COLLATERAL PLEDGE AGREEMENT
This Collateral Pledge Agreement ("Agreement") dated as of December 31,
2004 is made by Global Matrechs, Inc., a Delaware corporation ("Pledgor") in
favor of Mark Allen ("Secured Party").
A. Secured Party has extended credit to True To Form, Limited ("Debtor") as
evidenced by that certain Secured Note dated as of December 31, 2004 (as
amended, restated, modified, or replaced from time to time, the "Note"), in
connection with the merger of in connection with the merger of True to Form,
Limited , a Massachusetts corporation and TTF Acquisition Corp., a wholly owned
subsidiary of Pledgor. To induce Secured Party to extend credit to Debtor,
Pledgor has guaranteed the Note and executes and delivers this Agreement to
Secured Party. All capitalized terms used herein and not otherwise defined shall
have the same meanings assigned to such terms in the Note or the Security
Agreement, as hereinafter defined.
B. This Agreement is given and is intended to provide additional security
for the Obligations as defined in the Security Agreement of even date herewith
among Debtor and Secured Party (the "Security Agreement").
NOW THEREFORE, for other good and sufficient consideration, the receipt of
which is hereby acknowledged, Pledgor, intending to be legally bound hereby,
covenants and agrees as follows:
1. Pledgor, for the purpose of granting a continuing lien and security
interest to secure the Obligations, does hereby assign, pledge, hypothecate,
deliver and set over to Secured Party, its successors and assigns, 100% of its
interest in all of the shares of capital stock of Debtor , as more specified in
Schedule I, whether now owned or hereafter acquired by Pledgor or in which
Pledgor now or hereafter has any rights, options or warrants, together with all
certificates representing such shares and all rights (but none of the
obligations) under or arising out of the applicable organizational documents of
such corporations, together with any additions, exchanges, replacements and
substitutions therefor, dividends and distributions with respect thereto, and
the proceeds thereof (collectively, the "Pledged Collateral").
2. The pledge and security interest described herein shall continue in
effect to secure all Obligations from time to time incurred or arising unless
and until all Obligations have been indefeasibly paid and satisfied in full.
3. Pledgor, severally hereby represents and warrants that:
(a) Except as pledged herein, Pledgor has not sold, assigned,
transferred, pledged or granted any option or security interest in or otherwise
hypothecated the Pledged Collateral in any manner whatsoever and the Pledged
Collateral is pledged herewith free and clear of any and all liens, security
interests, encumbrances, claims, pledges, restrictions, legends, and options,
except for Permitted Liens, as defined in the Security Agreement.
(b) Pledgor has the full power and authority to execute, deliver, and
perform under this Agreement and to pledge the Pledged Collateral hereunder.
(c) This Agreement constitutes the valid and binding obligation of
Pledgor, enforceable in accordance with its terms, and the pledge of the Pledged
Collateral referred to herein is not in violation of and shall not create any
default under any agreement, undertaking or obligation of Pledgor.
(d) Pledgor is pledging hereunder all of the Pledgor's interest and
ownership in Debtor.
(e) Contemporaneously with the execution hereof, Pledgor is delivering
to Secured Party all certificates representing or evidencing the Pledged
Collateral, accompanied by duly executed instruments of transfer or assignments
in blank, to be held by Secured Party in accordance with the terms hereof.
(f) The Secured Party is authorized to file such UCC financing
statements as it may deem necessary to perfect the pledge anticipated hereby.
4. If an Event of Default (as defined in the Note) occurs, then Secured
Party may, at its sole option, exercise from time to time with respect to the
Pledged Collateral any and/or all rights and remedies available to it hereunder,
under the Uniform Commercial Code as adopted in the State of Delaware ("UCC"),
or otherwise available to it, at law or in equity, including, without
limitation, the right to dispose of the Pledged Collateral at public or private
sale(s) or other proceedings, and Pledgor agrees that, if permitted by law,
Secured Party or its nominee may become the purchaser at any such sale(s).
5. (a) In addition to all other rights granted to Secured Party herein or
otherwise available at law or in equity, Secured Party shall have the following
rights, each of which may be exercised at Secured Party's sole discretion (but
without any obligation to do so), at any time following the occurrence of an
Event of Default under the Note, without further consent of Pledgor: (i)
transfer the whole or any part of the Pledged Collateral into the name of itself
or its nominee for the purpose of selling the same, or to conduct a sale of the
Pledged Collateral pursuant to the UCC or pursuant to any other applicable law;
(ii) vote the Pledged Collateral; (iii) notify the persons obligated on any of
the Pledged Collateral to make payment to Secured Party of any amounts due or to
become due thereon; and (iv) release, surrender or exchange any of the Pledged
Collateral at any time, or to compromise any dispute with respect to the same.
Secured Party may proceed against the Pledged Collateral, or any other
collateral securing the Obligations, in any order, and against Pledgor and any
other obligor, jointly and/or severally, in any order to satisfy the
Obligations. Each Pledgor waives and releases any right to require Secured Party
to first collect any of the Obligations secured hereby from any other collateral
of Pledgor, any other Pledgor or any other party securing the Obligations under
any theory of marshalling of assets, or otherwise. All rights and remedies of
Secured Party are cumulative, not alternative.
(b) Pledgor hereby irrevocably appoints Secured Party its