PLEDGE AGREEMENT
THIS PLEDGE AGREEMENT (hereinafter referred to as the
"Agreement") is made this 20th day of February 2002 by and
between XXXXXX XXXXXXX ("Borrower") and Xxxxx Xxxxxxxxx
("Lender").
WITNESSETH, THAT WHEREAS Borrower is indebted to Lender in
the principal amount of $100,000 (the "Debt"), which Debt is
evidenced by a Promissory Note of even date herewith (the
"Note"); and
WHEREAS, pursuant to a stock option agreement, Borrower has
used the funds lent through the Note to exercise certain stock
options to purchase 1,000,000 shares of stock in Comtex News
Network, Inc. (the "Shares"); and
WHEREAS, in order to secure the timely payment of all
amounts due under the Note, Borrower hereby assigns, grants and
transfers to Lender all of her rights, title and interest in and
to the Shares (the "Collateral"); and
NOW THEREFORE, in order to secure the timely payment of all
amounts due under the Note and secure the prompt and complete
performance by Borrower of all of her obligations, and for other
good and valuable consideration, the receipt and adequacy of
which are hereby acknowledged, the parties hereto agree as
follows:
1. PLEDGE, ASSIGNMENT AND GRANT OF SECURITY INTEREST. The
Borrower hereby assigns and pledges to the Lender and grants to
the Lender a continuing security interest in all of the
Borrower's right, title and interest in the Collateral, together
with any proceeds of the Collateral and all rights, powers and
privileges incident to the Collateral.
2. DELIVERY; POSSESSION. The original certificates,
instruments and documentation that evidence or represent the
Collateral are being delivered and deemed to have been delivered
to Lender, it being the intention that such delivery perfect the
security interest granted in Section 1.
3. WAIVER. The Borrower hereby consents that at any time
and from time to time and with or without consideration, the
Lender, after notice to but without further consent of the
Borrower and without in any manner affecting, impairing,
lessening or releasing this Agreement, may renew, extend, change
the manner, time, place and terms of payment of, sell, exchange,
release, surrender, realize upon, modify, waive, grant
indulgences with respect to and otherwise deal with in any manner
all of any part of the obligations of Borrower hereunder.
4. DEFAULT AND LOSS OF VALUE OF COLLATERAL.
4.1 Each of the following, at the option of Lender, shall
constitute an event of default ("Event of Default") under this
Agreement:
4.1.1. The occurrence of an Event of Default as
defined under the Note.
4.2 Upon the occurrence of an Event of Default, Lender may
and is hereby authorized to claim all Collateral in full and
complete satisfaction of any amounts due under the Note or
pursuant to this Agreement. Lender may at any time or from time
to time take any and all actions with respect to the Collateral
(and the funds represented thereby) as authorized herein or by
applicable law. In furtherance therewith, the Borrower hereby
grants such power of attorney (which grant is coupled with an
interest) to Lender to effect Lender's control of the Collateral
as provided herein in the Event of a Default.
4.3 Upon an Event of Default, Lender shall (a) have all of
the rights and remedies of a secured party and a pledgee under
the Maryland Uniform Commercial Code with respect to the
Collateral, including but not limited to the right to take
possession of and after default, to sell or otherwise dispose of
the Collateral at one or more public or private sales, without
advertisement or notice (other than as specifically required by
law or as set forth herein), (b) have all of the other rights and
remedies provided hereunder or in the Note, and (c) have all of
the other rights and remedies provided by statue, at law, equity
or otherwise; provided, however, Borrower shall have no liability
for any deficiency created by the possession and sale of the
Collateral by Lender. Without limiting the generality of the
foregoing, upon an Event of Default, the Lender shall be entitled
to (a) give notice to any appropriate person or entity that all
payments and other distributions to be made with respect to any
of the Collateral should be made directly to the Lender (b) if
necessary, endorse the name of the Borrower on any check, draft
or other item of payment received in connection with any of the
Collateral, (c) institute and prosecute legal and equitable
proceedings to enforce collection of the sums due under or with
respect to any of the Collateral or to realize upon any
collateral therefor, (d) settle, renew, extend, compromise,
compound, exchange or adjust any legal proceedings, brought with
respect to any of the Collateral, (e) exercise any and all voting
rights incident to the ownership of any of the Collateral, (f)
otherwise deal with any of the Collateral as fully and completely
as though the Lender was the absolute owner thereof for all
purposes and (g) do all other acts and things necessary or
appropriate in the Lender's opinion to carry out the terms of
this Agreement.
4.4. Borrower recognizes that the Lender may be unable
to effect a public sale of all or any part of the Collateral, by
reason of certain prohibitions contained in the Securities Act of
1933, as amended or the securities law of the applicable
jurisdiction, and Lender may be compelled to resort to one or
more private sales to a restricted group of Borrowers who may be
obliged to agree, among other things, to acquire all or a part of
the Collateral for their own account, for investment and not with
a view to the distribution or resale thereof. Borrower
acknowledges and agrees that any private sale so made may be at
prices and on other terms less favorable to the Lender than if
such Collateral were sold at public sale, and the Lender has no
obligation to delay the sale of such Collateral for public sale
under any securities laws. Borrower agrees that a private sale
or sales made under the foregoing circumstances shall be deemed
to have been made in a commercially reasonable manner. If any
consent, approval or authorization of any federal, state,
municipal or other governmental department, agency or authority
should be necessary to effect any sale or other disposition of
the Collateral, or any partial sale or other disposition of the
Collateral, Borrower shall execute all such applications
and other instruments as may be required in connection with
security any such consent, approval or authorization and will
otherwise use its best efforts to secure the same.
