PLEDGE AND ESCROW AGREEMENT
THIS PLEDGE AND ESCROW AGREEMENT, dated as of August 7, 2001, is made
by Xxxxxx X. Xxxxxxxxxxxx (the "Pledgor") and Xxxxxx & Xxxxxxxxx LLP (the
"Escrow Agent") for the benefit of Xxxxxx Xxxxx (the "Lender").
RECITALS
A. In order to induce the Lender to make a loan to Pledgor pursuant to a
Secured Promissory Note of even date herewith (the "Note") in the
principal amount of $450,000.00 made concurrently with the execution of
this Pledge and Escrow Agreement, the Pledgor has agreed to pledge
11,500,000 shares of the Common Stock represented by the certificates
set forth on Schedule A hereto (the "Pledged Securities") of
0xxxxxxxx.xxx Holdings, Inc. as security for the full payment and
performance of Pledgors obligation under the Note.
B. The Lender has agreed to accept the Pledged Securities as security for
such obligations.
NOW, THEREFORE, it is agreed as follows:
1. Pledge. As collateral security for the payment, performance and
observance of the Note, the Pledgor herewith pledges, assigns, transfers,
hypothecates, and grants to the Lender, a security interest in the Pledged
Securities and the certificate(s) evidencing the same and such additional
property at any time and from time to time receivable by the Pledgor as a
dividend or in respect of or in exchange for any or all such shares, the Pledgor
herewith pledges, together with any and all products and proceeds of any of the
foregoing in whatever form. The Pledged Securities and the products and proceeds
thereof may be referred to collectively as the "Pledged Collateral."
2. Delivery to Agent for Lender. Concurrently with the execution of
this Pledge and Escrow Agreement, the Pledgor shall deliver the certificates
representing the Pledged Securities to the Escrow Agent, acting as agent for the
Lender solely for the purposes of perfecting the security interest granted
hereby. Acting in such capacity, the Escrow Agent shall maintain possession of
the Pledged Securities until they are required to be released to either the
Pledgor or the Lender pursuant to the provisions of this Agreement. The Pledgor
has deposited with the Escrow Agent stock powers duly executed in blank with
signatures guaranteed by a Medallion Participant, which shall be delivered with
the Pledged Securities.
3. Title. The Pledgor agrees to use reasonable efforts to defend the
Lender's right, title, lien and security interest in and to the Pledged
Collateral against the claims and demands of all persons whomsoever. The Pledgor
also represents and warrants to the Lender that it has good title to all of the
Pledged Collateral, free and clear of all claims, mortgages, pledges, liens,
encumbrances and security interests of every nature whatsoever ("Liens") except
those granted to the Lender herein and that no consent or approval of any
governmental or regulatory authority, or of any securities exchange is required
to be obtained by the Pledgor in connection herewith.
4. Delivery of the Pledged Securities by Escrow Agent. Upon the failure
of the Pledgor to pay the interest or principal on the Note when due in
accordance with the terms thereof or occurrence of another Event of Default
defined in the Note (an "Event of Default") and upon two business days notice to
the Escrow Agent and the other party, the Escrow Agent shall deliver, the
certificate(s) representing the Pledged Securities and additional collateral
held pursuant to Section 5 hereof or otherwise to the Lender. Upon payment in
full of the Note and upon two business days notice to the Escrow Agent and the
other party, the Escrow Agent shall deliver the certificate(s) for the Pledged
Securities and additional collateral held pursuant to Section 5 hereof or
otherwise to the Pledgor and the Pledge Collateral shall no longer be subject to
the security interest granted hereby.
5. Dividends. If, upon the dissolution or liquidation (in whole or in
part) of the Lender, any sum shall be paid as a liquidating dividend or
otherwise upon or with respect to any of the Pledged Securities, and if any
other dividends of any kind shall be otherwise paid upon or with respect to any
of the Pledged Securities under any other circumstances, such sum shall be paid
over to the Escrow Agent, to be held as additional collateral hereunder. In case
any stock or other dividend shall be declared on any of the Pledged Securities,
or any shares of stock or fractions thereof shall be issued pursuant to any
stock split involving any of the Pledged Securities, or any shares shall be
distributed upon or with respect to the Pledged Securities pursuant to a
recapitalization or reclassification of the capital of the Lender, or pursuant
to the dissolution, liquidation (in whole or in part), bankruptcy or
reorganization of the Lender, or to the merger or consolidation of the Lender
with or into another Lender, the shares, obligations or other property so
distributed shall be delivered to the Escrow Agent (together with stock powers
executed in blank by the Pledgor, where appropriate), to be held by it as
additional collateral hereunder, and all of the same shall constitute Pledged
Collateral for all purposes hereof.
