Document:

Unassociated Document

    

     

    PLEDGE
      AND ESCROW AGREEMENT

     

    THIS
      PLEDGE AND ESCROW AGREEMENT
      (the
“Agreement”)
      is
      made and entered into as of September 11, 2006 (the “Effective
      Date”)
      by and
      among GWIN,
      INC.,
      a
      corporation organized and existing under the laws of the State of Delaware
      (the
“Pledgor”),
      CSI
      BUSINESS FINANCE, INC.,
      (the
“Pledgee”),
      and
KIRKPATRICK
      & LOCKHART NICHOLSON GRAHAM LLP,
      as
      escrow agent (“Escrow
      Agent”).
      

     

    RECITALS:

     

    WHEREAS,
      the
      Pledgor and Pledgee shall, contemporaneously with the execution and delivery
      of
      this Agreement, enter into that certain Loan Agreement (the “Loan
      Agreement”)
      pursuant to which the Pledgee shall lend to the Pledgor, and the Pledgor shall
      borrow from the Pledgee, the sum of Six Hundred Fifty-Five Thousand Dollars
      ($655,000) (the “Loan
      Amount”);

     

    WHEREAS,
      as a
      material inducement for Pledgee to enter into the Loan Agreement and to fund
      the
      Loan Amount, the Pledgor has agreed to issue to the Pledgee two (2) promissory
      notes on the terms and subject to the conditions set forth in the Loan Agreement
      (together, the “Notes”
and
      each, a “Note”)
      in the
      form attached to the Loan Agreement as Exhibit
      A
      and
      evidencing the terms and conditions of each Note;

     

    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 to the Pledgee
      or any successor to the Pledgee under this
      Agreement, the Loan Agreement, the Notes, that certain Security Agreement,
      of
      even date herewith, by and between the Pledgor and the Pledgee (the
“Security
      Agreement”),
      that
      certain Insider Pledge and Escrow Agreement, by and among the Pledgee, the
      Pledgor, Wayne Allyn Root and the Escrow Agent (the “Insider
      Pledge Agreement”)
      and
      that certain Subsidiary Security Agreement, of even date herewith, by and
      between Global SportsEDGE, Inc., a wholly-owned subsidiary of Pledgor and the
      Pledgee (the “Subsidiary
      Security Agreement”
and,
      together with this Agreement, the Notes, the Pledge Agreement, the Security
      Agreement, the Insider Pledge Agreement and the Subsidiary Security Agreement,
      the “Transaction
      Documents”),
      the
      Pledgor has agreed to irrevocably pledge to the Pledgee 502,500,000 shares
      of
      the Pledgor’s common stock, par value $0.0001 per share (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 to the Pledgee under the Transaction
      Documents (the “Obligations”).
      The
      Pledgor shall deliver to the Escrow Agent a stock certificate representing
      502,500,000
      Pledged Shares upon the effectiveness of the Share Increase (as such term is
      defined in the Loan Agreement) and in accordance with Section 5.8 of the
      Loan
      Agreement.
      The
      delivery of the Pledged Shares shall be together with duly executed stock powers
      or other appropriate transfer documents executed in blank by the Pledgor (the
      “Transfer
      Documents”),
      and
      such stock certificate and Transfer Documents shall be held by the Escrow Agent
      pursuant to this Agreement until the full payment of all amounts due to the
      Pledgee under the Notes and through repayment in accordance with the terms
      of
      the Notes, or the termination or expiration of this Agreement. 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    2.  Rights
      Relating to the Pledged Shares.
      Prior
      to the occurrence of an Event of Default (as defined herein) and the issuance
      of
      the Pledged Shares to the Pledgee (in accordance with Section 5.1), the Pledged
      Shares shall not be, or be deemed to be, issued or outstanding shares of the
      Pledgor and neither the Pledgee nor any other person shall be entitled to vote
      the Pledged Shares, to receive dividends and other distributions thereon, or
      to
      enjoy any other rights and privileges incident to the ownership of the Pledged
      Shares.

