Exhibit 10.4
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PLEDGE AGREEMENT
PLEDGE AGREEMENT (this "Agreement"), dated as of November 30, 2005 by and
between POLYSTICK U.S. CORPORATION, a New York corporation with its address c/o
GSV, Inc., 000 Xxxx Xxxx Xxxx, Xxxxxxxx, Xxxxxxxxxxx 00000 ("Pledgor"), and 000
XXXXXX XXXXXX CORPORATION, a New Jersey corporation with its address at 00
Xxxxxxxxxx Xxxxxx, Xxxxxx Xxxx, Xxx Xxxxxx 00000 ("Pledgee").
1. Guaranty. Pledgor has executed a Guaranty of even date herewith (the
"Guaranty") in favor of Pledgee, guaranteeing the timely payment and performance
of all of the liabilities, indebtedness, duties and obligations of GSV, Inc., a
Delaware corporation ("GSV"), under the Promissory Note of even date herewith
given by GSV in favor of Pledgee (the "Note").
2. Pledge. As collateral security for the timely fulfillment and
performance of each and every covenant and obligation of Pledgor under the
Guaranty and hereunder as well as all of the liabilities, indebtedness, duties
and obligations of GSV under the Note (the "Guaranteed Obligations"), Pledgor
hereby pledges, mortgages, sets over and assigns to Pledgee, and grants to
Pledgee a security interest in, (a) 356,249 shares of Series B Convertible
Preferred Stock, par value $.001 per share ("Series B Preferred Stock"), of GSV
(the "Pledged Shares"), held by Pledgor on the date hereof, being 23.7% of the
issued and outstanding Series B Convertible Preferred Stock, par value $.001 per
share, of GSV and all certificates or instruments representing or evidencing the
Pledged Shares, (b) all substitutions for the Pledged Shares and replacements of
the Pledged Shares, and all rights related thereto, including, without
limitation, all warrants, options, appreciation rights and other rights,
contractual or otherwise, in respect thereof and any and all dividends, cash
dividends, cash, instruments, chattel paper and other rights, property, products
or proceeds from time to time received, receivable or otherwise distributed in
respect of or in exchange for any or all of the Pledged Shares, and (c) any and
all proceeds of any of the foregoing (collectively, the "Pledged Collateral").
3. Events of Default. An event of default under this Agreement shall be
deemed to exist upon the occurrence of any of the following event (each such
event being herein called an "Event of Default"): (i) an Event of Default under
the Convertible Note or default under or breach of the Guarantee; (ii) failure
of Pledgor punctually and fully to perform, observe, discharge or comply with
any of the other covenants set forth in this Agreement or the Guaranty; or (iii)
Pledgor makes an assignment for the benefit of creditors, or if any action is
brought by or against Pledgor seeking its dissolution or liquidation of its
assets or seeking the appointment of a trustee, interim trustee, receiver,
conservator or other custodian for any of its property, or if Pledgor becomes
the subject of a voluntary or involuntary case under the U.S. Bankruptcy Code,
or if any reorganization or arrangement proceeding is instituted by or against
Pledgor for the settlement, readjustment, composition or extension of any of its
debts upon any terms, or if any action or petition is otherwise brought by
Pledgor seeking similar relief or alleging that it is insolvent or unable to pay
its debts as they mature.
4. Delivery of Pledged Collateral. Upon execution and delivery hereof, all
certificates or instruments representing or evidencing the Pledged Collateral
shall be delivered by Pledgor to Pledgee and shall be in suitable form for
transfer by delivery, or shall be accompanied by duly executed undated
instruments of transfer or assignment in blank, all in form and substance
satisfactory to Pledgee. In addition, in the event that during the term of this
Agreement Pledgor shall have become entitled to receive with respect to the
Pledged Collateral any certificate, option or rights (including, without
limitation, in connection with a dividend, distribution of capital,
reclassification, reorganization, merger or other exchange of units), or any
liquidating distributions, Pledgor also agrees to immediately deliver the same
to Pledgee, together with any appropriate endorsement or transfer instruments.
5. Termination of Guaranty. Immediately upon termination of the Guaranty,
the Pledgee shall execute and deliver any documents or instruments reasonably
requested by the Pledgor or its counsel that may be necessary to return the
Pledged Collateral to the Pledgor.
6. Additional Remedies on Default. Upon occurrence of an Event of Default,
Pledgee, (i) without demand of performance or other demand or notice of any kind
may forthwith declare any or all of the Guaranteed Obligations to be immediately
due and payable and foreclose or otherwise enforce the Pledgee's security
interest in the Pledged Collateral in any manner permitted by law or provided
for in this Agreement, including, without limitation, to register the Pledged
Collateral in its own name or its nominee and, subject to compliance with
applicable state and U.S. Federal securities laws and rules, sell, assign, give
options to purchase, or otherwise dispose of and deliver the Pledged Collateral,
in whole or part, at public or private sale or sales, which sale or sales shall
be held in a commercially
reasonable manner within the meaning of the Uniform Commercial Code in effect
under the laws of the State of New Jersey, upon such terms and conditions as
Pledgee may deem advisable and at such prices at it may deem best, with the
right of Pledgee upon any such sale or sales to purchase the whole or any part
of the Pledged Collateral, free of any right or equity of redemption in Pledgor,
which right or equity is expressly waived or released, (ii) may recover from
Pledgor all costs and expenses, including, without limitation, reasonable
attorney's fees, incurred or paid by Pledgee in exercising or enforcing any
right, power, or remedy with respect to any or all of the Collateral provided to
it by this Agreement or by applicable law; and (iii) shall be entitled to
immediately exercise all voting rights and other consensual rights pertaining to
the Pledged Shares.
