Exhibit 10.10

 

PLEDGE AGREEMENT

 

THIS PLEDGE AGREEMENT made as of this 13 day of January, 2017 (as amended,
restated, supplemented or otherwise modified from time to time, this
“Agreement”), among USELL.COM, INC., a Delaware corporation (“USELL”), BST
DISTRIBUTION, INC., New York corporation (“BST”), UPSTREAM PHONE HOLDINGS, INC.,
a Delaware corporation (“Upstream Holdings”); together with USELL and BST, the
“Pledgors” and each, the “Pledgor”) and XXXX, a Delaware limited liability
company, in its capacity as agent (“Agent”) for the Purchasers identified below
(in such capacity, together with its successors and assigns, the “Pledgee”).

 

WHEREAS:

 

A.           Each Pledgor, other than Upstream Holdings, and We Sell Cellular
LLC (“We Sell”) have executed and delivered to XXXX (“Purchaser”, and together
with its successors and assigns and each other purchaser of a Note (as defined
below) and their respective successors and assigns, individually and
collectively, the “Purchasers”) those certain senior secured notes each made by
the applicable Pledgor and dated as of the date hereof in an original aggregate
principal amount of $8,660,000 (such notes, together with any promissory notes
or other securities issued in exchange or substitution therefor or replacement
thereof, and as any of the same may be amended, supplemented, restated or
modified and in effect from time to time, the “Notes”). The Notes were issued
pursuant to a certain Note Purchase Agreement dated as of the date hereof (as
the same may be amended, restated, supplemented or otherwise modified, the “Note
Purchase Agreement”), among the Pledgors, We Sell, the Agent and the Purchasers.
References to the “Transaction Documents” shall mean the Note Purchase
Agreement, the Notes and the other Related Agreements.

 

B.           Upstream Holdings and the other Guarantors named and as defined
therein have executed and delivered to Pledgee a Subsidiary Guaranty dated as of
the date hereof (as amended, restated, supplemented, restated or modified from
time to time, the “Subsidiary Guaranty”).

 

C.           Each Pledgor legally and beneficially owns the interests specified
on Exhibit A hereto and each other corporation or other entity, the stock or
other equity interests and securities of which are owned or acquired by Pledgor
and described on an addendum hereto from time to time executed by Pledgor in
form and substance satisfactory to Pledgee, is referred to herein as a “Pledge
Entity” and collectively as the “Pledge Entities”; provided that the parties
hereto agree that, as of the date hereof, the Pledge Entities specified on
Exhibit A are the only Pledge Entities.

 

D.           Pursuant to a Security Agreement dated as of the date hereof by and
among the Agent, the Pledgors, the other entities party thereto as “Debtors” and
Pledgee (as the same may be amended, restated, modified or supplement and in
effect from time to time, the “Security Agreement”), each Pledgor has granted
Pledgee, for its benefit and the benefit of the Purchasers, a first priority
security interest in, lien upon and pledge of all of such Pledgor’s rights in
such Pledgor’s Collateral (as defined in the Security Agreement).

 

 

 

  

E.           To induce the Purchasers to enter into the Note Purchase Agreement,
purchase the Notes and to make the financial accommodations available to the
Pledgors and We Sell under the Note Purchase Agreement, and in order to secure
the payment and performance by each Pledgor of the Liabilities (as hereafter
defined), each Pledgor has agreed to pledge to Pledgee all of the capital stock
and other equity interests and securities (the “Pledged Equity”) of the Pledge
Entities now or hereafter owned or acquired by such Pledgor to secure the
Liabilities. For purposes of this Agreement, “Liabilities” means all Liabilities
(as defined in the Security Agreement), and all obligations, liabilities and
indebtedness of every nature of Pledgors from time to time owed or owing under
or in respect of this Agreement, the Note Purchase Agreement, the Notes, the
Security Agreement, the Account Control Agreements, the Subsidiary Guaranty and
any of the other Transaction Documents, as the case may be, including, without
limitation, the principal amount of all debts, claims and indebtedness, accrued
and unpaid interest and all fees, costs and expenses, whether primary,
secondary, direct, contingent, fixed or otherwise, heretofore, now and/or from
time to time hereafter owing, due or payable whether before or after the filing
of a bankruptcy, insolvency or similar proceeding under applicable federal,
state, foreign or other law and whether or not an allowed claim in any such
proceeding.

 

NOW, THEREFORE, in consideration of the premises and in order to induce the
Purchasers to purchase the Notes under the Note Purchase Agreement and for other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, each Pledgor hereby agrees with Pledgee as follows:

 

1.            Defined Terms. Unless otherwise defined herein, all capitalized
terms used herein shall have the meanings given them in the Note Purchase
Agreement.

 

2.Pledge.

