PLEDGE SHARES ESCROW AGREEMENT
Exhibit
10.10
PLEDGE
SHARES ESCROW AGREEMENT
(the
“Agreement”)
dated
March 27, 2007 made by NeomMedia Technologies, Inc., a Delaware corporation
(the
“Pledgor”),
in
favor of CORNELL
CAPITAL PARTNERS, L.P.,
(the
“Buyer”)
in
connection with the Securities Purchase Agreement, of even date herewith (the
"Securities
Purchase Agreement").
RECITALS:
WHEREAS, the
Pledgor has granted to the Buyer a security interest in certain property of
the
Pledgor pursuant to the Security Agreement of even date herewith (the
“Security
Agreement”)
including all of its shares of stock of its subsidiary 12Snap AG (the
“Pledged
Shares”);
WHEREAS, the
parties to this Agreement desire to appoint XXXXX
XXXXXXXX,
ESQ.,
as escrow agent (“Escrow
Agent”)
to
hold in escrow the Pledged Shares pursuant to the terms and conditions of this
Agreement and the Security Agreement. All capitalized terms not otherwise
defined herein shall have the meaning ascribed to them in the Security
Agreement.
NOW,
THEREFORE,
in
consideration of the mutual covenants, agreements, warranties, and
representations herein contained, and for other good and valuable consideration,
the receipt and sufficiency of which is hereby acknowledged, the parties hereto
agree as follows:
TERMS
AND CONDITIONS
Pledge
and Transfer of Pledged Shares.
The
Pledgor hereby grants to the Buyer an irrevocable, first priority security
interest in the Pledged Shares as security for the Obligations as set forth
in
the Security Agreement. Within four (4) business days of the execution of this
Agreement, the Pledgor shall deliver to the Escrow Agent, and the Escrow Agent
shall hold in escrow pursuant to the terms of this Agreement, stock certificates
made out in favor of the Pledgor representing the Pledged Shares, together
with
duly executed stock powers or other appropriate transfer documents with
medallion bank guarantees and executed in blank by each Pledgor (the
“Transfer
Documents”),
and such stock certificates and Transfer Documents shall be held by the Escrow
Agent until the satisfaction in full of all the Obligations (as defined in
the
Security Agreement).
Rights
Relating to Pledged Shares.
Upon the occurrence of an Event of Default (as defined herein), the Buyer shall
be entitled to vote the Pledged Shares, receive dividends and other
distributions thereon, and enjoy all other rights and privileges incident to
the
ownership of the Pledged Shares.
Release
of Pledged Shares from Pledge.
Upon the satisfaction in full of all the Obligations the parties hereto shall
notify the Escrow Agent to such effect in writing. Promptly upon receipt of
such
written notice, the Escrow Agent shall return to the Pledgor the Transfer
Documents and the certificates representing the Pledged Shares (collectively
the
“Pledged
Materials”),
whereupon any and all rights of the Buyer in the Pledged Materials shall be
terminated.
Event
of Default.
An “Event
of Default”
shall be deemed to have occurred under this Agreement upon an Event of Default
under the Security Agreement.
Remedies.
Upon
and anytime after the occurrence of an Event of Default, the Buyer shall have
the right acquire the Pledged Shares in accordance with the following procedure:
(a) the Buyer shall provide written notice of such Event of Default (the
“Default
Notice”)
to the Escrow Agent, with a copy to the Pledgor; (b) in a Default Notice the
Buyer shall specify the number of Pledged Shares to be issued to the Buyer);
and
(c) as soon as practicable after receipt of a Default Notice, the Escrow Agent
shall deliver the specified number of Pledged Shares along with the applicable
Transfer Documents to the Buyer.
Upon
and any time after the occurrence of an Event of Default the Buyer shall have
the right to (i) sell the Pledged Shares and to apply the proceeds of such
sales, net of any selling commissions, to the Obligations and (ii) any and
all
remedies of a secured party with respect to such property as may be available
under the Uniform Commercial Code as in effect in the State of New Jersey.
