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EXHIBIT 10.60
PLEDGE AND SECURITY AGREEMENT
This Pledge (the "Pledge") is by and between Xxxxxxx X. Xxx, Xxxxxx X.
Xxxxxxx, Xxxx X. Xxxxxx, Xxxxx X'Xxxxxxxx, Xxxxx Xxxxx, and Xxxx Xxxxxxx
(collectively, the "Pledgors" and individually a "Pledgor") and HOMECOM
COMMUNICATIONS, INC., a Delaware Corporation (hereinafter referred to as the
"Pledgee").
The Pledgors and Pledgee have executed a Stock Purchase Agreement of
even date herewith (the "Agreement"). The Pledgor undertakes certain obligations
to indemnify the Pledgee in Section 8.1 of the Merger Agreement. Capitalized
terms used in this agreement and not otherwise defined shall have the meanings
ascribed to them in the Agreement.
As an inducement to the Pledgee to enter into the Merger Agreement, and
in consideration thereof, the Pledgor has agreed to secure the due and punctual
payment and performance of all of their obligations under the Agreement to
indemnify the Pledgee (the "Obligations"). Accordingly, the Pledgor hereby
agrees with the Pledgee as follows:
SECTION 1. Pledge. As collateral security for payment in full of the
Obligations, the Pledgor hereby (i) transfers, sets over and delivers unto Xxxx
Moss Kline & Xxxxx LLP, Attorneys at Law, as Escrow Agent for Pledgor and
Pledgee, pursuant to an Escrow Agreement, dated of even date herewith between
the Pledgor, the Pledgee and the Escrow Agent, stock certificates numbered
______________ representing 17,910 shares of the common stock of the Pledgee
(the "Pledged Securities") and (ii) pledges, hypothecates and grants to the
Pledgee a security interest in the Pledged Securities. Upon delivery of the
Pledged Securities to the Escrow Agent, such Pledged Securities shall be
accompanied by duly executed stock powers in blank and by such other instruments
or documents as the Pledgee or its counsel may reasonably request.
SECTION 2. Obligations Secured. This Pledge is made, and the security
interest created hereby is granted to the Pledgee, to secure the full payment
and performance of the Obligations.
SECTION 3. Representations and Warranties. Each Pledgor hereby
represents and warrants as to himself or herself that, except for the security
interest granted to the Pledgee, the Pledgor is the legal and equitable owner of
the Pledged Securities, that to the best of his or her knowledge there are no
liens, charges, encumbrances and security interests of any kind and nature
arising by through or under Pledgor, the Pledgor will make no voluntary
assignment, pledge, mortgage, hypothecation or transfer of the Pledged
Securities, the Pledgor has good right and legal authority to pledge the Pledged
Securities in the manner hereby done or contemplated and will defend its title
thereto against the claims of all persons and the pledge of the Pledged
Securities is effective to vest in the Pledgee the rights of the Pledgee in the
Pledged Securities as set forth herein.
SECTION 4. Voting Rights; Dividends, Etc.
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(a) So long as the Pledged Securities are held by the Escrow
Agent, the Pledgor shall be entitled to exercise any and all voting rights and
power consensual rights and powers accruing to an owner of the Pledged
Securities or any part thereof for any purpose not inconsistent with the terms
of this Pledge or any agreement giving rise to any of the Obligations: At the
option of the Pledgors, in lieu of the Escrow Agent delivering Pledged
Securities to Pledgee, Pledgors may deposit cash equal to the value of the
Pledged Securities to be so delivered as determined in accordance with Section
5. The Escrow Agent shall promptly upon receipt of the cash deposit release the
applicable number of Pledge Securities to Pledgors and deliver the cash or cash
equivalents to Pledgee.
(b) Any and all dividends or other distributions on account of
the Pledged Securities including but not limited to regular dividends,
liquidating dividends, other distributions in property, return of capital or
other distributions of money or property made on or in respect of Pledged
Securities, whether resulting from a subdivision, combination or
reclassification of outstanding capital stock of any corporation, the capital
stock of which is pledged hereunder or received in exchange for Pledged
Securities or any part thereof or as a result of any merger, consolidation,
acquisition or other exchange of assets or on the liquidation, whether voluntary
or involuntary, of any issuer of the Pledged Securities, or otherwise, shall be
and become part of the Pledged Securities pledged hereunder and, if received by
the Pledgor, shall forthwith be delivered to the Pledgee to be held as
collateral subject to the terms of this Pledge.
(c) The Pledgee shall execute and deliver to the Pledgor, or
cause to be executed and delivered to the Pledgor, as appropriate, all such
proxies, powers of attorney, dividend orders and other instruments as the
Pledgor may reasonably request for the purpose of enabling the Pledgor to
exercise the voting and/or consensual rights and powers which Pledgor is
entitled to exercise pursuant to paragraph.