 

(a)          Each Pledgor hereby pledges, assigns, hypothecates, transfers,
delivers and grants to Pledgee, for the benefit of itself and the Purchasers, a
first lien on and first priority perfected security interest in (i) all of the
Pledged Equity and other equity interests of the Pledge Entities now owned or
hereafter acquired by such Pledgor (collectively, the “Pledged Interests”), (ii)
any other shares of Pledged Equity hereafter pledged or referred to be pledged
to the Pledgee pursuant to this Agreement; (ii) all “investment property” as
such term is defined in §9-102(a)(49) of the UCC (as defined below) with respect
thereto; (iv) any “security entitlement” as such term is defined in §
8-102(a)(17) of the UCC with respect thereto; (v) all books and records relating
to the foregoing; and (vi) all Accessions and Proceeds (as each is defined in
the UCC) of the foregoing, including, without limitation, all distributions
(cash, stock, or otherwise), dividends, stock dividends, securities, cash,
instruments, rights to subscribe, purchase, or sell, and other property, rights,
and interest that such Pledgor is at any time entitled to receive or is
otherwise distributed in respect of, or in exchange for, any or all of the
Pledged Collateral (as defined below), and without affecting the obligations of
any Pledgor under any provision of the Security Agreement, in the event of any
consolidation or merger in which any Pledgor is not the surviving corporation,
all shares of each class or Pledged Equity of the successor entity formed by or
resulting from such consolidation or merger (the collateral described in clauses
(i) through (vi) of this Section 2 being collectively referred to as the
“Pledged Collateral”), as collateral security for the prompt and complete
payment and performance when due (whether at the stated maturity, by
acceleration or otherwise) of the Liabilities. All of the Pledged Interests now
owned by each Pledgor which are presently represented by certificates are listed
on Exhibit A hereto, which certificates, with undated assignments separate from
certificates or stock/membership interest powers duly executed in blank by such
Pledgor and irrevocable proxies, are being delivered to Pledgee simultaneously
herewith. Upon the creation or acquisition of any new Pledged Interests, Pledgor
shall execute an Addendum in the form of Exhibit B attached hereto (a “Pledge
Addendum”). Any Pledged Collateral described in a Pledge Addendum executed by
Pledgor shall thereafter be deemed to be listed on Exhibit A hereto. Pledgee
shall maintain possession and custody of the certificates representing the
Pledged Interests and any additional Pledged Collateral.

 

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(b)         Each Pledged Interest consisting of either (i) a membership interest
in a Person that is a limited liability company or (ii) a partnership interest
in a Person that is a partnership (if any) (1) is not and will not be evidenced
by a certificate and (2) is not and will not be deemed a “security” governed by
Article 8 of the UCC.

 

3.          Representations and Warranties of Pledgors. Each Pledgor represents
and warrants to Pledgee, and covenants with Pledgee, that:

 

(a)         Exhibit A sets forth (i) the authorized capital stock and other
equity interests of each Pledge Entity, (ii) the number of shares of capital
stock and other equity interests of each Pledge Entity that are issued and
outstanding as of the date hereof, and (iii) the percentage of the issued and
outstanding shares of capital stock and other equity interests of each Pledge
Entity held by such Pledgor. Such Pledgor is the record and beneficial owner of,
and has good and marketable title to, the Pledged Interests of such Pledgor, and
such shares are and will remain free and clear of all pledges, liens, security
interests and other encumbrances and restrictions whatsoever, except the liens
and security interests in favor of Pledgee created by this Agreement (other than
Liens in favor of BAM Administrative Services LLC, which shall be released
simultaneously with the purchase of the Notes on the Closing Date);

 

(b)         Except as set forth on Exhibit A, there are no outstanding options,
warrants or other similar agreements with respect to the Pledged Interests or
any of the other Pledged Collateral;

 

(c)         This Agreement is the legal, valid and binding obligation of each
Pledgor, enforceable against each Pledgor in accordance with its terms except to
the extent that such enforceability is subject to applicable bankruptcy,
insolvency, reorganization, fraudulent conveyance and moratorium laws and other
laws of general application affecting enforcement of creditors’ rights
generally, or the availability of equitable remedies, which are subject to the
discretion of the court before which an action may be brought;

 

(d)         The Pledged Interests have been duly and validly authorized and
issued, are fully paid and non-assessable, and the Pledged Interests listed on
Exhibit A constitute all of the issued and outstanding capital stock or other
equity interests of the Pledge Entities;

 

(e)          No consent, approval or authorization of or designation or filing
with any governmental or regulatory authority on the part of any Pledgor is
required in connection with the pledge and security interest granted under this
Agreement;

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(f)          The execution, delivery and performance of this Agreement will not
violate any provision of any applicable law or regulation or of any order,
judgment, writ, award or decree of any court, arbitrator or governmental
authority, which are applicable to any Pledgor, or of the articles or
certificate of incorporation, certificate of formation, bylaws or any other
similar organizational documents of any Pledgor or any Pledge Entity or of any
securities issued by any Pledgor or any Pledge Entity or of any mortgage,
indenture, lease, contract, or other agreement, instrument or undertaking to
which any Pledgor or any Pledge Entity is a party or which is binding upon any
Pledgor or any Pledge Entity or upon any of the assets of any Pledgor or any
Pledge Entity, and will not result in the creation or imposition of any lien,
charge or encumbrance on or security interest in any of the assets of any
Pledgor or any Pledge Entity, except as otherwise contemplated by this
Agreement;

