STOCK PLEDGE AGREEMENT (this "AGREEMENT"), dated as of April
7, 2000, among CELEXX Corporation, a Nevada Corporation ("PLEDGOR"), and the
pledgees signatory hereto and their respective endorsees, transferees and
assignees (collectively, "PLEDGEE").
W I T N E S S E T H:
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WHEREAS, pursuant to the Secured Convertible Preferred Stock
Purchase Agreement, dated the date hereof between Pledgor and Pledgee (the
"PURCHASE AGREEMENT"), Pledgor is selling 350 shares of its 6% Series A Secured
Convertible Preferred Stock (the "PREFERRED SHARES") to Pledgee; and
WHEREAS, as a material inducement to Pledgee to purchase the
Preferred Shares, Pledgee has required and Pledgor has agreed to grant to
Pledgee a security interest in 1,000,000 shares of Common Stock .001 par value
per share, of X-Xxxx.xxx, Inc., a Nevada company (the "COMPANY") currently owned
by Pledgor (the "SHARES"), as collateral security for the timely and full
satisfaction of all obligations of Pledgor (including the obligations to timely
deliver Underlying Shares as and when required by the Transaction Documents),
whether matured or unmatured, now or hereafter existing or created and becoming
due and payable, under the Transaction Documents (such obligations are
collectively the "OBLIGATIONS"). Terms used and not defined herein shall have
the meaning ascribed to them in the Purchase Agreement.
NOW, THEREFORE, in consideration of the foregoing recitals,
and the mutual covenants contained herein, the parties hereby agree as follows:
1. SECURITY. As collateral security for the punctual payment
and performance, when due, by Pledgor of all the Obligations, Pledgor, hereby
pledges with, hypothecates, transfers and assigns to Pledgee, its successors and
assigns, all of the Shares and all proceeds, shares and other securities
received, receivable or otherwise distributed in respect of or in exchange for
the Shares, including, without limitation, any shares and other securities into
which such Shares are convertible or exchangeable (collectively referred to as
the "COLLATERAL"). Simultaneously herewith, Pledgor shall deliver to Pledgee the
certificate(s) representing the Shares, stamped with a bank medallion guarantee,
along with a stock transfer power duly executed in blank by Pledgor, to be held
by Pledgee as security. Any other Collateral received by Pledgor shall also be
delivered to Pledgee together with any executed stock powers or other transfer
documents requested by Pledgee, which request may be made at any time prior to
the date when the Obligations shall have been paid and otherwise satisfied in
full.
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2. VOTING POWER, DIVIDENDS, ETC. AND OTHER AGREEMENTS.
(a) Unless and until an Event of Default as set
forth in Section 3 hereof has occurred, Pledgor shall be entitled to:
(i) exercise all voting and/or
consensual powers pertaining to the Shares or other Collateral,
or any part thereof, for all purposes;
(ii) receive and retain dividends paid
with respect to the Shares or other Collateral; and
(iii) receive the benefits of any income
tax deductions available to Pledgor as a shareholder of the
Company.
(b) Pledgor agrees that it will not sell, assign,
transfer, pledge, hypothecate, encumber or otherwise dispose of
the Shares.
(c) Pledgor agrees to pay all costs including all
reasonable attorneys' fees and disbursements incurred by Pledgee
in enforcing this Agreement in accordance with its terms.
3. DEFAULT AND REMEDIES.
(a) For the purposes of this Agreement "Event of
Default" shall mean:
(i) default in or under any of the
Obligations after the expiration, without cure, of any
applicable cure period (including the failure to deliver
Underlying Shares as required by Section 3.1 of the Purchase
Agreement and Section 5 of the Certificate of Designation); or
(ii) a breach in any material respect
by Pledgor of any of its representations or warranties in this
Agreement or the Transaction Documents; or
(iii) the occurrence of a Triggering
Event (as defined in the Certificate of Designation (as defined
in the Purchase Agreement)) under the Certificate of Designation.
