PLEDGEAGREEMENT

 

 

THIS PLEDGE AGREEMENT ("Agreement"), dated as of _________, 2009, is executed by and among (A) Trestle Holdings, Inc., a Delaware corporation (“Trestle”); (B) MoqiZone Holdings Limited, a Cayman Island corporation (“MoqiZone Cayman”); (C) MobiZone Holdings Limited, a Hong Kong corporation (“MobiZone Hong Kong”); (D) Shanghai MoqiZone Information Technology Company Limited, a corporation organized under the laws of the People’s Republic of China (“MoqiZone”); (E) Leser Hunter Taubman & Taubman, a law firm formed under the laws of the State of New York and having an office at 17 State Street, 20th floor, New York, New York 10004 (the “Collateral Agent” or “LHTT”); and (F) those individuals, corporations, limited liability companies, or other entities who have executed this Agreement on the signature page hereof (collectively, the “Investors” or the “Secured Parties”).

 

Trestle, MoqiZone Cayman and MobiZone Hong Kong are hereinafter sometimes individually referred to as a “Pledgor” and collectively referred to as the “Pledgors.”  Trestle, MoqiZone Cayman, MobiZone Hong Kong and MoqiZone and the Investors are hereinafter sometimes collectively referred to as the “Business Parties.”

 

 

WHEREAS, Trestle is the owner of 100% of the share capital of MoqiZone Cayman (the “MoqiZone Cayman Shares”), MoqiZone Cayman is the owner of 100% of the share capital of MobiZone Hong Kong (the “MobiZone Hong Kong Shares”), and MobiZone Hong Kong is the owner of 100% of the share capital of MoqiZone (the “MoqiZone Shares”);

 

WHEREAS, pursuant to the terms of a Securities Purchase Agreement, dated as of June 1, 2009 (the “Purchase Agreement”), among the Business Parties, certain other Persons and the “Investors” (as defined therein), such Investors have purchased securities of MobiZone Hong Kong and Trestle, including 8% exchangeable notes of MobiZone Hong Kong, due March 31, 2011 (the “Notes”);

 

WHEREAS, by their stated terms, upon consummation of (a) the “Trestle Reverse Split” (as defined in the Purchase Agreement), (b) the filing of an amended and restated certificate of incorporation of Trestle and the Series A Preferred Stock Certificate of Designations (as defined) of Trestle with the Secretary of State of the State of Delaware, (c) the payment of accrued interest on the Notes, and (d) the delivery to each Investor of their respective rights to shares of Series A Preferred Stock, all as required under the Purchase Agreement (collectively, the “Performance Obligations”), such Notes shall be automatically cancelled and exchanged for a like Stated Value of shares of Series A voting convertible preferred stock of Trestle (the “Series A Preferred Stock”);

 

WHEREAS, as collateral to secure performance of their respective Performance Obligations under the Purchase Agreement, each of Trestle, MoqiZone Cayman and MoqiZone have each guaranteed payment of the Notes and the performance by the Business Parties of their respective Performance Obligations, all pursuant to a guaranty agreement, dated of even date herewith (the “Guaranty”); and

 

WHEREAS, in order to secure the payment of the Notes and performance of the Performance Obligations, (a) Trestle has agreed to pledge to the Investors the MoqiZone Cayman Shares, (b) MoqiZone Cayman has agreed to pledge to the Investors, the MobiZone Hong Kong Shares, and (c) MobiZone Hong Kong has agreed to pledge to the Investors the MoqiZone Shares, all pursuant to this Agreement;

 

 

1.	Pledge of the Pledged Shares.

(a)           Each of the Pledgors do hereby pledge, as pledgors, to the Investors, as pledgee, and grants to the Investors a first priority lien on and security interest in and to (i) all of Trestle’s right, title and interest in and to all of the MoqiZone Cayman Shares, (ii) all of MoqiZone Cayman’s right, title and interest in and to all of the MobiZone Hong Kong Shares, and (iii) all of MobiZone Hong Kong’s right, title and interest in and to all of the MoqiZone Shares (collectively, the “Shares”), together with all proceeds from the sale of the Shares, all dividends paid in respect of the Shares and any property or securities delivered to the holder of the Shares in respect thereof in the event of a merger or takeover of any of the Pledgors by a third party (collectively, the "Pledged Collateral").

