exhibit_10-16.htm


    
      

    

    Exhibit
      10.16

     

    


     

    PLEDGE
      AGREEMENT

     

     

    THIS
      PLEDGE AGREEMENT (the “Agreement”) is made and entered into as
      of February _28__, 2007 (the “Effective Date”) by and among
C-MARK INTERNATIONAL, INC., a corporation
      organized and existing under the laws of South Carolina (the “Company”),
      CHARLES JONES, CEO of the Company (the “Pledgor”), TRAFALGAR CAPITAL
      SPECIALIZED INVESTMENT FUND, LUXEMBOURG, (the “Pledgee”), and
JAMES G. DODRILL II, P.A., as escrow agent (“Escrow
      Agent”).

     

     

    RECITALS:

     

     

    WHEREAS,
      in order to secure the full and prompt payment when due (whether at
      the
      stated maturity, by acceleration or otherwise) of all of the Company’s
      obligations (the “Obligations”) to the Pledgee or any successor to the
      Pledgee under this Agreement, the Securities Purchase Agreement of even date
      herewith between the Pledgor and the Pledgee (the “Securities Purchase
      Agreement”), the Convertible Debentures (the “Convertible
      Debentures”) issued or to be issued by the Company to the Pledgee, either
      now or in the future, up to a total of Two Million Five Hundred Thousand Dollars
      ($2,500,000) of principal, plus any interest, costs, fees, and other amounts
      owed to the Pledgee thereunder, the Security Agreement of even date herewith
      between the Pledgor and the Pledgee (the “Security Agreement”), and all
      other contracts entered into between the parties hereto (collectively, the
      “Transaction Documents”), the Pledgor has agreed to irrevocably pledge to
      the Pledgee thirty five million (35,000,000) shares of the Pledgor’s common
      stock (the “Pledged Shares”).

     

     

    NOW,
      THEREFORE, in consideration of the mutual covenants, agreements,
      warranties, and representations herein contained, and for other good and
      valuable consideration, the receipt and sufficiency of which is hereby
      acknowledged, the parties hereto agree as follows:

     

     

    TERMS
      AND CONDITIONS

     

     

    1. Pledge
      and Transfer of Pledged Shares.

     

     

    1.1.
      The
      Pledgor hereby grants to Pledgee a security interest in all Pledged Shares
      as
      security for Pledgor’s obligations under the Convertible Debentures.
      Simultaneously with the execution of the Transaction Documents, the Pledgor
      shall deliver to the Escrow Agent stock certificates representing the Pledged
      Shares, together with duly executed stock powers or other appropriate transfer
      documents executed in blank by the Pledgor (the “Transfer Documents”),
      and such stock certificates and Transfer Documents shall be held by the Escrow
      Agent until the full payment of all amounts due to the Pledgee under the
      Convertible Debentures and through repayment in accordance with the terms of
      the
      Convertible Debentures, or the termination or expiration of this
      Agreement.

     

    


    
      
        
          
          

        

        
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    2. Rights
      Relating to Pledged Shares. Upon the occurrence of an Event of
      Default (as defined herein), the Pledgee shall be entitled to vote the Pledged
      Shares, to receive dividends and other distributions thereon, and to enjoy
      all
      other rights and privileges incident to the ownership of the Pledged
      Shares.

     

     

    3. Release
      of Pledged Shares from Pledge. Upon the payment of all amounts due
      to the Pledgee under the Convertible Debentures by repayment in accordance
      with
      the terms of the Note, the parties hereto shall notify the Escrow Agent to
      such
      effect in writing. Upon receipt of such written notice for payment of the
      amounts due to the Pledgee under the Convertible Debentures, the Escrow Agent
      shall return to the Pledgor the Transfer Documents and the certificates
      representing the Pledged Shares, (collectively the “Pledged Materials”),
      whereupon any and all rights of Pledgee in the Pledged Materials shall be
      terminated. Notwithstanding anything to the contrary contained herein, upon
      full
      payment of all amounts due to the Pledgee under the Convertible Debentures,
      by
      repayment in accordance with the terms of the Note, this Agreement and Pledgee’s
      security interest and rights in and to the Pledged Shares shall
      terminate.

