Fill and Sign the Exchange Agreement between Form

PLEDGE AND EXCHANGE AGREEMENT December 22, 1999 Thomson Kernaghan & Co. Limited 365 Bay Street, Tenth Floor Toronto, Ontario M5H 2V2, Canada Reference: Newagecities.com Ladies and gentlemen: Newagecities.com (the "Company") is offering eight point six-six (8.66) units (the "Units") in a private placement. Each Unit consists of one 8% Convertible Promissory Note (each a "Note" and collectively the "Notes") in the principal amount of $120,150 due April 30, 2000, which is convertible into 95,000 shares of the Company's common stock ("Common Stock"), and which is secured by the pledge of 650,000 shares of Common Stock, all as set forth in the term sheet delivered to you on December 15, 1999, and the transaction documents dated December 22, 1999, which include a Subscription Agreement, the Notes, a Registration Rights Agreement, and Warrants (the "Transaction Documents"). In order to induce Thomson Kernaghan & Co. Limited ("Thomson Kernaghan") to purchase six and 2/3 (6.66) Units, which will be evidenced by the Company's 8% Convertible Secured Promissory Note (the "Thomson Kernaghan Note")in the principal amount of $801,000 (which includes the purchase price of the Units and Thomson Kernaghan's agents fee) and due on April 30, 2000, and in consideration of your doing so, we, the undersigned hereby jointly and severally represent, warrant and agree with you as follows: 1. We are the registered and beneficial owners of 650,000 shares of Common Stock (the "Pledged Shares"). The Pledged Shares have been duly and validly issued, are fully paid and non-assessable. We have good and marketable title to the Pledged Shares, free and clear of any liens or claims, with full power and authority to sell, assign, transfer and deliver the same (subject to the restrictions set forth in paragraph 2 below). 2. The Shares are restricted securities. On April 6, 2000, (a) one year shall have elapsed from the date on which each of us acquired and paid the consideration given for the Shares, (b) our holding period for the Shares set forth in SEC Rule 144(d) shall have expired, and (c) the Shares shall be eligible for resale pursuant to SEC Rule 144, provided that there is then current public information available with respect to the company as required by SEC Rule 144(c). Thomson Kernaghan & Co. Limited December 3, 1999 Page 2 Reference: Newagecities.com 3. We hereby pledge the Shares to Thomson Kernaghan, and grant Thomson Kernaghan a security interest in the Shares, all pursuant to the Uniform Commercial Code as in effect in Florida (the "Code"), as collateral for the prompt and full performance of the Company's obligations under the Transaction Documents (the "Obligations")including without limitation, the prompt and full payment of the Thomson Kernaghan Note when due. If the Company shall for any reason default in its performance or observance of any of the Obligations, then Thomson Kernaghan shall have and may exercise all of the remedies of a pledgee and secured party under the Code or as otherwise provided by applicable law. These remedies are in addition to any and all remedies provided in the Transaction Documents. Thomson Kernaghan's remedies shall be cumulative, and the exercise of one shall not preclude the exercise of any other. 4. The pledge of the Pledged Shares by each of us is a bona fide pledge within the meaning of SEC Rule 144(d)(iv), and in the event of a default in the obligation secured by the pledge, the Pledged Shares shall be deemed to have been acquired by Thomson Kernaghan when they were acquired by each of us respectively 5. Until the Thomson Kernaghan Note has been paid or converted in full, and until the Company has fully performed and discharged all of the Obligations, each of us agrees not to sell, assign or transfer any shares of the Company's Common Stock without Thomson Kernaghan's prior written consent. 6. If, for any reason, (a) on April 30, 2000, a registration statement filed under the Securities Act of 1933, as amended (a "Registration Statement"), shall not be in effect with respect to the Common Stock into which the Notes are convertible and the Common Stock underlying the Warrants, or (b) on or after April 30, 2000, the Company refuses or fails to deliver Common Stock pursuant to an effective Registration Statement to Thomson Kernaghan upon conversion of any of the Notes or exercise of any Warrant, then, in any such event, upon the demand of Thomson Kernaghan, the undersigned shall promptly deliver to Thomson Kernaghan the number of Shares equal to the number of shares of Common Stock into which the Notes are convertible, and the number of shares of Common Stock underlying the Warrants, in exchange for the Notes and the Warrants or such interest therein as may be represented by the aggregate number of the Shares, all as Thomson Kernaghan shall specify. 7. The undersigned hereby irrevocably appoint First Level Capital, Inc., (the "Custodian"), whose address is 5301 North Federal Highway, Suite 120, Boca Raton, Florida 33487, as custodian of the Shares for the benefit of Thomson Kernaghan, and hereby agree that delivery of the Shares to the Custodian shall be valid and effective delivery for the account of Thomas Kernaghan for the purposes of perfecting the security interest and rights of Thomson Kernaghan under this agreement. 8. The undersigned have delivered the Shares to the Custodian, and hereby irrevocably instruct the Custodian to hold the Shares for the benefit of Thomson Kernaghan. Upon execution of this agreement, the undersigned agree to execute blank stock powers with respect to the Shares, with their signatures Medallion guarantied, and to deliver the stock powers to the Custodian. The undersigned hereby irrevocably instruct the Custodian to hold and deliver the stock powers together with the certificates for the Shares to which they relate. 9. The undersigned hereby further irrevocably instruct the Custodian that at any time on or after April 30, 2000, upon the receipt of a written statement from Thomson Kernaghan that the Company has defaulted its performance or observance of the Obligations, the Custodian shall deliver to Thomson Kernaghan the number of Shares specified in the statement, together with the executed stock powers related thereto, in exchange for any Note or Notes, and any Warrants, or any interest in any of the foregoing, tendered by Thomson Kernaghan with the statement. 10. This agreement shall terminate when the Company shall have fulfilled all of its Obligations, and a Registration Statement with respect to the Common Stock underlying the Notes and the Warrants shall continuously have been in effect for at least 90 trading days. Thomson Kernaghan & Co. Limited December 3, 1999 Page 3 Reference: Newagecities.com 11. This agreement shall be governed by and construed in accordance with the laws of the state of Florida. The parties hereby consent to the jurisdiction and venue of the courts of Ontario, Canada, to hear and determine any action to enforce or construe this agreement. The prevailing party in any such action shall be entitled to recover reasonable attorney's fees. Very truly yours, ------------------------------------ ------------------------------------ Signature Signature ------------------------------------ ------------------------------------ Name Name ------------------------------------ ------------------------------------ Address Address ------------------------------------ ------------------------------------ City, State, Zip Code City, State, Zip Code ------------------------------------ ------------------------------------ Number of Shares Number of Shares Thomson Kernaghan & Co. Limited December 3, 1999 Page 4 Reference: Newagecities.com The undersigned, First Level Capital, Inc., hereby accepts the appointment as Custodian of the Shares pursuant to this agreement, and hereby agrees to be bound as a party hereto and to perform all of its duties hereunder. First Level Capital, Inc. By _________________________________ Name _______________________________ Title ______________________________ Date signed ________________________