(b)           Each of the Pledgors does hereby agree to execute and deliver to the Collateral Agent (i) assignments separate from the Shares substantially in the form of Exhibit A hereto, undated and appropriately endorsed in blank, with respect to the Share comprising the Pledged Collateral and (ii) if legally required, such financing statements as the Collateral Agent may reasonably request with respect to the Pledged Collateral (or, if execution by Pledgors is not required pursuant to the applicable Uniform Commercial Code, each of the Pledgors hereby authorizes the Collateral Agent to file all financing statements deemed necessary by the Investors to perfect the security interests granted hereunder), (iii) take such other steps as the Investors may from time to time reasonably request to perfect the Investors' security interest in the Pledged Collateral or any part thereof under applicable law, and (iv) after the occurrence and during the continuance of an Event of Default, to execute and deliver on behalf of the Pledgors such other documents of transfer as the Investors or the Collateral Agent may from time to time reasonably require to enable the Investors to transfer the Pledged Collateral into the name of the Investors or the name of its nominee (all of the foregoing are hereinafter collectively referred to as the "Assignments").

(c)           Notwithstanding anything to the contrary, express or implied, contained in this Agreement or in the Guaranty, upon consummation and performance of the Performance Obligations, the Notes shall, for all purposes be deemed to have been fully paid and satisfied, and this Agreement and the Guaranty shall automatically terminate and be of no further force or effect.

 

2.           Definition; Security for Secured Obligations.

 

(a)           Unless otherwise defined in this Agreement, when used herein all capitalized terms shall have the same meaning as is defined in the Purchase Agreement.

 

(b)           The Pledged Collateral secures the prompt and complete payment, performance and observance of the Notes and the Performance Obligations.

 

3.           Pledged Collateral Adjustments. If during the term of this Agreement:

 

(a)           any non-cash dividend or distribution, reclassification, readjustment or other change is declared or made in the capital structure of Company, or any option, warrant or similar instrument included within the Pledged Collateral is exercised, or both, or

 

(b)           any subscription, warrants, options shall be issued in connection with the Pledged Collateral,

 

 

then the Pledgors shall (i) promptly deliver new, substituted and additional shares, warrants, options, or other equity securities, issued by reason of any of the foregoing, and all certificates and other instruments evidencing the same to the Investors to be held under the terms of this Agreement and shall constitute Pledged Collateral hereunder, and (ii) promptly deliver to the Investors or the Collateral Agent such additional Pledged Collateral.

Notwithstanding anything to the contrary, express or implied, contained in this Agreement (including this Section 4) or in the Purchase Agreement or any other Exhibit thereto (including the Guaranty), an “Event of Default” that would otherwise permit the Secured Parties to exercise any of their rights and remedies under this Agreement shall not be deemed to have occurred if (i) the consummation of the Performance Obligations shall be delayed beyond June 16, 2009, (ii) the Pledgors shall then be responding to comments from the Securities and Exchange Commission and otherwise seeking, in good faith, to perform such Performance Obligations, and (iii) the outstanding principal amount of the Notes shall be increased as provided in the Purchase Agreement.

(a)           Following the occurrence and during the continuance of an “Event of Default” (as that term is defined in the Purchase Agreement), upon not less than twenty (20) days prior written notice to the Pledgors and the Collateral Agent, Investors holding a majority in interest of the outstanding principal amount of the Notes (the “Majority Investors”), may, at their option, request that the Collateral Agent transfer or register the Pledged Collateral or any part thereof into its or their nominee's name with or without any indication that such Pledged Collateral is subject to the lien created hereunder. In addition, upon the occurrence and during the continuance of an Event of Default, the Investors may at any time exchange certificates or other instruments representing or evidencing Pledged Collateral for certificates or other instruments of smaller or larger denominations.

(b)           If at any time an Event of Default shall have occurred and be continuing, then, in addition to having the right to exercise any right or remedy of a secured party upon default under the New York State Uniform Commercial Code or applicable law or at equity, Secured Parties may, to the extent permitted by law but subject at all times to the terms of the Purchase Agreement, subject to giving notice to Pledgor but without being required to take or do any action (except as provided below):

(i)            apply any cash held by it hereunder to the payment of the Notes; and

(ii)           if there shall be no such cash or if the cash so applied shall be insufficient to pay in full the Notes, collect, receive, appropriate and realize upon the Pledged Collateral or any part thereof, and/or sell, assign, transfer, contract to sell or otherwise dispose of and deliver the Pledged Collateral or any part thereof, in its entirety or in portions, at public or private sale or at any broker's board, on any securities exchange or at any of Secured Parties places of business or elsewhere, for cash, upon credit or for future delivery, and at such price or prices as Secured Parties may deem best, and Secured Parties may (except as otherwise provided by law) be the purchaser of any or all of the Pledged Collateral so sold and thereafter may hold the same, absolutely, free from any right or claim of whatsoever kind.