     

     

    4. Event
      of Default. An “Event of Default” shall be deemed to have
      occurred under this Agreement upon an Event of Default under the Transaction
      Documents.

     

     

    5. Remedies.
      Upon and anytime after the occurrence of an Event of Default, the Pledgee shall
      have the right to provide written notice of such Event of Default (the
“Default Notice”) to the Escrow Agent, with a copy to the Pledgor. As
      soon as practicable after receipt of the Default Notice, the Escrow Agent shall
      deliver to Pledgee the Pledged Materials held by the Escrow Agent hereunder.
      Upon receipt of the Pledged Materials, the Pledgee shall have the right to
      (i) sell the Pledged Shares and to apply the proceeds of such sales, net of
      any selling commissions, to the Obligations owed to the Pledgee by the Pledgor
      under the Transaction Documents, including, without limitation, outstanding
      principal, interest, legal fees, and any other amounts owed to the Pledgee,
      and
      exercise all other rights and (ii) any and all remedies of a secured party
      with respect to such property as may be available under the Uniform Commercial
      Code as in effect in the State of New Jersey. To the extent that the net
      proceeds received by the Pledgee are insufficient to satisfy the Obligations
      in
      full, the Pledgee shall be entitled to a deficiency judgment against the Pledgor
      for such amount. The Pledgee shall have the absolute right to sell or dispose
      of
      the Pledged Shares in any manner it sees fit and shall have no liability to
      the
      Pledgor or any other party for selling or disposing of such Pledged Shares
      even
      if other methods of sales or dispositions would or allegedly would result in
      greater proceeds than the method actually used. The Escrow Agent shall have
      the
      absolute right to disburse the Pledged Shares to the Pledgee in batches not
      to
      exceed 9.9% of the outstanding capital of the Pledgor (which limit may be waived
      by the Pledgee providing not less than 65 days’ prior written notice to the
      Escrow Agent). The Pledgee shall return any Pledged Shares released to it and
      remaining after the Pledgee has applied the net proceeds to all amounts owed
      to
      the Pledgee.

     

    


    
      
        
          
          

        

        
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    5.1.
      Each
      right, power and remedy of the Pledgee provided for in this Agreement or any
      other Transaction Document shall be cumulative and concurrent and shall be
      in
      addition to every other such right, power or remedy. The exercise or beginning
      of the exercise by the Pledgee of any one or more of the rights, powers or
      remedies provided for in this Agreement or any other Transaction Document or
      now
      or hereafter existing at law or in equity or by statute or otherwise shall
      not
      preclude the simultaneous or later exercise by the Pledgee of all such other
      rights, powers or remedies, and no failure or delay on the part of the Pledgee
      to exercise any such right, power or remedy shall operate as a waiver thereof.
      No notice to or demand on the Pledgor in any case shall entitle it to any other
      or further notice or demand in similar or other circumstances or constitute
      a
      waiver of any of the rights of the Pledgee to any other further action in any
      circumstances without demand or notice. The Pledgee shall have the full power
      to
      enforce or to assign or contract is rights under this Agreement to a third
      party.

     

     

    5.2.
      Demand Registration Rights. In addition to all other remedies available
      to the Pledgee, upon an Event of Default, the Pledgor shall promptly, but in
      no
      event more than thirty (30) days after the date of the Default Notice, file
      a registration statement to register with the Securities and Exchange Commission
      the Pledged Shares for the resale by the Pledgee. The Pledgor shall cause the
      registration statement to remain in effect until all of the Pledged Shares
      have
      been sold by the Pledgee.

     

     

    6. Concerning
      the Escrow Agent.

     

     

    6.1.
      The
      Escrow Agent undertakes to perform only such duties as are expressly set forth
      herein and no implied duties or obligations shall be read into this Agreement
      against the Escrow Agent.

