<PAGE> 1
Exhibit 99.2
PLEDGE AGREEMENT
PLEDGE AGREEMENT, dated as of January 8, 2001, made by Mail.com, Inc., a
Delaware corporation ("Mail.com"), and World.com, Inc., a Nevada corporation
("World.com"; Mail.com and World.com are collectively referred to herein as the
"Pledgor"), in favor of the holders from time to time of Notes referred to below
(the "Holders"), the Holders and The Clark Estates, Inc., a New York
corporation, as collateral agent on behalf of the Holders (the "Collateral
Agent"). All obligations of Pledgor hereunder shall be joint and several
obligations of Mail.com and World.com. Capitalized terms used herein that are
defined in the Note Purchase Agreement (as defined below) shall have the
respective meanings ascribed to them in the Note Purchase Agreement.
W I T N E S S E T H:
WHEREAS, Mail.com, among others, has entered into a Note Purchase
Agreement, dated as of the date hereof, with the Purchasers of Notes named
therein (the "Note Purchase Agreement") pursuant to which the Purchasers
purchased or will purchase up to $15,000,000 Senior Convertible Notes due
January 5, 2006, issued by Mail.com, Mail.com Business Messaging Services, Inc.
and The Allegro Group, Inc.; and
WHEREAS, the Pledgor is the legal and beneficial owner of the shares of
capital stock (the "Pledged Shares") described in Schedule I hereto and issued
by India.com, Inc., a New Jersey corporation ("India.com"); and
WHEREAS, it is a condition precedent under the Note Purchase Agreement to
the Purchasers' respective obligations to purchase the Notes that the Pledgor
shall have made the pledge contemplated by this Agreement;
NOW, THEREFORE, in consideration of the premises and in order to induce
the Holders to purchase the Note, the Pledgor hereby agrees with the Holders as
follows:
SECTION 1. Pledge. The Pledgor hereby pledges to the Holders, and
grants to the Holders a security interest in, the following (the "Pledged
Collateral"):
(i) all of the Pledged Shares;
(ii) the certificates representing the Pledged Shares;
(iii) all dividends, cash, instruments and other property, from
time to time received, receivable or otherwise distributed
in respect of or in exchange for any or all of the
foregoing;
(iv) all of the shares which may be issued to the Pledgor by
India.com free of consideration or subscribed to by the
Pledgor as a result of increase in the capital stock of
India.com; and
<PAGE> 2
(v) all proceeds and products of the foregoing.
SECTION 2. Security for Obligations. This Agreement secures and the
Pledged Collateral is security for the full and prompt payment when due (whether
at stated maturity, by acceleration or otherwise) of, and the performance of,
all of the Companies' obligations under the Note Purchase Agreement and the
Notes and and the Pledgor's obligations under this Agreement, whether now or
hereafter existing and whether for principal, interest, fees, expenses or
otherwise, AND WHETHER OR NOT AN ALLOWABLE CLAIM AGAINST THE COMPANIES OR ANY
OTHER PARTY UNDER THE U.S. BANKRUPTCY CODE OR OTHERWISE ENFORCEABLE AGAINST ANY
SUCH PERSON, AND INCLUDING, IN ANY EVENT, INTEREST AND OTHER LIABILITIES
ACCRUING OR ARISING AFTER THE FILING BY OR AGAINST ANY SUCH PERSON OF A PETITION
UNDER THE U.S. BANKRUPTCY CODE OR THAT WOULD HAVE SO ACCRUED OR ARISEN BUT FOR
THE FILING OF SUCH A PETITION (all such obligations being, for purposes of this
Agreement, the "Secured Obligations").
SECTION 3. Delivery of Pledged Collateral; Legal Opinion, etc. (a) All
certificates or instruments representing or evidencing the Pledged Collateral
shall be delivered to the Collateral Agent, and held by the Collateral Agent at
One Rockefeller Plaza, 31st Floor, New York, NY 10020, on behalf of the Holders
pursuant hereto.
(b) Pledgor agrees to execute and deliver to the Collateral Agent (i)
stock powers, undated and appropriately endorsed in blank, with respect to the
Pledged Shares and (ii) such other documents of transfer as may from time to
time be reasonably requested on behalf of the Holders to enable the Collateral
Agent to transfer, after the occurrence and during the continuance of a default
in the performance or observance of the Secured Obligations, the Pledged
Collateral into its name or the name of its nominee (all of the foregoing are
hereinafter collectively referred to as the "Powers"). Pledgor shall cause its
counsel to deliver an opinion in form and substance satisfactory to the Holders,
dated the date of the Closing from counsel for the Pledgor covering such matters
as the Holders may reasonably request (and Pledgor hereby instructs its counsel
to deliver such opinion to you).
(c) Collateral Agent. The Collateral Agent, the Holders and the
Pledgor hereby agree that the Collateral Agent shall act as agent, bailee and
custodian for the benefit of the Holders with respect to the Pledged Collateral.
The Collateral Agent, the Holders and the Pledgor hereby further agree that the
Collateral Agent shall maintain and hold all Pledged Collateral at any time
delivered to it as agent, bailee and custodian for the benefit of the Holders.