(b) Pledgee shall have the following rights upon
any Event of Default and for so long as the Obligations are not satisfied in
full:
(i) the rights and remedies provided
by the Uniform COMMERCIAL CODE AS ADOPTED BY THE STATE OF NEW YORK (THE "UCC")
(as said law may at any time be amended);
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(ii) the right to receive and retain
all dividends, payments and other distributions of any kind
upon any or all of the Shares or other Collateral;
(iii) the right to cause any or all of
the Shares or other Collateral to be transferred to its own
name or to the name of its designee and have such transfer
recorded in any place or places deemed appropriate by Pledgee;
and
(iv) the right to sell, at a public or
private sale, the Collateral or any part thereof for cash,
upon credit or for future delivery, and at such price or
prices in accordance with the UCC (as such law may be
amended from time to time). Upon any such sale Pledgee shall
have the right to deliver, assign and transfer to the
purchaser thereof the Collateral so sold. Pledgee shall give
the Pledgor not less than ten (10) days' written notice of
its intention to make any such sale. Any such sale, shall be
held at such time or times during ordinary business hours
and at such place or places as Pledgee may fix in the notice
of such sale. Pledgee may adjourn or cancel any sale or
cause the same to be adjourned from time to time by announce
ment at the time and place fixed for the sale, and such sale
may be made at any time or place to which the same may be so
adjourned. In case of any sale of all or any part of the
Collateral upon terms calling for payments in the future,
any Collateral so sold may be retained by Pledgee until the
selling price is paid by the purchaser thereof, but Pledgee
shall incur no liability in the case of the failure of such
purchaser to take up and pay for the Collateral so sold and,
in the case of such failure, such Collateral may again be
sold upon like notice. Pledgee, however, instead of
exercising the power of sale herein conferred upon it, may
proceed by a suit or suits at law or in equity to foreclose
the security interest and sell the Collateral, or any
portion thereof, under a judgment or decree of a court or
courts of competent jurisdiction, the Pledgor having been
given due notice of all such action. Pledgee shall incur no
liability as a result of a sale of the Collateral or any
part thereof. All proceeds of any such sale, after deducting
the reasonable expenses and reasonable attorneys' fees
incurred in connection with such sale, shall be applied in
reduction of the Obligations, and the remainder, if any,
shall be paid to Pledgor.
4. APPLICATION OF PROCEEDS; RELEASE. The proceeds of any sale
or enforcement of or against all or any part of the Collateral, and any other
cash or collateral at the time held by Pledgee hereunder, shall be applied by
Pledgee first to the payment of the reasonable costs of any such sale or
enforcement, then to reimburse Pledgee for any damages, costs or expenses
incurred by Pledgee as a result of an Event of Default, then to the payment of
the principal amount of, and interest and any other payments due in respect of,
the Obligations. The remainder, if any, shall be paid to Pledgor. As used in
this Agreement, "proceeds" shall mean cash, securities and other property
realized in respect of, and distributions in kind of, the Collateral, including
any thereof received under any reorganization, liquidation or adjustment of debt
of any issuer of securities included in the Collateral.
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5. REPRESENTATIONS AND WARRANTIES. Pledgor hereby represents
and warrants to Pledgee that:
(i) Pledgor has full power and
authority and legal right to pledge the Collateral to Pledgee
pursuant to this Agreement and this Agreement constitutes
a legal, valid and binding obligation of Pledgor enforceable
in accordance with its terms;
(ii) the execution, delivery and
performance of this Agreement and other instruments
contemplated herein will not violate any provision of any
order or decree of any court or governmental instrumentality
or of any mortgage, indenture, contract or other agreement
to which the Pledgor is a party or by which the Pledgor and
the Collateral may be bound, and will not result in the
creation or imposition of any lien, charge or encumbrance
on, or security interest in, any of the Pledgor's properties
pursuant to the provisions of such mortgage, indenture,
contract or other agreement;
(iii) Pledgor is the sole owner of the
Collateral free and clear of all liens and the Shares have
been duly authorized and validly issued, fully paid and
non-assessable;
(iv) the Pledgor is duly organized,
validly existing and in good standing under the laws of the
jurisdiction of its organization; and
(v) the Shares are eligible for
resale by a Pledgor pursuant to Rule 144(k) promulgated under
the Securities Act (assuming that Pledgor is not itself an
affiliate of the Company under such rule).
6. NO WAIVER; NO ELECTION OF REMEDIES. No failure on the part
of Pledgee to exercise, and no delay in exercising, any right, power or remedy
hereunder shall operate as a waiver thereof; nor shall any single or partial
exercise by Pledgee of any right, power or remedy preclude any other or further
exercise thereof or the exercise of any other right, power or remedy. The
remedies herein provided are cumulative and are not exclusive of any remedies
provided by law. In addition, the exercise of any right or remedy of Pledgee at
law or equity or under this Agreement or any of the documents shall not be
deemed to be an election of Pledgee's rights or remedies under such documents or
at law or equity.
