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Exhibit 10.3
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AMENDED AND RESTATED
PLEDGE AGREEMENT
Dated as of March 7, 2001
among
LENDINGTREE INC.,
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
and
▇▇▇▇ ▇▇▇▇▇
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AMENDED AND RESTATED
PLEDGE AGREEMENT
This AMENDED AND RESTATED PLEDGE AGREEMENT (this "Agreement") is made
as of this 7th day of March, 2001, among ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, a natural person
residing in the State of North Carolina, ▇▇▇▇ ▇▇▇▇▇, a natural person residing
in the State of North Carolina (together with Mr. Ledba, the "Pledgor"), and
LendingTree, Inc., a Delaware corporation (the "Company").
W I T N E S S E T H :
- - - - - - - - - -
WHEREAS, the Pledgor desires that the Company make certain loans in an
aggregate principal amount of $2,400,000 (the "Loans") to ▇▇. ▇▇▇▇▇;
WHEREAS, it is a condition precedent to the Company making such loan to
▇▇. ▇▇▇▇▇ that ▇▇. ▇▇▇▇▇ execute and deliver to the Company a promissory note
dated March 7, 2001, (the promissory note attached hereto as Exhibit A along
with two amended and restated promissory notes dated as of March 7, 2001,
collectively referred to as the "Notes") in favor of the Company as evidence of
▇▇. ▇▇▇▇▇'▇ obligation to repay the Loans;
WHEREAS, Pledgor is a party to a lock-up agreement with ▇▇▇▇▇▇▇ Lynch,
Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated, effective as of February 15, 2000 (the
"Lock-up Agreement"), which, among other things, restricts the transferability
of the shares for 180 days following an initial public offering of the Company's
common stock;
WHEREAS, it is a condition to the Company making such loans to ▇▇.
▇▇▇▇▇ that the Pledgor execute and deliver to the Company this Agreement; and
WHEREAS, the Pledgor wishes to grant pledges, assignments and security
interests in favor of the Company as herein provided;
NOW, THEREFORE, in consideration of the premises contained herein and
for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto agree as follows:
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SECTION 1. Definitions. Terms not otherwise defined herein have, as used herein,
the respective meanings provided for in the Notes. The following additional
terms, as used herein, have the following respective meanings:
"Collateral" has the meaning assigned to such term in Section 3(A).
"Company Stock" means the common stock and preferred stock of the
Company, par value $0.01 per share Company listed on Schedule I hereto.
"Loans" has the meaning assigned to such term in the recitals hereof.
"Pledged Stock" means the Company Stock and any other capital stock
required to be pledged to the Company pursuant to Section 3(B).
"Secured Obligations" means (i) all principal of and interest
(including, without limitation, fees, expenses or otherwise and any interest
which accrues after the commencement of any case, proceeding or other action
relating to the bankruptcy, insolvency or reorganization of the Pledgor) on the
Loans as evidenced by the Notes and (ii) any amendments, restatements, renewals,
extensions or modifications of any of the foregoing.
"Security Interests" means the security interests in the Collateral
granted hereunder securing the Secured Obligations.
"Surplus" has the meaning assigned to such term in Section 9.
Unless otherwise defined herein, or unless the context otherwise
requires, all terms used herein which are defined in the New York Uniform
Commercial Code as in effect on the date hereof shall have the meanings therein
stated.
SECTION 2. Representations and Warranties.
The Pledgor represents and warrants as follows:
(A) Title to Pledged Securities. The Pledgor owns all of the Pledged
Stock, free and clear of any Liens other than the Security Interests. All of the
Pledged Stock has been duly authorized and validly issued, and is fully paid and
non-assessable, and is subject to no options to purchase or similar rights of
any person. The Pledgor is not and will not become a party to or otherwise bound
by any agreement, other than this Agreement and the Lock-up Agreement, which
restricts in
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any manner the rights of any present or future holder of any of the Pledged
Stock with respect thereto.
(B) Validity, Perfection and Priority of Security Interests. Upon the
delivery of the certificates representing the Pledged Stock to the Company in
accordance with Section 4 hereof, the Company will have valid and perfected
security interests in the Collateral subject to no prior lien. No registration,
recordation or filing with any governmental body, agency or official is required
in connection with the execution or delivery of this Agreement or necessary for
the validity or enforceability hereof or for the perfection or enforcement of
the Security Interests. The Pledgor has not performed or will not perform any
acts which might prevent the Company from enforcing any of the terms and
conditions of this Agreement or which would limit the Company in any such
enforcement.
