Exhibit 4.4
PLEDGE AGREEMENT
THIS PLEDGE AGREEMENT ("AGREEMENT") dated as of June 25, 2003, is
given by XXXXXX XXXXXX ("PLEDGOR"), in favor of CORNELL CAPITAL PARTNERS , LP, a
Delaware limited partnership ("CORNELL"). Capitalized terms used herein and not
otherwise defined herein shall have the respective meanings set forth in the
Securities Purchase Agreement of even date herewith given by Pick-Ups Plus Inc.,
a Delaware corporation (the "COMPANY"), to Cornell (as amended, restated,
supplemented or otherwise modified from time to time, the "SECURITIES PURCHASE
AGREEMENT").
WHEREAS:
A. The Company and Cornell wish to provide for the funding contemplated
under the Securities Purchase Agreement in the amount of One Hundred Eighty
Thousand (U.S.) Dollars ($180,000).
B. To induce Cornell to enter into the Securities Purchase Agreement,
Registration Rights Agreement, Convertible Debenture, and the Irrevocable
Transfer Agent Instructions, the Pledgor has also agreed to secure the Pledgor's
obligations under the Guaranty by a pledge to Cornell and grant a first-priority
security interest to Cornell of three million (3,000,000) free trading shares of
the Company's Common Stock (the "FREE TRADING PLEDGED STOCK") (referred to as
the "PLEDGED STOCK") which are issued and outstanding and owned by the Pledgor.
The Pledged Stock is more fully described on EXHIBIT A attached hereto.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants set forth herein, and for other good and valuable consideration the
receipt and sufficiency of which is hereby acknowledged, the parties hereby
agree as follows:
1. RECITALS. The above recitals are true and correct and same are
incorporated into this Agreement by this reference.
2. PLEDGE OF STOCK; GRANT OF SECURITY INTEREST. For value received the
Pledgor hereby grants a first-priority security interest in and to, and herewith
delivers to Cornell stock certificates representing, three million (3,000,000)
free trading shares of the Company's Common Stock (the "FREE TRADING PLEDGED
STOCK" and/or the "PLEDGED STOCK") together with any other shares and securities
from time to time receivable or otherwise distributed in respect of or in
exchange for any or all of such shares, being called the "PLEDGED Stock"), to
secure the payment and performance of all obligations of the Pledgor to Cornell
the Securities Purchase Agreement, Registration Rights Agreement, Irrevocable
Transfer Agent Instructions, and the Convertible Debenture all of even date
herewith and all of the documents, agreements and instruments between the
Pledgor and Cornell evidencing or otherwise pertaining to, the Secured
Obligations being herein (collectively referred to as the "TRANSACTION
DOCUMENTS") (the aforesaid obligations and liabilities of the Pledgor being
herein called the "SECURED OBLIGATIONS"). The Pledgor unconditionally agrees
that if the Company fails for any reason or for no reason to repay Cornell all
amounts owed under the
Securities Purchase Agreement and the Convertible Debenture within the period of
time provided in the Convertible Debenture and or comply with the Secured
Obligations under the Transaction Documents, that Cornell shall have the right
to take and/or sell all of the Pledged Stock without limitation.
3. REPRESENTATIONS AND WARRANTIES. The Pledgor represents and warrants
to, and agrees with, Cornell as follows:
(a) The Pledged Stock is represented by the stock certificate or
certificates described on EXHIBIT A attached hereto under the Pledgor's name,
and that such stock certificate or certificates, accompanied by an instrument of
assignment or transfer duly executed in blank by the Pledgor as the owner named
in such stock certificate or certificates, have been delivered to Cornell by the
Pledgor. The Pledged Stock was validly issued, fully paid and non-assessable.
The Pledged Stock is not subject to any voting agreement, voting trust or
similar agreement or arrangement. The Pledged Stock is free and clear of any and
all restrictions, liens and encumbrances other than those in favor of Cornell.
The Pledgor further covenants and agrees to keep the Pledged Stock free and
clear of any and all restrictions liens and encumbrances other than those in
favor of Cornell.