6. Voting. Until there is an Event of Default, the Pledgor shall have
the sole and absolute right to exercise all voting power with respect to the
Pledged Securities. If an Event of Default occurs and is continuing, the Lender
shall have the sole and absolute right, in addition to any other rights granted
herein, to exercise any and all voting power with respect to the Pledged
Securities. In such event the Pledgor hereby appoints the Lender as the
Pledgor's true and lawful proxy to vote such shares in any manner which the
Lender deems advisable for or against all matters which may be submitted to a
vote of such stockholders.
7. Rights of Secured Party. The Pledgor agrees that, upon an Event of
Default, the Lender shall have the rights and remedies provided in the Uniform
Commercial Code in force in the State of Florida at the date of this agreement
and in this connection, the Lender may upon five days' notice to the Pledgor,
sent by registered mail, and without liability for any diminution in price which
may have occurred, sell all the Pledged Collateral in such manner and for such
price as the Lender may determine or propose to retain the Pledged Collateral in
lieu of repayment of the Loan. At any bona fide public sale the Lender shall be
free to purchase all or any part of the Pledged Securities. Out of the proceeds
of any sale the Lender may retain an amount equal to the principal and interest
then due on the Loan, plus the amount of the expenses of the sale. Lender agrees
that, upon an Event of Default, its sole remedy is the sale or retention of the
Pledged Collateral for satisfaction of any unpaid obligations of the Pledgor
under the terms of the Note.
8. Endorsement. Upon an Event of Default in respect of the Note, the
Lender shall have the right, for and in the name, place and stead of the
Pledgor, to execute endorsements, assignments or other instruments of conveyance
or transfer with respect to all or any of the Pledged Collateral.
9. Indemnification and Costs.
(a) The Pledgor and the Lender release the Escrow Agent from any
claims, causes of action and demands at any time arising out of or with respect
to this Agreement, the Pledged Collateral and/or any actions, taken or omitted
to be taken by the Escrow Agent with respect thereto, and the Pledgor and the
Lender hereby agree to hold the Escrow Agent harmless from and with respect to
any and all such claims, causes of action and demands other than those resulting
from the gross negligence or willful misconduct of the Escrow Agent.
(b) The Lender shall be exclusively responsible for all costs and
expenses (if any) incidental to the performance by the Escrow Agent of its
duties as agent hereunder.
10. Rights Duties and Immunities.
(a) The duties and obligations of the Escrow Agent shall be determined
solely by the express provisions of this Agreement. The Escrow Agent shall not
be liable except for the performance of such duties and obligations as are
specifically set out in this Agreement and the Escrow Agent shall not be deemed
to have any knowledge of, or responsibility for, the terms of any other
agreement, instrument or document.
(b) The Escrow Agent shall not be responsible in any manner whatsoever
for any failure or inability of any party hereto, or of any one else, to deliver
documents to the Escrow Agent or otherwise to honor any of the provisions of
this Agreement.
(c) The Escrow Agent shall be entitled to rely upon any judgment,
certification, demand, notice, instrument or other writing delivered to it
hereunder without being required to determine the authenticity of the
correctness of any fact stated therein or the propriety or validity or the
service thereof. The Escrow Agent shall be fully protected in acting on and
relying upon any written notice, direction, request, waiver, consent, receipt or
other paper or document which the Escrow Agent believes to be genuine. The
Escrow Agent may act in reliance upon any instrument or signature it reasonably
believes to be genuine and the Escrow Agent may assume that any person
purporting to give any advice or make any statement in connection with the
provisions hereof has been duly authorized to do so.
