PLEDGE, ESCROW AND SECURITY AGREEMENT
AGREEMENT made August 11, 2000, between Global iTechnology, Inc., a
Delaware corporation, (the "Pledgor"), and _____________, at __________________,
______________________, at _____________________________ and ________________ at
_________________________________ (the "Pledgees").
WHEREAS, as of the date of this Agreement, Pledgees have collectively
loaned Pledgor $705,000 of which $330,000 was loaned on the date hereof
(together the "Loan"); and
WHEREAS, the Loan is evidenced by three promissory Notes aggregating
$705,000 principal amount; and
WHEREAS, in order to induce the Pledgees to make the Loan, the Pledgor
has agreed to pledge certain stock to the Pledgees.
It is therefore agreed:
1. Pledge.
In consideration of the Pledgees making the Loan, the Pledgor
hereby grants a security interest to the Pledgees in instruments of the
following description, duly endorsed in blank or accompanied by duly
endorsed stock powers, separate form, and herewith delivered to the
Escrow Agent:
Issuer No. of Shares Certificate No.
------ ------------- ---------------
Certificate Express, Inc. 1,875,000
The Pledgor, simultaneously with the execution of this
Agreement, will deposit the pledged shares with Sommer & Schneider LLP,
Pledgor's counsel, who shall serve as Escrow Agent. The Escrow Agent
shall hold the pledged shares on the books of the Company in the name
of the Pledgor. The Escrow Agent shall hold the pledged shares as
security for the repayment of the Loan and shall not encumber or
dispose of the shares except in accordance with the provisions of
paragraph 8 of this agreement.
2. Dividends. During the term of this pledge, all dividends and other
amounts received by the Pledgor as a result of his record ownership of the
pledged shares shall be applied by him to the payment of the principal and
interest on the Loan.
3. Voting Rights. During the term of this pledge, and so long as the
Pledgor is not in default in the performance of any of the terms of this
agreement or in the payment of the principal or interest of the Loan, the
Pledgor shall have the right to vote the pledged shares on all corporate
questions.
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4. Representations. The Pledgor warrants and represents that there are
no restrictions upon the transfer of any of the pledged shares, other than may
appear on the face of the certificates, and that the Pledgor has the right to
transfer such shares free of any encumbrances and without obtaining the consents
of the other shareholders.
5. Adjustments. In the event that, during the term of this pledge, any
share dividend, reclassification, readjustment, or other change is declared or
made in the capital structure of the Company which has issued the pledged
shares, all new, substituted, and additional shares, or other securities, issued
by reason of any such change shall be held by the Pledgees, pro rata, under the
terms of this agreement in the same manner as the shares originally pledged
hereunder.
6. Warrants and Rights. In the event that during the term of this
pledge, subscription warrants or any other rights or options shall be issued in
connection with the pledged shares, such warrants, rights, and options shall be
immediately assigned by the Pledgor to the Pledgees to be held under the terms
of this agreement, and if exercised by the Pledgor all new shares or other
securities so acquired by the Pledgor shall be immediately assigned to the
Pledgees, pro rata to be held under the terms of this agreement in the same
manner as the shares originally pledged hereunder.
7. Payment of Loan. Upon payment at maturity of the principal and
interest of the Loan, less amounts theretofore received and applied by the
Pledgees in reduction thereof, the Pledgees shall return to the Pledgor all the
pledged shares.
8. Default. In the event that the Pledgor defaults in the performance
of any of the terms of this agreement, the Pledgees shall have the rights and
remedies provided in the Uniform Commercial Code in force in the State of New
York at the date of this agreement and to direct the Escrow Agent to deliver the
pledged shares to the Pledgees.
9. Right in Collateral; Agent. The Pledgees shall have rights in the
pledged shares, pro rata, in accordance with their respective principal balances
outstanding and hereby irrevocably appoint Eli Oxenhorn, as their agent and
attorney in fact to seize upon the pledged shares and take such action as it
deems prudent in the event of a default.
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IN WITNESS WHEREOF the parties have executed this agreement on the day
first above written.
PLEDGOR
GLOBAL iTECHNOLOGY, INC.
By:_____________________________
Lee Montellaro, CFO
PLEDGEES
