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EXHIBIT 10.11
PLEDGE AGREEMENT
AGREEMENT made as of the 30th day of March, 1999, by and
among XXX X. XXXX (hereinafter referred to as the "PLEDGOR"), OPENSITE
TECHNOLOGIES, INC., (hereinafter called the "PLEDGEE") and GROSS, SHUMAN,
BRIZDLE & XXXXXXXXX, P.C., a New York professional service corporation with
offices at 000 Xxxx Xxxxxx, Xxxxx 000, Xxxxxxx, Xxx Xxxx 00000 (hereinafter
referred to as the "ESCROW AGENT").
W I T N E S S E T H
WHEREAS, the PLEDGEE has loaned the Pledgor the sum of
$300,000 in accordance with the terms of an agreement dated March 30, 1999 (the
"Xxxx Agreement") (capitalized terms not defined herein shall have the meanings
given to them in the Xxxx Agreement); and
WHEREAS, the PLEDGOR has delivered to the ESCROW AGENT a
share certificate of OPENSITE TECHNOLOGIES, INC. representing 650,000 shares of
Common Stock, $.01 par value per share of the PLEDGEE (the "Shares" or "Share
Certificate"); and
WHEREAS, in order to induce the PLEDGEE to make the loan, the
PLEDGOR has agreed to pledge the Shares to the PLEDGEE as security for the
performance by the PLEDGOR of his duties and obligations under the Xxxx
Agreement.
NOW, THEREFORE, in consideration of the sum of ONE DOLLAR
($1.00) and other good and valuable consideration, the receipt of which is
hereby acknowledged, it is agreed between the parties as follows:
1. Delivery of Shares
PLEDGOR herewith delivers to the ESCROW AGENT:
a) Executed stock powers for the Share
Certificate No. C-104, undated and endorsed in blank, and
b) 650,000 shares of the Common Stock of
OPENSITE TECHNOLOGIES, INC. represented by Certificate No. C-104.
The PLEDGOR does hereby pledge, transfer and assign the Shares in
escrow to the PLEDGEE, and grants to the PLEDGEE a security interest therein,
and does hereby appoint PLEDGEE, his true and lawful attorney for him, and in
his name, place and xxxxx to cause said Shares to be transferred on the books
of OPENSITE TECHNOLOGIES, INC., to the name of the PLEDGEE in the event of the
occurrence, for any reason of any event of default as defined in Paragraph 9 of
this Agreement. Upon such default, the PLEDGEE shall deliver to the ESCROW
AGENT written notice that the PLEDGOR has so defaulted. The ESCROW AGENT will
then notify the PLEDGOR by certified mail, return receipt requested, mailed to
the above address, of the default and the PLEDGOR will then have thirty (30)
days from the date of receipt of the mailing of said notice to cure said
default. If said default is not so cured within thirty (30) days, then the
ESCROW AGENT shall deliver to the PLEDGEE or to its assigns, heirs or personal
representatives such proportion of the Shares (with executed stock power) as
required to repay the Loan as set forth in Paragraph 3 of the Xxxx Agreement
and deliver the remaining Shares to PLEDGOR.
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2. Shares to be held in Escrow
The ESCROW AGENT shall hold the said Share Certificates, said stock
powers and the other items delivered as hereinbefore referred to in Paragraph 1
as security for the performance of the said duties and obligations of the
PLEDGOR and they shall be held until the PLEDGOR fully performs all of his
duties and obligations under the Xxxx Agreement, at which time the ESCROW
AGENT, upon receipt of written notice from the PLEDGEE that the PLEDGOR has so
fully performed, shall deliver the said Shares, and other items referred to in
Paragraph 1 to the PLEDGOR.
3. Representations and Warranties of PLEDGOR
PLEDGOR represents and warrants and, so long as the amounts due under
the Xxxx Agreement remain unpaid, shall be deemed continuously to represent and
warrant that:
a) The Shares are genuine and in all respects what they
purport to be;
b) PLEDGOR is the owner of the Shares free of all
security interests or other encumbrances, except this security
interest, a Restricted Stock Agreement entered into between the
parties and an Amended and Restated Stockholders Agreement dated March
__, 1999; and
c) PLEDGOR is authorized to enter into this Agreement.
