Exhibit 10.4
PLEDGE AGREEMENT
(WebMediaBrands Inc.)
This PLEDGE
AGREEMENT (as the same may from time to time be amended, restated
or otherwise modified, this “Agreement”) is made as of
the 29 th day of May, 2009, by
WEBMEDIABRANDS INC., a Delaware corporation
(“Borrower”), in favor of ALAN M. MECKLER, a New York
resident (“Lender”).
1. Recitals .
Lender has made a
loan (the “Loan”) to the Borrower and Mediabistro.com,
Inc. as evidenced by a Promissory Note of even date herewith (the
“Note”) from Borrower and Mediabistro.com, Inc. to
Lender in the original principal amount of Seven Million One
Hundred Ninety Seven Thousand One Hundred Forty Three and
21
/
100
Dollars
($7,197,143.21).
Borrower deems it to be in its
direct pecuniary and business interests that Borrower obtain the
Loan from the Lender.
Borrower understands that the Lender
is willing to make the Loan to Borrower only upon certain terms and
conditions, one of which is that Borrower grant to Lender, a
security interest in and an assignment of the Collateral, as
hereinafter defined, and this Agreement is being executed and
delivered in consideration of the Loan and for other valuable
consideration.
2. Definitions . Except as
specifically defined herein, (a) capitalized terms used herein
that are defined in the Security Agreement shall have their
respective meanings ascribed to them in the Security Agreement, and
(b) unless otherwise defined in the Security Agreement, terms
that are defined in the U.C.C. are used herein as so defined. As
used in this Agreement, the following terms shall have the
following meanings:
“Collateral” means,
collectively, (a) the Pledged Securities and each addition, if
any, thereto and each substitution, if any, therefor, in whole or
in part, (b) the certificates representing the Pledged
Securities, and (c) the dividends, cash, instruments and other
property distributed in respect of and other proceeds of any of the
foregoing.
“Event of Default” means
an event or condition that constitutes an Event of Default, as
defined in Section 7.1 hereof.
“Obligations” means,
collectively, (a) all indebtedness and other obligations now
owing or hereafter incurred by Borrower under the Note, and the
other Loan Documents, and includes the principal of and interest on
the Loan; (b) each renewal, extension, consolidation or
refinancing of the Note, in whole or in part; (c) the
Accommodation Fee and other all fees and other amounts payable to
Lender pursuant to the Note or any other Loan Document; and
(d) all Related Expenses.
“Pledged Securities”
means, subject to Section 5 hereof, all of the shares of stock
or other equity interest of each subsidiary of Borrower owned by
Borrower, as listed on the attached Exhibit A , and all
additional shares of stock or other equity interest of each
subsidiary of Borrower owned by Borrower from time to time or
acquired by Borrower in any manner.
“Security Agreement”
means the Security Agreement of even date herewith from Borrower to
Lender and granting the Lender a security interest in the
Borrower’s existing or future personal property and other
assets described therein.
3. Security Interest .
Borrower hereby grants to Lender a security interest in and an
assignment of the Collateral as security for the Obligations. For
the better protection of Lender hereunder, Borrower has executed
appropriate transfer powers, in the form of the attached Exhibit
B , with respect to the Pledged Securities and, concurrently
herewith, is depositing the Pledged Securities and the aforesaid
transfer powers with Lender. Borrower authorizes Lender, at any
time after the occurrence of an Event of Default, to transfer the
Pledged Securities into the name of Lender or Lender’s
nominee, but Lender shall be under no duty to do so.
Notwithstanding any provision or inference herein or elsewhere to
the contrary, Lender shall have no right to vote the Pledged
Securities at any time unless and until there shall have occurred
an Event of Default.