The Collateral Agent, the Holders and the Pledgor acknowledge and agree that the
Collateral Agent is acting and will act with respect to the Pledged Collateral
for the benefit of the Holders and is not, and shall not at any time in the
future be, with respect to the Pledged Collateral, in any manner or to any
extent, subject to the direction or control of the Pledgor. The Collateral Agent
agrees to act in accordance with this Agreement and in accordance with any
written instructions from the holders of a majority in principal amount
outstanding of the Notes (the "Majority Holders"). Under no circumstances shall
the Collateral Agent deliver possession of Pledged Collateral to the Pledgor or
any other person, or otherwise release any Pledged Collateral from the security
interest created
2
<PAGE> 3
hereby, except in accordance with the written instruction of the Majority
Holders or in accordance with the terms of this Agreement.
(d) Books and Records. The Collateral Agent shall make
appropriate notations in its books and records to reflect that the
Pledged Collateral has been delivered to it and is held by the Collateral
Agent for the benefit of the Holders.
(e) Fees and Expenses of Collateral Agent. The Collateral Agent
shall notify the Pledgor of all fees, expenses and charges of the
Collateral Agent arising out of the Collateral Agent's execution and
performance of its duties and obligations under this Agreement, which
fees shall be as set forth on Schedule II attached hereto, and such
reasonable fees, expenses and charges shall be paid promptly by the
Pledgor or, if already paid by the Collateral Agent, the Pledgor promptly
shall reimburse the Collateral Agent therefor. In the event that the
Pledgor fails promptly to pay, or reimburse the Collateral Agent for
payment of, such reasonable fees, expenses and charges, the Holders
shall, upon request by the Collateral Agent, promptly pay, or reimburse
the Collateral Agent for payment of, such reasonable fees, expenses and
charges, and all amounts so paid or reimbursed by the Holders shall be
payable by the Pledgor under Section 12 hereof and constitute Secured
Obligations secured hereby. The Collateral Agent may employ, upon notice
to the Pledgor at the Pledgor's expense, such legal counsel and other
experts as it reasonably deems necessary in connection with performing
its duties and obligations under this Agreement, and shall be fully
protected in relying upon the advice of such counsel and other experts as
are reasonably selected by it.
(f) Removal or Resignation of Collateral Agent. The Majority
Holders may, at any time, remove and discharge the Collateral Agent from
the performance of its duties under this Agreement. In addition, the
Collateral Agent may, at any time, effective upon 90 days' prior written
notice to the Pledgor and the Holders and the appointment of a successor
Collateral Agent, terminate its agreement to act as the Collateral Agent
hereunder. Upon the effective date of any such termination, the
Collateral Agent shall promptly deliver the Pledged Collateral then held
by it or its agents to the successor Collateral Agent, the Holders or to
such person or entity as the Holders may direct in writing and shall
execute and deliver such notices, instructions and assignments as may be
reasonably necessary or desirable to transfer the rights of the
Collateral Agent with respect to the Pledged Collateral to the successor
Collateral Agent.
(g) Exculpation; Indemnification. (i) The Collateral Agent
hereby accepts the agency created in this Agreement. Except as otherwise
expressly required by this Section 3(g), the Collateral Agent shall not
have any duty or liability with respect to the administration or
investment of any property or the payment of income or principal to the
Holders or the Pledgor, and no implied obligations shall be inferred from
this Agreement.
The Collateral Agent shall not be personally liable under any
circumstances, except for its own willful misconduct or gross negligence.
In particular, but not by way of limitation, the Holders and the Pledgor
agree that:
3
<PAGE> 4
(1) The Collateral Agent shall not be personally
liable for any error of judgment made in good
faith by an officer of the Collateral Agent;
(2) No provision of this Agreement shall require
the Collateral Agent to expend or risk its
personal funds or otherwise incur any
financial liability in the performance of its
rights or powers hereunder, if the Collateral
Agent shall have reasonable grounds for
believing that repayment of such funds or
adequate indemnity against such risk or
liability is not reasonably assured or
provided to it;
(3) Under no circumstances shall the Collateral
Agent be personally liable for the payment of
any interest on any money or the Pledged
Collateral held by it hereunder, except as
otherwise agreed by the Collateral Agent;
(4) The Collateral Agent shall not be personally
responsible for or in respect of the
validity, value, genuineness or
collectability of the Pledged Collateral or
any other property, the validity or
sufficiency of this Agreement, the
correctness of the recitals contained herein
or for the due execution hereof by the
Pledgor or the Holders;
(5) The Collateral Agent shall incur no liability
to anyone in acting upon any signature,
instrument, notice, resolution, request,
consent, order, certificate, report, opinion,
bond or other document or paper believed by
it to be genuine and believed by it to be
signed by the proper party or parties. The
Collateral Agent may accept a certified copy
of a resolution of the board of directors or
other governing body of any corporate party
as conclusive evidence that such resolution
has been duly adopted by such body and that
the same is in full force and effect. As to
any fact or matter the manner of
ascertainment of which is not specifically
prescribed herein, the Collateral Agent may
for all purposes hereof rely on a