(b) The Pledgor has full power, right and authority to enter into and
perform his obligations under this Agreement, and this Agreement has been duly
executed and delivered by the Pledgor and constitutes the valid and binding
obligations of the Pledgor and is enforceable against the Pledgor in accordance
with its terms. No permits, approvals or consents of or notifications to (1) any
governmental entities or (2) any other persons or entities are necessary in
connection with the execution, delivery and performance by the Pledgor of this
Agreement and the consummation by the Pledgor of the actions contemplated
hereby. Neither the execution and delivery of this Agreement by the Pledgor nor
the performance by any of them of the actions contemplated hereby will:
(i) violate or conflict with or result in a breach of any
provision of any law, statute, rule, regulation, order, permit,
judgment, ruling, injunction, decree or other decision (collectively,
"RULES") of any court or other tribunal or any governmental entity or
agency binding on the Pledgor or his properties, or conflict with or
cause an event of default under any contract or agreement of the
Pledgor; or
(ii) require any authorization, consent, approval, exemption
or other action by or notice to any court, administrative or
governmental body, person, entity or any other third party.
4. TITLE; STOCK RIGHTS, DIVIDENDS, ETC. The Pledgor will warrant and
defend Cornell's title to the Pledged Stock, and the lien herein created,
against all claims of all persons, and will maintain and preserve such security
interest. It is understood and agreed that the collateral hereunder includes any
stock rights, stock dividends, liquidating dividends, new securities, payments,
distributions and proceeds (including cash dividends and sale proceeds) and
other property to which the Pledgor may become entitled by reason of the
ownership of the Pledged Stock during the existence of this Agreement, and any
such property received by the Pledgor shall be held in trust and forthwith
delivered to Cornell to be held hereunder in accordance with the terms of this
Agreement.
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5. EVENTS OF DEFAULT; REMEDIES. Upon the occurrence of any event of
default under this Agreement, the Securities Purchase Agreement, Registration
Rights Agreement, the Convertible Debenture, and the Irrevocable Transfer Agent
Instructions Cornell shall have all of the rights and remedies provided by law
and/or by this Agreement, including but not limited to all of the rights and
remedies of a secured party under the New Jersey Uniform Commercial Code, and
the Pledgor hereby authorizes Cornell to all of the Pledged Stock at public or
private sale and to apply the proceeds of such sale to the costs and expenses
thereof (including the reasonable attorneys' fees and disbursements incurred by
Cornell) and then to the payment of the other Secured Obligations as set forth
below. Any requirement of reasonable notice shall be met if Cornell sends such
notice to the Pledgor within one (1) Trading Day of the date of sale,
disposition or other event giving rise to the required notice. The Pledgor
expressly authorizes such sale or sales of the Pledged Stock in advance of and
to the exclusion of any sale or sales of or other realization upon owed to
Cornell. Cornell shall be under no obligation to reserve rights against prior
parties.
6. ADDITIONAL REMEDIES. Upon the occurrence of an event of default this
Agreement, the Securities Purchase Agreement, Registration Rights Agreement, the
Convertible Debenture, and the Irrevocable Transfer Agent Instructions, Cornell
shall have also the right pursuant to the Assignment Separate from Certificate
attached hereto as EXHIBIT B to transfer into its name, or into the name of its
nominee or nominees, all of the Pledged Stock and may otherwise act with respect
thereto as though Cornell is the outright owner thereof, and the Pledgor hereby
irrevocably constitutes and appoints Cornell as its proxy and attorney-in-fact,
with full power of substitution, to do so.
7. TERMINATION. This Agreement shall terminate upon the registration
statement filed pursuant to the Registration Rights Agreement dated the date
here being declared effective by the United States Securities and Exchange
Commission and upon such termination Cornell shall assign, transfer and deliver
without recourse and without warranty the Pledged Stock to the Pledgor (and any
property received in respect thereof) as has not theretofore been sold or
otherwise applied pursuant to the provisions of this Agreement. Notwithstanding
anything to the contrary herein, so long as the Secured Obligations is zero or
would be made zero simultaneously with the termination hereof, the Pledgor shall
have the right to terminate this Agreement at any time by providing written
notice of such termination to Cornell and upon such termination, Cornell shall
assign, transfer and deliver without recourse or without warranties any
remaining Pledged Stock to the Pledgor or any property received in respect
thereof and has not been sold or otherwise applied under this agreement to
satisfy the Secured Obligations.