(c)           In the event of a sale as aforesaid, Secured Parties may, at any such sale, restrict the number of prospective bidders or purchasers and/or further restrict such prospective bidders or purchasers to Persons who will represent and agree that they are purchasing for their own account, for investment and not with a view to the distribution or resale of the Pledged Collateral, and may otherwise require that such sale be conducted subject to restrictions as to such other matters as Secured Parties may deem necessary in order that such sale may be effected in such manner as to comply with all applicable state and federal securities and other laws.  Upon any such sale, Secured Parties shall have the right to deliver, assign and transfer the Pledged Collateral so sold to the purchaser thereof.

 

(d)           Pledgors hereby acknowledge that, notwithstanding that a higher price might be obtained for the Pledged Collateral at a public sale than at a private sale or sales, the making of a public sale of the Pledged Collateral may be subject to registration requirements under applicable securities laws and other legal restrictions, compliance with which would make a public sale of the Pledged Collateral impractical.  Accordingly, Pledgors hereby agree that private sales made by Secured Parties in good faith in accordance with the provisions of this Section 4 may be at prices and on other terms less favorable to the seller than if the Pledged Collateral were sold at a public sale, and that Secured Parties shall not have any obligation to take any steps in order to permit the Pledged Collateral to be sold at a public sale.

(e)           Each purchaser at any such sale shall hold the property sold, absolutely free from any claim or right whatsoever, including any equity or right of redemption of Pledgors, and Pledgors hereby specifically waive all rights of redemption, stay or appraisal and other rights that Pledgors has or may have under any law, regulation or statute now existing or hereafter adopted or otherwise.  Secured Parties shall give Pledgors not less than thirty (30) calendar days' written notice of its intention to make any such public or private sale.  Such notice, in case of a public sale, shall state the time and place fixed for such sale, and, in case of a sale at broker's board, on a securities exchange, at one or more of Secured Parties' places of business or elsewhere, shall state the board, exchange or other location at which such sale is to be made and the day on which the Pledged Collateral, or that portion thereof so being sold, will first be offered for sale at such location.  Such notice, in case of a private sale, shall state only the date on or after which such sale may be made.  Any such notice given as aforesaid shall be deemed to be reasonable notification.

(f)           Any such public sale shall be held at such time or times within ordinary business hours and at such place or places as Secured Parties may fix in the notice of such sale.  At any sale the Pledged Collateral may be sold in one lot as an entirety or in parts, as Secured Parties may determine.  Secured Parties shall not be obligated to make any sale pursuant to any such notice.  Secured Parties may, without notice or publication, adjourn any sale or cause the same to be adjourned from time to time by announcement at the time and place fixed for the sale, and such sale may be made at any time or place to which the same may be so adjourned.  In case of any sale of all or any part of the Pledged Collateral on credit or for future delivery, the Pledged Collateral so sold may be retained by Secured Parties until the selling price is paid by the purchaser thereof, but Secured Parties shall not incur any liability in case of the failure of such purchaser to take up and pay for the Pledged Collateral so sold and, in case of any such failure, such Pledged Collateral may again be sold upon like notice.

(g)           On any sale of any part of the Pledged Collateral, Secured Parties is hereby authorized to comply with any limitation or restriction in connection with such sale that may be necessary in order to avoid any violation of applicable law or in order to obtain any required approval of the purchaser(s) by any governmental authority or officer or court.

(h)           Pledgors hereby acknowledge, understand and agree that compliance with the foregoing procedures shall satisfy any applicable requirements that such sale or disposition be made in a commercially reasonable manner.