     

    3.  Release
      of the Pledged Shares from Pledge.
      Upon
      the payment of all amounts due to the Pledgee under the Notes by repayment
      in
      accordance with the terms of the Notes, the parties hereto shall notify the
      Escrow Agent to such effect in writing. Upon receipt of such written notice,
      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 Notes, by repayment in
      accordance with the terms of the Notes, 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 Notes or the Loan Agreeement.

     

    5.  Remedies.
      

     

    5.1.  Upon
      and
      anytime after the occurrence of an Event of Default, the Pledgee shall have
      the
      right acquire the Pledged Shares in accordance with the following procedure:
      (a)
      the Pledgee shall provide written notice of such Event of Default (the
“Default
      Notice”)
      to the
      Escrow Agent, with a copy to the Pledgor; (b) in a Default Notice the Pledgee
      shall specify the number of Pledged Shares to be issued to the Plegdee,
provided
      however,
      that
      the Pledgee shall not have the right to acquire such number of Pledged Shares
      which would cause the Pledgee, together with its affiliates, to beneficially
      own
      in excess of 4.99% of the outstanding capital of the Pledgor (unless the Pledgee
      waives such limitation by providing sixty-five (65) days’ advance written
      notice); and (c) as soon as practicable after receipt of a Default Notice,
      the
      Escrow Agent shall deliver the specified number of Pledged Shares along with
      the
      applicable Transfer Documents to the Pledgor’s Transfer Agent with instructions
      to issue such Pledged Shares to the Pledgee. 

     

    5.2.  Upon
      receipt of the Pledged Shares issued to the Pledgee, 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 Delaware. 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
      Pledgor shall remain liable for shortfalls, if any, that may exist after the
      Pledgee has exhausted all remedies hereunder. The Pledgee shall return any
      Pledged Shares issued to it and instruct the Escrow Agent to return any Pledged
      Shares it is holding in escrow after the all amounts owed to the Pledgee under
      the Notes have been satisfied.

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    5.3.  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.

     

    5.4.  In
      addition to all other remedies available to the Pledgee, upon the issuance
      of
      Pledged Shares to the Pledgee, the Pledgor shall promptly, but in no event
      more
      than sixty (60) days after the date of the Default Notice, file a registration
      statement to register with the U.S. 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.

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    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.

     

    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
      of the Southern District of Texas, Houston Division, sitting in Houston, Texas,
      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 special counsel to the
      Pledgor 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 Pledgor and the Pledgee will not seek to disqualify
      such counsel and waives any objection Pledgee might have with respect to the
      Escrow Agent acting as the Escrow Agent pursuant to this Agreement.

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    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:

     

    
      	
              If
                to the Pledgor, to:

            	
              GWIN,
                Inc.

            
	 	
              5052
                S. Jones Blvd.

            
	 	
              Suite
                100

            
	 	
              Las
                Vegas, NV 89118

            
	 	
              Attention:
                Douglas
                R. Miller

              Telephone: (702)
                967-6000

            
	 	
              Facsimile: (702)
                967-6002

            
	 	 
	
              With
                a copy to:

            	
              Kirkpatrick
                & Lockhart Nicholson Graham LLP

            
	 	
              201
                South Biscayne Boulevard - Suite 2000

            
	 	
              Miami,
                FL 33131-2399

            
	 	
              Attention: Clayton
                E. Parker, Esq.

            
	 	
              Telephone: (305)
                539-3300

            
	 	
              Facsimile: (305)
                358-7095

            
	 	 
	
              If
                to the Pledgee:

            	
              CSI
                Business Finance, Inc.

            
	 	
              109
                North Post Oak Lane, Suite 422

            
	 	
              Houston,
                Texas 77024

            
	 	
              Attention: Timothy
                J. Connolly

            
	 	
              Telephone: (713)
                621-2737

            
	 	
              Facsimile: (713)
                586-6678

            
	 	 

    

    

    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.