8. SEVERABILITY. If any provision of this Agreement is, for any reason,
invalid or unenforceable, the remaining provisions of this Agreement will
nevertheless be valid and enforceable and will remain in full force and effect.
Any provision of this Agreement that is held invalid or unenforceable by a court
of competent jurisdiction will be deemed modified to the extent necessary to
make it valid and enforceable and as so modified will remain in full force and
effect.
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9. AMENDMENT AND WAIVER. This Agreement may be amended, or any
provision of this Agreement may be waived, provided that any such amendment or
waiver will be binding on a party hereto only if such amendment or waiver is set
forth in a writing executed by the parties hereto. The waiver by any such party
hereto of a breach of any provision of this Agreement shall not operate or be
construed as a waiver of any other breach.
10. SUCCESSORS. Except as otherwise provided herein, this Agreement
shall bind and inure to the benefit of and be enforceable by the parties and
their successors and assigns.
11. ASSIGNMENT. This Agreement shall not be directly or indirectly
assignable or delegable by the Pledgor.
12. 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 rule of strict construction will be applied against any party.
13. FURTHER ASSURANCES. Each party hereto will execute all documents
and take such other actions as the other parties may reasonably request in order
to consummate the transactions provided for herein and to accomplish the
purposes of this Agreement.
14. NOTICES, CONSENTS, ETC. Any notices, consents, waivers or other
communications required or permitted to be given under the terms hereof must be
in writing and will be deemed to have been delivered: (i) upon receipt, when
delivered personally; (ii) upon receipt, when sent by facsimile (provided
confirmation of transmission is mechanically or electronically generated and
kept on file by the sending party); or (iii) one (1) trading day after deposit
with a nationally recognized overnight delivery service, in each case properly
addressed to the party to receive the same. The addresses and facsimile numbers
for such communications shall be:
If to Pledgor: Xxxxxx Xxxxxx
0000 Xxxxxxxx Xx. - Xxxxx 000
Xxxxxxxxxx, Xxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to Cornell: Cornell Capital Partners, LP
000 Xxxxxx Xxxxxx - Xxxxx 0000
Xxxxxx Xxxx, Xxx Xxxxxx 00000
Attention: Xxxx X. Xxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
With Copy to: Xxxxxx Xxxxxxxx LLP
0000 Xxxxxxxxxx Xxxxxx - Xxxxx 0
Xxxxx, XX 00000
Attention: Xxxxx Xxxxxxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
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or at such other address and/or facsimile number and/or to the attention of such
other person as the recipient party has specified by written notice given to
each other party three (3) trading days prior to the effectiveness of such
change. Written confirmation of receipt (A) given by the recipient of such
notice, consent, waiver or other communication, (B) mechanically or
electronically generated by the sender's facsimile machine containing the time,
date, recipient facsimile number and an image of the first page of such
transmission or (C) provided by a nationally recognized overnight delivery
service, shall be rebuttable evidence of personal service, receipt by facsimile
or receipt from a nationally recognized overnight delivery service in accordance
with clause (i), (ii) or (iii) above, respectively.
15. REMEDIES, OTHER OBLIGATIONS, BREACHES AND INJUNCTIVE RELIEF.
Cornell's remedies provided in this Agreement shall be cumulative and in
addition to all other remedies available to Cornell under this Agreement, the
Securities Purchase Agreement, Registration Rights Agreement, the Convertible
Debenture, and the Irrevocable Transfer Agent Instructions, at law or in equity
(including a decree of specific performance and/or other injunctive relief), no
remedy of Cornell contained herein shall be deemed a waiver of compliance with
the provisions giving rise to such remedy and nothing herein shall limit
Cornell's right to pursue actual damages for any failure by a Pledgor to comply
with the terms of this Agreement or the Company for failure to comply, the
Securities Purchase Agreement, Registration Rights Agreement, the Convertible
Debenture, and the Irrevocable Transfer Agent Instructions. Every right and
remedy of Cornell under the this Agreement, the Securities Purchase Agreement,
Registration Rights Agreement, the Convertible Debenture, and the Irrevocable
Transfer Agent Instructions or under applicable law may be exercised from time
to time and as often as may be deemed expedient by Cornell. Pledgor acknowledges
that a breach by it of its obligations hereunder will cause irreparable harm to
Cornell and that the remedy at law for any such breach may be inadequate.