(d) The Escrow Agent shall not be liable for any error of judgment, or
for any act done or step taken or omitted by it in good faith, or for any
mistake of fact or law, or for anything which it may do or refrain from doing in
connection herewith, except its own bad faith, willful misconduct or gross
negligence.
(e) The Escrow Agent may seek the advice of legal counsel as to any
question arising from or relating to the construction of any of the provisions
of this Agreement or its duties or obligations hereunder or otherwise, and it
shall incur no liability and shall be fully protected in respect of any action
taken, omitted or suffered by it in good faith in accordance with the advice of
such counsel.
(f) The Escrow Agent does not make and will not be required or deemed
to make any representation as to the validity or genuineness of any agreement,
document or other instrument held by or delivered to it.
(g) If a dispute arises between one or more of the parties hereto, or
between any of the parties hereto and any person not a party hereto, as to
whether or not or to whom the Escrow Agent shall deliver any of the Pledged
Securities or as to any other matter arising from or relating to this Agreement
or any related agreement, the Escrow Agent shall not be required to determine
such dispute and need not make any delivery of any of the Pledged Securities,
but will retain the same until the rights of the parties to the dispute shall
have finally been determined by written agreement among the parties to the
dispute or by final non-appealable order of a court of competent jurisdiction.
In the event that the Escrow Agent has received notice of such order or any such
agreement, the Escrow Agent shall cause the Pledged Securities to be released
and delivered in accordance with such agreement or order.
(h) The Escrow Agent shall be entitled to assume that no dispute of the
type referred to in Section 10(g) has arisen unless it has received a written
notice that such a dispute has arisen, which written notice refers specifically
to this Agreement and identifies by name and address the adverse claimants in
such dispute. Any party delivering written notice of a dispute pursuant to this
Section 10(h) shall simultaneously therewith deliver a copy of such notice to
all parties. For purposes of this Section 10(h), the Escrow Agent shall not be
deemed to have received a written notice until all parties to this Agreement
have received such written notice. If a dispute of the type referred to in
Section 10(g) arises, the Escrow Agent may, in its sole discretion (but shall
not be obligated to), commence interpleader or similar actions or proceedings
for determination of such dispute.
11. Successor Escrow Agent.
(a) The Escrow Agent may, at any time, resign as such with or without
the prior written consent of all the parties hereto, in which case the Escrow
Agent (and any successor escrow agent) shall deliver the Pledged Securities, a
copy of this Agreement and any other documents delivered to it hereunder to any
successor escrow agent jointly designated by the Lender and Pledgor in writing,
or to any court of competent jurisdiction, whereupon the Escrow Agent shall be
discharged of and from any and all further duties and obligations arising in
connection with this Agreement. The resignation of the Escrow Agent shall take
effect on the earlier of (i) the appointment of a successor escrow agent, or
(ii) the day which is two business days after the date of the delivery of the
Pledged Securities, a copy of this Agreement and any other documents delivered
to the Escrow Agent hereunder to any court of competent jurisdiction. In the
event that a successor escrow agent has not been appointed at the expiration of
such two-day period, the Escrow Agent's sole responsibilities hereunder shall
be: (i) to maintain the safekeeping of the Pledged Securities and any other
documents delivered to it hereunder, if any, and (ii) to release and deliver the
Pledged Securities and any such documents in accordance with Section 4 of this
Agreement.
(b) If the Escrow Agent receives a written notice signed by the Lender
and Pledgor stating that they have selected a successor escrow agent, the Escrow
Agent shall deliver the Pledged Securities (and any other documents then held by
it hereunder, if any) to the successor escrow agent named in the aforesaid
notice within 15 days after receipt of such written notice.
12. Power of Attorney. Upon an Event of Default which is continuing,
the Pledgor hereby appoints the Lender or Lender's designees, successors or
assigns as the Pledgor's attorney-in-fact for the purpose of carrying out the
provisions of this Agreement and taking any action and executing any instrument
which the Lender may deem necessary or advisable to accomplish the purposes
hereof. Without limiting the generality of the foregoing, the Lender shall have
the right and power to receive, endorse and collect all checks and other orders
for the payment of money made payable to the Pledgor representing any interest
or dividend or other distribution payable in respect of the Pledged Collateral
which the Lender is entitled to receive hereunder or any part thereof and to
give full discharge for the same.
