereunder shall be paid by the
Pledgor.

     

    
      
        
        

      

      
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        6.4. If any
of the parties shall be in disagreement about the interpretation of this
Agreement, or about the rights and obligations, or the propriety of any action
contemplated by the Escrow Agent hereunder, the Escrow Agent may, at its sole
discretion deposit the Pledged Materials with the Clerk of the United States
District Court Southern District of Florida, sitting in Miami, Florida, and,
upon notifying all parties concerned of such action, all liability on the part
of the Escrow Agent shall fully cease and terminate. The Escrow Agent shall be
indemnified by the Pledgor, the Company and Pledgee for all costs, including
reasonable attorneys’ fees in connection with the aforesaid proceeding, and
shall be fully protected in suspending all or a part of its activities under
this Agreement until a final decision or other settlement in the proceeding is
received.

     

        6.5. The
Escrow Agent may consult with counsel of its own choice (and the costs of such
counsel shall be paid by the Pledgor and Pledgee) and shall have full and
complete authorization and protection for any action taken or suffered by it
hereunder in good faith and in accordance with the opinion of such counsel. The
Escrow Agent shall not be liable for any mistakes of fact or error of judgment,
or for any actions or omissions of any kind, unless caused by its willful
misconduct or gross negligence.

     

        6.6. The
Escrow Agent may resign upon ten (10) days’ written notice to the parties
in this Agreement. If a successor Escrow Agent is not appointed within this ten
(10) day period, the Escrow Agent may petition a court of competent
jurisdiction to name a successor.

     

        6.7 Conflict Waiver. The Pledgor hereby
acknowledges that the Escrow Agent is securities counsel to the Pledgee and
counsel to the Pledgee in connection with the transactions contemplated and
referred herein. The Pledgor agrees that in the event of any dispute arising in
connection with this Agreement or otherwise in connection with any transaction
or agreement contemplated and referred herein, the Escrow Agent shall be
permitted to continue to represent the Pledgee and the Pledgor will not seek to
disqualify such counsel and waives any objection Pledgor might have with respect
to the Escrow Agent acting as the Escrow Agent pursuant to this
Agreement.

     

    
      
        
        

      

      
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        6.8 Notices.
Unless otherwise provided herein, all demands, notices, consents, service of
process, requests and other communications hereunder shall be in writing and
shall be delivered in person or by overnight courier service, or mailed by
certified mail, return receipt requested, addressed:

     

    
      	 
      	 
      	 
      	 
      	 
      
	
                If
      to a Pledgor, to such

            	 
      	 
      
	
               
      Pledgor’s attention c/o:

            	 
      	
              14850
      Montfort Drive, Suite 131

            
	 
      	 
      	
              Dallas,
      Texas 75254

            
	 
      	 
      	
              Attention:  Blair
      Merriam, CEO

            
	 
      	 
      	
              Telephone:
      (303) 881-2604

            
	 
      	 
      	
              Facsimile:  (480)
      287-9560

            
	 
      	 
      	 
      
	
                With
      a copy to:

            	 
      	 
      
	 
      	 
      	
              Michael
      J. Tauger, Esq.

            
	 
      	 
      	
              5445
      DTC Parkway, Suite 520

            
	 
      	 
      	
              Greenwood
      Village, CO 80111

            
	 
      	 
      	
              Telephone:   (303)
      713-0363

            
	 
      	 
      	
              Facsimile:  (720)
      489-1587 

            
	 
      	 
      	 
      
	
                If
      to the Pledgee:

               

            	 
      	
              Trafalgar
      Capital Specialized

               Investment
      Fund, Luxembourg

            
	 
      	 
      	
              8-10
      Rue Mathias Hardt

            
	 
      	 
      	
              BP
      3023

            
	 
      	 
      	
              L-1030
      Luxembourg

            
	 
      	 
      	
              Attention:
      Andrew Garai, Chairman of the Board of

              Trafalgar
      Capital Sarl, the General Partner

            
	 
      	 
      	
              Facsimile:
      011-44-207-405-0161

            
	 
      	 
      	
              and
      001-786-323-1651

            
	 
      	 
      	 
      
	
                With
      copy to:

            	 
      	
              James
      G. Dodrill II, P.A.

            
	 
      	 
      	
              5800
      Hamilton Way

            
	 
      	 
      	
              Boca
      Raton, FL  33496

            
	 
      	 
      	
              Telephone:
      (561) 862-0529

            
	 
      	 
      	
              Facsimile:
      (561) 892-7787

            


    

     

    Any such
notice shall be effective (a) when delivered, if delivered by hand delivery
or overnight courier service, or (b) five (5) days after deposit in
the United States mail, as applicable.

     

     

    7. Binding
Effect. All of the covenants and obligations contained herein shall be
binding upon and shall inure to the benefit of the respective parties, their
successors and assigns.

