Attached files
Exhibit 10.3
COLLATERAL PLEDGE AGREEMENT
------
Dated as of the 17th day of October 2010
by and between
Add-on Exchange, Inc., Pledgor
and
GoIP Global, Inc., Pledgee
------
Page 1 of 12
COLLATERAL PLEDGE AGREEMENT
THIS COLLATERAL PLEDGE AGREEMENT, dated as of the 17th day of October 2010,
is from Add-on Exchange, Inc. 410 Park Avenue, 15th Floor, New York, NY 10022,
(hereinafter referred to as the "Pledgor") to GoIP Global, Inc., 475 Park Avenue
South. Suite 3001, New York, NY 10016, ("hereinafter referred to as "GOIG" or
the "Pledgee").
RECITALS
Whereas, GOIG intends to advance to the Pledgor a minimum of $15,000 per
month for 12 months, and wishes to secure the repayment of such loan and certain
interest on such loan,
NOW, THEREFORE, in consideration of the premises and for the continued
forbearance in collecting such loan and interest, the Parties agree as follows:
Section 1. Defined Terms. As used in this Agreement, the following terms
will have the following meanings unless the context requires otherwise:
"Business Day" shall mean every day other than Saturday, Sunday and any day
which is a legal holiday under the laws of the State of New York or is a day on
which GOIG's office or banking institutions in New York are closed.
"Collateral" shall mean the items given in Exhibit I attached hereto and
incorporated by reference and any later additions to the Collateral which
collateral GOIG deems acceptable, provided that GOIG's acceptance of Collateral
shall not prevent GOIG from requiring substitution of any such Collateral at a
later time which, in GOIG's sole discretion, affect the valuation,
Page 2 of 12
marketability, liquidity, ownership or perfectability of such Collateral, or for
any other reason GOIG deems appropriate.
"Event of Default" shall have the meaning given to such term in Section 10.
"Lien" shall mean any security interest, mortgage, pledge, lien, charge,
encumbrance, title retention agreement or analogous instrument or device, in, of
or on any assets or properties of the Person referred to.
"Obligations" shall mean (a) the obligation of the Pledgor to repay all amounts
owing to GOIG, now existing or after this time created, whether under a
Promissory Note of even date between the Parties or otherwise.
"Other Collateral" shall mean assets held subject to a security interest in
favor of GOIG, all pursuant to the Other Agreements.
"Person" shall mean any individual, corporation, partnership, limited
partnership, limited liability company, joint venture, firm, association, trust,
unincorporated organization, government or governmental agency or political
subdivision or any other entity, whether acting in an individual, fiduciary or
other capacity.
Section 2. Security for Obligations. As security for the payment and
performance of all of the Obligations, the Pledgor hereby pledges to GOIG the
Collateral in the event of default under this Agreement or the Convertible
Promissory Note between the Parties of even date.
Section 3. Collateral. The Pledgor agrees to pledge to GOIG the Collateral
given in Exhibit I, attached hereto and incorporated by reference.
Section 4. Financing Statement. Contemporaneously with the execution of
this Agreement, the Pledgor shall deliver to GOIG an executed financing
statement and any other documents necessary to record GOIG's lien on the Assets.
Page 3 of 12
Section 5. Certain Representations Warranties and Covenants. The Pledgor
makes the following representations, warranties and covenants:
(a) The Pledgor has title to all Collateral, free of all Liens. No
financing statement covering all or any part of the Collateral is on file in any
public office.
(b) The Pledgor has the power and authority and the legal right to execute
and deliver, and to perform its obligations under, this Agreement, and has taken
all necessary action to authorize such execution, delivery and performance; this
Agreement constitutes a legal, valid and binding obligation of the Pledgor
enforceable in accordance with its terms; the execution, delivery and
performance of this Agreement will not violate any provision of any law,
statute, rule or regulation or any order, writ, judgment, injunction, decree,
determination or award of any court, governmental agency or arbitrator presently
in effect having applicability to the Pledgor.
(c) All ownership of the Collateral by Pledgor is genuine. No item of
Collateral is subject to any offset or similar right or claim of the issuer
thereof.
(d) The Pledgor shall not forgive, cancel, subordinate, compromise, modify,
amend or extend the time for payment of, or waive any default under any
Collateral, or consent to or acquiesce in any of the foregoing, without in each
case the prior written consent of GOIG.
