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
2. 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.
3. 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.
4. Event of Default. An "Event of Default" shall be deemed to have occurred
under this Agreement upon an Event of Default under the Note.
5. 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.
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, 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.
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 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.
6.5. 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.
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. The Escrow Agent shall not receive any fees or compensation in connection
with this Agreement.
7. 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.
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:
(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.
9. 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.
10. 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 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.
11. 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.
12. 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.
13. 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.
14. No Penalties. No provision of this Agreement is to be interpreted as a
penalty upon any party to this Agreement.
15. 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.
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:
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Name: Xxxx Xxxxxx
Title: Portfolio Manager
TRUST LICENSING, INC.
By:
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Name: Xxxxxxx X. Xxxx
Title: CEO
ESCROW AGENT
By:
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Name: Xxxxx Xxxxxxxx, Esq.