(C) UCC Filing Locations. The primary residence and principal place of
business of Pledgor are located at the following address:
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
and
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
SECTION 3. The Security Interests.
In order to secure the full and punctual payment of the Secured
Obligations in accordance with the terms thereof, and to secure the performance
of all the obligations of the Pledgor hereunder:
(A) The Pledgor hereby assigns and pledges to the Company and grants to
the Company a security interest in the Pledged Stock, and all of his rights and
privileges with respect to the Pledged Stock (whether such rights are fully
vested or may become fully vested in the future), and all income and profits
thereon, and all dividends and other payments and distributions with respect
thereto, and all proceeds of the foregoing, in each case whether now owned or
hereafter existing or in which Pledgor now has or hereafter acquires an interest
(the "Collateral"). Contemporaneously with the execution and delivery hereof,
the Pledgor is delivering certificates representing the Pledged Stock in pledge
hereunder.
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(B) In the event that the (i) Company at any time, in connection with
the Pledged Stock, issues any additional or substitute shares of capital stock
of any class, including, but not limited to, issuing unrestricted shares to
replace restricted shares that have vested or (ii) the Pledgor exercises any or
all of its options, warrants or other rights to acquire capital stock of the
Company, the Pledgor will immediately pledge and deposit with the Company
certificates representing all such shares (including any exercised options) as
additional security for the Secured Obligations. All such shares constitute
Pledged Stock and are subject to all provisions of this Agreement.
(C) The Security Interests are granted as security only and shall not
subject to, or transfer or in any way affect or modify, any obligation or
liability of the Pledgor with respect to any of the Collateral or any
transaction in connection therewith.
SECTION 4. Delivery of Pledged Stock.
All certificates representing Pledged Stock delivered to the Company by
the Pledgor pursuant hereto shall be in suitable form for transfer by delivery,
or shall be accompanied by duly executed instruments of transfer or assignment
in blank, with signatures appropriately guaranteed, and accompanied by any
required transfer tax stamps, all in form and substance satisfactory to the
Company.
SECTION 5. Non-Recourse Obligations.
(A) The Company hereby agrees that, so long as the conditions set forth
in Section 5(B) are satisfied, the Company's sole recourse for satisfaction of
the Secured Obligations shall be to exercise its rights against the Collateral
secured by this Agreement.
(B) Conditions for Non-Recourse Status. (i) ▇▇. ▇▇▇▇▇ (x) is not
terminated for Cause by the Company and (y) does not voluntarily terminate his
employment for other than Good Reason, as those terms are defined in the
Employment Agreement dated as of September 2, 1999, between the Company and ▇▇.
▇▇▇▇▇; and (ii) Pledgor has exhausted all other capital stock of the Company
directly or indirectly held by Pledgor, and all options or other rights to
acquire capital stock of the Company, in satisfaction of the Secured
Obligations.
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SECTION 6. Filing; Further Assurances.
(A) The Pledgor agrees that it will, at its expense and in such manner
and form as the Company may require, execute, deliver, file and record any
financing statement, specific assignment or other paper and take any other
action that may be necessary in order to create, preserve, perfect or validate
any Security Interest or to enable the Company to exercise and enforce its
rights hereunder with respect to any of the Collateral. To the extent permitted
by applicable law, the Pledgor hereby authorizes the Company to execute and
file, in the name of the Pledgor or otherwise, Uniform Commercial Code financing
statements (which may be carbon, photographic, photostatic or other
reproductions of this Agreement or of a financing statement relating to this
Agreement) which the Company in its sole discretion may deem necessary to
further perfect the Security Interests.
(B) The Pledgor agrees that Pledgor will not change (i) Pledgor's name
or (ii) the location of Pledgor's primary residence or principal place of
business unless Pledgor shall have given the Company not less than 30 days'
prior notice thereof.
SECTION 7. Right to Receive Distributions on Collateral.
Prior to the occurrence of any Event of Default, the Pledgor shall be
entitled to receive all cash dividends, if any, on the Pledged Stock. Upon the
occurrence and during the continuance of an Event of Default, the Company shall
be entitled to retain all dividends and other payments and distributions made
upon or with respect to the Collateral and the Pledgor shall take all such
action as the Company may deem necessary or appropriate to give effect to such
right and all such dividends and other payments and distributions which are
received by the Pledgor shall be received in trust for the benefit of the
Company and shall, forthwith upon demand by the Company during the continuance
of an Event of Default, be paid over to the Company as Collateral in the same
form as received (with any necessary endorsement). After all Events of Default
that shall have occurred have been cured, the Company's right to retain
dividends, interest and other payments and distributions under this Section 7
shall cease and the Company shall pay over to the Pledgor any such Collateral
retained by the Company during the continuance of an Event of Default. Any
non-cash dividends and other payments or distributions shall be immediately
pledged to the Company hereunder.