 

(g)         The pledge, assignment and delivery of the Pledged Interests and the
other Pledged Collateral pursuant to this Agreement creates a valid first lien
on and perfected first priority security interest in such Pledged Interests and
Pledged Collateral and the proceeds thereof in favor of Pledgee, subject to no
prior pledge, lien, mortgage, hypothecation, security interest, charge, option
or encumbrance or to any agreement purporting to grant to any third party a
security interest in the property or assets of Pledgor which would include the
Pledged Interests or any other Pledged Collateral (other than Liens in favor of
BAM Administrative Services LLC, which shall be released simultaneously with the
purchase of the Notes on the Closing Date). Until this Agreement is terminated
pursuant to Section 11 hereof, each Pledgor covenants and agrees that it will
defend, for the benefit of Pledgee, Pledgee’s right, title and security interest
in and to the Pledged Interests, the other Pledged Collateral and the proceeds
thereof against the claims and demands of all other persons or entities; and

 

(h)         No Pledgor nor any Pledged Entity (i) will become a person whose
property or interests in property are blocked or subject to blocking pursuant to
Section 1 of Executive Order 13224 of September 23, 2001 Blocking Property and
Prohibiting Transactions with Persons Who Commit, Threaten to Commit or Support
Terrorism (66 Fed. Reg. 49079(2001), (ii) will engage in any dealings or
transactions prohibited by Section 2 of such executive order, or (iii) will
otherwise become a person on the list of Specially Designated Nationals and
Blocked Persons or subject to the limitations or prohibitions under any other
Office of Foreign Asset Control regulation or executive order.

 

4.           Dividends, Distributions, Etc. If, prior to irrevocable repayment
in full in cash of the Liabilities, any Pledgor shall receive any certificate
(including, without limitation, any certificate representing a dividend or a
distribution in connection with any reclassification, increase or reduction of
capital, or issued in connection with any reorganization, merger or
consolidation), or any options or rights, whether as an addition to, in
substitution for, or in exchange for any of the Pledged Interests or otherwise,
such Pledgor agrees, in each case, to accept the same as Pledgee’s agent and to
hold the same in trust for Pledgee, and to deliver the same promptly (but in any
event within five days) to Pledgee in the exact form received, with the
endorsement of such Pledgor when necessary and/or with appropriate undated
assignments separate from certificates or stock powers duly executed in blank,
to be held by Pledgee subject to the terms hereof, as additional Pledged
Collateral. The applicable Pledgor shall promptly deliver to Pledgee (i) a
Pledge Addendum with respect to such additional certificates, and (ii) any
financing statements or amendments to financing statements as requested by
Pledgee. Each Pledgor hereby authorizes Pledgee to attach each such Pledge
Addendum to this Agreement. Except as provided in Section 5(b) below, all sums
of money and property so paid or distributed in respect of the Pledged Interests
which are received by any Pledgor shall, until paid or delivered to Pledgee, be
held by Pledgor in trust as additional Pledged Collateral.

 

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5.Voting Rights; Dividends; Certificates.

 

(a)         So long as no Event of Default (as defined in the Notes) has
occurred and is continuing, each Pledgor shall be entitled (subject to the other
provisions hereof, including, without limitation, Section 8 below) to exercise
its voting and other consensual rights with respect to the Pledged Interests and
otherwise exercise the incidents of ownership thereof in any manner not
inconsistent with this Agreement, the Note Purchase Agreement and/or any of the
other Transaction Documents. Each Pledgor hereby grants to Pledgee or its
nominee, an irrevocable proxy to exercise all voting, corporate and limited
liability company rights relating to the Pledged Interests in any instance,
which proxy shall be effective, at the discretion of Pledgee, upon the
occurrence and during the continuance of an Event of Default. Upon the request
of Pledgee at any time, each Pledgor agrees to deliver to Pledgee such further
evidence of such irrevocable proxy or such further irrevocable proxies to vote
the Pledged Interests as Pledgee may request.

 

(b)         So long as no Event of Default shall have occurred and be
continuing, each Pledgor shall be entitled to receive cash dividends or other
distributions made in respect of the Pledged Interests, to the extent permitted
to be made pursuant to the terms of the Notes and the Note Purchase Agreement.
Upon the occurrence and during the continuance of an Event of Default, in the
event that any Pledgor, as record and beneficial owner of the Pledged Interests,
shall have received or shall have become entitled to receive, any cash dividends
or other distributions in the ordinary course, such Pledgor shall deliver to
Pledgee, and Pledgee shall be entitled to receive and retain, for the benefit of
Pledgee and the Purchasers, all such cash or other distributions as additional
security for the Liabilities.