Each
right, power and remedy of the Buyer provided for in this Agreement or any
other
Transaction Document shall be cumulative and concurrent and shall be in addition
to every other such right, power or remedy. The
exercise or beginning of the exercise by the
Buyer
of any one or more of the rights, powers or remedies provided for in this
Agreement or any
other Transaction Document or
now or hereafter existing at law or in equity or by statute or otherwise shall
not preclude the simultaneous or later exercise by the
Buyer
of all such other rights, powers or remedies, and no failure or delay on the
part of the
Buyer
or any Buyer to exercise any such right, power or remedy shall operate as a
waiver thereof. No notice to or demand on any Pledgor in any case shall entitle
any Pledgor to any other or further notice or demand in similar or other
circumstances or constitute a waiver of any of the rights of
the
Buyer
to any other further action in any circumstances without demand or notice.
The
Buyer
shall have the full power to enforce or to assign or contract is rights under
this Agreement to a third party.
Representations,
Warranties and Covenants.
The
Pledgor represents, warrants and covenants that:
Pledgor
is, and at the time when pledged hereunder will be, the legal, beneficial and
record owner of, and has (and will have) good and valid title to, all Pledged
Shares pledged by it hereunder, subject to no pledge, lien, mortgage,
hypothecation, security interest, charge, option or other encumbrance
whatsoever;
Pledgor
has full power, authority and legal right to pledge all the Pledged Shares
pledged pursuant to this Agreement; and
all
the Pledged Shares have been duly and validly issued, are fully paid and
non-assessable and are subject to no options to purchase or similar
rights.
Each
Pledgor covenants and agrees to take all reasonable steps to defend the Buyer’s
right, title and security interest in and to the Pledged Shares and the proceeds
thereof against the claims and demands of all persons whomsoever (other than
the
Buyer and the Escrow Agent); and the Pledgor covenants and agrees that it will
have like title to
and right to pledge any other property at any time hereafter pledged to
the
Buyer
hereunder and will likewise take all reasonable steps to defend the right
thereto and security interest therein of the
Buyer.
The
Pledgor covenants and agrees to take no action which would violate or be
inconsistent with any of the terms of any Transaction Document, or which would
have the effect of impairing the position or interests of the Buyer under any
Transaction Document.
Concerning
the Escrow Agent.
The
Escrow Agent undertakes to perform only such duties as are expressly set forth
herein and no implied duties or obligations shall be read into this Agreement
against the Escrow Agent.
2
The
Escrow Agent may act in reliance upon any writing or instrument or signature
which it, in good faith, believes to be genuine, may assume the validity and
accuracy of any statement or assertion contained in such a writing or
instrument, and may assume that any person purporting to give any writing,
notice, advice or instructions in connection with the provisions hereof has
been
duly authorized to do so. The Escrow Agent shall not be liable in any manner
for
the sufficiency or correctness as to form, manner, and execution, or validity
of
any instrument deposited in this escrow, nor as to the identity, authority,
or
right of any person executing the same; and its duties hereunder shall be
limited to the safekeeping of such certificates, monies, instruments, or other
document received by it as such escrow holder, and for the disposition of the
same in accordance with the written instruments accepted by it in the
escrow.
The
Buyer and the Pledgor hereby agree, to defend and indemnify the Escrow Agent
and
hold it harmless from any and all claims, liabilities, losses, actions, suits,
or proceedings at law or in equity, or any other expenses, fees, or charges
of
any character or nature which it may incur or with which it may be threatened
by
reason of its acting as Escrow Agent under this Agreement; and in connection
therewith, to indemnify the Escrow Agent against any and all expenses, including
attorneys’ fees and costs of defending any action, suit, or proceeding or
resisting any claim (and any costs incurred by the Escrow Agent pursuant to
Sections 6.4 or 6.5 hereof). The Escrow Agent shall be vested with a lien on
all
property deposited hereunder, for indemnification of attorneys’ fees and court
costs regarding any suit, proceeding or otherwise, or any other expenses, fees,
or charges of any character or nature, which may be incurred by the Escrow
Agent
by reason of disputes arising between the makers of this escrow as to the
correct interpretation of this Agreement and instructions given to the Escrow
Agent hereunder, or otherwise, with the right of the Escrow Agent, regardless
of
the instructions aforesaid, to hold said property until and unless said
additional expenses, fees, and charges shall be fully paid. Any fees and costs
charged by the Escrow Agent for serving hereunder shall be paid by the
Pledgor.