certificate, signed by the Majority Holders,
as to such fact or matter, and such
certificate shall constitute full protection
to the Collateral Agent for any action taken
or omitted to be taken by it in good faith in
reliance thereon;
(6) In the exercise or administration of the
agency hereunder, the Collateral Agent (A)
may act directly or through agents or
attorneys pursuant to agreements entered into
with any of them, and the Collateral Agent
shall not be liable for the default or
misconduct of such agents or attorneys if
such
4
<PAGE> 5
agents or attorneys shall have been selected
by the Collateral Agent in good faith and (B)
may consult with counsel, accountants and
other skilled persons to be selected in good
faith and employed by it, and it shall not be
liable for anything done, suffered or omitted
in good faith by it in accordance with the
advice or opinion of any such counsel,
accountants or other skilled persons;
(7) The Collateral Agent's sole duty with respect
to the custody, safekeeping and physical
preservation of the Pledged Collateral shall
be to deal with them in a similar manner as
the Collateral Agent deals with similar
property for its own account, subject to the
protections and limitations on liability
afforded to the Collateral Agent under this
Agreement;
(8) At any time the Collateral Agent may request
instructions in writing from the Holders and
the Collateral Agent shall not be liable with
respect to any act or omission in accordance
with the instructions of the Majority Holders
or for refusing to take any action without
such instructions;
(9) The Collateral Agent shall not be deemed to
have knowledge or notice of the occurrence or
nonoccurrence of any act or event unless the
Collateral Agent shall have received notice
thereof from a Holder specifying that it is
being given under this subsection (9); and
(10) Except as expressly provided in this Section
3(g), in accepting and performing the agency
hereby created the Collateral Agent acts
solely as agent hereunder and not in its
individual capacity.
(ii) The Pledgor shall indemnify and hold the Collateral Agent harmless
from and against any and all loss, liability, damage or expense
(including, without limitation, reasonable attorneys' fees and expenses)
that the Collateral Agent may suffer or incur in connection with the
entering into and performance of its obligations under this Agreement,
(except to the extent such loss, liability, damage or expense arises from
the gross negligence or willful misconduct of the Collateral Agent). The
Holders agree to indemnify the Collateral Agent (to the extent not
reimbursed by the Pledgor) for all obligations subject to indemnification
hereunder. If the Pledgor fails to perform its obligations under this
Section 3(g), the Holders shall, upon request by the Collateral Agent,
perform such obligations, and all expenses incurred by the Holders in
connection therewith shall be payable by the Pledgor under Section 12
hereof and constitute Secured Obligations secured hereby.
5
<PAGE> 6
SECTION 4. Representations and Warranties. The Pledgor makes the following
representations:
(a) The Pledgor is a corporation duly organized, validly existing and
in good standing under the laws of the jurisdiction of its incorporation.
(b) The Pledgor has taken all actions and obtained all consents or
approvals necessary to authorize it to enter into and perform its obligations
under this Agreement and to consummate the transactions contemplated hereby.
(c) Neither the execution or delivery of this Agreement nor the
consummation of the transactions contemplated hereby will conflict with,
violate, constitute a breach of or a default (with the passage of time or
otherwise) under, or require the consent or approval of or filing with any
person or entity (other than consents and approvals which will have been
obtained and filings which will have been made at or prior to the date hereof)
under, (i) the articles of incorporation or by-laws of the Pledgor, or (ii) any
award of any arbitrator or any contract, agreement, undertaking, lease,
indenture, mortgage, instrument, order, judgment, decree, statute, law, rule or
regulation to which the Pledgor is party or by which it or any of its properties
or assets is subject, or result in the imposition of a lien, mortgage, pledge,
hypothecation, assignment, deposit arrangement, security interest or other
encumbrance (collectively, a "Lien") on any properties or assets of the Pledgor,
except for the Lien created by this Agreement.
(d) This Agreement has been duly executed and delivered by the Pledgor
and constitutes the legal, valid and binding obligation of the Pledgor,
enforceable against the Pledgor in accordance with its terms.
(e) The Pledged Shares (i) have been duly authorized and validly
issued; and (ii) are fully paid and non-assessable.
(f) The Pledgor is the legal and beneficial owner of the Pledged
Collateral free and clear of any Lien, except (a) for the Lien and security
interest created by this Agreement, (b) restrictions on resale under Federal and
state securities laws, (c) restrictions and obligations contained in the
India.com Investors Rights Agreement dated September 13, 2000 by and among
Pledgor and the Investors named therein (the "Investors Rights Agreement") and
the Exchange Agreement dated September 13, 2000 by and among Mail.com and the
Investors under the Investors Rights Agreement (the "Exchange Agreement") and
(d) up to 3,000,000 of the Pledged Shares held by Mail.com are subject to
options granted to employees of Mail.com (the "Mail.com Employee Options"). The
Mail.com Employee Options are subject to vesting requirements and are subject to
forfeiture in certain circumstances.
(g) The pledge of the Pledged Shares pursuant to this Agreement creates
a valid and perfected first priority security interest in the Pledged
Collateral, securing the payment of all of the Secured Obligations.