5.           Representations and Warranties. The Pledgors hereby represent and warrant to the Investors as follows:

(a)           the Pledgors are the legal and beneficial owner of the Pledged Collateral owned by the Pledgors, free and clear of any lien, except for the lien created by this Agreement; and

 

 

(b)           The Pledgors have full power and authority to enter into this Agreement, assign, deposit, pledge and grant a lien on or otherwise transfer all of its rights in the Pledged Collateral free and clear of any liens;

6.            Voting Rights. During the term of this Agreement, and except as otherwise provided in this Section 6, the Pledgors shall have the right to vote any Shares which form all or a portion of the Pledged Collateral, to the extent such Shares may be voted, on all questions presented to the holders of ordinary shares of Trestle, and the Collateral Agent will deliver all necessary documents to allow the Pledgors to take such action upon the Pledgors' request. After the occurrence and during the continuance of an Event of Default, the Investors may, at the Investors' option, exercise all voting and other consensual rights and powers pertaining to the Pledged Collateral (to the extent it may vote). the Pledgors hereby agree to execute all proxies or other instruments, documents or agreements deemed reasonably necessary by the Investors to evidence the right to vote the Pledged Collateral as provided hereunder, and the Pledgors agree that they shall not be entitled to rescind, revoke or otherwise modify the Investors' vote executed in accordance with this Section 6. Any and all proxies executed by the Pledgors pursuant to this Section 6 shall be deemed for all purposes to be a proxy coupled with an interest and shall be irrevocable until the payment in full, in cash, of all amounts due under the Note.

 

7.           Dividends and Other Distributions.  The Collateral Agent shall be entitled to receive any and all dividends and other distributions paid in respect of the Pledged Collateral which dividends and/or distributions shall be deemed to be held in escrow if received by the Investors and shall become part of the Pledged Collateral upon receipt thereof.

 

8.           Transfers and Other Liens. The Pledgors agree that, except as otherwise provided in Section 4 above, until all of the Obligations are paid in full, it will not (i) sell or otherwise dispose of, or grant any option or other rights with respect to, any of the Pledged Collateral without the prior written consent of the Investors, or (ii) create or permit to exist any lien upon or with respect to any of the Pledged Collateral, except for the lien created by this Agreement.

 

9.            Sale of Pledged Collateral.  Subject at all times to the provisions of Section 10 below, in view of the fact that federal and state securities laws may impose certain restrictions on the method by which a sale of the Pledged Collateral may be effected after an Event of Default, the Pledgors agrees that after the occurrence and during the continuance of an Event of Default, the Investors may, from time to time, attempt to sell all or any part of the Pledged Collateral by means 0f a private placement restricting the bidders and prospective purchasers to those who are qualified and will represent and agree that they are purchasing for investment only and not for distribution. In so doing, the Investors may solicit offers to buy the Pledged Collateral, or any part of it, from one or more investors deemed by the Investors, in its reasonable judgment, to be financially responsible parties who might be interested in purchasing the Pledged Collateral. The acceptance by the Investors of the highest and best offer obtained therefrom shall be deemed to be a commercially reasonable method of disposing of such Pledged Collateral

10.          Alternative Remedy. Notwithstanding the provisions of this Agreement, on and after an Event of Default, the Investors may (but shall not be obligated to) elect, in lieu of the remedies specified in Section 10, to retain all of the Pledged Collateral as full and complete liquidated damages for any amounts then due and owing by the Pledgors to the Investors under the Note.

11.          Termination.  This Agreement shall remain in full force and effect until the Note shall have been indefeasibly paid in full. Upon the termination of this Agreement as provided above (other than as a result of the sale of the Pledged Collateral), this Agreement shall automatically terminate and all liens and security interests created hereunder shall terminate and be released.  Upon confirmation of payment in full of the Note, the Collateral Agent shall (a) if any UCC-1 Financing Statements were previously filed, file any UCC-3 Termination Statements releasing the lien and security interest created by the Assignments, and (b) to the extent it then has possession of any of the remaining Pledged Collateral, will deliver such Pledged Collateral and the Assignments to the Pledgors.

 

12.          Agreements with and Duties of the Collateral Agent.

(a)           The Collateral Agent shall be under no duty to give the Pledged Collateral held by it hereunder any greater degree of care than it gives its own similar property.

(b)           If the Collateral Agent is permitted or required to deliver any of the Pledged Collateral or pay money back to any Business Party or Business Parties, such payment shall be made by check or by wire transfer, at the Collateral Agent's sole discretion, unless the Collateral Agent shall have received written notice from such Business Party or Business Parties of a new and/or different postal address or unless this Agreement shall have provided otherwise.  If payment is made by check or Pledged Collateral is to be delivered, the same shall be mailed to the address specified by the Business Party(s) in this Agreement (or to a new or different address subsequently specified to Collateral Agent by writing from such Business Party(s)).