     

    8.  Governing
      Law; Venue; Service of Process.
      The
      interpretation and construction of this Agreement, and all matters relating
      hereto, shall be governed by the laws of the State of Delaware without giving
      effect to the principles of conflicts of laws thereof. Each of the parties
      hereto consents to the jurisdiction of the federal and state courts of the
      State
      of Texas in any such action or proceeding and waives any objection to venue
      laid
      therein. 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.

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    9.  Enforcement
      Costs.
      If any
      legal action or other pro-ceeding is brought for the enforcement of this
      Agreement, or because of an alleged dispute, breach, default or
      misrepresenta-tion 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 limita-tion, 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 here-after 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. 

     

    14.  Opportunity
      to Hire Counsel; Role of Kirkpatrick & Lockhart Nicholson Graham
      LLP.
      Pledgee
      acknowledges that they have been advised and have been given an opportunity
      to
      hire counsel with respect to this Agreement and the transactions contemplated
      hereby. Pledgee further acknowledges that the law firm of Kirkpatrick &
Lockhart Nicholson Graham LLP has solely represented the Company in connection
      with this Agreement and the transactions contemplated hereby and no other
      person.

     

    

     

    [Remainder
      of Page Intentionally Left Blank]

    

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

     

    
      	 	 	CSI Business Finance,
              Inc. 
	 	 	 
	 	 	By: /s/Timothy
              J.
              Connolly           
              
	 	 	Name: Timothy
              J. Connolly  
	 	 	 
	 	 	GWIN,
              INC. 
	 	 	 
	 	 	By: /s/
              Douglas R.
              Miller            
              
	 	 	
              Name: Douglas
                R. Miller 

            
	 	 	
              Title: President 

            
	 	 	 
	 	 	Escrow
              Agent 
	 	 	By: /s/
              Kirkpatrick & Lockhart Nicholson Graham LLP
	 	 	Name: Kirkpatrick & Lockhart Nicholson
              Graham LLP
	 	 	 

    

    

    

    

     

    

    

         

    
      
        
        

      

      
        6Unassociated Document

     

    INSIDER
      PLEDGE AND ESCROW AGREEMENT

     

    THIS
      INSIDER PLEDGE AND ESCROW AGREEMENT
      (this
“Agreement”)
      is
      made and entered into as of September 11, 2006 (the “Effective
      Date”)
      by and
      among WAYNE
      ALLYN ROOT (the
      “Pledgor”),
      CSI
      BUSINESS FINANCE, INC. (the
      “Pledgee”),
      GWIN,
      INC.,
      a
      Delaware corporation (the “Company”),
      and
KIRKPATRICK
      & LOCKHART NICHOLSON GRAHAM LLP,
      as
      escrow agent (“Escrow
      Agent”).
      

     

    RECITALS:

     

    WHEREAS,
      the
      Company and Pledgee shall, contemporaneously with the execution and delivery
      of
      this Agreement, enter into that certain Loan Agreement (the “Loan
      Agreement”)
      pursuant to which the Pledgee shall lend to the Company, and the Company shall
      borrow from the Pledgee, the sum of Six Hundred Fifty-Five Thousand Dollars
      ($655,000) (the “Loan
      Amount”);

     

    WHEREAS,
      as a
      material inducement for Pledgee to enter into the Loan Agreement and to fund
      the
      Loan Amount, the Company has agreed to issue to the Pledgee two (2) promissory
      notes on the terms and subject to the conditions set forth in the Loan Agreement
      (together, the “Notes”)
      and
      each, a “Note”)
      in the
      form attached to the Loan Agreement as Exhibit
      A
      and
      evidencing the terms and conditions of each Note;

     