13. Notices. Any notice or demand upon the Pledgor shall be deemed to
have been sufficiently given for all purposes thereof if mailed, postage
prepaid, by registered or certified mail, return receipt requested, or if
delivered, to the addresses set out below or at such other address as the
parties hereto may heretofore have designated in writing:
If to the Pledgor:
Xxxxxx Xxxxxxxxxxxx
0000 Xxxxx Xxxxx
Xxxxxxxx, XX 00000
If to the Lender:
Xxxxxx Xxxxx
0000 X. Xxxxxx Xxxxx
Xxxxxxxxxxx, XX 00000
If to the Escrow Agent:
Xxxxxx & Xxxxxxxxx LLP
000 Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxx Xxxx, XX 00000
14. Governing Law. EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN ANY OF THE
LOAN DOCUMENTS, IN ALL RESPECTS, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY
AND PERFORMANCE, THIS AGREEMENT AND THE OBLIGATIONS ARISING HEREUNDER SHALL BE
GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE
STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND PERFORMED IN SUCH STATE,
WITHOUT REGARD TO THE PRINCIPLES THEREOF REGARDING CONFLICT OF LAWS, AND ANY
APPLICABLE LAWS OF THE UNITED STATES OF AMERICA. LENDER AND PLEDGOR AGREE TO
SUBMIT TO PERSONAL JURISDICTION AND TO WAIVE ANY OBJECTION AS TO VENUE IN THE
COUNTY OF NEW YORK, STATE OF NEW YORK. SERVICE OF PROCESS ON PLEDGOR OR LENDER
IN ANY ACTION ARISING OUT OF OR RELATING TO ANY OF THE LOAN DOCUMENTS SHALL BE
EFFECTIVE IF MAILED TO SUCH PARTY AT THE ADDRESS LISTED IN SECTION 13 HEREOF.
NOTHING HEREIN SHALL PRECLUDE LENDER OR PLEDGOR FROM BRINGING SUIT OR TAKING
OTHER LEGAL ACTION IN ANY OTHER JURISDICTION.
15. Submission to Jurisdiction. Each of the parties hereto hereby
irrevocably and unconditionally consents to submit to the exclusive jurisdiction
of the courts of the State of Florida and of the United States of America, in
each case located in Hillsboro County, for any action, proceeding or
investigation in any court or before any governmental authority ("Litigation")
arising out of or relating to the Transaction Documents and the transactions
contemplated thereby (and agrees not to commence any Litigation relating thereto
except in such courts), and further agrees that service of any process, summons,
notice or document by U.S. registered mail to its respective address set forth
in this Agreement shall be effective service of process of any Litigation
brought against it in any such court. Each of the parties hereto hereby
irrevocably and unconditionally waives any objection to the laying of venue of
any Litigation arising out of this Agreement or the transactions contemplated
hereby in the courts of the State of Florida or the United States of America, in
each case located in the County of Hillsboro, and hereby further irrevocably and
unconditionally waives and agrees not to plead or claim in any court that any
such Litigation brought in any such court has been brought in an inconvenient
forum.
16. Multiple Counterparts. This Agreement may be executed in any number
of counterparts, each of which shall be deemed an original and all of which
taken together shall constitute but one and the same instrument.
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, the Pledgor has executed this Agreement as of the
day and year first above.
"PLEDGOR"
/s/ Xxxxxx X. Xxxxxxxxxxxx
-----------------------------
Xxxxxx X. Xxxxxxxxxxxx
Accepted and Agreed this 7th day of August, 2001.
"LENDER"
By: /s/ Xxxxxx Xxxxx
--------------------
Xxxxxx Xxxxx
Accepted and Agreed this 7th day of August, 2001.
"ESCROW AGENT"
XXXXXX & XXXXXXXXX LLP
By: /s/ Xxxxxxx X. Xxxxxx
--------------------------
Name: Xxxxxxx X. Xxxxxx
Title:
SCHEDULE A
Name Certificate No. No. of Shares
0xxxxxxxxx.xxx Holdings, Inc. 11,500,000