(d) Upon the delivery of the Pledged Securities to Pledgee in
accordance with Section 10, all rights of the Pledgor to exercise the voting
and/or consensual rights and powers which Pledgor is entitled to exercise
pursuant to paragraph (a)(i) above and/or to receive the dividends which Pledgor
is authorized to receive and retain pursuant to paragraph (a)(ii) above shall
cease, and all such rights thereupon shall become vested in the Pledgee, which
shall have the sole and exclusive right and authority to exercise such voting
and/or consensual rights and powers which the Pledgor shall otherwise be
entitled to exercise pursuant to paragraph (a)(i) above and/or to receive and
retain the dividends which the Pledgor shall otherwise be authorized to retain
pursuant to paragraph (a)(ii) above. Any and all money and other property paid
over to or received by the Pledgee pursuant to the provisions of this paragraph
(b) shall be retained by the Pledgee as additional collateral hereunder and
shall be applied in accordance with the provisions of Section 9 hereof.
SECTION 5. Remedies. If (i) an Event of Default shall have occurred and
be continuing, and (ii) all or any portion of the Pledged Securities have been
released and delivered to the Pledgee (on behalf of the Pledgee), then the
Pledgee may elect to hold such Pledged Securities as treasury stock or cancel
them in full and final satisfaction of that portion of the Obligations
represented by the value of such Pledged Securities determined as follows: one
hundred (100%) percent of the weighted
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(by trading volume) averages per share trading price of Parent common stock for
the last ten (10) trading days immediately preceding the date the Pledged
Securities are actually released and delivered to the Parent. Pledgor hereby
waives (to the extent permitted by law) all rights of redemption, stay and/or
appraisal which the Pledgor now has or may at any time in the future have under
any rule of law or statute now existing or hereafter enacted. The Pledgee and
Pledgor agree that the exercise of any such remedy by the Parent shall be
conclusively deemed to conform to commercially reasonable standards under the
Uniform Commercial Code as in effect in the State of Georgia.
SECTION 6. Pledgee Appointed Attorney-in-Fact. The Pledgor hereby
constitutes and appoints the Pledgee the attorney-in-fact of the Pledgor for the
purpose of carrying out the provisions of Section 5 of this Pledge, which
appointment is irrevocable and coupled with an interest. Without limiting the
generality of the foregoing, the Pledgee shall have the right to execute any
stock power or endorse any stock certificate with respect to any Pledged
Securities released and delivered to it and to ask for, demand, xxx for,
collect, receive, and give acquittance for any and all moneys due or to become
due under and by virtue of any of the Pledged Securities, to endorse checks,
drafts, orders and other instruments for the payment of money payable to the
Pledgor, representing any interest or dividend or other distribution payable in
respect of the Pledged Securities or any part thereof or on account thereof and
to give full discharge for the same, to settle, compromise, prosecute, or defend
any action, claim or proceeding with respect thereto, and to sell, assign,
endorse, pledge, transfer and make any agreement respecting, or otherwise
dealing with, the same.
SECTION 7. Event of Default Defined. For purposes of this Pledge, an
"Event of Default" shall exist hereunder upon the failure of Pledgor to pay or
perform any Obligation within ten (10) days of the receipt of written demand
from any Pledgee unless a Pledgor has objected to the claim of an Event of
Default or the Indemnity Amount within ten (10) days of its receipt of such
notice.
SECTION 8. Application of the Value of Pledged Securities. The value of
Pledged Securities determined in accordance with Section 5 or cash deposit shall
be applied by the Pledgee as follows:
First: to the payment of all costs and expenses incurred by
the Pledgee in connection herewith, including but not limited to, all court
costs and the fees and disbursements of counsel for the Pledgee in connection
herewith, and to the repayment of all advances made by the Pledgee hereunder for
the account of the Pledgor, and the payment of all costs and expenses paid or
incurred by the Pledgee in connection with the exercise of any right or remedy
hereunder; and
Second: to the payment in full of all other Obligations.
Any amounts remaining after such application shall be promptly remitted to the
Pledgor, its successors, legal representatives or assigns, or as otherwise
provided by law.
SECTION 9. Escrow Agreement. The Escrow Agent shall hold the Pledged
Securities pursuant to the terms of the Escrow Agreement. Upon the full payment,
satisfaction or lapse of the
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Obligations, the Pledged Securities shall be promptly released by the Escrow
Agent to the Pledgor, in the manner provided in the Escrow Agreement. Upon the
occurrence of an Event of Default under this Pledge, the Pledgee shall notify
the Escrow Agent and the Pledgor in writing of the occurrence of the Event of
Default and the "Indemnity Amount" which is due under the Agreement. Upon
receipt of notice from the Pledgor that an Event of Default has occurred, the
Escrow Agent shall promptly give Pledgor and Pledgee ten (10) days advanced
written notice of the proposed release of the Pledged Securities, stating the
basis therefor. Should any Pledgor give the Escrow Agent written notice that he
or she disputes the occurrence of an Event of Default or the amount claimed due,
the Escrow Agent may either hold the Pledged Securities until a final judgment
of a court of competent jurisdiction is entered directing the Escrow Agent as to
the proper disposition of the Pledged Securities or the Escrow Agent may file an
interpleader action or a declaratory judgment action against the Pledgee and the
Pledgor seeking a determination of the proper disposition of the Pledged
Securities. If the Escrow Agent receives no written notice from a Pledgor of a
dispute as to the existence of an Event of Default, then Pledged Securities
having a value (determined by the Escrow Agent in accordance with Section 5
hereof) equal to the "Indemnity Amount" stated in the notice received from the
Pledgee, shall be released by the Escrow Agent to the Pledgee (on behalf of the
Pledgee) but shall remain subject to the terms and conditions of this Pledge.