SECTION 8. General Authority.
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The Pledgor hereby irrevocably appoints the Company its true and lawful
attorney, with full power of substitution, in the name of the Pledgor, the
Company, or otherwise, for the sole use and benefit of the Company, but at the
expense of the Pledgor, to the extent permitted by law to exercise, at any time
and from time to time while an Event of Default has occurred and is continuing,
all or any of the following powers with respect to all or any of the Collateral:
(i) to demand, ▇▇▇ for, collect, receive and give acquittance
for any and all monies due or to become due upon or by virtue thereof,
(ii) to settle, compromise, compound, prosecute or defend any
action or proceeding with respect thereto,
(iii) to sell, transfer, assign or otherwise deal in or with
the same or the proceeds or avails thereof, as fully and effectually as
if the Company were the absolute owner thereof, and
(iv) to extend the time of payment of any or all thereof and
to make any allowance and other adjustments with reference thereto;
provided that the Company shall give the Pledgor not less than ten days' prior
written notice of the time and place of any sale or other intended disposition
of any of the Collateral except any Collateral which is perishable or threatens
to decline speedily in value or is of a type customarily sold on a recognized
market. The Company and the Pledgor agree that such notice constitutes
"reasonable notification" within the meaning of Section 9-504(3) of the Uniform
Commercial Code.
SECTION 9. Sale of Pledged Stock.
The Pledgor shall not sell, transfer or gift the Pledged Stock without
the prior written consent (which consent shall not be unreasonably withheld) of
the Company. In the event that the Pledgor sells a portion or all of the Pledged
Stock, the Company will deliver to the buyer the corresponding number of shares
of Pledged Stock against the aggregate amount of proceeds from such sale. In the
event that the aggregate amount of proceeds from such sale exceeds the aggregate
amount of principal and accrued interest (including, without limitation, fees,
expenses or otherwise) then outstanding on the Loans (the "Surplus"), the
Company shall pay the Pledgor the Surplus. If the aggregate amount of proceeds
from such sale are less than the amount of principal and accrued interest
(including, without limitation, fees,
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expenses or otherwise) then outstanding on the Loans, the Pledgor shall not
remain liable for any deficiency. Notwithstanding anything to the contrary in
this Section 9, any sale of the Pledged Stock by the Pledgor must be in
accordance with the provisions and terms of the Lock-up Agreement.
SECTION 10. Remedies upon Event of Default.
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If any Event of Default shall have occurred and be continuing, the
Company may exercise all the rights of a secured party under the Uniform
Commercial Code (whether or not in effect in the jurisdiction where such rights
are exercised) and, in addition, the Company may, without being required to give
any notice, except as herein provided or as may be required by applicable law,
(i) apply the cash, if any, then held by it as Collateral as specified in
Section 13 and (ii) if there shall be no such cash or if such cash shall be
insufficient to pay all the Secured Obligations in full, sell the Collateral or
any part thereof at public or private sale or at any broker's board or on any
securities exchange, for cash, upon credit or for future delivery, and at such
price or prices as the Company may deem satisfactory. The Company may be the
purchaser of any or all of the Collateral so sold at any public sale (or, if the
Collateral is of a type customarily sold in a recognized market or is of a type
which is the subject of widely distributed standard price quotations, at any
private sale). The Company is authorized, in connection with any such sale, if
it deems it advisable so to do, (i) to restrict the prospective bidders on or
purchasers of any of the Pledged Stock to a limited number of sophisticated
investors who will represent and agree that they are purchasing for their own
account for investment and not with a view to the distribution or sale of any of
such Pledged Stock, (ii) to cause to be placed on certificates for any or all of
the Pledged Stock or on any other securities pledged hereunder a legend to the
effect that such security has not been registered under the Securities Act of
1933 and may not be disposed of in violation of the provision of said Act, and
(iii) to impose such other limitations or conditions in connection with any such
sale as the Company deems necessary or advisable in order to comply with said
Act or any other law. The Pledgor covenants and agrees that it will execute and
deliver such documents and take such other action as the Company deems necessary
or advisable in order that any such sale may be made in compliance with law.