    WHEREAS,
      to
      induce
      the Pledgee to enter into the Loan Agreement, the Notes, that certain Pledge
      and
      Escrow Agreement (the “Pledge
      Agreement”),
      of
      even date herewith, by and among the Company, the Pledgee and the Escrow Agent,
      that certain Security Agreement, of even date herewith, by and between the
      Company and the Pledgee (the “Security
      Agreement”)
      and
      that certain Subsidiary Security Agreement, of even date herewith, by and
      between Global SportsEDGE, Inc., a wholly-owned subsidiary of the Company and
      the Pledgee (the “Subsidiary
      Security Agreement”
and,
      together with this Agreement, the Notes, the Pledge Agreement, the Security
      Agreement and the Subsidiary Security Agreement, the “Transaction
      Documents”),
      the
      Pledgor has agreed to irrevocably pledge to the Pledgee a total of Four Hundred
      Sixty Two Thousand Two Hundred Twenty-Two (462,222) shares of convertible Series
      A Preferred Stock, convertible at the rate of ten (10) shares of Common Stock
      for every one share of Series A Preferred Stock in the amounts set forth beside
      their names in Schedule I of this Agreement (the “Pledged
      Shares”)
      of the
      Company’s common stock, par value $0.0001 per share, beneficially owned by the
      Pledgor in accordance with this Agreement.

     

    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. Obligations
      Secured. The
      obligations secured hereby are any and all obligations of the Company now
      existing or hereinafter incurred to the Pledgee, whether oral or written and
      whether arising before, on or after the date hereof including, without
      limitation, those obligations of the Company to the Pledgee under the
      Transaction Documents and any other amounts now or hereafter owed to the Pledgee
      by the Company thereunder (collectively, the “Obligations”).

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

     

    2. Pledge
      and Transfer of the Pledged Shares.
      The
      Pledgor hereby grants to Pledgee an irrevocable, first priority security
      interest in all Pledged Shares as security for the Company’s Obligations.
      Simultaneously with the execution of the Transaction Documents, the Pledgor
      shall deliver to the Escrow Agent stock certificates made out in favor of the
      Pledgee representing the Pledged Shares, together with duly executed stock
      powers or other appropriate transfer documents with medallion bank guarantees
      and 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 Obligations due to the Pledgee, including the
      repayment of all amounts owed by the Company to the Pledgee under the Notes
      (whether outstanding principal, interest, legal fees, or any other amounts
      owed
      to the Pledgee by the Company).

     

    3. Rights
      Relating to the Pledged Shares.
      Upon
      the occurrence of an Event of Default (as defined herein), the Pledgee shall
      be
      entitled to vote the Pledged Shares, receive dividends and other distributions
      thereon, and enjoy all other rights and privileges incident to the ownership
      of
      the number of Pledged Shares actually released from escrow in accordance with
      Section 6.1 hereof. 

     

    4. Release
      of the Pledged Shares from Pledge.
      Upon
      the full payment of all Obligations due to the Pledgee under the Transaction
      Documents, including the repayment of all amounts owed by the Company to the
      Pledgee under the Notes (whether outstanding principal, interest, legal fees,
      and any other amounts owed to the Pledgee by the Company), the parties hereto
      shall notify the Escrow Agent to such effect in writing. Promptly upon receipt
      of such written notice, 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.

     

    5. Event
      of Default.
      An
“Event
      of Default”
shall
      be deemed to have occurred under this Agreement upon an Event of Default under
      the Notes or the Loan Agreement.

     

    6. Remedies.
      

     

    a. Upon
      and
      anytime after the occurrence of an Event of Default, the Pledgee shall have
      the
      right to acquire the Pledged Shares in accordance with the following procedure:
      (a) the Pledgee shall provide written notice of such Event of Default (the
      “Default
      Notice”)
      to the
      Escrow Agent, with a copy to the Pledgor; (b) in a Default Notice the Pledgee
      shall specify the number of Pledged Shares to be issued to the Plegdee,
provided
      however,
      that
      the Pledgee shall not have the right to acquire such number of Pledged Shares
      which would cause the Pledgee, together with its affiliates, to beneficially
      own
      in excess of 4.99% of the outstanding capital of the Company (unless the Pledgee
      waives such limitation by providing sixty-five (65) days’ advance written
      notice); and (c) as soon as practicable after receipt of a Default Notice,
      the
      Escrow Agent shall deliver the specified number of Pledged Shares along with
      the
      applicable Transfer Documents to the Company’s Transfer Agent with instructions
      to issue such Pledged Shares to the Pledgee.