SECTION 10. Notice. All notices or other communications which are
required or permitted hereunder or under the Escrow Agreement shall be in
writing and sufficient for purposes of this Pledge if delivered by hand, by
facsimile transmission, by registered or certified mail, postage prepaid, or by
courier or overnight carrier, to the persons at the addresses set forth below
(or at such other address as may be provided hereunder), and shall be deemed to
have been delivered as of the date so delivered:
If to Pledgor to: Ganymede Corp.
000 Xxxx Xxxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxxx, XX 00000
Attn: Xxxxxxx X. Xxx
Facsimile: (000) 000-0000
With a copy to: Xxxxxxxx & Fox
Xxx Xxxx Xxxxxx Xxxxx
Xxxxxxx, XX 00000
Attn: Xxxxxx X. Xxxxxxx
Facsimile: (000) 000-0000
If to Pledgee: HomeCom Communications, Inc.
Fourteen Xxxxxxxx Xxxxxx, Xxxxx 000
0000 Xxxxxxxx Xxxx
Xxxxxxx, Xxxxxxx 00000
Attn: Xxxxxx Xxx, Xxxxxx Xxxxxxxx
Facsimile: (000) 000-0000
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With a copy to: Xxxx Moss Kline & Xxxxx LLP
000 Xxxxxxxxx Xxxx Xxxxxx, Xxxxx 000
1000 Xxxxxxxxx Road, N.E.
Xxxxxxx, Xxxxxxx 00000
Attn: Xxxxxxx X. Xxxx, Esq.
Facsimile: (000) 000-0000
SECTION 11. Further Assurances. The Pledgor agrees that it will join
with the Pledgee in executing and will file or record such notices, financing
statements or other documents as may be reasonably necessary to the perfection
of the security interest of the Pledgee hereunder, and as the Pledgee or its
counsel may reasonably request, such instruments to be in form and substance
satisfactory to the Pledgee and its counsel, and that Pledgor will do such
further acts and things and execute and deliver to the Pledgee such additional
conveyances, assignments, agreements and instruments as the Pledgee may at any
time reasonably request in connection with the administration and enforcement of
this Pledge or relative to the Pledged Securities or any part thereof or in
order to assure and confirm unto the Pledgee its rights, powers and remedies
hereunder.
SECTION 12. No Waiver. No failure on the part of the Pledgee to
exercise, and no delay on its part in exercising any right, power or remedy
hereunder shall operate as a waiver thereof, nor shall any single or partial
exercise of any such right, power, or remedy preclude any other or the further
exercise thereof or the exercise of any other right, power or remedy. All
remedies hereunder are cumulative and are not exclusive of any other remedies
provided by law.
SECTION 13. Governing Law; Amendments. This Pledge has been executed
and delivered in the State of Georgia and shall in all respects be construed in
accordance with and governed by the laws of said State. This Pledge may not be
amended or modified nor may any of the Pledged Securities be released or the
security interest granted hereby extended, except in writing signed by the
parties hereto.
SECTION 14. Binding Agreement; Notices. This Pledge, and the terms,
covenants and conditions hereof, shall be binding upon and inure to the benefit
of the Pledgee and to all holders of the indebtedness secured hereby and to the
Pledgor and its successors, legal representatives and assigns. Pledgee shall not
be permitted to transfer, assign or negotiate its rights or remedies hereunder
without the prior written consent of the Pledgor. No notice to or demand on the
Pledgor shall entitle the Pledgor to any other or further notice or demand in
the same, similar or other circumstances. Any notice shall be conclusively
deemed to have been received and shall be effective on the day on which
delivered to the Pledgee or the Pledgor at the respective addresses set forth in
Section 10.
SECTION 15. Headings. Section headings used herein are for convenience
only and are not to affect the construction of or be taken into consideration in
interpreting this Pledge.
SECTION 16. Counterparts. This Pledge may be executed in any number of
counterparts,
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each of which shall be deemed to be an original and all of which when taken
together shall constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Pledge to be
executed as of this 23rd day of April, 1999.
PLEDGOR:
/s/ Xxxxxxx X. Xxx
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Xxxxxxx X. Xxx
/s/ Xxxxxx X. Xxxxxxx
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Xxxxxx X. Xxxxxxx
/s/ Xxxx X. Xxxxxx
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Xxxx X. Xxxxxx
/s/ Xxxxx X'Xxxxxxxx
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Xxxxx X'Xxxxxxxx
/s/ Xxxxx Xxxxx
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Xxxxx Xxxxx
/s/ Xxxx Xxxxxxx
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Xxxx Xxxxxxx
PLEDGEE:
HOMECOM COMMUNICATIONS, INC.
By: /s/ Xxxxxx Xxx
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Name: Xxxxxx Xxx
Title: President and CEO
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