STOCK PLEDGE AGREEMENT
THIS STOCK PLEDGE AGREEMENT (the "Agreement"), dated March 21, 2000, is
made and entered into by and between U.S. INTERACTIVE, INC., a Delaware
corporation ("Pledgor"), with reference to the capital stock or other interests
of the Companies set forth on Schedule A hereto (each a "Company" and
collectively the "Companies"), and PNC BANK, NATIONAL ASSOCIATION, as Agent for
itself and the other Banks under the Credit Agreement described below (the
"Secured Party").
WHEREAS, pursuant to that certain Credit Agreement (as from time to
time restated, amended, modified or supplemented, the "Credit Agreement") dated
this date by and among the Pledgor (as a Borrower), the Banks party thereto, and
the Secured Party, the Secured Party and the Banks have agreed to provide
certain loans and other financial accommodations to Pledgor; and
WHEREAS, pursuant to and in consideration of the Credit Agreement,
certain of the issued and outstanding capital stock of each of the Companies is
to be pledged to the Secured Party in accordance herewith; and
WHEREAS, Pledgor owns the outstanding capital stock of the Companies as
set forth on Schedule A hereto.
NOW, THEREFORE, intending to be legally bound hereby, the parties
hereto hereby agree as follows:
1. Defined Terms.
(a) Except as otherwise expressly provided herein, capitalized terms
used in this Agreement shall have the respective meanings assigned to them in
the Credit Agreement. Where applicable and except as otherwise expressly
provided herein, terms used herein (whether or not capitalized) shall have the
respective meanings assigned to them in the Uniform Commercial Code as enacted
in Pennsylvania as amended from time to time (the "Code").
(b) "Pledged Collateral" shall mean and include the following: (i) the
capital stock, shares, securities and all other ownership interests listed on
Schedule A attached hereto and made a part hereof, and all rights and privileges
pertaining thereto, including, without limitation, all present and future
securities, shares, capital stock and other ownership interests receivable in
respect of or in exchange for any such securities, shares, capital stock or
ownership interests, all rights under shareholder agreements and other similar
agreements relating to all securities, shares, capital stock and other ownership
interests, all rights to subscribe for securities, shares, capital stock or
other ownership interests incident to or arising from ownership of such
securities, shares, capital stock or other ownership interests, all cash,
interest, stock and other dividends or distributions paid or payable on such
securities, shares, capital stock or other ownership interests, and all books
and records (whether paper, electronic or any other medium) pertaining to the
foregoing, including, without limitation, all stock record and transfer books,
(ii) any and all other securities, shares, capital stock and other ownership
interests hereafter pledged by Pledgor to the Secured Party to secure the
Secured Obligations (as hereinafter defined), and all rights and privileges
pertaining thereto, including, without limitation, all securities, shares,
capital stock and other ownership interests receivable in respect of or in
exchange for such securities, shares, capital stock or other ownership
interests, all rights to subscribe for securities, shares, capital stock or
other ownership interests incident to or arising from ownership of such
securities, shares, capital stock or other ownership interests, all cash,
interest, stock and other dividends or distributions paid or payable on such
securities, shares, capital stock or other ownership interests, and all books
and records pertaining to the foregoing, and (iii) whatever is received when any
of the foregoing is sold, exchanged, replaced or otherwise disposed of,
including all proceeds, as such term is defined in the Code, thereof.
2. Grant of Security Interests.
(a) To secure the payment and performance of all Obligations and of all
Indebtedness of Borrower under any Loan Document or any other agreement with any
Bank or any Affiliate of any Bank (collectively, the "Secured Obligations"),
Pledgor hereby grants to the Secured Party a first priority security interest in
and hereby pledges to Agent, in each case for the benefit of each of the Banks
and Agent and any Affiliate of any of the Banks, all of Pledgor's now existing
and hereafter acquired or arising right, title and interest in, to and under the
Pledged Collateral whether now or hereafter existing and wherever located.