Pledgor therefore agrees that, in the event of any such breach or threatened
breach, Cornell shall be entitled, in addition to all other available remedies,
to an injunction restraining any breach, or specific performance without the
necessity of showing economic loss and without any bond or other security being
required.
16. GOVERNING LAW; JURISDICTION. All questions concerning the
construction, validity, enforcement and interpretation of this Agreement shall
be governed by the internal laws of the State of New Jersey, without giving
effect to any choice of law or conflict of law provision or rule (whether of the
State of New Jersey or any other jurisdictions) that would cause the application
of the laws of any jurisdictions other than the State of New Jersey. Each party
hereby irrevocably submits to the exclusive jurisdiction of the state and
federal courts sitting in Xxxxxx County and the United States District Court for
the District of New Jersey, for the adjudication of any dispute hereunder or in
connection herewith or therewith, 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 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
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service of process and notice thereof. Nothing contained herein shall be deemed
to limit in any way any right to serve process in any manner permitted by law.
17. COSTS AND EXPENSES. Without limiting any obligation of the Pledgor
hereunder, the Pledgor agrees to pay all reasonable fees and costs incurred by
Cornell in enforcing its rights hereunder, including, without limitation,
reasonable attorneys' fees and expenses, whether or not involving litigation
and/or appellate or bankruptcy proceedings.
18. NO INCONSISTENT AGREEMENTS. None of the parties hereto will
hereafter enter into any agreement which is inconsistent with the rights granted
to the parties in this Agreement.
19. THIRD PARTIES. Nothing herein expressed or implied is intended or
shall be construed to confer upon or give to any person or entity, other than
the parties to this Agreement and their respective permitted successor and
assigns, any rights or remedies under or by reason of this Agreement.
20. WAIVER OF JURY TRIAL. AS A MATERIAL INDUCEMENT FOR CORNELL TO LOAN
TO THE COMPANY THE MONIES UNDER THE PROMISSORY NOTE AND TO ACCEPT THIS GUARANTY,
THE GUARANTOR HEREBY WAIVES ANY RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
RELATED IN ANY WAY TO THIS AGREEMENT AND/OR ANY AND ALL OF THE OTHER DOCUMENTS
ASSOCIATED WITH THIS TRANSACTION.
21. ENTIRE AGREEMENT. This Agreement (including the recitals and
exhibits hereto), and the Guaranty of even date among the parties hereto, set
forth the entire understanding of the parties with respect to the subject matter
hereof, and shall not be modified or affected by any offer, proposal, statement
or representation, oral or written, made by or for any party in connection with
the negotiation of the terms hereof, and may be modified only by instruments
signed by all of the parties hereto.
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IN WITNESS WHEREOF, the parties have caused this Pledge Agreement to be
duly executed as of the day and year first above written.
XXXXXX XXXXXX
By:
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CORNELL CAPITAL PARTNERS, LP
By: Yorkville Advisors LLC
Its: General Partner
By:
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Name: Xxxx X. Xxxxxx
Title: Portfolio Manager
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EXHIBIT A
DESCRIPTION OF PLEDGED SHARES
SHARES PLEDGED BY PLEDGOR
-------------------------
NUMBER OF SHARES CERTIFICATE NUMBER
---------------- ------------------
3,000,000
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EXHIBIT B
ASSIGNMENT SEPARATE FROM CERTIFICATE
FOR VALUE RECEIVED, XXXXXX XXXXXX hereby sells, assigns and transfers
onto CORNELL CAPITAL PARTNERS, LP, three million (3,000,000) shares of Common
Stock of PICK-UPS PLUS INC., a Delaware corporation standing in its name on the
books of said corporation, represented by Certificate No. _____ herewith and
does hereby irrevocably constitute and appoint ________________________________
attorney to transfer the said stock on the books of the within named company
with full power of substitution in the premises.
DATED: ______________, 2003
XXXXXX XXXXXX
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