Exhibit 10.9
PLEDGE AND ESCROW AGREEMENT
THIS PLEDGE AND ESCROW AGREEMENT (the "Agreement") is made and entered
into as of April 14, 2005 (the "Effective Date") by and among XXXXXXXXXX EQUITY
PARTNERS, LTD. a Delaware corporation (the "Pledgee"), TRUST LICENSING, INC., a
corporation organized and existing under the laws of the State of Delaware (the
"Company" and/or the "Pledgor"), and XXXXX XXXXXXXX, ESQ., as escrow agent
("Escrow Agent").
RECITALS:
WHEREAS, on even date herewith, the Pledgee and the Company entered into a
promissory Note for the principal amount of Six Hundred Thousand Dollars
($600,000) (the "Note"), a copy of which is attached as Exhibit "A;"
WHEREAS, pursuant to the terms of the Note, the Company is obligated to
make certain payments to the Pledgee, as more particularly described in the
Note; and
WHEREAS, in order to secure the Company's obligations under the Note, the
Company has agreed to pledge to the Pledgee Sixty Million (60,000,000) shares
(the "Shares") of the Company's authorized and unissued common stock of the
Company.
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 Pledge Shares. The Pledgor hereby grants to
Pledgee a security interest in all Shares beneficially owned by such Pledgor as
security for its obligations under the Note. Simultaneously with the execution
of this Agreement and the closing of the transactions contemplated under the
Note, Pledgor shall deliver to the Escrow Agent stock certificates representing
the Shares, together with duly executed stock powers or other appropriate
transfer documents executed in blank by 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 Note or the
termination or expiration of this Agreement. The Pledgor hereby grants Pledgee a
further security interest in any stock rights, rights to subscribe, stock
dividends, new securities, or other property (excluding cash dividends) to which
the Pledgor is or may hereafter become entitled to receive on account of the
Shares originally pledged hereunder. In the event Pledgor receives additional
property of such nature ("Additional Pledged Property"), the Pledgor shall
immediately deliver such Additional Pledged Property to the Escrow Agent to be
held by the Escrow Agent in the same manner and on the same terms as the Shares
originally pledged hereunder
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1. Title to Pledge Shares. From the Effective Date, subject only to the
security interest of Pledgee created hereunder, the Pledgor shall be the legal
and record owner of their respective Shares, and shall be entitled to vote the
Shares, to receive dividends and other distributions thereon, and to enjoy all
other rights and privileges incident to the ownership of the Shares, subject to
the restrictions herein. Upon the occurrence of an Event of Default (as defined
herein), the Pledgee shall be entitled to vote the Shares, to receive dividends
and other distributions thereon, and to enjoy all other rights and privileges
incident to the ownership of the Shares.
2. Release of Shares from Pledge. Upon the full payment of all amounts due
to the Pledgee under the Note, the parties hereto shall notify the Escrow Agent
to such effect in writing. Upon receipt of such written notice, the Escrow Agent
shall return to the Pledgor the Transfer Documents and the certificates
representing the Shares, 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
Note, this Agreement and Pledgee's security interest and rights in and to the
Shares, shall terminate.
3. Event of Default. An "Event of Default" shall be deemed to have
occurred under this Agreement upon an Event of Default under the Note.
4. Remedies. Upon the occurrence of the Event of Default, Pledgee shall
provide written notice of such Default (the "Default Notice") to the Escrow
Agent, with a copy to the Company and 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, whereupon Pledgee may
exercise all rights and 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 New Jersey and all rights and remedies specified in the Note.
5. Concerning the Escrow Agent.
5.1. 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.
5.2. 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.
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5.3. Pledgee, the Company and Pledgor hereby agree, jointly and
severally, 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; 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.
5.4. 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 of New Jersey, sitting in Newark, New
Jersey, 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.
5.5. The Escrow Agent may consult with counsel of its own choice
(and the costs of such counsel shall be paid jointly and severally by Pledgor,
the Company 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.
5.6. 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.
5.7. The Escrow Agent shall not receive any fees or compensation in
connection with this Agreement.
6. Conflict Waiver. Pledgee acknowledges and agrees that the Escrow Agent
is solely representing the Pledgor in connection with this Agreement and the
Note and Pledgee waives any objection it might have with respect to the Escrow
Agent acting as the Escrow Agent pursuant to this Agreement.
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7. 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:
(i) If to the Company/Pledgor:
Trust Licensing, Inc.
000 Xxxxx Xxxx Xxxxxx Xxxx - Xxxxx X000-0000
Xxxxxxxxxx, Xx 00000
Attn: Xxxxxxx X. Xxxx
with a copy to:
XxXxxxxxxx & Xxxxx, LLP
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxx X. Xxxx, Esq.
(ii) If to the Pledgee:
Xxxxxxxxxx Equity Partners, Ltd.
000 Xxxxxx Xxxxxx - Xxxxx 0000
Xxxxxx Xxxx, XX 00000
Attn: Xxxx Xxxxxx, Portfolio Manager
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.
8. 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.
9. 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 New Jersey 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 or Federal courts located in Xxxxxx
County, New Jersey, and the parties hereto agree
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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.
10. 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.
11. 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.
12. 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.
13. No Penalties. No provision of this Agreement is to be interpreted as a
penalty upon any party to this Agreement.
14. JURY TRIAL. EACH OF THE PLEDGEE, THE COMPANY 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 and
Escrow Agreement as of the date first above written.
XXXXXXXXXX EQUITY PARTNERS, LTD.
By: /s/ Xxxx Xxxxxx
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Name: Xxxx Xxxxxx
Title: Portfolio Manager
TRUST LICENSING, INC.
By: /s/ Xxxxxxx X. Xxxx
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Name: Xxxxxxx X. Xxxx
Title: CEO
ESCROW AGENT
By: /s/ Xxxxx Xxxxxxxx
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Name: Xxxxx Xxxxxxxx, Esq.
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