(e) The Pledgor shall immediately notify GOIG in the event of any merger,
takeover or acquisition that results in a Change of Control of the the companies
issuing the securities held as Collateral, as that term is defined in the
Subscription Agreement of even date.
(f) The Pledgor waives any defenses it may have with respect to any failure
of this Agreement, or other actions of GOIG, to create or preserve an
enforceable interest in the Collateral that is not subject to prior liens,
claims or encumbrances of other parties.
Section 6. Further Assurances. The Pledgor agrees that at any time and from
time to time, at the expense of the Pledgor, the Pledgor will promptly execute
and deliver all further instruments and documents, and take all further action
that may be necessary or that GOIG may reasonably request, in order to enable
Page 4 of 12
GOIG to exercise and enforce its rights and remedies hereunder with respect to
any Collateral (but any failure to request or assure that the Pledgor execute
and deliver such instruments or documents or to take such action shall not
affect or impair the validity, sufficiency or enforceability of this Agreement
or the Collateral, regardless of whether any such item was or was not executed
and delivered or action taken in a similar context or on a prior occasion).
Section 7. Transfers and Other Liens. The Pledgor agrees that it will not
(i) sell, assign (by operation of law or otherwise) or otherwise dispose of or
grant any option with respect to, any of the Collateral, or (ii) create or
permit to exist any Lien upon or with respect to any of the Collateral.
Section 8. Attorney-in-Fact. As additional security for the Obligations,
the Pledgor hereby irrevocably appoints GOIG as the Pledgor's attorney-in fact,
with full authority, only in the event of default, to act in the place and stead
of such Pledgor and in the name of such Pledgor or otherwise, from time to time
in GOIG's good- faith discretion, to take any action and to execute any
instrument that GOIG may reasonably believe necessary or advisable to accomplish
the purposes of this Agreement, in a manner consistent with the terms hereof,
including, without limitation, in the event of default, to receive, indorse and
collect all instruments made payable to the Pledgor representing any payment,
dividend or other distribution in respect of the Collateral or any part thereof
and to give full discharge for the same.
Section 9. GOIG May Perform. If the Pledgor fails to perform any agreement
contained herein, GOIG may itself perform, or cause performance of, such
agreement, and the reasonable expenses of GOIG incurred in connection therewith
shall be payable by the Pledgor under Section 12 hereof.
Section 10. Default. Each of the following occurrences shall constitute an
Event of Default under this Agreement:
(a) The Pledgor shall fail to observe or perform any material covenant or
agreement applicable to the Pledgor under this Agreement.
Page 5 of 12
(b) The Pledgor shall, within two (2) Business Days of receipt of written
notice from GOIG, fail to comply with the material requirements of this
Agreement.
(c) Any material representation or warranty made by the Pledgor in this
Agreement, or any certificate or other document delivered by the Pledgor to GOIG
shall prove to have been false or materially misleading when made.
(d) GOIG determines that the Pledgor has acted contrary to, or otherwise
breached a material term or condition of, this Agreement.
(e) The Pledgor is closed, placed in receivership or subject to similar
action by any state or federal regulatory agency.
(f) The Pledgor shall be in material default under a Convertible Note
and/or any of the Other Agreements of even date between the Pledgor and/or its
shareholders and GoIP.
Section 11. Remedies upon Default. If any Event of Default shall have
occurred and be continuing:
(a) GOIG may make draws on or claims under any Collateral, or exercise in
respect of the Collateral any other rights and remedies provided for herein or
otherwise available to it under applicable law. The Pledgor hereby waives all
requirements of law, if any, relating to the marshaling of assets which would be
applicable in connection with the enforcement by GOIG of its remedies hereunder,
absent this waiver. GOIG may disclaim warranties of title and possession and the
like.
(b) GOIG may notify any Person obligated on any of the Collateral that the
same has been assigned or transferred to GOIG and that the same should be
performed as requested by, or paid directly to, GOIG or its agents, as the case
may be. The Pledgor shall join in giving such notice, if GOIG so requests. GOIG
may, in GOIG's name or in the Pledgor's name, demand, sue for, collect or
receive any money or property at any time payable or receivable on account of,
or securing, any such Collateral or grant any extension to, make any compromise
or settlement with or otherwise agree to waive, modify, amend or change the
obligation of any such Person, without affecting any Obligation of the Pledgor.