 

(c)         Subject to any sale or other disposition by Pledgee of the Pledged
Interests, any other Pledged Collateral or other property pursuant to this
Agreement, upon the indefeasible full payment in cash, satisfaction and
termination of all of the Liabilities and the termination of this Agreement
pursuant to Section 11 hereof and of the liens and security interests hereby
granted, the Pledged Interests, the other Pledged Collateral and any other
property then held as part of the Pledged Collateral in accordance with the
provisions of this Agreement shall be returned to the applicable Pledgor or to
such other persons or entities as shall be legally entitled thereto.

 

(d)         Each Pledgor shall cause all Pledged Interests (other than the
Pledged Interests consisting of limited liability company interests) to be
certificated at all times while this Agreement is in effect.

 

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6.           Rights of Pledgee. Pledgee shall not be liable for failure to
collect or realize upon the Liabilities or any collateral security or guaranty
therefor, or any part thereof, or for any delay in so doing, nor shall Pledgee
be under any obligation to take any action whatsoever with regard thereto. Any
or all of the Pledged Interests held by Pledgee hereunder may, if an Event of
Default has occurred and is continuing, without notice, be registered in the
name of Pledgee or its nominee, and Pledgee or its nominee may thereafter
without notice exercise all voting and corporate rights at any meeting with
respect to any Pledge Entity and exercise any and all rights of conversion,
exchange, subscription or any other rights, privileges or options pertaining to
any of the Pledged Interests as if it were the absolute owner thereof,
including, without limitation, the right to vote in favor of, and to exchange at
its discretion any and all of the Pledged Interests upon the merger,
consolidation, reorganization, recapitalization or other readjustment with
respect to any Pledge Entity or upon the exercise by any Pledge Entity, any
Pledgor or Pledgee of any right, privilege or option pertaining to any of the
Pledged Interests, and in connection therewith, to deposit and deliver any and
all of the Pledged Interests with any committee, depository, transfer agent,
registrar or other designated agency upon such terms and conditions as Pledgee
may reasonably determine, all without liability except to account for property
actually received by Pledgee, but Pledgee shall have no duty to exercise any of
the aforesaid rights, privileges or options and shall not be responsible for any
failure to do so or delay in so doing.

 

7.            Remedies. Upon the occurrence and during the continuance of an
Event of Default, Pledgee may exercise in respect of the Pledged Collateral, in
addition to other rights and remedies provided for herein or otherwise available
to it, all the rights and remedies of a secured party under the Uniform
Commercial Code (“UCC”) of the jurisdiction applicable to the affected Pledged
Collateral from time to time. Without limiting the foregoing, Pledgee may,
without demand of performance or other demand, advertisement or notice of any
kind (except the notice specified below of time and place of public or private
sale) to or upon any Pledgor or any other person or entity (all and each of
which demands, advertisements and/or notices are hereby expressly waived), upon
the occurrence and during the continuance of an Event of Default forthwith
collect, receive, appropriate and realize upon the Pledged Collateral, or any
part thereof, and/or may forthwith date and otherwise fill in the blanks on any
assignments separate from certificates or stock power or otherwise sell, assign,
give an option or options to purchase, contract to sell or otherwise dispose of
and deliver said Pledged Collateral, or any part thereof, in one or more
portions at one or more public or private sales or dispositions, at any exchange
or broker’s board or at any of Pledgee’s offices or elsewhere upon such terms
and conditions as Pledgee may deem advisable and at such prices as it may deem
best, for any combination of cash and/or securities or other property or on
credit or for future delivery without assumption of any credit risk, with the
right to Pledgee upon any such sale, public or private, to purchase the whole or
any part of said Pledged Collateral so sold, free of any right or equity of
redemption in Pledgor, which right or equity is hereby expressly waived or
released. Pledgee shall apply the net proceeds of any such collection, recovery,
receipt, appropriation, realization, sale or disposition, after deducting all
costs and expenses of every kind incurred therein or incidental to the
safekeeping of any and all of the Pledged Collateral or in any way relating to
the rights of Pledgee hereunder, including reasonable attorneys’ fees and legal
expenses, to the payment, in whole or in part, of the Liabilities, in such order
as Pledgee may elect. Each Pledgor shall remain liable for any deficiency
remaining unpaid after such application. Only after so paying over such net
proceeds and after the payment by Pledgee of any other amount required by any
provision of law, including, without limitation, Section 9-608 of the UCC, need
Pledgee account for the surplus, if any, to any Pledgor. Each Pledgor agrees
that Pledgee need not give more than ten (10) days’ notice of the time and place
of any public sale or of the time after which a private sale or other intended
disposition is to take place and that such notice is reasonable notification of
such matters. No notification need be given to any Pledgor if it has signed
after default a statement renouncing or modifying any right to notification of
sale or other intended disposition. Notwithstanding any provision in any
operating agreement or shareholder agreement of any issuer of the Pledged
Collateral or the Delaware Limited Liability Company Act or the Business
Corporation Law of the State of New York to the contrary, the undersigned
constituting all of the members and/or shareholders of each issuer hereby
acknowledge that such member and/or shareholder, as applicable, may pledge to
the Agent all of such member’s and/or shareholder’s right, title and interest in
such issuer, and upon foreclosure the successful bidder (which may include the
Agent) will be deemed admitted as a member and/or shareholder, as applicable, of
such issuer, and will automatically succeed to all of such pledged right, title
and interest, including without limitation such members’ and/or shareholder’s
limited liability company and equity interests, right to vote and participate in
the management and business affairs of the issuer, right to a share of the
profits and losses of the issuer and right to receive distributions from the
issuer.