     

     

    6.2.
      The
      Escrow Agent may act in reliance upon any writing or instrument or signature
      which it, in good faith, believes to be genuine, may assume the validity and
      accuracy of any statement or assertion contained in such a writing or
      instrument, and may assume that any person purporting to give any writing,
      notice, advice or instructions in connection with the provisions hereof has
      been
      duly authorized to do so. The Escrow Agent shall not be liable in any manner
      for
      the sufficiency or correctness as to form, manner, and execution, or validity
      of
      any instrument deposited in this escrow, nor as to the identity, authority,
      or
      right of any person executing the same; and its duties hereunder shall be
      limited to the safekeeping of such certificates, monies, instruments, or other
      document received by it as such escrow holder, and for the disposition of the
      same in accordance with the written instruments accepted by it in the
      escrow.

     

     

    6.3.
      Pledgee and the Pledgor hereby agree, to defend and indemnify the Escrow Agent
      and hold it harmless from any and all claims, liabilities, losses, actions,
      suits, or proceedings at law or in equity, or any other expenses, fees, or
      charges of any character or nature which it may incur or with which it may
      be
      threatened by reason of its acting as Escrow Agent under this Agreement; and
      in
      connection therewith, to indemnify the Escrow Agent against any and all
      expenses, including attorneys’ fees and costs of defending any action, suit, or
      proceeding or resisting any claim (and any costs incurred by the Escrow Agent
      pursuant to Sections 6.4 or 6.5 hereof). The Escrow Agent shall be vested
      with a lien on all property deposited hereunder, for indemnification of
      attorneys’ fees and court costs regarding any suit, proceeding or otherwise, or
      any other expenses, fees, or charges of any character or nature, which may
      be
      incurred by the Escrow Agent by reason of disputes arising between the makers
      of
      this escrow as to the correct interpretation of this Agreement and instructions
      given to the Escrow Agent hereunder, or otherwise, with the right of the Escrow
      Agent, regardless of the instructions aforesaid, to hold said property until
      and
      unless said additional expenses, fees, and charges shall be fully paid. Any
      fees
      and costs charged by the Escrow Agent for serving hereunder shall be paid by
      the
      Pledgor.

     

    


    
      
        
          
          

        

        
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    6.4.
      If
      any of the parties shall be in disagreement about the interpretation of this
      Agreement, or about the rights and obligations, or the propriety of any action
      contemplated by the Escrow Agent hereunder, the Escrow Agent may, at its sole
      discretion deposit the Pledged Materials with the Clerk of the United States
      District Court Southern District of Florida, sitting in Miami, Florida, and,
      upon notifying all parties concerned of such action, all liability on the part
      of the Escrow Agent shall fully cease and terminate. The Escrow Agent shall
      be
      indemnified by the Pledgor, the Company and Pledgee for all costs, including
      reasonable attorneys’ fees in connection with the aforesaid proceeding, and
      shall be fully protected in suspending all or a part of its activities under
      this Agreement until a final decision or other settlement in the proceeding
      is
      received.

     

     

    6.5.
      The
      Escrow Agent may consult with counsel of its own choice (and the costs of such
      counsel shall be paid by the Pledgor and Pledgee) and shall have full and
      complete authorization and protection for any action taken or suffered by it
      hereunder in good faith and in accordance with the opinion of such counsel.
      The
      Escrow Agent shall not be liable for any mistakes of fact or error of judgment,
      or for any actions or omissions of any kind, unless caused by its willful
      misconduct or gross negligence.

     

     

    6.6.
      The
      Escrow Agent may resign upon ten (10) days’ written notice to the parties
      in this Agreement. If a successor Escrow Agent is not appointed within this
      ten
      (10) day period, the Escrow Agent may petition a court of competent
      jurisdiction to name a successor.