Notwithstanding such first priority security interest, the Pledged Shares remain
subject to the restrictions contained in the Investors Rights Agreement and the
Exchange Agreement. The security interest granted herein in such
6
<PAGE> 7
number of Pledged Shares as are subject to Pledgor's obligation to
contribute to India.com a portion of the shares of India.com held by
Mail.com upon certain adjustments to the conversion price of the
outstanding Series A Exchangeable Convertible Preferred Stock of
India.com shall be released if necessary in order to permit Pledgor to
satisfy its obligations under the Exchange Agreement. The security
interest granted herein in such number of Pledged Shares as are subject
to the Mail.com Employee Options shall be released upon the exercise or
other disposition of such options to the extent necessary to satisfy
Mail.com's obligations with respect to such Mail.com options.
(h) All representations and warranties contained herein shall survive
the execution and delivery hereof.
SECTION 5. Further Assurances, Etc. (a) The Pledgor agrees that at any
time and from time to time, at the cost and expense of the Pledgor, the Pledgor
will promptly execute and deliver all further instruments and documents, and
take all further action, that the Majority Holders or the Collateral Agent may
reasonably request in order to perfect and protect the Lien and security
interest granted hereby or to enable the Holders or the Collateral Agent to
exercise and enforce their respective rights and remedies hereunder with respect
to any Pledged Collateral.
(b) The Pledgor agrees to defend the title to the Pledged Collateral
and the Lien thereon and security interest therein of the Holders against the
claim of any other person or entity and to maintain and preserve such Lien and
security interest until payment in full of all of the Secured Obligations.
SECTION 6. Voting Rights; Dividends; Etc.
(a) As long as no Event of Default shall have occurred and be
continuing (or, in the case of subsection (a)(i) of this Section 6, as long as
no notice of a continuing Event of Default shall have been given by the Majority
Holders to the Pledgor):
(i) The Pledgor shall be entitled to exercise any and all
voting and other consensual rights pertaining to the
Pledged Collateral or any part thereof for any purpose not
inconsistent with the terms of this Agreement or the Note
Purchase Agreement;
(ii) The Pledgor shall be entitled to receive and retain any and
all dividends paid in respect of the Pledged Collateral,
other than any and all
(A) dividends paid or payable other than in cash
in respect of, and instruments and other
property received, receivable or otherwise
distributed in respect of, or in exchange
for, any Pledged Collateral,
(B) dividends and other distributions paid or
payable in cash in respect of any Pledged
Collateral in connection with a partial or
total liquidation or dissolution or in
connection
17
<PAGE> 8
with a reduction of capital, capital surplus
or paid-in surplus, and
(c) cash paid, payable or otherwise distributed
in redemption of, or in exchange for, any
Pledged Collateral,
all of which shall be forthwith delivered to the Collateral
Agent to hold as Pledged Collateral and shall, if received
by the Pledgor, be received in trust for the benefit of the
Holders, be segregated from the other property or funds of
the Pledgor, and be forthwith delivered to the Collateral
Agent as Pledged Collateral in the same form as so received
(with any necessary indorsement).
(iii) The Holders and the Collateral Agent shall, at the
Pledgor's expense, execute and deliver (or cause to be
executed and delivered) to the Pledgor all such proxies and
other instruments (including, without limitation, a
certificate of the Collateral Agent with respect to the
identification and holding of the Pledged Shares in its
possession) as the Pledgor may reasonably request for the
purpose of enabling the Pledgor to exercise the voting and
other rights which it is entitled to exercise pursuant to
paragraph (i) above and to receive the dividends which it
is authorized to receive and retain pursuant to paragraph
(ii) above.
(b) Upon the occurrence and during the continuance of an Event of
Default:
(i) Upon notice by the Majority Holders to the Pledgor and the
Collateral Agent, all rights of the Pledgor to exercise the
voting and other consensual rights which it would otherwise
be entitled to exercise pursuant to Section 6(a)(i) above
shall cease, and all such rights shall thereupon become
vested in the Holders who shall thereupon have the sole
right to exercise such voting and other consensual rights.
(ii) All rights of the Pledgor to receive the dividends which it
would otherwise be authorized to receive and retain
pursuant to Section 6(a)(ii) above shall cease, and all
such rights shall thereupon become vested in the Holders
who shall thereupon have the sole right to receive and hold
as Pledged Collateral such dividends.
(iii) All dividends which are received by the Pledgor contrary to
the provisions of paragraph (ii) of this Section 6(b) shall
be received in trust for the benefit of the Holders, shall
be segregated from other funds of the Pledgor and shall be
forthwith paid over to the Collateral Agent as Pledged
Collateral in the same form as so received (with any
necessary indorsement).
(iv) The Pledgor shall, if necessary to permit the Holders to
exercise the voting and other rights which it may be
entitled to exercise pursuant to Section 6(b)(i) above and
to receive all dividends and distributions which it may
8
<PAGE> 9
be entitled to receive under Section 6(b)(ii) above,
execute and deliver to the Holders, from time to time and
upon written notice of the Majority Holders, appropriate
proxies, dividend payment orders and other instruments as
the Holders may reasonably request. The foregoing shall not
in any way limit the Holders' power and authority granted
pursuant to Section 8 hereof.