 

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8.           No Disposition, Etc. Until the irrevocable payment in full in cash
of the Liabilities, each Pledgor agrees that it will not sell, assign, transfer,
exchange, or otherwise dispose of, or grant any option with respect to, the
Pledged Interests or any other Pledged Collateral, nor will any Pledgor create,
incur or permit to exist any pledge, lien, mortgage, hypothecation, security
interest, charge, option or any other encumbrance with respect to any of the
Pledged Interests or any other Pledged Collateral, or any interest therein, or
any proceeds thereof, except for the lien and security interest of Pledgee
provided for by this Agreement and the Security Agreement and Permitted
Encumbrance, as defined in the Note Purchase Agreement.

 

9.Sale of Pledged Interests.

 

(a)          Each Pledgor recognizes that Pledgee may be unable to effect a
public sale or disposition (including, without limitation, any disposition in
connection with a merger of a Pledge Entity) of any or all the Pledged Interests
by reason of certain prohibitions contained in the Securities Act, and
applicable state securities laws, but may be compelled to resort to one or more
private sales or dispositions thereof to a restricted group of purchasers who
will be obliged to agree, among other things, to acquire such securities for
their own account, for investment and not with a view to the distribution or
resale thereof. Each Pledgor acknowledges and agrees that any such private sale
or disposition may result in prices and other terms (including the terms of any
securities or other property received in connection therewith) less favorable to
the seller than if such sale or disposition were a public sale or disposition
and each Pledgor agrees that it is not commercially unreasonable for Pledgee to
engage in any such private sales or dispositions under such circumstances.
Pledgee shall be under no obligation to delay a sale or disposition of any of
the Pledged Interests in order to permit any Pledgor or a Pledge Entity to
register such securities for public sale under the Securities Act, or under
applicable state securities laws, even if such Pledgor or a Pledge Entity would
agree to do so.

 

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(b)          Each Pledgor further agrees to do or cause to be done all such
other acts and things as may be reasonably necessary to make such sales or
dispositions of the Pledged Interests valid and binding and in compliance with
any and all applicable laws, regulations, orders, writs, injunctions, decrees or
awards of any and all courts, arbitrators or governmental instrumentalities,
domestic or foreign, having jurisdiction over any such sales or dispositions,
all at such Pledgor’s expense; provided that no Pledgor shall have any
obligation to register the Pledged Interests as securities under the Securities
Act or the applicable state securities laws solely by virtue of this Section
9(b). Each Pledgor further agrees that a breach of any of the covenants
contained in Sections 4, 5(a), 5(b), 8, 9 and 24 will cause irreparable injury
to Pledgee and that Pledgee has no adequate remedy at law in respect of such
breach and, as a consequence, agrees, without limiting the right of Pledgee to
seek and obtain specific performance of other obligations of each Pledgor
contained in this Agreement, that each and every covenant referenced above shall
be specifically enforceable against each Pledgor, and each Pledgor hereby waives
and agrees not to assert any defenses against an action for specific performance
of such covenants.

 

(c)          Each Pledgor further agrees to indemnify and hold harmless the
Purchasers, Pledgee and their respective successors and assigns, their
respective officers, directors, employees, attorneys, independent contractors,
consultants and agents, and any person or entity in control of any thereof, from
and against any loss, liability, claim, damage and expense, including, without
limitation, legal fees and expenses (in this paragraph collectively called the
“Indemnified Liabilities”), under federal and state securities laws or otherwise
insofar as such Indemnified Liability (i) arises out of or is based upon any
untrue statement or alleged untrue statement of a material fact contained in any
registration statement, prospectus or offering memorandum or in any preliminary
prospectus or preliminary offering memorandum or in any amendment or supplement
to any thereof or in any other writing prepared by any Pledgor in connection
with the offer, sale or resale of all or any portion of the Pledged Collateral
unless such untrue statement of material fact was provided by Pledgee, in
writing, specifically for inclusion therein, or (ii) arises out of or is based
upon any omission or alleged omission to state therein a material fact required
to be stated or necessary to make the statements therein not misleading, such
indemnification to remain operative regardless of any investigation made by or
on behalf of Pledgee or any successor thereof, or any person or entity in
control of any thereof. In connection with a public sale or other distribution,
each Pledgor will provide customary indemnification to any underwriters, their
successors and assigns, officers and directors and each person or entity who
controls any such underwriter (within the meaning of the Securities Act). If and
to the extent that the foregoing undertakings in this paragraph may be
unenforceable for any reason, each Pledgor agrees to jointly and severally make
the maximum contribution to the payment and satisfaction of each of the
Indemnified Liabilities which is permissible under applicable law. The
obligations of each Pledgor under this paragraph (c) shall survive any
termination of this Agreement.

