STOCK PLEDGE AGREEMENT
This Stock Pledge Agreement ("Agreement") is made and entered into this 8th
day of April, 2002, by and between Wyngate Limited, a Jersey Limited Company
("Pledgor") and GolfGear International, Inc., a Nevada corporation ("Pledgee").
Pledgor and Pledgee are sometimes hereinafter referred to individually as
"party" and collectively as "parties".
Recitals
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A. Pledgor and Pledgee have entered into a Stock Purchase
Agreement, the terms of which require Pledgor to purchase from Pledgee twelve
million three hundred thirty-three thousand (12,333,000) shares of the common
stock of Pledgee ("Corporation").
B. Pursuant to terms of the Stock Purchase Agreement described in
Recital A. above Pledgor executed and delivered to Pledgee a Promissory Note
("Note") in the principal sum of Nine Hundred Twenty-Four Thousand Nine Hundred
Seventy-Five and 00/100 Dollars ($924,975.00) a copy of which is attached hereto
as EXHIBIT "A", and by this reference made a part hereof.
C. The Stock Purchase Agreement requires the Note to be secured by
a security interest in the twelve million three hundred thirty-three thousand
(12,333,000) shares of the Corporation's common stock purchased by Pledgor from
Pledgee as security for all the obligations contained in the Note ("Secured
Obligations").
NOW, THEREFORE, the parties hereby agrees as follows:
1. Incorporation of Recitals. The Recitals set forth above are
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material and by this reference are incorporated herein and made a part of this
Agreement.
2. Grant of Security Interest. To secure the full and prompt
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payment in performance of all the Secured Obligations of Pledgor, Pledgor hereby
grants in favor of Pledgee a security interest in and does hereby pledge and
hypothecate to Pledgee and deposits with Pledgee as security for the Secured
Obligations twelve million three hundred thirty-three thousand (12,333,000)
shares of the Corporation's common stock, represented by Certificate No. 1700
(the "Shares").
3. Representations of Pledgor. Pledgor represents that it owns
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the Shares free and clear of any liens or encumbrances, and that it has the
right and authority to pledge the Shares as provided by the terms of this
Agreement. Pledgor further represents it has not transferred, assigned,
encumbered or created any right in favor of any other person or entity in and to
the Shares.
4. Rights to Dividends, etc. Pledgor shall be entitled to
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receive, as its sole property, all dividends, interest and distributions
generated by the Shares so long as it is not delinquent in making payments
required by the Note. If at any time Pledgor is delinquent in making payments
required by the Note, all dividends, interest, and distributions generated by
the Shares shall be paid to Pledgee.
5. Voting Rights. Pledgor shall have the exclusive right to vote
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the Shares during the time they are held by the Pledgee. Pledgor and Pledgee
further understand and agree that during the time the Shares are deposited with
Pledgee, Pledgee shall not have any voting power with regard to the Shares,
except that Pledgee shall have the right to vote the Shares during any period
the Note is in default.
6. Rights of Pledgee on Default. Upon the occurrence of any event
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of default in payment of the Note or the breach by Pledgor of any of her
representations or covenants contained in this Agreement, and such default or
breach continues uncured for a period of thirty (30) days or more after written
notice duly given by Pledgee to Pledgor and the Corporation, Pledgee shall be
entitled to exercise all its rights and prosecute all actions, suits or
proceedings to enforce payment and performance of the terms and conditions of
this Agreement and to take such other actions as it may deem desirable to
protect its interests with respect thereto, including:
(a) Pledgee may either (i) sell all or part of the Shares at
public sale in accordance with the provisions of California Commercial Code, or
(ii) Pledgor may propose to retain the Shares in satisfaction of the Secured
Obligations. In the event of public sale, Pledgee may purchase the Shares at
such public sale as provided in California Commercial Code. The proceeds of any
such sale shall be applied in the order set forth in California Commercial Code.
Said public sale may proceed only after no less than thirty (30) days' prior
written notice to Pledgor of the time and place of the sale but without further
demand on Pledgor that it cure its default, except as otherwise provided by the
statutes referred to hereinabove;
(b) So long as Pledgor remains in default of its obligations
under the terms of this Agreement or the Note, all dividends, interest or
distributions generated by the Shares shall be held by the Pledgee as additional
security and shall be subject to foreclosure in the event of Pledgor's continued
or subsequent default.
7. Return of Shares. When and if the Note has been paid in full,
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all certificate(s) or other evidence representing the Shares and other items
then held in pledge shall thereupon be promptly released from pledge and
delivered to Pledgor. Pledgor shall be responsible for preparing or causing to
be prepared at her expense all documents necessary to terminate Pledgee's
security interest in the Shares.
