EXHIBIT 4
PLEDGE AGREEMENT
THIS PLEDGE AGREEMENT, entered into as of March 27, 2000, between E-
NEWCO, INC., a Delaware corporation (the "Company"), and XXX X. XXXXXXX
(the "Purchaser").
W I T N E S S E T H:
WHEREAS, the Purchaser has purchased from the Company 110 shares of
the Company's Common Stock (the "Shares"); and
WHEREAS, the Company has loaned to the Purchaser the sum of $410,955.05
which the Purchaser has used to pay the purchase price of the Shares; and
WHEREAS, the Purchaser has executed and delivered to the Company a
partially- recourse promissory note evidencing such loan (the "Note") and
has agreed to pledge all of the Shares to the Company as security for the
payment of the Note:
NOW, THEREFORE, it is agreed as follows:
1. The Purchaser hereby delivers to the Company one or more certificates
representing the Shares, together with two Assignments Separate From
Certificate signed by the Purchaser. The Purchaser hereby pledges and
grants a security interest in the Shares, including any shares into which
the Shares may be converted and all proceeds of the Shares, as security for
the timely payment of all of the Purchaser's obligations under the Note and
for the Purchaser's performance of all of its obligations under this
Agreement. In the event of a default in payment of the Note, the Purchaser
hereby appoints the Company as his true and lawful attorney to take such
action as may be necessary or appropriate to cause the Shares to be
transferred into the name of the Company or any assignee of the Company and
to take any other action on behalf of the Purchaser permitted hereunder or
under applicable law.
2. The Company agrees to hold the Shares as security for the timely
payment of all of the Purchaser's obligations under the Note and for the
Purchaser's performance of all of its obligations under this Agreement, as
provided herein. At no time shall the Company dispose of or encumber the
Shares, except as otherwise provided in this Agreement or the Restricted
Stock Purchase Agreement dated as of the date hereof between the Company
and the Purchaser (the "Restricted Stock Purchase Agreement").
3. At all times while the Company is holding the Shares as security
under this Agreement, the Company shall:
(a) Collect any dividends that may be declared on the Shares and
credit such dividends against any accrued interest or unpaid
principal under the Note, as part payment;
(b) Collect and hold any shares that may be issued upon conversion
of the Shares; and
(c) Collect and hold any other securities or other property that
may be distributed with respect to the Shares.
Such shares and other securities or property shall be subject to the
security interest granted in Section 1 of this Agreement and shall be held
by the Company under this Agreement.
4. While the Company holds the Shares as security under this Agreement,
the Purchaser shall have the right to vote the Shares at all meetings of
the Company's stockholders; provided that the Purchaser is not in default
in the performance of any term of this Agreement, the Restricted Stock
Purchase Agreement or Employment Agreement or in any payment due under the
Note. In the event of such a default, the Company shall have the right to
the extent permitted by law to vote and to give consents, ratifications and
waivers and take any other action with respect to the Shares with the same
force and effect as if the Company were the absolute and sole owner of the
Shares.
5. Upon payment in full of the outstanding principal balance of the Note
and all interest and other charges due under the Note, subject to the terms
of the Restricted Stock Purchase Agreement, the Company shall release from
pledge and redeliver to the Purchaser the certificate(s) representing the
Shares and the Assignment Separate From Certificate forms.
6. In the event that the Purchaser fails to perform any term of this
Agreement or fails to make any payment when due under the Note and such
failure continues for 10 days after notice thereof (an "Event of Default"),
the Company shall have all of the rights and remedies of a creditor and
secured party at law and in equity, including (without limitation) the
rights and remedies provided under the Uniform Commercial Code.
Without limiting the foregoing, after an Event of Default, the
Company may, after giving ten (10) days' prior written notice to the
Purchaser by certified mail at his residence or business address, sell any
or all of the Shares in such manner and for such price as the Company may
determine, including (without limitation) through a public or private sale
or at any broker's board or on any securities exchange, for cash, upon
credit or for future delivery. The Company is authorized at any such sale,
if it deems it advisable to do so, to restrict the prospective bidders or
purchasers of any of the Shares to persons who will represent and agree
that they are purchasing for their own account for investment, and not with
a view to the distribution or sale of any of the Shares, to restrict the
prospective bidders or purchasers and the use any purchaser may make of the
Shares and impose any other restriction or condition that the Company deems
necessary or advisable under the federal and state securities laws.
Upon any such sale the Company shall have the right to deliver,
assign and transfer to the purchaser thereof the Shares so sold. Each
purchaser at any such sale shall hold the Shares so sold absolute, free
from any claim or right of any kind. In case of any sale of any or all of
the Shares on credit or for future delivery, the Shares so sold may be
retained by the Company until the selling price is paid by the purchaser
thereof, but the Company shall not incur any liability in case of the
failure of such purchaser to take up and pay for the Shares so sold and, in
case of any such failure, such Shares may again be sold under the terms of
this section.
The Purchaser hereby agrees that any disposition of any or all of
the Shares by way of a private placement or other method which in the
opinion of the Company is required or advisable under Federal and state
securities laws is commercially reasonable. At any public sale, the Company
may (if it is the highest bidder) purchase all or any part of the Shares at
such price as the Company deems proper. Out of the proceeds of any sale,
the Company may retain an amount sufficient to pay all amounts then due
under the Note, together with the expenses of the sale and reasonable
attorneys' fees. The Company shall pay the balance of such proceeds, if
any, to the Purchaser. The Purchaser shall be liable for any deficiency
that remains after the Company has exercised its rights under this
Agreement.
7. This Agreement shall be governed by and construed in accordance with
the laws of the State of New York, without regard to New York choice of law
provisions.
8. This Agreement shall inure to the benefit of, and be binding upon,
the Company and its successors and assigns and be binding upon the
purchaser and the Purchaser's legal representative, heirs, legatees,
distributees, assigns and transferees by operation of law. It is expressly
understood by the parties that if the Company engages in a transaction
(whether pursuant to a merger or otherwise) pursuant to which it becomes a
wholly owned subsidiary of another entity, such parent entity shall succeed
to the Company's rights and obligations hereunder and thereafter references
to the "Company" shall be to such parent entity.
9. This Agreement contains the entire pledge agreement between the
Company and the Purchaser.
10. The Purchaser will execute any additional agreements, assignments or
documents or take any other actions reasonably required by the Company to
preserve and perfect the security interest in the Shares granted to the
Company herein and otherwise to effectuate this Agreement.
IN WITNESS WHEREOF, the Company has caused this Agreement to be
executed on its behalf by its duly authorized officer, and the Purchaser
has personally executed this Agreement.
E-NEWCO, INC.
By /s/ Xxx X. Xxxxxxx
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Title President
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XXX X. XXXXXXX
/s/ Xxx X. Xxxxxxx
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