 

(d)          Each Pledgor further agrees not to exercise any and all rights of
subrogation it may have against a Pledge Entity upon the sale or disposition of
all or any portion of the Pledged Collateral by Pledgee pursuant to the terms of
this Agreement until the termination of this Agreement in accordance with
Section 11 below.

 

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10.         No Waiver; Cumulative Remedies. Pledgee shall not by any act, delay,
omission or otherwise be deemed to have waived any of its remedies hereunder,
and no waiver by Pledgee shall be valid unless in writing and signed by Pledgee,
and then only to the extent therein set forth. A waiver by Pledgee of any right
or remedy hereunder on any one occasion shall not be construed as a bar to any
right or remedy which Pledgee would otherwise have on any further occasion. No
course of dealing between any Pledgor and Pledgee and no failure to exercise,
nor any delay in exercising on the part of Pledgee or the Purchasers of, any
right, power or privilege hereunder or under the other Transaction Documents
shall impair such right or remedy or operate as a waiver thereof; nor shall any
single or partial exercise of any right, power or privilege hereunder preclude
any other or further exercise thereof or the exercise of any other right, power
or privilege. The rights and remedies herein provided are cumulative and may be
exercised singly or concurrently, and are not exclusive of any rights or
remedies provided by law or in the Note Purchase Agreement.

 

11.         Termination. This Agreement and the liens and security interests
granted hereunder shall terminate and Pledgee, at each Pledgor’s sole cost and
expense, shall return any Pledged Interests or other Pledged Collateral then
held by Pledgee in accordance with the provisions of this Agreement to Pledgor
upon the termination of the Note Purchase Agreement and the full and complete
performance and indefeasible satisfaction of all of the Liabilities (i) in
respect of the Notes (including, without limitation, the indefeasible payment in
full in cash of all such Liabilities) and (ii) with respect to which claims have
been asserted by Pledgee and/or Purchasers.

 

12.         Possession of Collateral. Beyond the exercise of reasonable care to
assure the safe custody of the Pledged Interests in the physical possession of
Pledgee pursuant hereto, neither Pledgee, nor any nominee of Pledgee, shall have
any duty or liability to collect any sums due in respect thereof or to protect,
preserve or exercise any rights pertaining thereto (including any duty to
ascertain or take action with respect to calls, conversions, exchanges,
maturities, tenders or other matters relating to the Pledged Collateral and any
duty to take any necessary steps to preserve rights against any parties with
respect to the Pledged Collateral), and shall be relieved of all responsibility
for the Pledged Collateral upon surrendering them to any Pledgor. Each Pledgor
assumes the responsibility for being and keeping itself informed of the
financial condition of a Pledge Entity and of all other circumstances bearing
upon the risk of non-payment of the Liabilities, and Pledgee shall have no duty
to advise any Pledgor of information known to Pledgee regarding such condition
or any such circumstance. Pledgee shall have no duty to inquire into the powers
of a Pledge Entity or its officers, directors, managers, members, partners or
agents thereof acting or purporting to act on its behalf.

 

13.         Taxes and Expenses. Each Pledgor will jointly and severally pay to
Pledgee within the Applicable Time Frame (as hereafter defined) (a) any taxes
(excluding income taxes, franchise taxes or other taxes levied on gross
earnings, profits or the like of Pledgee) payable or ruled payable by any
Governmental Authority (as defined in the Security Agreement) in respect of this
Agreement, together with interest and penalties, if any, and (b) all expenses,
including the fees and expenses of counsel for Pledgee and of any experts and
agents that Pledgee may incur in connection with (i) the administration,
modification or amendment of this Agreement, (ii) the custody or preservation
of, or the sale of, collection from, or other realization upon, any of the
Pledged Collateral, (iii) the exercise or enforcement of any of the rights of
Pledgee hereunder, or (iv) the failure of Pledgor to perform or observe any of
the provisions hereof. For purposes hereof, the term “Applicable Time Frame”
means the earlier of (a) ten (10) days after Pledgee’s written demand for such
payment and (b) the date set forth in Pledgee’s written demand for such payment
if such payment is required to be made by Pledgee prior to the ten (10) day
period referred to in the foregoing clause “(a).”