(b) Upon the execution and delivery of this Agreement, Pledgor shall
deliver to and deposit with the Secured Party in pledge, all stock certificates
and other instruments evidencing the Pledged Collateral owned by Pledgor,
together with undated stock powers signed in blank by Pledgor. The stock powers
delivered by Pledgor hereunder shall be utilized by Secured Party only after an
Event of Default has occurred.
3. Further Assurances.
Prior to or concurrently with the execution of this Agreement, and
thereafter at any time and from time to time upon reasonable request of the
Secured Party, Pledgor shall execute and deliver to the Secured Party all
financing statements, continuation financing statements, assignments,
certificates and documents of title, affidavits, reports, notices, schedules of
account, letters of authority, further pledges, powers of attorney and all other
documents (collectively, the "Security Documents") which the Secured Party may
reasonably request, in form reasonably satisfactory to the Secured Party, and
take such other action which the Secured Party may reasonably request, to
perfect and continue perfected and to create and maintain the first priority
status of the Secured Party's security interest in the Pledged Collateral and to
fully consummate the transactions contemplated under this Agreement. If an Event
of Default has occurred and is continuing, Pledgor hereby irrevocably makes,
constitutes and appoints the Secured Party (and any of the Secured Party's
officers or employees or agents designated by the Secured Party) as Pledgor's
true and lawful attorney with power to sign the name of Pledgor on all or any of
the Security Documents which the Secured Party determines must be executed,
filed, recorded or sent in order to perfect or continue perfected the Secured
Party's security interest in the Pledged Collateral in any jurisdiction. Such
power, being coupled with an interest, is irrevocable until all of the Secured
Obligations have been indefeasibly in full paid and the Commitments have
terminated.
4. Representations and Warranties.
Pledgor hereby represents and warrants to the Secured Party as follows:
(a) Pledgor, has and will continue to have (or, in the case of
after-acquired Pledged Collateral, at the time Pledgor acquires rights in such
Pledged Collateral, will have and will continue to have), title to its Pledged
Collateral, free and clear of all Liens.
(b) The capital stock shares, securities, and other ownership interests
constituting the Pledged Collateral have been duly authorized and validly issued
to Pledgor (as set forth on Schedule A hereto), are fully paid and nonassessable
and constitute one hundred percent (100%) of the issued and outstanding capital
stock of each of the Companies.
(c) The security interests in the Pledged Collateral granted hereunder
are valid, perfected and of first priority, subject to the Lien of no other
Person.
(d) There are no restrictions upon the transfer of the Pledged
Collateral other than applicable state and federal securities laws and Pledgor
has the power and authority and right to transfer the Pledged Collateral owned
by Pledgor free of any encumbrances and without obtaining the consent of any
other Person.
(e) Pledgor has all necessary power to execute, deliver and perform
this Agreement.
(f) There are no actions, suits, or proceedings pending or, to
Pledgor's best knowledge after due inquiry, threatened against or affecting
Pledgor with respect to the Pledged Collateral, at law or in equity or before or
by any Official Body, and Pledgor is not in default with respect to any
judgment, writ, injunction, decree, rule or regulation which would materially
adversely affect Pledgor's performance hereunder.
(g) This Agreement has been duly executed and delivered and constitutes
the valid and legally binding obligation of Pledgor, enforceable in accordance
with its terms, except to the extent that enforceability of this Agreement may
be limited by applicable bankruptcy, insolvency, reorganization, moratorium or
other similar Laws affecting the enforceability of creditors' rights generally
or limiting the right of specific performance.
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(h) Neither the execution and delivery by Pledgor of this Agreement,
nor the compliance with the terms and provisions hereof, will violate any
provision of any Law or conflict with or result in a breach of any of the terms,
conditions or provisions of any judgment, order, injunction, decree or ruling of
any Official Body to which Pledgor is subject or any provision of any agreement,
understanding or arrangement to which Pledgor is a party or by which Pledgor is
bound.
(i) Pledgor's chief executive office address is as set forth on the
signature page hereto.
