EXHIBIT
10.2
STOCK PLEDGE AND ESCROW
AGREEMENT
THIS AGREEMENT is made the 8th day of October,
2009, between Lester Levin Inc., a New York corporation (“
LLI ”), Document Security Systems, Inc., a New
York corporation (“ DSS ”) (hereinafter
collectively referred to as “ Obligees ”)
and Raymond Meyers (hereinafter referred to as “
Pledgor ”), Internet Media Services,
Inc., a Delaware corporation (the
“Company” ), and Manufacturers and
Traders Trust Company (hereinafter referred to as “
Escrow Agent ”).
Recitals
WHEREAS, Pledgor is a controlling stockholder,
President and director of the Company;
WHEREAS, LLI and the Company have entered into
that certain Asset Purchase Agreement of even date herewith (the
“ Asset Purchase Agreement ”) pursuant to
which LLI is selling and transferring certain assets of its
LegalStore.com business to the Company in exchange for the issuance
to LLI’s parent corporation, DSS, 7,500,000 shares of common
stock of the Company;
WHEREAS, pursuant to the covenants in the Asset
Purchase Agreement, following the transaction, the Company is
obligated to take certain measures to advance the business of the
Company;
WHEREAS, Pledgor has agreed to secure the
performance of the Company’s obligations to Obligees pursuant
to such covenants in the Asset Purchase Agreement by executing this
agreement and transferring to and registering in the name of the
Escrow Agent the 9,000,000 shares of stock of the Company held by
the undersigned.
NOW, THEREFORE, in consideration of the premises
and understandings contained herein and for good and valuable
consideration, receipt of which is hereby acknowledged, the parties
agree as follows:
(a) As
collateral security for the performance of those certain covenants
of the Company under the Asset Purchase Agreement set forth in
Section 1(b) below, Pledgor hereby (i) grants to Obligees a
security interest in and (ii) pledges to Obligees and (iii)
transfers as security all of the following instruments and property
(receipt of which is hereby acknowledged by Escrow
Agent):
(i) Nine
million (9,000,000) shares of common stock of Company held by the
Pledgor and all successor stock to said shares, replacement stock
for said shares, substituted stock for said shares or additional
shares of stock of Company issued or transferred as a dividend on
or stock split of or otherwise received because of or in lieu of
the ownership of said shares of common stock of Company during the
term of this agreement, whether the same resulted from merger,
consolidation, reorganization or otherwise (hereinafter sometimes
referred to as “ Shares ”), all to be
registered in the name of the Escrow Agent; and
(ii) Any
and all other instruments or cash or, in kind, dividends or other
property which anyone is or may hereafter become entitled to
receive with respect to replacement of, substitution for, or
succession to the aforesaid Shares.
All of the foregoing property and instruments
shall be individually and collectively hereinafter referred to as
“Collateral.” The Collateral shall be held by the
Escrow Agent hereinafter named in accordance with the terms and
pro-visions contained in this agreement.
Certificates registering the Shares should be
registered in the name of the Escrow Agent.
Pledgor agrees to forthwith deliver to Escrow
Agent any and all Collateral hereafter acquired by Pledgor along
with stock powers duly endorsed in blank with respect to any stock
certificate therefor.
(b) The
following events shall constitute an “ Event of
Default ” under this agreement: (i) The
Company’s failure to comply with the following covenants in
Article VI of the Asset Purchase Agreement: Section 6.2
Board of Directors ; Section 6.3 Working Capital ;
Section 6.4 Registration of Shares ; Section 6.8
Corporate Existence; Reporting Status ; Section 6.9
Certain Negative Covenants (the “
Company’s Covenants ”), which covenants
are incorporated herein by reference; and (ii) a breach of the
Company’s representations and warranties set forth in Section
5 of the Asset Purchase Agreement, which representatio