All monies and other proceeds received by Pledgee upon any collection, sale
or other disposition of any Collateral, together with all other monies and other
proceeds received by Pledgee hereunder, shall be applied in the following order:
(i) to the payment of the reasonable costs and expenses of such sale, collection
or other disposition which may have been incurred by Pledgee, including without
limitation attorney's fees as provided in clause (b) above and all other
reasonable expenses, liabilities and advances made or incurred by Pledgee in
connection therewith; (ii) to the payment of all other Guaranteed Obligations
then due in such order as Pledgee may elect; and (iii) after payment in full of
all Guaranteed Obligations then due, any surplus then remaining from such
proceeds shall be paid to Pledgor. Pledgor shall remain liable to Pledgee for
any deficiency owing on the Guaranteed Obligations after the application of the
proceeds of the Pledged Collateral as provided above.
The remedies provided herein in favor of Pledgee shall not be deemed
exclusive, but shall be cumulative, and shall be in addition to all other
remedies in favor of Pledgee existing at law or in equity.
7. Representations and Covenants of Pledgor. Until the fulfillment of the
Guaranteed Obligations, Pledgor represents, warrants and agrees as follows:
Pledgor has the legal right and all requisite corporate power and authority and
approvals required to execute and deliver this Agreement and to perform fully
its obligations hereunder. This Agreement and the other documents and agreements
being delivered in connection herewith to which Pledgor is a party have been
duly authorized by all necessary corporate action and have been duly executed
and delivered by Pledgor and (assuming the due authorization, execution and
delivery hereof by Pledgee) are valid and binding obligations of Pledgor, as the
case may be, enforceable against it in accordance with its terms. The execution,
delivery and performance by Pledgor of this Agreement in accordance with its
terms (i) are not and will not be inconsistent with Pledgor's Certificate of
Incorporation (as amended) or Pledgor's By laws, or the Certificate of
Incorporation (as amended) or By laws of GSV, (ii) do not and will not require
the approval or consent of any governmental body or any other person; (iii) do
not and will not conflict with or result in any breach or violation of any of
the terms and conditions of, or constitute (or with notice or lapse of time or
both would constitute) a default under any law or order of any governmental body
applicable to Pledgor, or any contract to which Pledgor is a party or by or to
which Pledgor or any of its properties is bound or subject; or (iv) will not
result in the creation of any lien on any of the properties of Pledgor. Promptly
after the execution of this Agreement, the Pledgor shall take or cause to be
taken all actions, and bear all costs, necessary to file any and all financing
statements and other similar documents as may be required under applicable law
in order to perfect or maintain the perfection of the Pledgee's security
interest in the Pledged Collateral. The Pledged Collateral owned by Pledgor
shall at all times be free and clear of all claims, mortgages, pledges, liens,
encumbrances and security interests of every nature whatsoever created by or
arising through it, except for the security interest granted to Pledgee
hereunder.
8. Further Assurances. Pledgor hereby represents and warrants that it is
the owner and holder of the Pledged Collateral, free and clear of any claims,
mortgages, pledges, liens, encumbrances and security interests of every nature
whatsoever. The Pledged Shares are duly authorized, validly issued, fully paid
and non-assessable shares of Series B Preferred Stock of GSV. Pledgor will, from
time to time, at Pledgor's expense, and upon Pledgee's request, promptly execute
and deliver all further instruments and documents and take all further action
that may be necessary or desirable, or that Pledgee may reasonably request, in
order to perfect and protect any security interest granted or purported to be
granted hereby, to enable Pledgee to exercise and enforce the rights and
remedies of Pledgee hereunder with respect to any of the Pledged Collateral or
to carry out the provisions and purposes hereof. Pledgor shall permit Pledgee
(or any person designated by it) from time to time to inspect the Collateral and
to inspect, audit and make copies of or extracts from all books and records
maintained by or on behalf of Pledgor pertaining to the Pledged Collateral. So
long as any of the Guaranteed Obligations shall be outstanding, the Pledgor
shall not, without the express prior written consent of Pledgee, sell, assign,
exchange, pledge or otherwise transfer, encumber, or grant any option, warrant
or other right to purchase any Pledged Collateral which is pledged hereunder, or
consent to any amendment to the certificate of incorporation or certificate of
designations, preferences and rights pertaining to the Pledged Shares that
adversely affects the rights of the holders of the Pledged Shares. In case of
any adverse claims in respect to the Pledged Collateral or any portions thereof,
arising out of any act done or suffered by Pledgor, the Pledgor promises and
agrees to hold harmless and to indemnify Pledgee from and against any losses,
liabilities, damages, expenses, costs, and
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reasonable attorneys' fees incurred in or about defending, protecting, or
prosecuting the security interests hereby created.