(v) Until the Secured Obligations have been paid in full, the
Pledgor shall provide the Holders and the Collateral Agent
with a copy of the notice of call regarding any ordinary or
extraordinary shareholders' meeting of India.com promptly
after the Pledgor's receipt of such notice.
SECTION 7. Transfers and Other Liens. Subject to the rights of the
Holders to be prepaid out of the net proceeds thereof as provided in the Note
Purchase Agreement, prior to an Event of Default the Pledgor may sell, transfer
or otherwise dispose of, or grant any option or warrant with respect to, any of
the Pledged Collateral. Upon any such disposition, the Pledgor shall cause the
net proceeds thereof to be immediately deposited with the Collateral Agent as
collateral for the Secured Obligations. So long as no Event of Default has
occurred and is continuing and after application of such net proceeds to any
required prepayment under the Note Purchase Agreement, such proceeds shall be
released to the Pledgor. Except as provided above in this Section 7 and except
as contemplated in Section 4, the Pledgor shall not create or permit to exist
any Lien upon or with respect to any of the Pledged Collateral, except for the
Lien and the security interest created pursuant to this Agreement.
SECTION 8. Collateral Agent Appointed Attorney-in-Fact. The Pledgor
hereby irrevocably constitutes and appoints the Collateral Agent, with full
power of substitution, as its true and lawful attorney-in-fact with full
irrevocable power and authority in the place and stead of the Pledgor and in the
name of the Pledgor or in its own name, from time to time in the discretion of
the Majority Holders, for the purpose of carrying out the terms of this
Agreement, to take any and all appropriate action and to execute and deliver any
and all documents and instruments which the Majority Holders reasonably may deem
necessary or advisable to accomplish the purposes of this Agreement, including,
without limitation, to receive, indorse and collect all instruments made payable
to the Pledgor representing any dividend or other distribution or payment in
respect of the Pledged Collateral or any part thereof and to give full discharge
for the same and to vote or grant any consent in respect of the Pledged Shares
authorized by Section 6(b) hereof. The Pledgor hereby ratifies, to the extent
permitted by law, all that any said attorney shall lawfully do or cause to be
done by virtue hereof. This power, being coupled with an interest, is
irrevocable until the Secured Obligations are paid in full. To induce any third
Person to act under this Section 8, the Pledgor hereby agrees that any third
Person receiving a duly executed copy or facsimile of this Agreement may act
under this Section 8 without any investigation or other action, including any
determination of directions of the Majority Holders, and that the termination of
this Section 8 shall be ineffective as to such third Person unless and until
actual notice or knowledge of such termination shall have been received by such
third Person, and the Pledgor, on behalf of itself and its successors and
assigns, hereby agrees to indemnify and hold harmless any such third Person from
and against any and all claims that may arise against such third Person by
reason of such third Person having relied on the provisions of this Section 8.
9
<PAGE> 10
SECTION 9. Collateral Agent May Perform. If the Pledgor fails to
perform any agreement contained herein, the Majority Holders may authorize the
Collateral Agent itself to perform, or cause the performance of, such agreement,
and the expenses of the Collateral Agent incurred in connection therewith shall
be payable by the Pledgor under Section 12 hereof and constitute Secured
Obligations secured hereby.
SECTION 10. Reasonable Care. The Holders and the Collateral Agent
shall each be deemed to have exercised reasonable care in the custody and
preservation of the Pledged Collateral in its possession if the Pledged
Collateral is accorded treatment substantially equal to that which the Holders
or the Collateral Agent, respectively, accords its own property, it being
understood that neither the Holders nor the Collateral Agent shall have any
responsibility for (i) ascertaining or taking action with respect to calls,
conversions, exchanges, maturities, tenders or other matters relative to any
Pledged Collateral, whether or not the Holders or the Collateral Agent has or is
deemed to have knowledge of any such matter, or (ii) taking any necessary steps
to preserve rights against any person or entity with respect to any Pledged
Collateral.
SECTION 11. Remedies upon Default. If any Event of Default shall have
occurred and be continuing:
(a) The Holders may exercise in respect of the Pledged Collateral, in
addition to other rights and remedies provided for herein or otherwise available
to it, all the rights and remedies of a secured party after default under the
Uniform Commercial Code (the "Code") in effect in the State of New York at that
time, and the Majority Holders may also, without notice except as specified
below, sell the Pledged Collateral or any part thereof in one or more parcels at
public or private sale, at any exchange, broker's board or at any office of the
Holders or elsewhere, for cash, on credit or for future delivery, and upon such
other terms as the Holders may deem commercially reasonable. The Pledgor agrees
that, to the extent notice of sale shall be required by law, at least ten days'
notice to the Pledgor of the time and place of any public sale or the time after
which any private sale is to be made shall constitute reasonable notification.
The Holders shall not be obligated to make any sale of Pledged Collateral
regardless of notice of sale having been given. The Majority Holders may adjourn
any public or private sale from time to time by announcement at the time and
place fixed therefor, and such sale may, without further notice, be made at the
time and place to which it was so adjourned. The Pledgor hereby waives any
claims against the Holders arising by reason of the fact that the price at which
any Pledged Collateral may have been sold at such a private sale was less than
the price which might have been obtained at a public sale, even if the Holders
accept the first offer received and does not offer such Pledged Collateral to
more than one offeree.