4. Representations and
Warranties . Borrower hereby represents and warrants to Lender
as follows:
4.1. Borrower is the legal record
and beneficial owner of, and has good and marketable title to, the
Pledged Securities, and the Pledged Securities are not subject to
any pledge, lien, mortgage, hypothecation, security interest,
charge, option, warrant or other encumbrance whatsoever, nor to any
agreement purporting to grant to any third party a security
interest in the property or assets of Borrower that would include
such Pledged Securities, except the security interest created by
this Agreement or otherwise securing only Lender and as otherwise
specifically permitted by the Note.
4.2. All of the Pledged Securities
have been duly authorized and validly issued, and are fully paid
and non-assessable (except as such rights may arise under mandatory
provisions of applicable statutory law that may not be waived or
otherwise agreed and not as a result of any rights contained in any
organizational document).
4.3. Borrower has full power,
authority and legal right to pledge all of the Pledged Securities
pursuant to the terms of this Agreement.
4.4. No consent, license, permit,
approval or authorization, filing or declaration with any
Governmental Authority, and no consent of any other Person, is
required to be obtained by Borrower in connection with the pledge
of the Pledged Securities hereunder, that has not been obtained or
made, and is not in full force and effect.
4.5. The pledge, assignment and
delivery of the Pledged Securities hereunder creates a valid first
lien on, and a first perfected security interest in, the Pledged
Securities and the
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proceeds thereof. Other than pursuant to this
Agreement or as specifically permitted by the Note, Borrower has
not granted any other liens on, or security interests in, the
Pledged Securities.
4.6. The Pledged Securities
constitute one hundred percent (100%) of the outstanding
capital stock owned by Borrower of each other Subsidiary of
Borrower.
4.7. Borrower fully anticipates that
the Obligations will be repaid without the necessity of selling the
Pledged Securities.
4.8. Borrower has received
consideration that is the reasonable equivalent value of the
obligations and liabilities that Borrower has incurred to Lender.
Borrower is not insolvent, as defined in any applicable state or
federal statute, nor will Borrower be rendered insolvent by the
execution and delivery of this Agreement to Lender. Borrower is not
engaged or about to engage in any business or transaction for which
the assets retained by Borrower are or will be an unreasonably
small amount of capital, taking into consideration the obligations
to Lender incurred hereunder. Borrower does not intend to incur
debts beyond Borrower’s ability to pay them as they
mature.
4.9. If the Pledged Securities are
“restricted securities” within the meaning of
Rule 144, or any amendment thereof, promulgated under the
Securities Act of 1933, as amended (the “Securities
Act”), as determined by counsel for Borrower, Borrower
further represents and warrants that, except as disclosed in
writing to Lender, (a) Borrower has been the beneficial owner
of the Pledged Securities since July 17, 2007, (b) the
full purchase price or other consideration for the Pledged
Securities has been paid, and (c) Borrower does not have a
short position in or any put or other option to dispose of any
securities of the same class as the Pledged Securities or any other
securities convertible into securities of such class.
5. Foreign Subsidiaries .
Notwithstanding anything in this Agreement to the contrary,
Borrower shall not be required to pledge more than sixty-five
percent (65%) of the total combined voting power of all
classes of equity interests or stock of any Foreign
Subsidiary.
6. Additional Covenants of
Borrower .
6.1. Borrower covenants and agrees
to defend the right, title and security interest of Lender in and
to the Pledged Securities and the proceeds thereof, and to maintain
and preserve the lien and security interest provided for by this
Agreement against the claim and demands of all third parties, so
long as this Agreement shall remain in effect.
6.2. Borrower covenants and agrees
not to sell, assign, transfer, exchange or otherwise dispose of, or
grant any option with respect to, or create, incur or permit to
exist any pledge, lien, mortgage, hypothecation, security interest,
charge, option or any other encumbrance with respect to any of the
Pledged Securities, or any interest therein, or any proceeds
thereof, except for the lien and security interest provided for by
this Agreement and any security agreement securing only
Lender.
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6.3. Borrower covenants and agrees
(a) to cooperate, in good faith, with Lender and to do or
cause to be done all such other acts as may be necessary to enforce
the rights of Lender under this Agreement, (b) not to take any
action, or to fail to take any action t