4. Covenants of PLEDGOR
So long as the Loan under the Xxxx Agreement remain unpaid, PLEDGOR:
a) will defend the Shares against the claims and demands
of all other parties; will keep the Shares free from all security
interests or other encumbrances, except this security interest, the
Restricted Stock Agreement and the Amended and Restated Stockholders
Agreement; and will not sell, transfer, assign, deliver or otherwise
dispose of the Shares or any interest therein without the prior
written consent of PLEDGEE;
b) will notify PLEDGEE promptly in writing of any change
in PLEDGOR's address;
c) will pay all taxes, assessments and other charges of
every nature which may be levied or assessed against the Shares;
d) in connection herewith, will execute and deliver to
PLEDGEE such financing statements and other documents, pay all costs
of title searches and filing of financing statements and all other
documents in all public offices requested by PLEDGEE, and do such
other things as PLEDGEE may request.
5. Income from Interest on Collateral
a) Until the occurrence of an event of default as
hereinafter provided, PLEDGOR reserves the right to receive all income
from or interest on the Shares, and if PLEDGEE receives any such
income or interest prior to such default, PLEDGEE shall pay the same
promptly to PLEDGOR.
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b) In the event of any such default, PLEDGOR will not
demand or receive any income from or interest on the Shares, and if
PLEDGOR receives any such income or interest without any demand by it,
PLEDGOR will pay the same promptly to PLEDGEE. PLEDGEE may apply the
net cash receipts from such income or interest to payment of any of
the amounts due under the Xxxx Agreement, provided that PLEDGEE shall
account for and pay over to PLEDGOR any such income or interest
remaining after payment in full of the amounts due under the Xxxx
Agreement.
6. PLEDGOR'S Right to Vote Shares
While the ESCROW AGENT is the holder of the said Shares, the PLEDGOR
shall have the right to vote the same at meetings of the stockholders of
OPENSITE TECHNOLOGIES, INC., so long as he is not in default in the performance
of any of the terms of this Agreement, or the Xxxx Agreement, and for that
purpose the ESCROW AGENT and/or the PLEDGEE shall execute any and all proxies
in favor of the PLEDGOR that may be required.
7. Reorganization of Corporation
In the event that during the term of this Agreement any stock
dividend, reclassification, readjustment, or other change is declared or made
in the capital structure of OPENSITE TECHNOLOGIES, INC., or any subscription
warrant or other option is substituted, or additional shares, or other
securities issued by reason of any such change or option such warrant, option,
shares or securities shall be held by the ESCROW AGENT under the terms of this
Agreement in the same manner as the Shares originally pledged hereunder.
8. PLEDGEE's Remedies in the Event of PLEDGOR'S Default
In the event that the PLEDGOR defaults in the performance of any of
the terms of this Agreement, or the Xxxx Agreement and fails to cure the
default within the thirty (30) day period provided in Paragraph l of this
Agreement, the PLEDGEE shall have all the rights and remedies provided in the
Uniform Commercial Code in force in the State of North Carolina at the date of
this Agreement, and in this connection, the PLEDGEE may upon thirty (30) 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 Shares or any
part thereof at public or private sale in such manner and for such price as the
PLEDGEE may determine; such price will be at the fair market value thereof. At
any bona fide public or private sale, the PLEDGEE shall be free to bid on and
purchase all or any part of the pledged Shares and to attend all meetings, to
sign waivers of notice thereof, and generally to carry on the business of
OPENSITE TECHNOLOGIES, INC.. The PLEDGEE shall apply the proceeds of such sale
to the expenses incident thereto including counsel fees and to the payment of
the Loan due under the Xxxx Agreement to the date of payment.
The rights and remedies hereunder shall be cumulative and not
exclusive, the PLEDGEE having the absolute right to resort to any one or more
or all of said rights and remedies. The PLEDGOR hereby expressly waives any
right to require the PLEDGEE to sell the Shares, but shall not waive any right
to claim that PLEDGEE's failure to sell the Shares be deemed a satisfaction of
the PLEDGOR'S said obligations and duties under the Xxxx Agreement, and this
Agreement.