     

     

    6.7
      Conflict Waiver. The Pledgor hereby acknowledges that
      the Escrow Agent is securities counsel to the Pledgee and counsel to the Pledgee
      in connection with the transactions contemplated and referred herein. The
      Pledgor agrees that in the event of any dispute arising in connection with
      this
      Agreement or otherwise in connection with any transaction or agreement
      contemplated and referred herein, the Escrow Agent shall be permitted to
      continue to represent the Pledgee and the Pledgor will not seek to disqualify
      such counsel and waives any objection Pledgor might have with respect to the
      Escrow Agent acting as the Escrow Agent pursuant to this Agreement.

     

     

    6.8
      Notices. Unless otherwise provided herein, all
      demands, notices, consents, service of process, requests and other
      communications hereunder shall be in writing and shall be delivered in person
      or
      by overnight courier service, or mailed by certified mail, return receipt
      requested, addressed:

     

    


    
      
        
          
          

        

        
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                If
                to the Pledgor, to:

            	
               

            	
              C-Mark
                International, Inc..

            
	
               

            	
               

            	
              4130
                E. Van Buren, Suite 325

            
	
               

            	
               

            	
              Phoenix,
                AZ 85008

            
	
               

            	
               

            	
              Attn:
                Mr. Charles Jones, CEO

            
	
               

            	
               

            	
              Telephone:
                (602) 443-8640

            
	
               

            	
               

            	
              Facsimile:
                (602) 443-8646

            
	 	 	 
	
                With
                a copy to:

            	
               

            	
              The
                O’Neal Law Firm, P.C.

            
	
               

            	
               

            	
              17100
                E. Shea Blvd., Suite 400-D

            
	
               

            	
               

            	
              Fountain
                Hills, AZ  85268

            
	
               

            	
               

            	
              Attention:  William
                D. O’Neal, Esq.

            
	
               

            	
               

            	
              Telephone:
                (480) 812-5058

            
	
               

            	
               

            	
              Facsimile:
                (480) 816-9241

            
	 	 	 
	
                If
                to the Pledgee:

               

            	
               

            	
              Trafalgar
                Capital Specialized

               Investment
                Fund, Luxembourg

            
	
               

            	
               

            	
              8-10
                Rue Mathias Hardt

            
	
               

            	
               

            	
              BP
                3023

            
	 	 	
              L-1030
                Luxembourg

            
	
               

            	
               

            	
              Attention:
                Andrew Garai, Chairman of the Board of

              Trafalgar
                Capital Sarl, the General Partner

            
	
               

            	
               

            	
              Facsimile:
                011-44-207-405-0161

            
	
               

            	
               

            	
              and
                001-786-323-1651

            
	 	 	 
	
                With
                copy to:

            	
               

            	
              James
                G. Dodrill II, P.A.

            
	
               

            	
               

            	
              5800
                Hamilton Way

            
	
               

            	
               

            	
              Boca
                Raton, FL  33496

            
	
               

            	
               

            	
              Telephone:
                (561) 862-0529

            
	
               

            	
               

            	
              Facsimile:
                (561) 892-7787

            


    

     

    Any
      such
      notice shall be effective (a) when delivered, if delivered by hand delivery
      or overnight courier service, or (b) five (5) days after deposit in
      the United States mail, as applicable.

     

     

    7. Binding
      Effect. All of the covenants and obligations contained herein shall
      be binding upon and shall inure to the benefit of the respective parties, their
      successors and assigns.

     

     

     

     

    


    
      
        
          
          

        

        
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    8. Governing
      Law; Venue; Service of Process. The validity, interpretation and
      performance of this Agreement shall be determined in accordance with the laws
      of
      the State of Florida applicable to contracts made and to be performed wholly
      within that state except to the extent that Federal law applies. The parties
      hereto agree that any disputes, claims, disagreements, lawsuits, actions or
      controversies of any type or nature whatsoever that, directly or indirectly,
      arise from or relate to this Agreement, including, without limitation, claims
      relating to the inducement, construction, performance or termination of this
      Agreement, shall be brought in the state state courts located in Broward County,
      Florida or United States District Courts for the Southern District of
      Florida, and the parties hereto agree not to challenge the selection of that
      venue in any such proceeding for any reason, including, without limitation,
      on
      the grounds that such venue is an inconvenient forum. The parties hereto
      specifically agree that service of process may be made, and such service of
      process shall be effective if made, pursuant to Section 8
      hereto.