9. Voting Rights Prior to Default. Prior to the occurrence of an Event of
Default in the performance of the Guaranteed Obligations, Pledgor shall be
entitled to exercise all voting rights and other consensual rights pertaining to
the Pledged Shares.
10. Successors and Assigns. This Agreement shall be binding upon and inure
to the benefit of the parties hereto and their respective successors, assigns
and transferees. All obligations of the Pledgor hereunder shall be binding upon
its legal representatives, successors, and assigns. This Agreement and all
security interests and other liens granted or conveyed hereunder shall remain in
full force and effect and shall be irrevocable until such time as no Guaranteed
Obligations are outstanding. At such time, any certificates or instruments
representing the Pledged Collateral which are in Pledgee's possession shall be
delivered by Pledgee to Pledgor.
11. Amendments. This Agreement may not be modified, amended, altered or
supplemented, and no waiver or consent may be granted hereunder, except upon the
execution and delivery of a written agreement executed by the parties hereto.
12. Notices. All notices, consents, requests, demands and other
communications herein shall be in writing and shall be deemed duly given to any
party or parties (a) upon delivery to the address of the party or parties as
specified below if delivered in person or any courier or if sent by certified or
registered mail (return receipt requested); or (b) upon dispatch if transmitted
by confirmed telecopy or other means of confirmed facsimile transmissions, in
each case as addressed as follows:
If to the Pledgor:
Polystick U.S. Corporation
c/o GSV, Inc.
000 Xxxx Xxxx Xxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Attn.: Xx. Xxxx Xxxxx
Fax: (000) 000-0000
With a copy to:
Xxxxx & Xxxxxxx LLP
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxx X. Xxxxxx, Esq.
Fax: (000) 000-0000
If to the Pledgee:
000 Xxxxxx Xxxxxx Corporation
00 Xxxxxxxxxx Xxxxxx
Xxxxxx Xxxx, Xxx Xxxxxx 00000
Attn: Xxxxx X. Xxxxxxx
Fax: (000) 000-0000
With a copy to:
XxXxxxxx & English, LLP
Four Gateway Center
000 Xxxxxxxx Xxxxxx
Xxxxxx, Xxx Xxxxxx 00000
Attn: Xxxxxx Xxxxxx, Esq.
Fax: (000) 000-0000
The parties hereto may designate such other address or facsimile number by
written notice in the aforesaid manner.
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13. Governing Law. This Agreement shall be governed by, and interpreted,
construed and enforced in accordance with, the internal laws of the State of New
Jersey, without giving effect to the choice or conflict of law principles
thereof.
14. SUBMISSION TO JURISDICTION. THE PLEDGOR HEREBY IRREVOCABLY SUBMITS AND
CONSENTS TO THE EXCLUSIVE JURISDICTION OF THE FEDERAL AND STATE COURTS LOCATED
WITHIN THE STATE OF NEW JERSEY, AND IRREVOCABLY AGREES THAT ALL ACTIONS OR
PROCEEDINGS RELATED TO THIS NOTE MAY BE LITIGATED IN SUCH COURTS, AND
UNCONDITIONALLY WAIVES ANY OBJECTION WHICH IT MAY HAVE BASED UPON IMPROPER VENUE
OR FORUM NON CONVENIENS TO THE CONDUCT OF ANY PROCEEDING IN ANY SUCH COURT AND
WAIVES PERSONAL SERVICE OF ANY AND ALL PROCESS UPON IT, AND CONSENTS THAT ALL
SUCH SERVICE OF PROCESS BE MADE BY DELIVERY TO THE MAKER AS SET FORTH IN SECTION
11 HEREOF. NOTHING CONTAINED IN THIS SECTION 13 SHALL AFFECT THE RIGHT OF THE
HOLDER TO SERVE LEGAL PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO ENFORCE
A JUDGMENT OBTAINED IN THE COURTS OF ANY OTHER JURISDICTION.
15. JURY TRIAL. TO THE FULLEST EXTENT PERMITTED BY LAW, THE MAKER HEREBY
WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY ACTION BROUGHT ON THIS
NOTE.
16. Counterparts; Severability. This Agreement may be executed with
counterpart signature pages or in several counterparts, each of which shall be
an original, but all of which together shall constitute one and the same
agreement. In the event that any provision of this Agreement shall prove to be
invalid or unenforceable in any jurisdiction, such provision shall be deemed to
be severable from the other provisions of this Agreement, which shall remain
binding on all parties hereto in such jurisdiction and such provision shall, in
any other jurisdiction, remain binding on all parties hereto.
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Signature Page Follows
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IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed as of the day and year first above written.
POLYSTICK U.S. CORPORATION
By: /s/ Xxxx Xxxxx
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Name: Xxxx Xxxxx
Title:President
000 XXXXXX XXXXXX CORPORATION.
By: /s/ Xxxxx Xxxxxx
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Name: Xxxxx Xxxxxx
Title: President
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