Upon any such sale the Company shall have the right to deliver, assign and
transfer to the purchaser thereof the Collateral so sold. Each purchaser at any
such sale shall hold the Collateral so sold absolutely and free from any claim
or right of whatsoever kind, including any equity or right of redemption of the
Pledgor which may be waived, and the Pledgor, to the extent permitted by law,
hereby specifically waives all rights of redemption, stay or appraisal which it
has or may have under any law now existing or hereafter adopted. The notice (if
any) of such sale required by Section 9 shall (1) in case of a public sale,
state the time and place fixed for such sale, (2) in case of sale at a broker's
board or on a securities exchange, state the board or exchange at which such
sale is to be made and the day on which the Collateral, or the portion thereof
so being sold, will first be offered for sale at such board or exchange, and (3)
in the case of a private sale, state the day after which such sale may be
consummated. Any such public sale shall be held at such time or times within
ordinary business hours and at such place or places as the Company may fix in
the notice of such sale. At
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any such sale the Collateral may be sold in one lot as an entirety or in
separate parcels, as the Company may determine. The Company shall not be
obligated to make any such sale pursuant to any such notice. The Company may,
without notice or publication, adjourn any public or private sale or cause the
same to be adjourned from time to time by announcement at the time and place
fixed for the sale, and such sale may be made at any time or place to which the
same may be so adjourned. In case of any sale of all or any part of the
Collateral on credit or for future delivery, the Collateral so sold may be
retained by the Company until the selling price is paid by the purchaser
thereof, but the Company shall not incur any liability in case of the failure of
such purchaser to take up and pay for the Collateral so sold and, in case of any
such failure, such Collateral may again be sold upon like notice. The Company,
instead of exercising the power of sale herein conferred upon it, may proceed by
a suit or suits at law or in equity to foreclose the Security Interests and sell
the Collateral, or any portion thereof, under a judgment or decree of a court or
courts of competent jurisdiction.
SECTION 11. Expenses.
The Pledgor agrees that it will forthwith upon demand pay to the
Company:
(i) the amount of any taxes which the Company may have been
required to pay by reason of the Security Interests or to free any of
the Collateral from any Lien thereon, and
(ii) the amount of any and all out-of-pocket expenses,
including the fees and disbursements of counsel and of any other
experts, which the Company may incur in connection with (w) the
administration or enforcement of this Agreement, including such
expenses as are incurred to preserve the value of the Collateral and
the validity, perfection, rank and value of any Security Interest, (x)
the collection, sale or other disposition of any of the Collateral, (y)
the exercise by the Company of any of the rights conferred upon it
hereunder or (z) any Event of Default.
SECTION 12. Limitation on Duty of Company in Respect of Collateral.
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Beyond the exercise of reasonable care in the custody thereof, the
Company shall have no duty as to any Collateral in its possession or control or
in the possession or control of any agent or bailee or any income thereon or as
to the preservation of rights against prior parties or any other rights
pertaining thereto. The Company shall be deemed to have exercised reasonable
care in the custody and preservation of the Collateral in its possession if the
Collateral is accorded treatment substantially equal to that which it accords
its own property, and shall not be liable or responsible for any loss or damage
to any of the Collateral, or for any diminution in the value thereof, by reason
of the act or omission of any agent or bailee selected by the Company in good
faith.
SECTION 13. Application of Proceeds.
Upon the occurrence and during the continuance of an Event of Default,
the proceeds of any sale of, or other realization upon, all or any part of the
Collateral and any cash held shall be applied by the Company in the following
order of priorities:
first, to payment of the expenses of such sale or other
realization, including reasonable compensation to agents and counsel
for the Company, and all expenses, liabilities and advances incurred or
made by the Company in connection therewith, and any other unreimbursed
expenses for which the Company is to be reimbursed pursuant to Section
12 of each Note or Section 11 hereof;
second, to the ratable payment of unpaid principal of the
Secured Obligations;
third, to the ratable payment of accrued but unpaid interest
on the Secured Obligations in accordance with the provisions of the
Notes;
fourth, to the ratable payment of all other Secured
Obligations, until all Secured Obligations shall have been paid in
full; and
finally, to payment to the Pledgor or its successors or
assigns, or as a court of competent jurisdiction may direct, of any
surplus then remaining from such proceeds.
SECTION 14. Appointment of Agents.
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At any time or times, in order to comply with any legal requirement in
any jurisdiction, the Company may appoint a bank or trust company or one or more
other persons, to act as agent or agents on behalf of the Company with such
power and authority as may be necessary for the effectual operation of the
provisions hereof and may be specified in the instrument of appointment (which
may, in the discretion of the Company, include provisions for the protection of
such agent or agents similar to the provisions of Section 14).
SECTION 15. Termination of Security Interests; Release of Collateral.