(b) Any cash held by the Holders or Collateral Agent as Pledged
Collateral and all cash proceeds received by the Holders in respect of any sale
of, collection from, or other realization upon all or any part of the Pledged
Collateral shall be applied:
First, to the payment of the costs and expenses of such sale, including,
without limitation, reasonable expenses of the Holders, the Collateral Agent and
their respective agents to the extent permitted under the Note Purchase
Agreement and hereunder, including the reasonable fees and expenses of counsel
for the Holders, and all expenses, liabilities and
10
<PAGE> 11
advances made or incurred by the Holders to the extent permitted under
the Note Purchase Agreement and hereunder, the Collateral Agent and their
respective agents in connection therewith or pursuant to Section 9
hereof;
Second, to the Collateral Agent for any fees or other Secured Obligations
owing to the Collateral Agent in its capacity as such;
Third, to the Holders, for the payment in full of the Secured
Obligations; and
Finally, after payment in full of all of the Secured Obligations, to the
payment to the Pledgor (by wire transfer to the account set forth in the Note
Purchase Agreement or such other account specified by the Pledgor), or its
successors or assigns, or to whomsoever may be lawfully entitled to receive the
same as a court of competent jurisdiction may direct.
SECTION 12. Expenses. The Pledgor will upon demand pay to the Holders
the amount of any and all reasonable expenses, including, without limitation,
the reasonable fees and expenses of one counsel for all of the Holders, which
the Holders may incur in connection with (i) the administration of this
Agreement, (ii) the custody or preservation of, sale of, collection from, or
other realization upon, any of the Pledged Collateral, (iii) the exercise or
enforcement of any of the rights and remedies hereunder of the Holders and the
Collateral Agent, or (iv) the failure by the Pledgor to perform or observe any
of the provisions hereof.
SECTION 13. Security Interest Absolute. All rights of the Holders and
the Collateral Agent and security interests hereunder, and all obligations of
the Pledgor hereunder, shall be absolute, unconditional and irrevocable
irrespective of:
(i) any lack of validity or enforceability of any provision of
the Note Purchase Agreement, the Note or any other
agreement or instrument relating thereto;
(ii) any change in the time, manner or place of payment of, or
in any other term of, or any increase in the amount of, all
or any of the Secured Obligations, or any other amendment
or waiver of any term of, or any consent to any departure
from any requirement of, the Note Purchase Agreement;
(iii) any exchange, release or non-perfection of any Lien on any
other collateral; or
(iv) any other circumstance which might otherwise constitute a
defense available to, or a discharge of, a borrower or a
pledgor.
SECTION 14. Amendments, Etc. No amendment or waiver of any provision
of this Agreement nor consent to any departure by the Pledgor herefrom shall in
any event be effective unless the same shall be in writing and signed by the
Majority Holders, and then such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given,
11
<PAGE> 12
except that any such amendment or waiver which affects the rights or obligations
of the Collateral Agent hereunder must also be signed by the Collateral Agent.
SECTION 15. Addresses for Notices. All notices and other
communications provided for hereunder shall be in writing, and mailed,
telecopied or delivered by hand or express courier:
If to the Pledgor, to:
Mail.com, Inc.
World.com, Inc.
c/o Mail.com, Inc.
Suite 660
11 Broadway
New York, NY 10004
Attention: Thomas Murawski
with a copy to David Ambrosia at the same address:
If to the Holders, to:
Federal Partners, L.P.
One Rockefeller Plaza
31st Floor
New York, NY 10020
Attention: Stephen M. Duff
and
Zesiger Capital Group LLC
320 Park Avenue
New York, NY 10022
with a copy to:
Robin Spear, Esq.
Pillsbury Winthrop LLP
One Battery Park Plaza
New York, NY 10004
12
<PAGE> 13
If to the Collateral Agent, to:
The Clark Estates, Inc.
One Rockefeller Plaza
31st Floor
New York, NY 10020
Attention: Stephen M. Duff
or, as to each party, at such other address as shall be designated by such party
in a written notice to each other party complying as to delivery with the terms
of this Section. All such notices and other communications shall be effective
seven days after having been deposited in the mails, or upon having been
telecopied with confirmation of receipt, or delivered by hand or express courier
to the addressee or its agent, respectively.