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9. Events of Default
The whole of the indebtedness as evidenced by the Xxxx Agreement shall
be immediately due and payable at the option of the PLEDGEE and/or the
provision of Paragraph 1 and Paragraph 8 shall become effective upon the
happening of any one of the following specified events of default:
a) Non-payment of the Loan within ten (10) days after
the same has become due and the same not being cured within 30 days of
written notice having been sent to the PLEDGEE by the PLEDGOR.
b) The breach by the PLEDGOR of any material covenant,
condition or Agreement as contained in this Agreement and the same not
being cured within 30 days of written notice having been sent to the
PLEDGEE by the PLEDGOR.
10. Prohibition against PLEDGOR'S Disposition of Shares
During the term of this pledge, the PLEDGOR shall not have the right
to sell or otherwise dispose of, or encumber the Shares pledged hereunder,
without the written consent of the PLEDGEE. Notwithstanding anything in this
Agreement to the contrary, the PLEDGEE agrees, from time to time, to consent to
the sale and release of Shares from this Pledge Agreement provided that the
Market Value of the Shares remaining subject to this Pledge Agreement is at
least 150% of the unpaid Loan amount.
11. Indemnification of Escrow Agent
The parties jointly and severally agree to indemnify and hold the
ESCROW AGENT harmless from any loss, liability or expense incurred without
willful default or gross negligence on the part of the ESCROW AGENT arising out
of or in connection with the acceptance or administration by the ESCROW AGENT
of its duties hereunder including the costs and expenses of defending itself
against any claims of liability hereunder. The ESCROW AGENT shall not be bound
in any way by any other Agreement or contract between the parties hereto or any
of them (whether or not it has knowledge thereof) and the ESCROW AGENT's only
duties and responsibilities shall be to hold the items described in paragraph 1
hereof as escrow agent and to dispose of the Shares in accordance with the
terms of this Agreement. The ESCROW AGENT may act upon any instrument or other
writing believed by the ESCROW AGENT in good faith to be genuine and to be
signed and presented by the proper person and the ESCROW AGENT shall not be
liable in connection with the performance of its duties under this Agreement
except for the ESCROW AGENT's own willful default or gross negligence. The
ESCROW AGENT may consult with outside reputable counsel and any opinion of such
outside reputable counsel shall be full and complete authorization and
protection in respect of any action taken or permitted by the ESCROW AGENT
hereunder in good faith and in reliance upon such opinion. In the event of any
dispute, the ESCROW AGENT may deposit the escrow funds in a court of competent
jurisdiction and the ESCROW AGENT shall thereupon be relieved and discharged
from its duties hereunder.
12. No Waiver of Remedies
No delay or omission by PLEDGEE in exercising any right or remedy
hereunder or with respect to any indebtedness shall operate as a waiver thereof
or of any other right or remedy, and no single or partial exercise thereof
shall preclude any other or further exercise thereof or the exercise of any
other right or remedy. PLEDGEE may remedy any default by PLEDGOR hereunder in
any reasonable manner
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without waiving the default remedied and without waiving any other prior or
subsequent default by PLEDGOR. All rights and remedies of PLEDGEE hereunder are
cumulative.
13. Modification of Agreement
No modification, rescission, waiver, release or amendment of any
provision of this Agreement shall be made except by a written Agreement
subscribed by PLEDGOR and by a duly authorized officer of PLEDGEE.
14. Binding Effect; Governing Law
This Agreement shall bind and inure to the benefit of the parties,
their distributees, legal representatives, assigns, successors in interest, and
estate. This Agreement is made under and shall be governed by the laws of the
State of North Carolina.
IN WITNESS WHEREOF, the parties have executed this Agreement the day
and year first above written.
PLEDGOR:
/s/ Xxx X. Xxxx
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Xxx X. Xxxx
PLEDGOR:
OPENSITE TECHNOLOGIES, INC.
/s/ Xxxxxxx Xxxxxx-Xxxxx
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Xxxxxxx Xxxxxx-Xxxxx
ESCROW AGENT:
GROSS, SHUMAN, BRIZDLE & XXXXXXXXX, P.C.
By: /s/
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