Page 6 of 12
(c) All cash proceeds received by or on behalf of GOIG in respect of any
sale of, collection from, or other realization upon all or any part of the
Collateral may, in the discretion of GOIG, be held by or on behalf of GOIG as
collateral for, or then or at any time thereafter be applied in whole or in part
by GOIG against, all or any part of the Obligations (including any expenses of
GOIG payable pursuant to Section 12 hereof).
(d) In the event of a default under this Agreement and/or the Promissory
Note of even date between he Parties, such Collateral immediately without
further action shall be the property of GOIG in strict foreclosure, and the
Pledgor shall be deemed to have assigned and transferred said Collateral and all
rights thereto to GoIP.
Section 12. Liability; Costs and Expenses; Indemnity.
(a) GOIG shall not be liable for any error of judgment, or for any act done
or step taken or omitted by it in good faith or for any mistakes of fact or law,
or for anything which it may do or refrain from doing in connection herewith,
except its own gross negligence or willful misconduct.
(b) Subject to the exceptions stated in Section 12(a), GOIG shall be fully
protected by each Pledgor in acting or relying upon any written notice,
direction, request, waiver, consent, receipt or other paper or document which
GOIG in good faith believes to be genuine and to have been signed or presented
by the proper party or parties.
(c) The Pledgor will pay or reimburse GOIG on demand for all out-of-pocket
expenses (including in each case all filing and recording fees and taxes and all
reasonable fees and expenses of counsel, incurred by GOIG in connection with the
administration, continuance, amendment or enforcement of this Agreement, and all
such costs and expenses shall be part of the Obligations. The Pledgor shall
indemnify and hold GOIG harmless from and against any and all claims, losses and
liabilities (including reasonable attorneys' fees, arising out of or resulting
from this Agreement (including enforcement of this Agreement) or GOIG's actions
pursuant hereto, except claims, losses or liabilities resulting solely from
GOIG's gross negligence or willful misconduct as determined by a final judgment
of a court of competent jurisdiction. Any liability of the Pledgor to indemnify
and hold GOIG harmless pursuant to the preceding sentence shall be part of the
Page 7 of 12
Obligations. The obligations of the Pledgor under this Section shall survive any
termination of this Agreement.
Section 13. Waivers and Amendments; Remedies. This Agreement may be waived,
modified, amended, terminated or discharged only explicitly in a writing signed
by GOIG. A waiver so signed shall be effective only in the specific instance and
for the specific purpose given. Mere delay or failure to act shall not preclude
the exercise or enforcement of any rights and remedies available to GOIG. All
rights and remedies of GOIG shall be cumulative and may be exercised singly in
any order or sequence, or concurrently, at GOIG's option, and the exercise or
enforcement of any such right or remedy shall neither be a condition to nor bar
the exercise or enforcement of any other.
Section 14. Notices. Any notice, request or demand to or upon the parties
hereto must be given in writing. Notices may be sent by receipted hand delivery,
by registered or certified mail, return receipt requested, postage prepaid, by
Federal Express, courier or other similar and reliable carrier or by facsimile
transmission (signed on behalf of the sender) and shall be addressed to the
party to receive the same as follows or to such other addressee as may be
hereafter designated in writing by the respective parties hereto:
To GOIG:
Issac H. Sutton
Chief Executive Officer
GoIP Global, Inc.
475 Park Avenue South. Suite 3001
New York, NY 10016
Page 8 of 12
To Pledgors:
Add-on Exchange, Inc.
410 Park Avenue, 15th Floor
New York, NY 10022
Except as otherwise expressly provided herein, all notices, requests and demands
to or upon a party hereto shall be in writing, shall be executed by an
authorized representative of the party sending such notice, and shall be deemed
to have been validly served, given or delivered (a) if sent by certified or
registered mail against receipt, when delivered against receipt, (b) when
received if sent by facsimile as provided herein to the address or telephone
number provided herein or in the latest direction from any party, provided that
they are confirmed by a written notice, deposited in the first-class mail on the
date the transmission was sent, (c) within one day in the case of overnight hand
delivery, courier or services such as Federal Express with guaranteed next day
of delivery, or (d) if sent by any other method authorized under this Section,
upon actual delivery.