SECTION 16. Continuing Security Interest; Release of Security
Interest. This Pledge Agreement shall create a continuing security interest in
the Pledged Collateral and shall (i) remain in full force and effect until
payment in full of the Secured Obligations, (ii) be binding upon the Pledgor,
its successors and assigns, and (iii) inure to the benefit of and be enforceable
by the Holders and its successors, transferees and assigns. Upon the payment in
full of the Secured Obligations, the Pledgor shall be entitled to the return of
such of the Pledged Collateral as shall not have been sold or otherwise applied
pursuant to the terms hereof, and the Collateral Agent shall so return such
Pledged Collateral. Notwithstanding the foregoing, (a) the Collateral Agent
shall release on behalf of the Holders the security interest in the Pledged
Collateral and the Pledgor shall be entitled to the return of such of the
Pledged Collateral as shall not have been sold or otherwise applied pursuant to
the terms hereof, (I) upon a sale, transfer or other disposition of the Pledged
Collateral as permitted under this Agreement and the prepayment of Notes as
become subject to prepayment in accordance with the Note Purchase Agreement, or
(II) the Company shall raise at least $35 million in cash proceeds from the sale
of assets (including the Pledged Collateral) or from the issuance of additional
debt (other than Purchase Money Indebtedness or Acquired Debt) or equity
financings on or before April 30, 2001 and (b) the Collateral Agent shall
release on behalf of the Holders the security interest granted herein in such
number of Pledged Shares (I) as are subject to Pledgor's obligation to
contribute to India.com a portion of the shares of India.com held by Pledgor
upon certain adjustments to the conversion price of the outstanding Series A
Exchangeable Convertible Preferred Stock of India.com if necessary in order to
permit Pledgor to satisfy its obligations under the Exchange Agreement and (II)
as are subject to the Mail.com Employee Options upon the exercise or other
disposition of such options to the extent necessary to satisfy Mail.com's
obligations with respect to such Mail.com options.
SECTION 17. Continuance and Acceleration of Secured Obligations Upon
Certain Events. If:
(a) any Event of Default that the Note Purchase Agreement states is to result
in the automatic acceleration of any Secured Obligations shall occur;
13
<PAGE> 14
(b) any injunction, stay or the like that enjoins any acceleration, or demand
for the payment, observance or performance, of any Secured Obligations that
would otherwise be required or permitted under the Transaction Agreements shall
become effective; or
(c) any Secured Obligations shall be or be determined to be or become
discharged, disallowed, invalid, illegal, void or otherwise unenforceable
(whether by operation of any present or future law or by order of any court or
governmental agency);
then (i) such Secured Obligations shall, for all purposes of this Agreement, be
deemed (A) in the case of clause (c), to continue to be outstanding and in full
force and effect notwithstanding the unenforceability thereof and (B) if such is
not already the case, to have thereupon become immediately due and payable and
to have commenced bearing interest at 12% per annum and (ii) the Holders may,
with respect to such Secured Obligations, exercise all of the rights and
remedies under this Agreement that would be available to them during an Event of
Default.
SECTION 18. Recovered Payments.
The Secured Obligations shall be deemed not to have been paid, observed or
performed, and the Pledgor's obligations under the Transaction Agreements in
respect thereof shall continue and not be discharged, to the extent that any
payment, observance or performance thereof by the Companies or any guarantor, or
out of the proceeds of any other collateral, is recovered from or paid over by
or for the account of the Holders for any reason, including as a preference or
fraudulent transfer or by virtue of any subordination (whether present or future
or contractual or otherwise) of the Secured Obligations, whether such recovery
or payment over is effected by any judgment, decree or order of any court or
governmental agency, by any plan of reorganization or by settlement or
compromise by the Holders (whether or not consented to by the Companies, the
Pledgor or any guarantor) of any claim for any such recovery or payment over.
The Pledgor hereby expressly waives the benefit of any applicable statute of
limitations and agrees that it shall be obligated hereunder with respect to any
Secured Obligations whenever such a recovery or payment over occurs.
SECTION 19. Evidence of Secured Obligations.
The records of the Holders shall be conclusive evidence of the Secured
Obligations, and of all payments, observances and performances in respect
thereof, absent manifest error.
SECTION 20. Binding Nature of Certain Adjudications.
The Pledgor shall be conclusively bound by the adjudication in any action or
proceeding, legal or otherwise, involving any controversy arising under, in
connection with, or in any way related to, any of the Secured Obligations, and
by a judgment, award or decree entered therein.
SECTION 21. Subordination of Rights Against the Borrower, Guarantors and
other Collateral.
All rights that the Pledgor may at any time have against the Companies, any
guarantor or any other collateral for the Secured Obligations (including rights
of subrogation, exoneration, reimbursement and contribution and whether arising
under applicable law or otherwise) in any
14
<PAGE> 15
way arising out of, related to, or connected with, (i) the Pledgor's grant of a
security interest in the Pledged Collateral or its other obligations under the
Transaction Agreements, (ii) any obligation of contribution the Pledgor may
have, or (iii) any sale or other disposition of the Pledged Collateral by the
Holders or the payment or performance by the Pledgor of any obligation referred
to in clause (i) or (ii), are hereby expressly subordinated to the prior
payment, observance and performance in full of the Secured Obligations. The
Pledgor shall not enforce any of the rights, or attempt to obtain payment or
performance of any of the obligations, subordinated pursuant to this Section 21
until the Secured Obligations have been paid, observed and performed in full,
except that such prohibition shall not apply to routine acts, such as the giving
of notices and the filing of continuation statements, necessary to preserve any
such rights. If any amount shall be paid to or recovered by the Pledgor (whether
directly or by way of setoff, recoupment or counterclaim) on account of any
right or obligation subordinated pursuant to this Section 21, such amount shall
be held in trust by the Pledgor for the benefit of the Holders, not commingled
with any of the Pledgor's other funds and forthwith paid over to the Collateral
Agent, in the exact form received, together with any necessary endorsements, to
be applied and credited against, or held as security for, the Secured
Obligations.
