COLLATERAL PLEDGE AGREEMENT
AGREEMENT, dated as of February 4, 1997, among NET TELECOMMUNICATIONS,
INC., a Nevada corporation, having an address at 000 Xxxxxxxxxx Xxxxxx Xxxxx,
Xxx Xxxxx, Xxxxxx ("Debtor"), BENTLEY KING ASSOCIATES, INC., a Delaware
corporation, having and address at 0000 X. Xxxxxxxx Xxxx, Xxx Xxxxx, Xxxxxx
("Secured Party") and XXXXXXX X. XXXXXXXX, ESQ., having an address at 000 Xxxx
Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx ("Escrow Age ~t")(hereinafter "Pledge
Agreement")
WITNESSETH:
WHEREAS, concurrently herewith Secured Party is lending to Debtor the
sum of $300,000.00, as evidenced by a promissory note and loan agreement and
related documents dated as of February 4, 1997 herewith (the "Note" and Loan
Agreement"); and
WHEREAS, in order to induce Secured Party to make said loan, Debtor has
agreed to pledge to Secured Party certain property as security for the loan;
NOW THEREFORE, in consideration of Ten Dollars, and other valuable
consideration, the receipt and sufficiency of which is hereby acknowledged,
the parties hereto agree as follows:
1. Debt. Debtor is indebted to the Secured Party in accordance with a
Note dated as of February 4, 1997, in the amount of Three Hundred Thousand
Dollars ($300,000.00)
2. Description of Collateral. Simultaneously with the execution of the
Note, this Pledge Agreement and related documents, the Debtor shall deliver
all issued and outstanding shares of NTI Telecom, Inc., consisting of 2500
shares of common stock, certificate number 001, dated January 27, 1997,
together with a blank stock power duly endorsed (the "Pledged Property").
3. Appointment of Escrow Agent. The Debtor and the Secured Party do
hereby appoint the Escrow Agent to accept possession of the Pledged Property
and to hold it for the purposes and under the terms and conditions set forth
herein
4. Acceptance by Escrow Agent. The Escrow Agent upon receipt of the
Pledged Property, shall keep, hold and preserve said Pledged Property in its
possession until the payment in full and performance of all terms and
conditions on behalf of the Debtor of the Note and related documents, or until
the Debtor defaults in the payment of the Note or any term or condition of the
Note or related documents.
5. Return of Property on Performance. When the Note is paid in full and
upon performance of all the terms and conditions of the Note and related
documents, the Escrow Agent shall return the Pledged Property to the Debtor
upon written demand accepted by both the Debtor and the Secured Party.
6. Return of Property on Non-performance. If the Debtor defaults in the
payment of the Note or on any terms or conditions of the Note or Loan
Agreement or related documents, the Escrow Agent shall, upon written demand by
the Secured Party, deliver the Pledged Property to the Secured Party to be
dealt with by the Secured Party in manner and like as the Secured Party deems
fit.
7. Dividends on Property. Provided the Debtor is not in default of any
payment on the Note or any terms or conditions of the Note or Loan Agreement
or related documents, the Debtor shall have the right to receive all ordinary
dividends, excepting any liquidating dividend, on the Pledged Property and
shall have the right to vote the shares of stock at all meetings of the
corporation, except that Debtor shall not vote the shares of stock for
changing the present authorized and issued capital structure of the
corporation or for any consolidation, merger, liquidation or dissolution of
the corporation without the prior written consent of the Secured party. If
Debtor is in default, the Secured Party shall have the right to receive all
dividends on the Pledged Property and shall have the right to vote the shares
of stock at all meetings of the corporation.
8. Indemnification of Escrow Agent. The Debtor and the Secured Party do
hereby release the Escrow Agent from and against any and all liability
whatsoever arising out of this Pledge Agreement and agree to jointly and
severally indemnify and hold harmless Escrow Agent against the same.
9. Notices. All notices, requests, demands or other communications
provided for herein shall be in writing and shall be deemed to have been
property given if sent by registered or certified mail, return receipt
requested, addressed to the parties at their respective addresses hereinabove
set forth, or at such other addresses as the parties may designate in writing.
10. Modification And Waiver. No modification or waiver of any provision
of this Pledge Agreement, and no consent by Secured Party to any breach
thereof by Debtor, shall be effective unless such modification or waiver shall
then be in writing and signed by Secured Party, and the same shall then be
effective only for the period and on the conditions and for the specific
instances and purposes specified in writing. No course of dealing between
Debtor and Secured Party in exercising any rights or remedies hereunder shall
operate as a waiver or preclude the exercise of any other rights or remedies
hereunder. .
11. Applicable Law. This Pledge Agreement shall be construed in
accordance with an shall be governed by the laws of the State of Nevada.
12. Benefit. This Pledge Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective heirs, executors,
administrators, successors and assigns.
IN WITNESS WHEREOF, the parties hereto have duly executed this Pledge
Agreement on the date first above written.
NET TELECOMMUNICATIONS, INC.
By:/s/Xxxxxxx Xxxxx
-------------------------
Xxxxxxx Xxxxx
President
BENTLEY KING ASSOCIATES, INC.
By:/s/Xxx X. Xxxxxx
--------------------------
Xxx X. Xxxxxx
Executive Vice President
---------------------------
Xxxxxxx X. Xxxxxxxx
Escrow Agent