 

 9 

 

  

14.         Pledgee Appointed Attorney-In-Fact. Each Pledgor hereby irrevocably
appoints Pledgee as such Pledgor’s attorney-in-fact, with full authority in the
place and stead of such Pledgor and in the name of such Pledgor or otherwise,
from time to time in Pledgee’s discretion, to take any action and to execute any
instrument that Pledgee deems reasonably necessary or advisable to accomplish
the purposes of this Agreement, including, without limitation, to receive,
endorse and collect all instruments made payable to such Pledgor representing
any dividend, interest payment or other distribution in respect of the Pledged
Collateral or any part thereof and to give full discharge for the same, when and
to the extent permitted by this Agreement; provided that the power of attorney
granted hereunder shall only be exercised by Pledgee after the occurrence and
during the continuance of an Event of Default.

 

15.         Governing Law; Jurisdiction; Jury Trial. All questions concerning
the construction, validity, enforcement and interpretation of this Agreement
shall be governed by the internal laws of the State of New York, without giving
effect to any choice of law or conflict of law provision or rule (whether of the
State of New York or any other jurisdiction) that would cause the application of
the laws of any jurisdiction other than the State of New York. Each party hereby
irrevocably submits to the exclusive jurisdiction of the state and federal
courts sitting in the City of New York, borough of Manhattan, for the
adjudication of any dispute hereunder or in connection herewith or with any
transaction contemplated hereby or discussed herein, and hereby irrevocably
waives, and agrees not to assert in any suit, action or proceeding, any claim
that it is not personally subject to the jurisdiction of any such court, that
such suit, action or proceeding is brought in an inconvenient forum or that the
venue of such suit, action or proceeding is improper. Each party hereby
irrevocably waives personal service of process and consents to process being
served in any such suit, action or proceeding by mailing by registered or
certified mail a copy thereof to such party at the address for such notices to
it under this Agreement and agrees that such service shall constitute good and
sufficient service of process and notice thereof five (5) business days after
the mailing thereof. Nothing contained herein shall be deemed to limit in any
way any right to serve process in any manner permitted by law. Notwithstanding
the foregoing, the Pledgee may enforce its rights and remedies in any other
jurisdiction applicable to the Pledged Collateral. EACH PARTY HEREBY IRREVOCABLY
WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE
ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION HEREWITH OR ARISING OUT
OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.

 

16.         Counterparts. This Agreement may be executed in two or more
identical counterparts, all of which together shall be considered one and the
same agreement and shall become effective when counterparts have been signed by
each party and delivered to the other party; provided that a facsimile, .pdf or
similar electronically transmitted signature shall be considered due execution
and shall be binding upon the signatory thereto with the same force and effect
as if the signature were an original signature.

 

17.         Headings. The headings of this Agreement are for convenience of
reference and shall not form part of, or affect the interpretation of, this
Agreement.

 

18.         Severability. If any provision of this Agreement shall be invalid or
unenforceable in any jurisdiction, such invalidity or unenforceability shall not
affect the validity or enforceability of the remainder of this Agreement in that
jurisdiction or the validity or enforceability of any provision of this
Agreement in any other jurisdiction.

 

 10 

 

  

19.         ENTIRE AGREEMENT; AMENDMENTS. THIS AGREEMENT, TOGETHER WITH THE
OTHER TRANSACTION DOCUMENTS, SUPERSEDES ALL OTHER PRIOR ORAL OR WRITTEN
AGREEMENTS BETWEEN ANY PLEDGOR, PLEDGEE, THEIR AFFILIATES AND PERSONS ACTING ON
THEIR BEHALF WITH RESPECT TO THE MATTERS DISCUSSED HEREIN, AND THIS AGREEMENT,
TOGETHER WITH THE OTHER TRANSACTION DOCUMENTS AND THE OTHER INSTRUMENTS
REFERENCED HEREIN AND THEREIN, CONTAIN THE ENTIRE UNDERSTANDING OF THE PARTIES
WITH RESPECT TO THE MATTERS COVERED HEREIN AND THEREIN AND, EXCEPT AS
SPECIFICALLY SET FORTH HEREIN OR THEREIN, NEITHER THE PLEDGEE NOR ANY PLEDGOR
MAKES ANY REPRESENTATION, WARRANTY, COVENANT OR UNDERTAKING WITH RESPECT TO SUCH
MATTERS. AS OF THE DATE OF THIS AGREEMENT, THERE ARE NO UNWRITTEN AGREEMENT
BETWEEN THE PARTIES WITH RESPECT TO THE MATTERS DISCUSSED HEREIN. EXCEPT AS SET
FORTH IN SECTION 2(A) HEREOF, NO PROVISION OF THIS AGREEMENT MAY BE AMENDED,
MODIFIED OR SUPPLEMENTED OTHER THAN BY AN INSTRUMENT IN WRITING SIGNED BY THE
PLEDGOR AND PLEDGEE.