(j) All rights of Pledgor in connection with its ownership of each of
the Companies are evidenced and governed solely by the stock certificates, and
Pledgor has provided true and correct copies of its organizational documents
applicable to any of the Pledged Collateral.
5. General Covenants.
Pledgor hereby covenants and agrees as follows:
(a) Subject to Section 7.2.6 of the Credit Agreement, Pledgor shall do
all reasonable acts that may be necessary and appropriate to maintain, preserve
and protect the Pledged Collateral; Pledgor shall be responsible for the risk of
loss of, damage to, or destruction of the Pledged Collateral owned by Pledgor,
unless such loss is the result of the gross negligence or willful misconduct of
the Secured Party. Pledgor shall notify the Secured Party in writing ten (10)
days prior to any change in Pledgor's chief executive office address.
(b) Pledgor shall appear in and defend any action or proceeding of
which Pledgor is aware which would reasonably be expected to affect Pledgor's
title to, or the Secured Party's interest in, the Pledged Collateral or the
proceeds thereof; provided, however, that with the consent of the Secured Party
such Pledgor may settle such actions or proceedings with respect to the Pledged
Collateral, which consent shall not be unreasonably withheld or delayed.
(c) Pledgor shall, and shall cause each of the Companies to, keep
separate, accurate and complete records of the Pledged Collateral, disclosing
the Secured Party's security interest hereunder.
(d) Pledgor shall comply with all Laws applicable to the Pledged
Collateral unless any noncompliance would not individually or in the aggregate
materially impair the use or value of the Pledged Collateral or the Secured
Party's rights hereunder.
(e) Pledgor shall pay any and all taxes, duties, fees or imposts of any
nature imposed by any Official Body on any of the Pledged Collateral, except to
the extent contested in good faith by appropriate proceedings or subject to
extensions timely requested and granted.
(f) Pledgor shall permit the Secured Party, its officers, employees and
agents at reasonable times during normal business hours upon reasonable advance
notice to inspect all books and records related to the Pledged Collateral.
(g) To the extent, following the date hereof, Pledgor acquires capital
stock, shares securities, and other ownership interests of any of the Companies
or any of the rights, property or securities, shares, capital stock or other
ownership interests described in the definition of Pledged Collateral with
respect to any of the Companies, such stock, rights, property or securities,
shares, capital stock or ownership interests shall be subject to the terms
hereof and, upon such acquisition, shall be deemed to be hereby pledged to the
Secured Party; and, Pledgor thereupon shall deliver all such securities, shares,
capital stock, and other ownership interests together with an updated Schedule A
hereto, to the Secured Party.
(h) During the term of this Agreement, Pledgor shall not sell, assign,
replace, retire, transfer or otherwise dispose of its Pledged Collateral other
than in accordance with the Credit Agreement.
6. Other Rights With Respect to Pledged Collateral.
In addition to the other rights with respect to the Pledged Collateral
granted to the Secured Party hereunder, at any time and from time to time, after
and during the continuation of an Event of Default, the Secured Party, at its
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option and at the expense of the Pledgor, may (a) transfer into its own name, or
into the name of its nominee, all or any part of the Pledged Collateral,
thereafter receiving all dividends, income or other distributions upon the
Pledged Collateral; (b) take control of and manage all or any of the Pledged
Collateral; (c) apply to the payment of any of the Secured Obligations, whether
any be due and payable or not, any moneys, including cash dividends and income
from any Pledged Collateral, now or hereafter in the hands of the Secured Party
or any Affiliate of the Secured Party, on deposit or otherwise, belonging to
Pledgor, as the Secured Party in its sole discretion shall determine; and (d) do
anything which Pledgor is required but fails to do hereunder.