Upon the repayment in full of all Secured Obligations, the Security
Interests shall terminate and all rights to the Collateral shall revert to the
Pledgor. At any time and from time to time prior to such termination of the
Security Interests, the Company may release any of the Collateral in accordance
with its discretion. Upon any such termination of the Security Interests or
release of Collateral, the Company will, at the expense of the Pledgor, execute
and deliver to the Pledgor such documents as the Pledgor shall reasonably
request to evidence the termination of the Security Interests or the release of
such Collateral, as the case may be.
SECTION 16. Notices.
(A) All notices, communications and distributions hereunder shall be
given in accordance with Section 9 of each Note.
(B) The Company agrees to use its reasonable efforts to provide written
notice to the Pledgor at least ten (10) business days before any amounts become
due under this Agreement or either Note. No failure by the Company to provide
such notice shall excuse or waive the performance by the Pledgor of the
Pledgor's obligations under this Agreement or the Notes.
SECTION 17. Waivers, Non-Exclusive Remedies.
No failure on the part of the Company to exercise, and no delay in
exercising and no course of dealing with respect to, any right under this
Agreement shall operate as a waiver thereof; nor shall any single or partial
exercise by the Company of any right under the Notes or this Agreement preclude
any other or further exercise thereof or the exercise of any other right. The
rights in this Agreement and the Notes are cumulative and are not exclusive of
any other remedies provided by law.
SECTION 18. Successors and Assigns.
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This Agreement is for the benefit of the Company and its successors and
assigns, and in the event of an assignment of all or any of the Secured
Obligations, the rights hereunder, to the extent applicable to the indebtedness
so assigned, may be transferred with such indebtedness. This Agreement cannot be
assigned by the Pledgor without the written consent of the Company and its
successors and assigns.
SECTION 19. Changes in Writing.
Neither this Agreement nor any provision hereof may be changed, waived,
discharged or terminated orally, but only in writing signed by the Pledgor and
the Company.
SECTION 20. GOVERNING LAW.
THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY
THE LAWS OF THE STATE OF NEW YORK (WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF
LAW), EXCEPT AS OTHERWISE REQUIRED BY MANDATORY PROVISIONS OF LAW AND EXCEPT TO
THE EXTENT THAT REMEDIES PROVIDED BY THE LAWS OF ANY JURISDICTION OTHER THAN NEW
YORK ARE GOVERNED BY THE LAWS OF SUCH JURISDICTION.
SECTION 21. WAIVER OF TRIAL BY JURY.
TO THE EXTENT PERMITTED BY APPLICABLE LAW, THE PLEDGOR HEREBY
IRREVOCABLY WAIVES ALL RIGHT OF TRIAL BY JURY IN ANY ACTION, PROCEEDING OR
COUNTERCLAIM ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT OR ANY MATTER
ARISING HEREUNDER.
SECTION 22. Severability.
If any provision hereof is invalid or unenforceable in any
jurisdiction, then, to the fullest extent permitted by law, (i) the other
provisions hereof shall remain in full force and effect in such jurisdiction and
shall be liberally construed in favor of the Company in order to carry out the
intentions of the parties hereto as nearly as may be possible; and (ii) the
invalidity or unenforceability of any provision hereof in any jurisdiction shall
not affect the validity or enforceability of such provision in any other
jurisdiction.
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SECTION 23. Counterparts.
This Agreement may be signed in any number of counterparts, each of
which shall be an original, with the same effect as if the signatures thereto
and hereto were upon the same instrument.
[Remainder of page intentionally left blank]
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IN WITNESS WHEREOF, the parties hereto have caused this Pledge
Agreement to be duly executed and delivered as of the day and year first above
written.
By _______________________
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
By _______________________
Name: ▇▇▇▇ ▇▇▇▇▇
LENDINGTREE, INC.
By _______________________
Name:
Title:
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SCHEDULE I TO AMENDED AND RESTATED
PLEDGE AGREEMENT
Attached to and forming a part of that certain Amended and Restated Pledge
Agreement, dated as of March 7, 2001 made by ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ to LendingTree,
Inc.
Pledged Shares
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Class of Stock Certificate Number of Shares
Pledgor Issuer or Interest No(s). Par Value or Interest
------- ------ -------------- ----------- --------- ----------------
▇▇▇▇▇▇▇ ▇. LendingTree, Common $0.01 168,133
Lebda Inc.
▇▇▇▇▇▇▇ ▇. LendingTree, Preferred $0.01 200,000
Lebda Inc.
[TO BE COMPLETED]
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EXHIBIT A TO PLEDGE AGREEMENT
Promissory Note
See Attached
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