 

20.         Notices. All notices, approvals, requests, demands and other
communications hereunder shall be delivered or made in the manner set forth in,
and shall be effective in accordance with the terms of, the Note Purchase
Agreement, in the case of communications to the Agent, directed to the notice
address set forth in the Security Agreement.

 

21.         Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the parties and their respective successors and assigns,
including any purchasers of the Notes. Pledgor shall not assign this Agreement
or any rights or obligations hereunder without the prior written consent of
Pledgee. Pledgee may assign its rights hereunder without the consent of Pledgor,
in which event such assignee shall be deemed to be Pledgee hereunder with
respect to such assigned rights.

 

22.         No Third Party Beneficiaries. This Agreement is intended for the
benefit of the parties hereto and their respective successors and permitted
assigns, and is not for the benefit of, nor may any provision hereof be enforced
by, any other person or entity.

 

23.         Survival. All representations, warranties, covenants and agreements
of Pledgor and Pledgee shall survive the execution and delivery of this
Agreement.

 

24.         Further Assurances. Each Pledgor agrees that it will, at any time
and from time to time upon the written request of Pledgee, execute and deliver
all assignments separate from certificates or stock powers, financing statements
and such further documents and do such further acts and things as Pledgee may
reasonably request consistent with the provisions hereof in order to carry out
the intent and accomplish the purpose of this Agreement and the consummation of
the transactions contemplated hereby.

 

 11 

 

  

25.         No Strict Construction. The language used in this Agreement will be
deemed to be the language chosen by the parties to express their mutual intent,
and no rules of strict construction will be applied against any party.

 

26.         Pledgee Authorized. Each Pledgor hereby authorizes Pledgee to file
one or more financing or continuation statements and amendments thereto (or
similar documents required by any laws of any applicable jurisdiction) relating
to all or any part of the Pledged Interests or other Pledged Collateral without
the signature of such Pledgor.

 

27.         Pledgor Acknowledgement. Each Pledgor acknowledges receipt of an
executed copy of this Agreement. Each Pledgor waives the right to receive any
amount that it may now or hereafter be entitled to receive (whether by way of
damages, fine, penalty, or otherwise) by reason of the failure of the Pledgee to
deliver to any Pledgor a copy of any financing statement or any statement issued
by any registry that confirms registration of a financing statement relating to
this Agreement.

 

28.         Agent. The terms and provisions of Section 5.11 of the Security
Agreement which set forth the appointment of the Pledgee as Agent are hereby
incorporated by reference herein as if fully set forth herein.

 

[Signature Page Follows]

 

 12 

 

 

IN WITNESS WHEREOF, the parties hereto have caused this Pledge Agreement to be
duly executed and delivered by their duly authorized officers on the date first
above written.

 

  PLEDGORS:       USELL.COM, INC., a Delaware corporation       By:       Name:
 Nikhil Raman     Title:  Chief Executive Officer         bst distribution,
inc., a New York corporation       By:       Name:  Brian Tepfer     Title:
 Chief Executive Officer         UPSTREAM PHONE HOLDINGS, INC., a Delaware
corporation       By:       Name:  Nikhil Raman     Title:  Chief Executive
Officer  

 

SIGNATURE PAGE TO

PLEDGE AGREEMENT

  

 

 

 

  PLEDGEE:       XXXXX, a Delaware limited liability company, in its capacity as
agent for the Purchasers       By:       Name:       Title:  

 

SIGNATURE PAGE TO

PLEDGE AGREEMENT

 

 

 

 

ACKNOWLEDGEMENT

 

Each of the undersigned hereby (i) acknowledges receipt of a copy of the
foregoing Pledge Agreement, (ii) waives any rights or requirement at any time
hereafter to receive a copy of such Pledge Agreement in connection with the
registration of any Pledged Interests (as defined therein) in the name of
Pledgee or its nominee or the exercise of voting rights by Pledgee, (iii) agrees
promptly to note on its books and records the grant of the security interest in
the stock or other equity interests of the undersigned as provided in such
Pledge Agreement and (iv) agrees, to the extent it is a limited laibility
company, not to certificate any of its membership interests.

 

Dated: January 13, 2017

 

HD CAPITAL HOLDINGS LLC, a Delaware limited liability company   BST
DISTRIBUTION, INC., a New York corporation           By:   By:   Name:  Daniel
Brauser     Name:  Brian Tepfer   Title:  Manager     Title:  Chief Executive
Officer           UPSTREAM PHONE COMPANY USA, INC., a Delaware corporation   WE
SELL CELLULAR LLC, a Delaware limited liability company           By:     By:  
Name: Nikhil Raman     Name: Nikhil Raman   Title: Chief Executive Officer    
Title: Manager           UPSTREAM PHONE HOLDINGS, INC., a Delaware corporation  
XXXX       By:   By:   Name: Nikhil Raman     Name:   Title: Chief Executive
Officer     Title:  

 

SIGNATURE PAGE TO

ACKNOWLEDGMENT TO

PLEDGE AGREEMENT