7. TERMINATION. This Agreement shall terminate on the earliest
of (i) the date on which an Underlying Shares Registration Statement is first
declared effective by the Securities and Exchange Commission and (ii) the date,
if any, on which all of the Preferred Shares shall have been redeemed in
accordance with their terms and (iii) the date on which all Obligations have
been satisfied, paid or discharged in full.
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8. FURTHER ASSURANCES. The parties hereto agree that, from
time to time upon the written request of any party hereto, they will execute and
deliver such further documents and do such other acts and things as such party
may reasonably request in order fully to effect the purposes of this Agreement.
9. MISCELLANEOUS.
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(A) MODIFICATION. This Agreement contains the
entire understanding between the parties with respect to the subject matter
hereof and specifically incorporates all prior oral and written agreements
relating to the subject matter hereof. No portion or provision of this Agreement
may be changed, modified, amended, waived, supplemented, discharged, canceled or
terminated orally or by any course of dealing, or in any manner other than by an
agreement in writing, signed by the party to be charged.
(B) NOTICE. Any and all notices or other
communications or deliveries required or permitted to be provided hereunder
shall be in writing and shall be deemed given and effective on the earliest of
(i) the date of transmission, if such notice or communication is delivered via
facsimile at the facsimile telephone number specified in this Section prior to
6:30 p.m. (New York City time) on a Business Day, (ii) the Business Day after
the date of transmission, if such notice or communication is delivered via
facsimile at the facsimile telephone number specified in this Agreement later
than 6:30 p.m. (New York City time) on any date and earlier than 11:59 p.m. (New
York City time) on such date, (iii) the Business Day following the date of
mailing, if sent by nationally recognized overnight courier service, or (iv)
upon actual receipt by the party to whom such notice is required to be given.
The address for such notices and communications shall be as follows:
If to Pledgor: CeleXx Corporation
0000 Xxxx Xxxxxxxx Xxxx Xxxx, Xxxxx 000,
Xxxx Xxxxx, Xxxxxxx 00000
Facsimile No.: (000) 000-0000
Attn: Chief Financial Officer
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With copies to: Atlas Xxxxxxx, P.A.
000 Xxx Xxxx Xxxxxxxxx, Xxxxx 0000
Xxxx Xxxxxxxxxx, Xxxxxxx 00000
Facsimile No.: (000) 000-0000
Attn: Xxxxx X. Xxxxxxxxx, Esq.
If to the Pledgee: Birch Circle LLC
x/x Xxxxx Xxxxxxxx (Xxxxxx) Limited
Commercial Centre
P.O. Box 31106 SMB
Grand Cayman, Cayman Islands
British West Indies
Facsimile No.: (000) 000-0000
With copies to: Xxxxxxxx Xxxxxxxxx Xxxxxx Xxxxxxxx &
Xxxxxx LLP
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000
Facsimile No.: (000) 000-0000 and
(000) 000-0000
Attn: Xxxx X. Xxxxx, Esq.
(C) INVALIDITY. If any part of this Agreement is
contrary to, prohibited by, or deemed invalid under applicable laws or
regulations, such provision shall be inapplicable and deemed omitted to the
extent so contrary, prohibited or invalid, but the remainder hereof shall not be
invalidated thereby and shall be given effect so far as possible.
(D) BENEFIT OF AGREEMENT. This Agreement shall be
binding upon and inure to the parties hereto and their respective successors and
assigns.
(E) MUTUAL AGREEMENT. This Agreement embodies the
arm's length negotiation and mutual agreement between the parties hereto and
shall not be construed against either party as having been drafted by it.
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(F) NEW YORK LAW TO GOVERN. This Agreement shall
be governed by and construed and enforced in accordance with the internal laws
of the State of New York without regard to the principles of conflicts of law
thereof. Each party hereby irrevocably submits to the exclusive jurisdiction of
the state and Federal courts sitting in the city of New York, borough of
Manhattan, for the adjudication of any dispute hereunder or in connection
herewith 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 or that 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 in effect for notices to it under this Agreement and
agrees that such service shall constitute good and sufficient 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.
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IN WITNESS WHEREOF, the parties hereto have caused this Stock
Pledge Agreement to be duly executed by their respective authorized persons as
of the date first indicated above.
CELEXX CORPORATION
By:_____________________________________
Name:
Title:
BIRCH CIRCLE LLC
By:_____________________________________
Name:
Title:
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