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    

     

    b. Upon
      receipt of the Pledged Shares issued to the Pledgee, 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
      Company 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 Delaware. 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 any 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
      Pledgee shall return any Pledged Shares issued to it and instruct the Escrow
      Agent to return any Pledged Shares it is holding in escrow after the all amounts
      owed to the Pledgee under the Convertible Debentures have been satisfied.

     

    c. 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 any Pledgor in any case
      shall entitle such Pledgor 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. 

     

    7. Representations,
      Warranties and Covenants.
      

     

    a. The
      Company represents, warrants and covenants that:

     

    (i) The
      Pledgor is, and at the time when pledged hereunder will be, the legal,
      beneficial and record owner of, and has (and will have)
      good and
      valid title to, all Pledged Shares pledged hereunder, subject to no pledge,
      lien, mortgage, hypothecation, security interest, charge, option or other
      encumbrance whatsoever;

     

    (ii) The
      Pledgor has full power, authority and legal right to pledge all the Pledged
      Shares pledged pursuant to this Agreement; and

     

    (iii) all
      the
      Pledged Shares attributable to such Pledgor have been duly and validly issued,
      are fully paid and non-assessable and are subject to no options to purchase
      or
      similar rights.

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    

     

    b. The
      Company covenants and agrees to take all reasonable steps to defend the
      Pledgee’s right, title and security interest in and to the Pledged Shares and
      the proceeds thereof against the claims and demands of all persons whomsoever
      (other than the Pledgee and the Escrow Agent); and the Pledgor covenants and
      agrees that he will have like title to
      and
      right to pledge any other property at any time hereafter pledged to the Pledgee
      as Collateral hereunder and will likewise take all reasonable steps to defend
      the right thereto and security interest therein of the Pledgee.

     

    c. The
      Company covenants and agrees to take no action which would violate or be
      inconsistent with any of the terms of any Transaction Document, or which would
      have the effect of impairing the position or interests of the Pledgee under
      any
      Transaction Document.

     

    d. The
      Company represents, warrants and covenants that (i) the Pledgor is the
      beneficial owner of the Pledged Shares and (ii) this Agreement is made with
      recourse. Upon an Event of Default, the Pledgee shall be deemed to have acquired
      the Pledged Shares on the date they were acquired by the Pledgor. The Pledgor
      is
      an “affiliate” of the Company, as such term is defined in Rule 144(a)
      promulgated under the Securities Act of 1933, as amended.

     

    8. Concerning
      the Escrow Agent.

     

    a. 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.

     

    b. 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.

     

    c. 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.

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    

     

    d. 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
      of the Southern District of Texas, Houston Division, sitting in Houston, Texas,
      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.

     

    e. 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.

     

    f. 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.

     

    9. Conflict
      Waiver.
      The
      Pledgor hereby acknowledges that the Escrow Agent is special counsel to the
      Company 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 Company, the Pledgor will not seek to disqualify
      such
      counsel, and the Pledgor waives any objection the Pledgor might have with
      respect to the Escrow Agent acting as the Escrow Agent pursuant to this
      Agreement. 

     

    10. 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:

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

    

     

    
      	
              If
                to the Company, to:

            	
              GWIN,
                Inc.

            
	 	
              5052
                South Jones Boulevard

            
	 	
              Suite
                100

            
	 	
              Las
                Vegas, NV 89118

            
	 	
              Attention:
                 Douglas
                R. Miller

              Telephone: (702)
                967-6000

            
	 	
              Facsimile: (702)
                967-6002

            
	 	 
	
              With
                a copy to:

            	
              Kirkpatrick
                & Lockhart Nicholson Graham LLP

            
	 	
              201
                South Biscayne Boulevard - Suite 2000

            
	 	
              Miami,
                FL 33131-2399

            
	 	
              Attention: Clayton
                E. Parker, Esq.