4.5 Lender acknowledges that the surrender of the
Collateral by demand, by surrender or otherwise extinguishes the
Debt, interest accrued on the Debt, and any other obligations
under the Note and this Agreement, and all other remedies of
Lender against Borrower arising pursuant to the Note and this
Agreement.
5. EFFECT OF AGREEMENT. This Agreement is to remain in
force and effect until the Note is fully repaid, as same may be
amended from time to time. At such time, the rights assigned
hereunder and all rights of Lender hereunder shall terminate.
6. REPRESENTATIONS, WARRANTIES AND COVENANTS OF Borrower.
Borrower represents and warrants, and so long as this Agreement
is in effect, shall be deemed continuously to represent and
warrant that, unless compliance is waived by Lender in writing:
6.1. Borrower is now, or upon the use of the funds to
purchase the Shares will be, the sole and absolute owner of all
right, title and interest in the Collateral with full right and
title to assign same and that there is no outstanding assignment,
transfer, mortgage or pledge thereof and there are no
restrictions thereon which would impair the transfer of the
Collateral.
6.2. Borrower has not executed and will not execute any
assignment of ownership or proxy or security agreement or
financing statement covering the Collateral except to Lender
without Lender's written authorization.
6.3. Borrower is authorized to entered into this Agreement.
6.4. So long as the Note remains unpaid, Borrower will
defend the Collateral against the claims and demands of all other
parties, will keep the Collateral free from all future security
interests and other encumbrances, except the security interest
granted hereby; and will pay all taxes, assessments and other
charges of every nature which may be levied or assessed against
the Collateral.
7. MISCELLANEOUS.
7.1 Upon the Borrower's failure to perform any of its
duties hereunder after reasonable notice, the Lender may but
shall not be obligated to perform after written notice to
Borrower any or all such duties, and the Borrower shall pay an
amount equal to the reasonable expense thereof to the Lender upon
written demand by the Lender.
7.2 No delay or omission by Lender in exercising any right
to remedy hereunder or with respect to the Note shall operate as
waiver thereof or of any other right or remedy, and no single or
partial exercise thereof shall preclude any other or further
exercise thereof hereunder in any reasonable manner without
waiving the default remedied and without waiving any other prior
or subsequent default by the Borrower.
7.3 The Lender shall have no obligation to take, and the
Lender shall have the sole responsibility for taking, any and all
steps to preserve rights against any and all parties to any of
the Collateral.
7.4 Borrower agrees that any notice by Lender of sale,
disposition or other intended action hereunder or in connection
herewith, if required by the Maryland Uniform Commercial Code or
otherwise, shall constitute reasonable notice if such notice is
mailed by regular or certified mail, postage prepaid, or by
nationally recognized overnight delivery service, at least five
(5) days prior to such action, to the Borrower's address as set
forth below or to any other address with Borrower has specified
in writing to the Lender as the address of Borrower:
If to Borrower: Xxxxxx Xxxxxxx
000 Xxxxx Xxxxxx, XX
Xxxxxxxxxx, X.X. 00000-0000
(000) 000-0000
(000) 000-0000 fax
With a Copy to: Xxxxxxx X. Xxxxxxx, Esq.
Holland & Knight, LLC
0000 Xxxxxx Xxxxxxxxx
XxXxxx, XX 00000
If to Lender: Xxxxx Xxxxxxxxx,
0000 Xxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
With a Copy to: Xxxx X. Xxxxxx, Esq.
Denick & Xxxxx, P.A.
00 Xxxxx Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxx, Xxxxxxxx 00000
7.5 Subject to the provisions of Section 4.5, Borrower
agrees to pay all reasonable costs and expenses incurred by
Lender in enforcing this Agreement and in realizing upon the
Collateral, including without limitation, reasonable attorney's
fees and legal expenses.
7.6 As used herein, the singular number shall include the
plural, the singular and the use of the masculine feminine or
neuter gender shall include all genders, as the text may require.
7.7 No modifications, recission, waiver, release or
amendment of any provision of this Agreement shall be made,
except by written agreement subscribed by the Borrower and the
Lender.
7.8 All terms not defined are used as set forth in the
Maryland Uniform Commercial Code.
7.9 This Agreement is, and is intended to be, a continuing
security agreement, and shall remain in full force and effect
thereafter until the Note and any extensions or renewals thereof,
together with interest accruing thereon, shall be paid in full.
7.10 This Agreement benefits the Lender and its successors
and assigns, and binds the Borrowers and its successors, and
assigns.
7.11 Upon the Borrower's failure to perform any of its
duties hereunder, the Lender may, but shall not be obligated to,
perform any or all such duties, including, without limitation,
payment of taxes, assessments or other charges and expenses as
herein provided, and the Borrower shall pay an amount equal to
the cost thereof to the Lender on demand by the Lender. Payment
of all monies hereunder shall be secured by the Collateral and
shall be subject to the limitations of Section 4.5.
7.12 Borrower shall promptly execute and deliver to Lender
such further documents, instruments and assurances including,
without limitation such stock powers, other endorsements or
signature guarantees as may be necessary or required by Lender in
order to carry out the intent and purpose of this Agreement and
to protect the rights and remedies created or intended to be
created in favor of Lender hereunder.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first above written.
WITNESS:
_________________________________ /S/ XXXXXX XXXXXXX
Xxxxxx Xxxxxxx
_________________________________ /S/ XXXXX XXXXXXXXX
By: Xxxxx Xxxxxxxxx
EXHIBIT A
Collateral
All the Shares in Comtex, being 1,000,000 shares as
evidenced by the following certificate.