8. Notice. All notices or demands of any kind which may be
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required to be served under the terms of this Agreement shall be in writing and
shall be deemed served when personally delivered or five (5) days after being
mailed by registered or certified mail, return receipt requested, addressed as
follows:
Buyer: Wyngate Limited, a Jersey Limited Company
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x/x Xxxxx X. Xxxxxxxxxxx
000 Xxxxxxxx Xxxxx
00-000 Xxxxxxx Xxxxx Xxxx
Xxxxxx Xxxxx, XX 00000
Seller: GolfGear International, Inc.
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Attn: Xxxxxx X. Xxxxxxxx
0000 Xxxxxxxxxx Xxxxx
Xxxxxxxxxx Xxxxx, XX 00000
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Any party may change the address set forth herein by giving written notice of
said change to all parties.
9. Miscellaneous.
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9.1 Remedies Cumulative. The rights and remedies provided
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herein in favor of Pledgee shall not be deemed exclusive or construed as
limiting, but shall be cumulative and shall be in addition to all of the rights
and remedies existing at law or in equity.
9.2 Severability. Any provision of this Agreement which is
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prohibited, unenforceable or not authorized by a court of competent jurisdiction
shall be ineffective only to the extent of such prohibition, unenforceability or
non-authorization without invalidating the remaining provisions hereof or
affecting the validity, enforceability or legality thereof.
9.3 Waiver of Rights, Modification of Agreement. No delay on
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the part of Pledgee in exercising any of Pledgee's options, powers or rights, or
the partial or single exercise thereof, shall constitute a waiver thereof. No
provision of this Agreement may be changed, waived, modified or varied in any
manner orally, but only by an instrument in writing signed by the party against
whom enforcement of the change, waiver, modification or variation is sought.
9.4 Headings. The section headings contained herein are for
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the purposes of convenience only and are not intended to define or limit the
contents of said sections.
9.5 Successors; Agreement Binding Upon Successors. This
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Agreement is binding upon and shall inure to the benefit of the parties and
their respective heirs, executors, administrators, successors, transferees or
assigns, including specifically to the Successor Trustee of the Xxxxxxx X.
Xxxxxxx Trust. Pledgor may not delegate or transfer any of her obligations
under this Agreement without the prior written consent of Pledgee which shall
not be unreasonably withheld. With respect to Pledgor's successors and assigns,
such successors and assigns include any receiver, trustee or
debtor-in-possession of or for Pledgor.
9.6 Arbitration. Any dispute arising out of, or relating to,
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this Agreement or the breach, termination or the validity hereof, shall be
settled by arbitration in accordance with the Judicial Arbitration and Mediation
Services (JAMS) rules for arbitration of business disputes by a sole arbitrator
who shall be a former superior court or appellate court judge or justice with
experience in resolving business disputes. The arbitration shall be governed by
the California Code of Civil Procedure Section 1280 et seq. and the parties
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intend this procedure to be specifically enforceable in accordance with such
provisions. Judgment upon the award rendered by the arbitrator may be entered
by any court having jurisdiction thereof. The place of arbitration shall be
Riverside County, California. THE ARBITRATOR IS NOT EMPOWERED TO AWARD DAMAGES
IN EXCESS OF COMPENSATORY DAMAGES (INCLUDING REASONABLE ATTORNEYS' FEES AND
EXPERT WITNESS FEES) AND EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT TO
RECOVER SUCH DAMAGES (INCLUDING, WITHOUT LIMITATION, PUNITIVE DAMAGES) IN ANY
FORUM. The arbitrator may award equitable relief in those circumstances where
monetary damages would be inadequate. The arbitrator shall be required to
follow the applicable law as set forth in governing law section of this
Agreement. The arbitrator shall award reasonable attorneys' fees and costs of
arbitration to the prevailing party in such arbitration.
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9.7 Attorneys' Fees and Other Costs. Pledgor will reimburse
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Pledgee for all expenses incurred by Pledgee in seeking to collect and enforce
the Secured Obligations and any other rights under this Agreement, including
reasonable attorneys' fees, and actual attorneys' expenses (whether or not there
is litigation or arbitration), court costs and all costs in connection with any
proceedings under the United States Bankruptcy Code. Notwithstanding the
foregoing, Pledgor shall not be obligated to pay any costs or attorneys' fees of
Pledgee in any action in which Pledgor is the prevailing party over Pledgee.
9.8 Applicable Law. This Agreement and the rights and
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obligations of the parties hereunder shall be construed in accordance with and
governed by the internal laws of the State of California.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
the day and year first above written.
Pledgor:
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Wyngate Limited,
a Jersey Limited Company
By:
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Xxxxx X. Xxxxxxxxxxx
Its: President
Pledgee:
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GolfGear International, Inc.,
a Nevada corporation
By:
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Xxxxxx X. Xxxxxxxx
Its: President/Chairman
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EXHIBIT "A"