 

(c)           Whenever authorization shall be provided by the terms of this Agreement for the payment or delivery of Pledged Collateral by the Collateral Agent to one or more Business Parties and there is no express requirement hereunder for written instructions from the applicable Business Party(s) before such delivery is made, the Collateral Agent shall notify all Business Parties and, in its sole discretion, may defer payment or defer return or delivery of Pledged Collateral until such written requirement or consent is received from all of the Business Parties (or, depending on the Collateral Agent’s requirements, from less than all of them).  Where Collateral Agent determines to so defer payment or delivery, the Collateral Agent shall give written notice to the Business Parties of such determination.

(e)           It is expressly understood and agreed that under no circumstances shall the Collateral Agent be required to pay or have paid to any Business Party(s) any sum not representing proceeds from the sale of any Pledged Collateral that may be delivered to the Collateral Agent.

 

(f)           It is intended that the duties and responsibilities of the Collateral Agent shall be limited to ministerial duties and responsibilities to the maximum extent permitted by law.  In keeping with that intent, it is agreed that the receipt by Collateral Agent of Exhibit B, or an alternative written instrument containing the substantive information or content that is in Exhibit B (whether or not also including other information and content not inconsistent with the request and approval of delivery or disbursement action proposed to be taken by the Collateral Agent) shall, in the absence of actual knowledge by the Collateral Agent of falsehood, fraud or other intentional or gross misconduct on the part of any of the Business Parties that would render the proposed action under the written instrument to be inappropriate, be full and sufficient justification and authorization for the proposed payment or disbursement action by the Collateral Agent.  Notwithstanding anything to the contrary, express or implied, contained in this Agreement, if the Collateral Agent shall receive written instructions from the Investors in accordance with Alternative Instructions 2 of Exhibit B (or words of similar import), the Collateral Agent shall: (i) furnish a copy of such instructions to the Pledgors at the address designated on Exhibit B (or any alternative address requested by the Pledgors in writing), and (ii) take no action with respect to such written request until a date which shall be not less than ten (10) Business Days following receipt of such written instructions from the Investors.

 

(g)           The ministerial reliance by Collateral Agent on the written instrument referred to in Section 12(f) shall be full and sufficient justification and authorization, as stated in such Section, notwithstanding a determination that Collateral Agent had certain specified discretionary inquiry powers and opportunities that Collateral Agent did not pursue or that, absent the provisions of Section 12(f) above, Collateral Agent had (or might have had) fiduciary responsibilities to investigate before making any such payment or disbursement and did not do so.

 

 

(h)           The Collateral Agent shall have no duty or responsibility to enforce collection of any check delivered to it and subsequently dishonored, nor shall Collateral Agent have any duty or responsibility to give notice to any Business Party of such attempted payment and the subsequent dishonor thereof.

 

(i)           The Collateral Agent shall be entitled to rely upon the accuracy, act in reliance upon the contents, and assume the genuineness of any notice, instruction, certificate, signature (including copies of signature pages), instrument or other document (in each case, whether a copy, facsimile or original) which is given to the Collateral Agent pursuant to this Agreement, without the Collateral Agent being obligated to undertake any action or investigation to verify the truth or accuracy thereof — unless the Collateral Agent has actual knowledge that the document or other document, instruction, certificate or signature is not accurate, truthful, authorized or genuine.  For purposes of this Section 12(i), “Actual knowledge, or any other instance where “knowledge” would be required (and, therefore, “actual knowledge” would be required as a standard of “knowledge”)  shall consist of actual and conscious apprehension and understanding, presently in the mind or consciousness of the person acting for Collateral Agent (as opposed to knowledge previously known but not currently remembered or consciously being thought about) and shall be limited to such “actual knowledge” by an attorney in Collateral Agent’s firm who is currently actively engaged in the management of the Collateral Agent and who is made aware of the document, etc. that is the subject of this Section 12(i).  For purposes of this Agreement “knowledge” (being required to be “actual knowledge”) shall not included knowledge of any other attorney or person in LHTT who is not directly involved in making decisions regarding, or managing, the LHTT activities as Collateral Agent.  Knowledge by others within LHTT shall not be imputed to the persons described above for purposes of determining whether “knowledge” or “actual knowledge” existed.   Persons (lawyers) at Collateral Agent as to whom “actual knowledge” is relevant under this Section 12(i) currently includes Louis E. Taubman and Rachael Schmierer.