7. Additional Remedies Upon Event of Default.
Upon the occurrence of any Event of Default and while such Event of
Default shall be continuing, the Secured Party shall have, in addition to all
rights and remedies of a secured party under the Code or other applicable Law,
and in addition to its rights under Section 6 above and under the other Loan
Documents, the following rights and remedies:
(a) The Secured Party may, after fifteen (15) days' advance notice to
the Pledgor, sell, assign, give an option or options to purchase or otherwise
dispose of Pledgor's Pledged Collateral or any part thereof at public or private
sale, at any of the Secured Party's offices or elsewhere, for cash, on credit or
for future delivery, and upon such other terms as the Secured Party may deem
commercially reasonable. Pledgor agrees that fifteen (15) days' advance notice
of the time and place of any public sale or the time after which any private
sale is to be made shall constitute reasonable notification. The Secured Party
shall not be obligated to make any sale of Pledged Collateral regardless of
notice of sale having been given. The Secured Party may adjourn any public or
private sale from time to time by announcement at the time and place fixed
therefor, and such sale may, without further notice, be made at the time and
place to which it was so adjourned. Pledgor recognizes that the Secured Party
may be compelled to resort to one or more private sales of the Pledged
Collateral to a restricted group of purchasers who will be obliged to agree,
among other things, to acquire such securities, shares, capital stock or
ownership interests for their own account for investment and not with a view to
the distribution or resale thereof.
(b) The proceeds of any collection, sale or other disposition of the
Pledged Collateral, or any part thereof, shall, after the Secured Party has made
all deductions of expenses, including but not limited to attorneys' fees and
other expenses incurred in connection with repossession, collection, sale or
disposition of such Pledged Collateral or in connection with the enforcement of
the Secured Party's rights with respect to the Pledged Collateral, including in
any insolvency, bankruptcy or reorganization proceedings, be applied against the
Secured Obligations, whether or not all the same be then due and payable, as
follows:
(i) first, to the Secured Obligations and to reimburse the
Secured Party for out-of-pocket costs, expenses and disbursements, including
without limitation reasonable attorneys' fees and legal expenses, incurred by
the Secured Party in connection with realizing on the Pledged Collateral or
collection of any obligation of Pledgor under any of the Loan Documents,
including advances made subsequent to an Event of Default by the Secured Party
for the reasonable maintenance, preservation, protection or enforcement of, or
realization upon, the Pledged Collateral, including without limitation advances
for taxes, insurance, and the like, and reasonable expenses incurred to sell or
otherwise realize on, or prepare for sale of or other realization on, any of the
Pledged Collateral, in such order as the Secured Party may determine in its
discretion; and
(ii) the balance, if any, as required by Law.
8. Secured Party's Duties.
The powers conferred on the Secured Party hereunder are solely to
protect its interest in the Pledged Collateral and shall not impose any duty
upon it to exercise any such powers. Except for the safe custody of any Pledged
Collateral in its possession and the accounting for moneys actually received by
it hereunder or on its behalf, the Secured Party shall have no duty as to any
Pledged Collateral or as to the taking of any necessary steps to preserve rights
against prior parties or any other rights pertaining to any Pledged Collateral.
9. No Waiver; Cumulative Remedies.
No failure to exercise, and no delay in exercising, on the part of the
Secured Party, any right, power or privilege hereunder shall operate as a waiver
thereof; nor shall any single or partial exercise of any right, power or
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privilege hereunder preclude any further exercise thereof or the exercise of any
other right, power or privilege. The remedies herein provided are cumulative and
not exclusive of any remedies provided under the other Loan Documents or by Law.
Pledgor waives any right to require the Secured Party to proceed against any
other Person or to exhaust any of the Pledged Collateral or other security for
the Secured Obligations or to pursue any remedy in the Secured Party's power.
10. Assignment.
All rights of the Secured Party under this Agreement shall inure to the
benefit of its successors and assigns. All obligations of Pledgor shall bind its
successors and assigns; provided, however, Pledgor may not assign or transfer
any of its rights and obligations hereunder or any interest herein.
11. Severability.
Any provision of this Agreement which shall be held invalid or
unenforceable shall be ineffective without invalidating the remaining provisions
hereof.