SECTION 22. Governing Law; Severability Terms. This Agreement shall be
construed and enforced in accordance with, and the rights of the parties shall
be governed by, the law of the State of New York excluding choice-of-law
principles of the law of such State that would require the application of the
laws of a jurisdiction other than such State. Wherever possible, each provision
of this Agreement shall be interpreted in such manner as to be effective and
valid under applicable law, but if any provision of this Agreement shall be
prohibited by or invalid under applicable law, such provision shall be
ineffective only to the extent of such prohibition or invalidity and without
invalidating the remaining provisions of this Agreement. Unless otherwise
defined herein or in the credit agreement, terms defined in Article 8 or 9 of
the Uniform Commercial Code as in effect in the State of New York are used
herein as therein defined.
SECTION 23. Submission to Jurisdiction; Service of Process. (a) The
Pledgor agrees that any action or proceeding brought by the Holders or the
Collateral Agent in connection with this Agreement may be brought (and any
action or proceeding brought by the Pledgor against the Holders or the
Collateral Agent in connection herewith shall exclusively be brought) in the
courts of the State of New York sitting in the Borough of Manhattan or of the
United States of America for the Southern District of New York and, by execution
and delivery of this Agreement, hereby irrevocably waives any objection,
including, without limitation, any objection to the laying of venue or based on
the grounds of forum non conveniens, which it may now or hereafter have to the
bringing of any such action or proceeding by the Holders or the Collateral Agent
in such non-exclusive jurisdictions.
(b) The Pledgor hereby irrevocably appoints CT Corporation System (the
"Process Agent"), with an office on the date hereof at 1633 Broadway, New York,
NY 10019, United States of America, as its agent to receive on its behalf
service of copies of the summons and complaint and any other process that may be
served in any such action or proceeding. The Pledgor irrevocably consents to the
service of process of any of the aforesaid courts in any such action or
proceeding by the mailing of copies thereof by
15
<PAGE> 16
registered mail, postage prepaid, to it at its address set forth in
Section 15 of this Agreement or to the Process Agent at its address
specified above.
SECTION 24. Section Titles. The Section titles contained in this
Agreement are and shall be without substantive meaning or content of any kind
whatsoever and are not part of this Agreement.
IN WITNESS WHEREOF, the Pledgor has caused this Agreement to be duly
executed and delivered by its duly authorized officer on the date first above
written.
MAIL.COM, INC.
By: /s/ Thomas Murawski
------------------------------------------
Thomas Murawski
Chief Executive Officer
WORLD.COM, INC.
By /s/ Gary Millin
-------------------------------------------
Gary Millin
Chief Executive Officer
THE CLARK ESTATES, INC., as Collateral Agent
on behalf of the Holders
By: /s/ Kevin S. Moore
------------------------------------------
Name: Kevin S. Moore
Title: President
NATIONAL FEDERATION OF INDEPENDENT BUSINESS
EMPLOYEE PENSION TRUST
PUBLIC EMPLOYEE RETIREMENT SYSTEM OF IDAHO
CITY OF MILFORD PENSION & RETIREMENT FUND
CITY OF STAMFORD FIREMEN'S PENSION FUND
THE JENIFER ALTMAN FOUNDATION
ASPHALT GREEN, INC.
DEAN WITTER FOUNDATION
LAZAR FOUNDATION
ROANOKE COLLEGE
A. CAREY ZESIGER
ALEXA ZESIGER CARVER
BUTLER FAMILY LLC
16
<PAGE> 17
DAVID ZESIGER
HBL CHARITABLE UNITRUST
ANDREW HEISKELL
HELEN HUNT
JEANNE L. MORENCY
PSYCHOLOGY ASSOCIATES
PETER LOORAM
MARY C. ANDERSON
MURRAY CAPITAL, LLC
THE MEEHAN INVESTMENT PARTNERSHIP I, L.P.
DOMENIC J. MIZIO
MORGAN TRUST CO.OF THE BAHAMAS LTD. AS
TRUSTEE U/A/D 11/30/93
NICOLA Z. MULLEN
SUSAN URIS HALPERN
THEEUWES FAMILY TRUST, FELIX THEEUWES
TRUSTEE WILLIAM B. LAZAR
WELLS FAMILY LLC
ALBERT L. ZESIGER
BARRIE RAMSAY ZESIGER
DONALD AND DAN-THANH DEVIVO
JOHN J. & CATHERINE H. KAYOLA
WOLFSON INVESTMENT PARTNERS LP
By: ZESIGER CAPITAL GROUP, LLC, as attorney in
fact
By: /s/ Albert Zesiger
---------------------------
Albert Zesiger
Managing Director
FEDERAL PARTNERS, L.P.
By: Ninth Floor Corporation, its general partner
By /s/ Kevin S. Moore
---------------------------
Kevin S. Moore
President
17