 

(j)          The Collateral Agent may consult with and act relative hereto upon advice of counsel of its own selection in reference to any matter connected herewith, and shall not be liable to any of the parties hereto, or their respective legal representatives, heirs, successors and assigns, for any action taken in good faith on the advice of counsel or for any mistake of fact or error of judgment, or for any acts or omissions of any kind taken or made in good faith unless caused by its willful misconduct or gross negligence.

 

(k)           The Collateral Agent shall not be responsible for, or have any duty to inquire into, or be required to enforce any of the terms and provisions of any document or agreement other than this Agreement.

 

(l)           Without limiting the foregoing, the Collateral Agent shall not be responsible for, or have any duty to inquire into, monitor or enforce obligations between any of the Business Parties as to (i) whether there was support or justification for any such Business Party to act in accordance with written instructions of such Business Party or any other Business Party in attached Exhibit B or any written alternative acceptable to Collateral Agent that included (with anything else) the material or content of Exhibit B, or (ii) whether any Business Party properly uses and applies funds received by it, whether from the Collateral Agent or third parties, in accordance with the provisions of this Agreement or other applicable documents.  Notwithstanding anything to the contrary, express or implied, contained in this Agreement, if the Collateral Agent shall receive written instructions from the Investors in accordance with Alternative Instructions 2 of Exhibit B (or words of similar import), the Collateral Agent shall: (i) furnish a copy of such instructions to the Pledgors at the address designated on Exhibit B (or any alternative address requested by the Pledgors in writing), and (ii) take no action with respect to such written request until a date which shall be not less than ten (10) Business Days following receipt of such written instructions from the Investors.

 

 

(m)          This Agreement sets forth exclusively the duties of the Collateral Agent with respect to any and all matters pertinent hereto and no implied duties or obligations shall be read into this Agreement against the Collateral Agent.

 

(n)           If the Collateral Agent shall be uncertain as to its duties or rights hereunder or if it receives instructions with respect to the Pledged Collateral or any funds that may be derived from the sale or transfer of any Pledged Collateral, which, in the Collateral Agent’s sole discretion, it determines to be in actual or potential conflict with this Agreement or other instructions that it has received, the Collateral Agent shall be excused from taking action that it might otherwise be required to take, and its sole obligation shall be to keep safely all property held in escrow until the uncertainty is resolved.  Such uncertainty can be resolved by written and signed agreement among all affected Business Parties and Investors or by order or judgment of a court of competent jurisdiction, naming the involved Business Parties as participants in the action or proceeding brought to obtain judicial determination of the involved uncertain duties and obligations.

 

Alternatively, the Collateral Agent may, in its discretion, seek judicial determination of any dispute or uncertainty and/or deposit all of the Pledged Collateral and any funds that may be derived from the sale or transfer of any Pledged Collateral, in Court pursuant to proceedings under New York law.

 

(p)           The Collateral Agent makes no representation as to the validity, value, genuineness or collectability of any portion or all of the Pledged Collateral held by or delivered to it.

 

(q)           In the event that:

 

(i)           the Collateral Agent shall receive any conflicting or inconsistent notices or instructions from any one or more of the Business Parties, or

 

(ii)          there shall be any disagreement between or among any of the Business Parties, resulting in adverse claims or demands being made in connection with the subject matter of this Agreement, or

 

(iii)         there shall be any disagreement between or among any of the Business Parties and any other person, resulting in adverse claims or demands being made in connection with the subject matter of this Agreement, or

 

(iv)         the Collateral Agent, in good faith, shall be in doubt as to what action it should take hereunder,

 

then, and in any such event, Collateral Agent may, at its option, refuse to comply with any notices, instructions, claims or demands on it, or refuse to take any other action hereunder, so long as such disagreement continues or such doubt exists, and in any such event, the Collateral Agent shall not become liable in any way or to any person for its failure or refusal to act.  The Collateral Agent shall be entitled to continue so to refrain from acting until (A) the rights of all Business Parties or other third person(s) shall have been fully and finally adjudicated by a court of competent jurisdiction or (B) all differences shall have been adjusted and all doubt resolved by agreement among all of the interested persons, and the Collateral Agent shall have been notified thereof in writing signed by all such persons.  The Collateral Agent shall have the option, after thirty (30) days’ notice to the Business Parties of its intention to do so, to file an action in interpleader requiring the parties to answer and litigate any claims and rights among themselves.