     

        8. Governing
Law; Venue; Service of Process. The validity, interpretation and
performance of this Agreement shall be determined in accordance with the laws of
the State of Florida applicable to contracts made and to be performed wholly
within that state except to the extent that Federal law applies. The parties
hereto agree that any disputes, claims, disagreements, lawsuits, actions or
controversies of any type or nature whatsoever that, directly or indirectly,
arise from or relate to this Agreement, including, without limitation, claims
relating to the inducement, construction, performance or termination of this
Agreement, shall be brought in the state courts located in Broward County,
Florida or United States District Courts for the Southern District of Florida,
and the parties hereto agree not to challenge the selection of that venue in any
such proceeding for any reason, including, without limitation, on the grounds
that such venue is an inconvenient forum. The parties hereto specifically agree
that service of process may be made, and such service of process shall be
effective if made, pursuant to Section 8 hereto.

     

    
      
        
        

      

      
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        9. Enforcement
Costs. If any
legal action or other proceeding is brought for the enforcement of this
Agreement, or because of an alleged dispute, breach, default or
misrepresentation in connection with any provisions of this Agreement, the
successful or prevailing party or parties shall be entitled to recover
reasonable attorneys’ fees, court costs and all expenses even if not taxable as
court costs (including, without limitation, all such fees, costs and expenses
incident to appeals), incurred in that action or proceeding, in addition to any
other relief to which such party or parties may be entitled.

     

        10. Remedies
Cumulative. No
remedy herein conferred upon any party is intended to be exclusive of any other
remedy, and each and every such remedy shall be cumulative and shall be in
addition to every other remedy given hereunder or now or hereafter existing at
law, in equity, by statute, or otherwise. No single or partial exercise by any
party of any right, power or remedy hereunder shall preclude any other or
further exercise thereof.

     

        11. Counterparts. This Agreement may be
executed in one or more counterparts, each of which shall be deemed an original,
but all of which together shall constitute the same instrument.

     

        12. No
Penalties. No
provision of this Agreement is to be interpreted as a penalty upon any party to
this Agreement.

     

        13. JURY
TRIAL. EACH OF THE PLEDGEE AND THE PLEDGOR HEREBY KNOWINGLY, VOLUNTARILY
AND INTENTIONALLY WAIVES THE RIGHT WHICH IT MAY HAVE TO A TRIAL BY JURY OF ANY
CLAIM, DEMAND, ACTION OR CAUSE OF ACTION BASED HEREON, OR ARISING OUT OF, UNDER
OR IN ANY WAY CONNECTED WITH THE DEALINGS BETWEEN PLEDGEE AND PLEDGOR, THIS
PLEDGE AND ESCROW AGREEMENT OR ANY DOCUMENT EXECUTED IN CONNECTION HEREWITH, OR
ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN)
OR ACTIONS OF ANY PARTY HERETO OR THERETO IN EACH CASE WHETHER NOW EXISTING OR
HEREAFTER ARISING, AND WHETHER IN CONTRACT, TORT, EQUITY OR
OTHERWISE.

     

    
      
        
        

      

      
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    IN WITNESS WHEREOF, the
parties hereto have duly executed this Pledge Agreement as of the date first
above written.

     

    
      	 
      	
              PLATINA
      ENERGY GROUP, INC.

            
	 
      	 
      
	 
      	
              By:
      /s/ Blair Merriam

            
	 
      	
              Name:                 Blair
      Merriam

            
	 
      	
              Title:                 Chief
      Executive Officer

            
	 
      	 
      
	 
      	
              TRAFALGAR
      CAPITAL SPECIALIZED

            
	 
      	
              INVESTMENT
      FUND, LUXEMBOURG

            
	 
      	 
      
	 
      	
              By:                 Trafalgar
      Capital Sarl

            
	 
      	
              Its:                 General
      Partner

            
	 
      	 
      
	 
      	
              By:
      /s/ Andrew Garai

            
	 
      	
              Name:                 Andrew
      Garai

            
	 
      	
              Title:                 Chairman
      of the Board

            
	 
      	 
      
	 
      	 
      
	 
      	 
      
	 
      	 
      
	 
      	 
      
	 
      	 
      
	 
      	 
      
	 
      	
              JAMES
      G. DODRILL II, P.A.

            
	 
      	 
      
	 
      	
              By:

            
	 
      	
              Name:                 James
      Dodrill, Esq.

            
	 
      	
              Title:                 President

            


    

     

    
      
        
        

      

      
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    Schedule
1

    


    


    Pledgor:                                                                   Number of Shares
Pledged:                                                                   Free
Trading?:

    


    Platina
Energy
Group                                                   57,500
Shares of Series
E                                                                                    No

    Preferred
Stock