            
	 	
              Telephone: (305)
                539-3300

            
	 	
              Facsimile: (305)
                358-7095

            
	 	 
	
              If
                to the Pledgee:

            	
              CSI
                Business Finance, Inc.

            
	 	
              109
                North Post Oak Lane, Suite 422

            
	 	
              Houston,
                Texas 77024

            
	 	
              Attention: Timothy
                J. Connolly

            
	 	
              Telephone: (713)
                621-2737

            
	 	
              Facsimile: (713)
                586-6678

            
	 	 
	
              If
                to the Pledgor, to:

            	
              GWIN,
                Inc.

            
	 	
              5052
                South Jones Boulevard

            
	 	
              Suite
                100

            
	 	
              Las
                Vegas, NV 89118

            
	 	
              Attention:
                 Wayne
                Allyn Root 

              Telephone: (702)
                967-6000

            
	 	
              Facsimile: (702)
                967-6002

            
	 	 

    

    

    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.

     

    11. 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.

     

    12. Governing
      Law; Venue; Service of Process.
      The
      parties hereto agree that any disputes, claims, disagreements, lawsuits, actions
      or controversies of any type or nature whatsoever that, directly or he
      interpretation and construction of this Agreement, and all matters relating
      hereto, shall be governed by the laws of the State of Delaware without giving
      effect to the principles of conflicts of laws thereof. Each of the parties
      hereto consents to the jurisdiction of the federal and state courts of the
      State
      of Texas in any such action or proceeding and waives any objection to venue
      laid
      therein.

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

    

     

    13. Enforcement
      Costs.
      If any
      legal action or other pro-ceeding is brought for the enforcement of this
      Agreement, or because of an alleged dispute, breach, default or
      misrepresenta-tion 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 limita-tion, 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.

     

    14. 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 here-after 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. 

     

    15. 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.

     

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

     

    17. 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.

     

    18. Opportunity
      to Hire Counsel; Role of Kirkpatrick & Lockhart Nicholson Graham
      LLP.
      Each
      party hereto acknowledges that they have been advised and have been given an
      opportunity to hire counsel with respect to this Agreement and the transactions
      contemplated hereby. Each party further acknowledges that the law firm of
      Kirkpatrick & Lockhart Nicholson Graham LLP has solely represented the
      Company in connection with this Agreement and the transactions contemplated
      hereby and no other person.

    

     

    [REMAINDER
      OF PAGE INTENTIALLY LEFT BLANK]

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

    

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

     

    

    
      	 	
              CSI
                Business Finance, Inc.

            
	 	 
	 	 
	 	
              By:
                /s/ Timothy J. Connolly   

            
	 	
              Name: Timothy
                J. Connolly

            
	 	
              Title: Chief
                Executive Officer 

            

    

    

    

    
      	 	
              Wayne
                Allyn Root, an Individual

               

            
	 	
              By:
                /s/Wayne Allyn Root   

            
	 	
              Name:
                Wayne Allyn Root

            

    

    

      

      

      
        	 	
                GWIN,
                  Inc.

              
	 	
                By:
                  /s/ Douglas R. Miller         

              
	 	
                Name: Douglas
                  R. Miller

              
	 	
                Title: President

              
	 	 

      

      

    

    
      	 	
              Escrow
                Agent

            
	 	 
	 	 
	 	
              By:
                /s/ Kirkpatrick
                & Lockhart Nicholson Graham LLP  
                 

            
	 	
              Name:  Kirkpatrick
                & Lockhart Nicholson Graham LLP

            

    

    

    

    

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

    SCHEDULE
      I

    

    PLEDGOR

    

    
      	
              Name

            	 	
              Number
                of Shares Pledged

            
	 	 	 
	 	 	 
	
              Wayne
                Allyn Root

            	 	
              462,222
                convertible Series A Preferred Stock, convertible into 4,622,220
                shares of
                Common Stock

            
	 	 	 
	 	 	 

    

    

    

    
      
        
        

      

      
        9

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