     

     

    9. Enforcement
      Costs. If any legal action or other proceeding is
      brought for the enforcement of this Agreement, or because of an alleged dispute,
      breach, default or misrepresentation in connection with any provisions of this
      Agreement, the successful or prevailing party or parties shall be entitled
      to
      recover reasonable attorneys’ fees, court costs and all expenses even if not
      taxable as court costs (including, without limitation, all such fees, costs
      and
      expenses incident to appeals), incurred in that action or proceeding, in
      addition to any other relief to which such party or parties may be
      entitled.

     

     

    10. Remedies
      Cumulative. No remedy herein conferred upon any
      party is intended to be exclusive of any other remedy, and each and every such
      remedy shall be cumulative and shall be in addition to every other remedy given
      hereunder or now or hereafter existing at law, in equity, by statute, or
      otherwise. No single or partial exercise by any party of any right, power or
      remedy hereunder shall preclude any other or further exercise
      thereof.

     

     

    11. Counterparts.
      This Agreement may be executed in one or more counterparts, each of
      which shall be deemed an original, but all of which together shall constitute
      the same instrument.

     

     

    12. No
      Penalties. No provision of this Agreement is to be
      interpreted as a penalty upon any party to this Agreement.

     

     

    13. JURY
      TRIAL. EACH OF THE PLEDGEE AND THE PLEDGOR HEREBY KNOWINGLY,
      VOLUNTARILY AND INTENTIONALLY WAIVES THE RIGHT WHICH IT MAY HAVE TO A TRIAL
      BY
      JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION BASED HEREON, OR ARISING
      OUT OF, UNDER OR IN ANY WAY CONNECTED WITH THE DEALINGS BETWEEN PLEDGEE AND
      PLEDGOR, THIS PLEDGE AND ESCROW AGREEMENT OR ANY DOCUMENT EXECUTED IN CONNECTION
      HEREWITH, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER
      ORAL
      OR WRITTEN) OR ACTIONS OF ANY PARTY HERETO OR THERETO IN EACH CASE WHETHER
      NOW
      EXISTING OR HEREAFTER ARISING, AND WHETHER IN CONTRACT, TORT, EQUITY OR
      OTHERWISE.

     

    


    
      
        
          
          

        

        
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    IN
      WITNESS WHEREOF, the parties hereto have duly executed this Pledge and
      Escrow Agreement as of the date first above written.

     

     

    TRAFALGAR
      CAPITAL SPECIALIZED INVESTMENT FUND, LUXEMBOURG

     

    
      	
               

            	
               

            	
               

            
	
              By:

              Its:

            	
               

            	
              Trafalgar
                Capital Sarl

              General
                Partner

            
	 	 	 
	
              By:

            	 	/s/ 
              Andrew
              Garai              
	
              Name:

              Title:

            	
               

            	
              Andrew
                Garai

              Chairman
                of the Board

            


    

    


    
      	
               

            	
              CMark
                International, Inc.

            


    

    


    
      	
               

            
	
               

            
	
              By: 
                /s/ Charles Jones,
                Jr.          
                

            
	
               

            
	
              Name:
                Charles Jones, Jr.

            
	
               

            
	
              Title:
                CEO

            


    

    


    
      	
               

            	
              Escrow
                Agent: James G. Dodrill II,
                P.A.

            


    

    


    
      	
               

            	
               

            
	
              By:

            	
              /s/  
                James Dodrill, Esq.

            
	
              Name:

            	
              James
                Dodrill, Esq.

            
	
               

            	
               

            


    

     

     

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