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EXHIBIT 10.2

 

STOCK PLEDGE AND ESCROW AGREEMENT

 

THIS AGREEMENT is made the 8th day of October, 2009, between Lester Levin Inc., a New York corporation (“ LLI ”), Document Security Systems, Inc., a New York corporation (“ DSS ”) (hereinafter collectively referred to as “ Obligees ”) and Raymond Meyers (hereinafter referred to as “ Pledgor ”),  Internet Media Services, Inc., a Delaware corporation (the “Company” ), and Manufacturers and Traders Trust Company (hereinafter referred to as “ Escrow Agent ”).

 

Recitals

 

WHEREAS, Pledgor is a controlling stockholder, President and director of the Company;

 

WHEREAS, LLI and the Company have entered into that certain Asset Purchase Agreement of even date herewith (the “ Asset Purchase Agreement ”) pursuant to which LLI is selling and transferring certain assets of its LegalStore.com business to the Company in exchange for the issuance to LLI’s parent corporation, DSS, 7,500,000 shares of common stock of the Company;

 

WHEREAS, pursuant to the covenants in the Asset Purchase Agreement, following the transaction, the Company is obligated to take certain measures to advance the business of the Company;

 

WHEREAS, Pledgor has agreed to secure the performance of the Company’s obligations to Obligees pursuant to such covenants in the Asset Purchase Agreement by executing this agreement and transferring to and registering in the name of the Escrow Agent the 9,000,000 shares of stock of the Company held by the undersigned.

 

NOW, THEREFORE, in consideration of the premises and understandings contained herein and for good and valuable consideration, receipt of which is hereby acknowledged, the parties agree as follows:

 

1.

Pledge Agreement

 

(a)           As collateral security for the performance of those certain covenants of the Company under the Asset Purchase Agreement set forth in Section 1(b) below, Pledgor hereby (i) grants to Obligees a security interest in and (ii) pledges to Obligees and (iii) transfers as security all of the following instruments and property (receipt of which is hereby acknowledged by Escrow Agent):

 

(i)           Nine million (9,000,000) shares of common stock of Company held by the Pledgor and all successor stock to said shares, replacement stock for said shares, substituted stock for said shares or additional shares of stock of Company issued or transferred as a dividend on or stock split of or otherwise received because of or in lieu of the ownership of said shares of common stock of Company during the term of this agreement, whether the same resulted from merger, consolidation, reorganization or otherwise (hereinafter sometimes referred to as “ Shares ”), all to be registered in the name of the Escrow Agent; and

 

 

 


 

 

(ii)           Any and all other instruments or cash or, in kind, dividends or other property which anyone is or may hereafter become entitled to receive with respect to replacement of, substitution for, or succession to the aforesaid Shares.

 

All of the foregoing property and instruments shall be individually and collectively hereinafter referred to as “Collateral.” The Collateral shall be held by the Escrow Agent hereinafter named in accordance with the terms and pro-visions contained in this agreement.

 

Certificates registering the Shares should be registered in the name of the Escrow Agent.

 

Pledgor agrees to forthwith deliver to Escrow Agent any and all Collateral hereafter acquired by Pledgor along with stock powers duly endorsed in blank with respect to any stock certificate therefor.

 

(b)           The following events shall constitute an “ Event of Default ” under this agreement:  (i) The Company’s failure to comply with the following covenants in Article VI of the Asset Purchase Agreement:  Section 6.2 Board of Directors ; Section 6.3 Working Capital ; Section 6.4 Registration of Shares ; Section 6.8 Corporate Existence; Reporting Status ; Section 6.9 Certain Negative Covenants (the “ Company’s Covenants ”), which covenants are incorporated herein by reference; and (ii) a breach of the Company’s representations and warranties set forth in Section 5 of the Asset Purchase Agreement, which representatio


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