 

The rights of the Collateral Agent under this Section 12(q) are cumulative of all other rights which it may have by law or otherwise.

 

 

(r)           The Collateral Agent does not have and will not have any interest in the Pledged Collateral or any funds that may be derived from the sale or transfer of any Pledged Collateral, but is serving only as escrow holder and has only possession thereof.

 

(s)           The Collateral Agent’s duties and responsibilities shall be determined only with reference to this Agreement.  The Collateral Agent is not charged with any duties or responsibilities in connection with any other document or agreement.

 

(t)           The Collateral Agent may execute any of its powers or responsibilities hereunder either directly or by or through its agents or attorneys and the Collateral Agent shall not be responsible for any misconduct or negligence on the part of any agent or attorney appointed with due care by it hereunder.

 

(u)           Each of Business Parties do hereby release the Collateral Agent from any act done or omitted to be done by the Collateral Agent in good faith in the performance of its duties hereunder, and each of Business Parties do hereby jointly and severally agree to fully indemnify the Collateral Agent and its directors, officers, employees and agents (the “Collateral Agent Indemnified Parties”) for, and to hold each of them harmless from and against, any loss, liability, claim, damage or expense (including reasonable attorneys’ fees and expenses) incurred by the Collateral Agent Indemnified Parties, arising out of or in connection with the Collateral Agent entering into this Agreement and carrying out its duties hereunder, including the reasonable costs and expenses of defending itself from any claim or liability; provided, however, that the Collateral Agent Indemnified Parties shall not be entitled to indemnification hereunder for losses, liabilities and expenses caused by the willful misconduct, fraud or gross negligence of any of the Collateral Agent Indemnified Parties.  The agreements contained in this Section 12(u) shall survive despite any termination of this Agreement or the resignation or removal of the Collateral Agent.

 

(v)           The Collateral Agent shall not incur any liability for not performing any act or fulfilling any duty, obligation or responsibility hereunder by reason of any occurrence beyond the control of the Collateral Agent (including but not limited to any act or provision of any present or future law or regulation or governmental authority, any act of God or war, or the unavailability of the Federal Reserve Bank wire or telex or other wire or communication facility).

 

(w)           Anything in this Agreement to the contrary notwithstanding, in no event shall the Collateral Agent be liable for consequential loss or damage of any kind whatsoever (including but not limited to lost profits), regardless of the form of action.

 

(x)           The Collateral Agent may resign at any time or be removed by the written mutual consent of the Business Parties.  No resignation or removal of the Collateral Agent and no appointment of a successor Collateral Agent, however, shall be effective until the acceptance or removal of the Collateral Agent in the manner herein provided.  In the event of the resignation or removal of the Collateral Agent, the Business Parties shall in good faith agree upon a successor Collateral Agent.  If the Business Parties are unable to agree upon a successor Collateral Agent within fourteen (14) days after receipt of a notice of resignation or removal is given, the Collateral Agent may deposit the Pledged Collateral and any funds delivered to the Collateral Agent from the sale or transfer of any Pledged Collateral with a court of competent jurisdiction and may petition, at the sole expense of the Business Parties, a court of competent jurisdiction for the appointment of a successor Collateral Agent.  Any successor Collateral Agent shall execute and deliver to the predecessor Collateral Agent and the Business Parties an instrument accepting such appointment and the transfer of the Pledged Collateral and any funds delivered to the Collateral Agent from the sale or transfer of any Pledged Collateral and agreeing to the terms of this Agreement, and thereupon such successor Collateral Agent shall, without further act, become vested with all the estates, properties, rights, powers and duties of the predecessor Collateral Agent as if originally named herein.

 

(y)           Any law firm with which the Collateral Agent may merge or consolidate shall be the successor Collateral Agent without further act.

 

 

(z)           At any time either the Pledgors or the Investors can request the Collateral Agent to resign, the Collateral Agent agrees to resign and another Collateral Agent acceptable to both the Pledgors and the Investors shall be appointed as Collateral Agent.

 

13.          Definitions. The singular shall include the plural and vice versa and any gender shall include any other gender as the context may require.

 

14.          Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the Pledgors, the Investors and their respective successors and assigns. the Pledgors's successors and assigns shall include, without limitation, a receiver, trustee or debtor-in-possession of or for the Pledgors.