12. Governing Law.
This Agreement shall be construed in accordance with and governed by
the internal laws of the Commonwealth of Pennsylvania without regard to its
conflicts of law principles, except to the extent the validity or perfection of
the security interests or the remedies hereunder in respect of any Pledged
Collateral are governed by the law of a jurisdiction other than the Commonwealth
of Pennsylvania.
13. Notices.
All notices, statements, requests and demands given to or made upon
either party hereto in accordance with the provisions of this Agreement shall be
given or made as provided in Section 10.6 of the Credit Agreement.
14. Specific Performance.
Pledgor acknowledges and agrees that, in addition to the other rights
of the Secured Party hereunder and under the other Loan Documents, because the
Secured Party's remedies at law for failure of Pledgor to comply with the
provisions hereof relating to the Secured Party's rights (i) to inspect the
books and records related to the Pledged Collateral, (ii) to receive the various
notifications Pledgor is required to deliver hereunder, (iii) to obtain copies
of agreements and documents as provided herein with respect to the Pledged
Collateral, (iv) to enforce the provisions hereof pursuant to which the Pledgor
has appointed the Secured Party its attorney-in-fact, and (v) to enforce the
Secured Party's remedies hereunder, would be inadequate and that any such
failure would not be adequately compensable in damages, Pledgor agrees that each
such provision hereof may be specifically enforced.
15. Voting Rights in Respect of the Pledged Collateral.
So long as no Event of Default shall occur and be continuing under the
Credit Agreement, Pledgor may exercise any and all voting and other consensual
rights pertaining to the Pledged Collateral or any part thereof for any purpose
not inconsistent with the terms of this Agreement or the other Loan Documents;
provided, however, that Pledgor will not exercise or will refrain from
exercising any such voting and other consensual right pertaining to the Pledged
Collateral, as the case may be, if such action would have a material adverse
effect on the value of any Pledged Collateral. Without limiting the generality
of the foregoing and in addition thereto except as otherwise permitted in the
Credit Agreement, the Pledgor shall not vote to enable, or take any other action
to permit, any of the Companies to issue any stock or other equity securities or
other ownership interests of any nature or to issue any other securities,
shares, capital stock or other ownership interests convertible into or granting
the right to purchase or exchange for any stock or other equity securities or
other ownership interests of any nature of any such Company or to enter into any
agreement or undertaking restricting the right or ability of the Pledgor or the
Secured Party to sell, assign or transfer any of the Pledged Collateral.
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16. Consent to Jurisdiction.
Pledgor and each of the Companies hereby irrevocably submits to the
nonexclusive jurisdiction of any Pennsylvania State or Federal Court sitting in
Philadelphia, Pennsylvania, in any action or proceeding arising out of or
relating to this Agreement, and Pledgor and each of the Companies hereby
irrevocably agree that all claims in respect of such action or proceeding may be
heard and determined in such Pennsylvania State or Federal court. Pledgor and
each of the Companies hereby waives to the fullest extent it may effectively do
so, the defense of an inconvenient forum to the maintenance of any such action
or proceeding. Pledgor and each of the Companies hereby appoints the process
agent identified below (the "Process Agent") as its agent to receive on behalf
of such party and its respective property service of copies of the summons and
complaint and any other process which may be served in any action or proceeding.
Such service may be made by mailing or delivering a copy of such process to the
Pledgor or the Companies in care of the Process Agent at the Process Agent's
address, and the Pledgor and the Companies hereby authorize and direct the
Process Agent to receive such service on its behalf. Pledgor and each of the
Companies agree that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions (or any political
subdivision thereof) by suit on the judgment or in any other manner provided by
law. Pledgor and each of the Companies further agree that it shall, for so long
as any Commitment or any obligation of any Borrower to the Bank remains
outstanding, continue to retain Process Agent for the purposes set forth in this
Section 16. The Process Agent is U.S. Interactive, Inc., c/o General Counsel,
with an office on the date hereof at 0000 Xxxxxxxxxxx Xxxxxxxxx, Xxxx xx
Xxxxxxx, Xxxxxxxxxxxx, Xxxxxx Xxxxxx. Pledgor and each of the Companies shall
produce to Secured Party evidence of the acceptance by Process Agent of such
appointment.