Section 15. Pledgor Acknowledgments. The Pledgor hereby acknowledges that
(a) the Pledgor has been advised by counsel in the negotiation, execution and
delivery of this Agreement and, if applicable, the Other Agreements, (b) GOIG
has no fiduciary relationship to the Pledgor, the relationship being solely that
of debtor and creditor, and (c) no joint venture exists between the Pledgor and
GOIG.
Section 16. Continuing Interest. This Agreement shall (a) remain in full
force and effect until the Agreement shall terminate pursuant to Section 17
hereof, (b) be binding upon the Pledgor, its successors and assigns, and (c)
inure, together with the rights and remedies of GOIG hereunder, to the benefit
of, and be enforceable by, GOIG and its successors, transferees and assigns.
Without limiting the generality of the foregoing clause (c), GOIG may assign or
otherwise transfer all or any portion of its rights and obligations under this
Agreement or the Collateral to any other Person to the extent and in the manner
permitted by applicable law or regulations.
Section 17. Termination of Agreement. The Pledgor may terminate this
Agreement by delivering written notice to GOIG not less than thirty (30) days
prior to the intended date of termination. Notwithstanding anything contained in
this Section to the contrary, the Pledgor may not terminate this Agreement and
Page 9 of 12
the Pledge Agreement nor shall GOIG deliver to such Pledgor any Collateral
unless and until (a) either (i) such time as (x) Pledgor has discharged all
amounts due for principal and interest in connection with the aforesaid Note of
even date or any other loan and the Pledgor has satisfied all other Obligations
under this Agreement, and (b) no Event of Default is continuing under this
Agreement. This Agreement may also be terminated upon the mutual written
agreement of the Pledgor and GOIG. Immediately upon the Pledgor's satisfaction
of the requirements for termination under this Section, GOIG shall deliver all
of the remaining Collateral and any other property in its custody to the Pledgor
at such location as such Pledgor shall specify in writing. Any reversion or
return of the remaining Collateral upon termination of this Agreement and any
instruments of transfer or termination shall be at the expense of the Pledgor
and shall be without warranty by, or recourse against, GOIG. As used in this
Section, "Pledgor" includes any assigns of Pledgor, or whoever else may be
lawfully entitled to any part of the Collateral.
Section 18. Governing Law and Construction. THE VALIDITY, CONSTRUCTION AND
ENFORCEABILITY OF THIS AGREEMENT SHALL BE GOVERNED BY THE LAWS OF THE STATE OF
NEW YORK. Whenever possible, each provision of this Agreement and any other
statement, instrument or transaction contemplated hereby or relating hereto
shall be interpreted in such manner as to be effective and valid under such
applicable law, but, if any provision of this Agreement or any other statement,
instrument or transaction contemplated hereby or relating hereto shall be held
to be prohibited or invalid under such applicable law, such provision shall be
ineffective only to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of this
Agreement or any other statement, instrument or transaction contemplated hereby
or relating hereto.
Section 19. General. All representations and warranties contained in this
Agreement or in any other agreement between the Pledgor and GOIG shall survive
the execution, delivery and performance of this Agreement and the creation and
payment of the Obligations. The Pledgor waives notice of the acceptance of this
Agreement by GOIG. Captions in this Agreement are for reference and convenience
only and shall not affect the interpretation or meaning of any provision of this
Agreement.
Page 10 of 12
Section 20. Compliance with Applicable Laws. The Pledgor and its employees,
agents, officers, directors, approved contractors and subcontractors shall
comply with all applicable federal, state, foreign, and local laws, rules,
ordinances, codes, regulations and orders, when performing within the scope of
this Agreement. The Pledgor represents and warrants that it has complied with
all federal, state, foreign and local laws applicable to the performance of its
obligations under this Agreement.
IN WITNESS WHEREOF, the Pledgor has duly executed and delivered this Pledge
Agreement as of the date first above written.
PLEDGOR:
Add-On Exchange, Inc.
By: /s/ John Rafuse
--------------------------------
John A Rafuse, CEO
GoIP Global, Inc.
By: /s/ Isaac Sutton
--------------------------------
Isaac H. Sutton, CEO
Page 11 of 12
EXHIBIT I
INITIAL COLLATERAL
All of the assets of the Pledgor.
Page 12 of 1