 

15.          GOVERNING LAW. THIS AGREEMENT SHALL BE A CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES THAT WOULD REQUIRE THE APPLICATION OF THE LAWS OF ANY STATE OTHER THAN THE STATE OF NEW YORK.

 

16.          Severability. Whenever possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but, if any provision of this Agreement shall be held to be prohibited or invalid under 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.

 

17.          Further Assurances. The Pledgors agree that they will cooperate with the Investors and the Collateral Agent and will execute and deliver, or cause to be executed and delivered, all such other assignments separate from certificate, proxies, instruments and documents, and will take all such other actions, including, without limitation, the execution and filing of financing statements, as the Investors or the Collateral Agent may reasonably request from time to time m order to carry out the provisions and purposes of this Agreement.

 

18.          Notices. Except as otherwise provided herein, whenever it is provided herein that any notice, demand, request, consent, approval, declaration or other communications shall or may be given to or served upon any of the parties by any other party, or whenever any of the parties desires to give or serve upon any other communication with respect to this Agreement, each such notice, demand, request, consent, approval, declaration or other communication shall be in writing and shall be given (and deemed to have been given) to the address on record with the sending party and otherwise in accordance with and subject to the terms of the Note.

 

19.          Amendments, Waivers and Consents. No amendment to, modification or waiver of, or consent with respect to, any provision of this Agreement shall in any event be effective unless the same shall be in writing and signed and delivered by the Investors and the Pledgors, and then any such amendment, modification, waiver or consent shall be effective only in the specific instance and for the specific purpose for which given.

 

20.          Section Headings. The section headings in this Agreement are inserted for convenience of reference and shall not be considered a part of this Agreement or used in its interpretation.

 

21.          Execution in Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be an original, but all of which shall together constitute one and the same agreement. Any such counterpart which may be delivered by facsimile transmission shall be deemed the equivalent of an originally signed counterpart and shall be fully admissible in any enforcement proceedings regarding this Agreement.

 

 

22.          Merger. This Agreement represents the final agreement of the Pledgors and the Investors with respect to the matters contained herein and may not be contradicted by evidence of prior or contemporaneous agreements, or subsequent oral agreements, between the Pledgors and the Investors.

 

IN WITNESS WHEREOF, the Pledgors and the Investors have each caused this Agreement to be executed and delivered by its duly authorized officer as of the date first set forth above.

 

(a Delaware corporation)

 

 

FOR VALUE RECEIVED, the undersigned, ________________________, does hereby sell, assign and transfer unto _______________________________, shares of capital stock of ____________________________ (the “Shares”), standing in the name of the undersigned on the books of said corporation and does hereby irrevocably constitute and appoint ____________________________________, as Agent, as the undersigned's true and lawful attorney, for it and in its name and stead, to sell, assign and transfer all or any of the Shares, and for that purpose to make and execute all necessary acts of assignment and transfer thereof; and to substitute one or more persons with like full power, hereby ratifying and confirming all that said attorney or substitute or substitutes shall lawfully do by virtue hereof.

 

Dated: ___________________

 

[_________________________, a________________, ____________]

Leser, Hunter, Taubman & Taubman

17 State Street, Floor 20

New York, New York  10004

Attn:  Louis Taubman

Re:           Pledge Agreement, dated __________ 2009 among Trestle Holdings, Inc., MoqiZone Holdings Co. Ltd. and MoqiZone Holdings Limited (collectively, the Pledgors”), the Investors who have executed such Agreement (“the Investors”), and Hodgson Russ LLP (“Collateral Agent”).

Gentlemen:

Reference is made to the above captioned Pledge Agreement.  Unless otherwise defined herein, all capitalized terms shall have the same meaning as is defined in the Pledge Agreement.

[Please be advised that all of the Performance Obligations have been performed and/or paid in full and you are hereby instructed to release all of the Pledged Collateral in your possession to the Pledgors or as otherwise designed by Trestle Holdings, Inc.]

Please be advised that an Event of Default under the Purchase Agreement and the Pledge Agreement has occurred and is continuing, as a result of which you are hereby instructed to release all of the Pledged Collateral in your possession to the Investors or as otherwise designed by the Investors’ Representative.]

Names, Emails and signature(s) for:

 

If from the Investors

All instructions must include the signature of the person(s) authorizing said instructions.