17. Waiver of Jury Trial.
EXCEPT AS PROHIBITED BY LAW, PLEDGOR AND EACH OF THE COMPANIES HEREBY
WAIVE ANY RIGHT IT MAY HAVE TO A TRIAL BY A JURY IN RESPECT OF ANY LITIGATION
DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER, OR IN CONNECTION WITH THIS
AGREEMENT OR ANY OTHER DOCUMENTS OR TRANSACTIONS RELATING THERETO.
18. Entire Agreement; Amendments.
This Agreement constitutes the entire agreement between the parties
with respect to the subject matter hereof and supersedes all prior agreements
relating to a grant of a security interest in the Pledged Collateral by Pledgor.
This Agreement may not be amended or supplemented except by a writing signed by
the Secured Party and the Pledgor.
19. Counterparts.
This Agreement may be executed in any number of counterparts, and by
different parties hereto in separate counterparts, each of which when so
executed shall be deemed an original and all of which taken together shall
constitute but one and the same agreement.
20. Descriptive Headings
The descriptive headings which are used in this Agreement are for the
convenience of the parties only and shall not affect the meaning of any
provision of this Agreement.
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SIGNATURE PAGE 1 OF 1 TO
STOCK PLEDGE AGREEMENT
IN WITNESS WHEREOF, and intending to be legally bound, the parties
hereto have caused this Agreement to be duly executed as of the date first above
written.
PNC BANK, NATIONAL ASSOCIATION, as Agent
By:
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Name:
Title:
U.S. INTERACTIVE, INC.
By: (Seal)
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Name:
Title:
Chief Executive Office:
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ACKNOWLEDGEMENT AND CONSENT
Each of the undersigned hereby acknowledges receipt of a copy of the
Pledge Agreement, dated March 21, 2000, made by U.S. Interactive, Inc. for the
benefit of PNC Bank, National Association, as Agent, as Secured Party (the
"Pledge Agreement"). Each of the undersigned, intending to be legally bound
hereby, agrees for the benefit of the Secured Party and the Banks as follows:
1. Each of the undersigned will be bound by the terms of the Pledge
Agreement and will comply with such terms insofar as such terms are applicable
to the undersigned, including without limiting the generality of the foregoing,
those terms in Sections 16 and 17 of the Pledge Agreement.
2. Each of the undersigned will notify the Secured Party promptly in
writing of the occurrence of any of the events described in Section 5(g) of the
Pledge Agreement.
3. The terms of Section 3 of the Pledge Agreement shall apply to it,
mutatis mutandis, with respect to all actions that may facilitate, in the
reasonable judgment of the Secured Party, the carrying out of Section 3 of the
Pledge Agreement.
4. To the extent that any of undersigned has or hereafter may acquire
any immunity from the jurisdiction of any court or from any legal process
(whether through service or notice, attachment prior to judgment, attachment in
aid of execution, execution, or otherwise) with respect to itself or its
property, each of undersigned hereby irrevocably waives such immunity in respect
of its obligations under the Pledge Agreement and any other document or
agreement executed in connection therewith, and each of undersigned agrees that
it will not raise or claim any such immunity at or in respect of any such action
or proceeding.
5. Each of the undersigned acknowledges and agrees that any notices
sent to the Pledgor regarding any of the Pledged Collateral shall also be sent
to the Secured Party in the manner and at the address of Secured Party as
indicated in Section 13 of the Pledge Agreement.
U.S. INTERACTIVE CORP. (DELAWARE)
By:
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Name:
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Title:
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Address for Notices:
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Fax:_______________________
SCHEDULE A
TO
STOCK PLEDGE AGREEMENT
Description of Pledged Collateral
Pledgor Pledged Shares Type and Amount of Ownership
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U.S. Interactive, Inc. 100% of the issued and outstanding 100 shares of common stock, $.01
capital shares of U.S. par value
INTERACTIVE CORP.
(DELAWARE), a Delaware
corporation