If
any of the parties shall be in disagreement about the interpretation of this
Agreement, or about the rights and obligations, or the propriety of any action
contemplated by the Escrow Agent hereunder, the Escrow Agent may, at its sole
discretion deposit the Pledged Materials with the Clerk of the United States
District Court of New Jersey, sitting in Newark, New Jersey, and, upon notifying
all parties concerned of such action, all liability on the part of the Escrow
Agent shall fully cease and terminate. The Escrow Agent shall be indemnified
by
the Pledgor and the Buyer for all costs, including reasonable attorneys’ fees in
connection with the aforesaid proceeding, and shall be fully protected in
suspending all or a part of its activities under this Agreement until a final
decision or other settlement in the proceeding is
received.
The
Escrow Agent may consult with counsel of its own choice (and the costs of such
counsel shall be paid by the Pledgor and Buyer) and shall have full and complete
authorization and protection for any action taken or suffered by it hereunder
in
good faith and in accordance with the opinion of such counsel. The Escrow Agent
shall not be liable for any mistakes of fact or error of judgment, or for any
actions or omissions of any kind, unless caused by its willful misconduct or
gross negligence.
The
Escrow Agent may resign upon ten (10) days’ written notice to the parties in
this Agreement. If a successor Escrow Agent is not appointed within this ten
(10) day period, the Escrow Agent may petition a court of competent jurisdiction
to name a successor.
Conflict
Waiver.
The Pledgor hereby acknowledges that the Escrow Agent is general counsel to
the
Buyer, a partner in the general partner of the Buyer, and counsel to the Buyer
in connection with the transactions contemplated and referred herein. The
Pledgor agrees that in the event of any dispute arising in connection with
this
Agreement or otherwise in connection with any transaction or agreement
contemplated and referred herein, the Escrow Agent shall be permitted to
continue to represent the Buyer and the Pledgor will not seek to disqualify
such
counsel and waives any objection Pledgor might have with respect to the Escrow
Agent acting as the Escrow Agent pursuant to this Agreement.
3
Notices.
Unless otherwise provided herein, all demands, notices, consents, service of
process, requests and other communications hereunder shall be in writing and
shall be delivered in person or by overnight courier service, or mailed by
certified mail, return receipt requested, addressed:
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If
to the Pledgor, to:
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Neomedia
Technologies, Inc.
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0000
Xxxxxx Xxxxxx, Xxxxx #000
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Xxxx
Xxxxx, XX 00000
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Attention:
Xxxxxxx X. Xxxxxx, President
|
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Telephone: (000)
000-0000
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Facsimile: (000)
000-0000
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With
a copy to:
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Xxxxxxxxxxx
& Xxxxxxxx Xxxxxxx Xxxxx Xxxxx LLP
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000
Xxxxx Xxxxxxxx Xxxxxxxxx - Xxxxx 0000
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Xxxxx,
XX 00000-0000
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Attention: Xxxxxxx
X. Xxxxxx, Esq.
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Telephone: (000)
000-0000
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Facsimile: (000)
000-0000
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If
to the
Buyer:
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Cornell
Capital Partners L.P.
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000
Xxxxxx Xxxxxx, Xxxxx 0000
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Xxxxxx
Xxxx, XX 00000
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Attention:
Xxxx
X. Xxxxxx
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Telephone: (000)
000-0000
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Facsimile:
(000)
000-0000
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With
copy to:
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Cornell
Capital Partners, LP
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000
Xxxxxx Xxxxxx, Xxxxx 0000
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Xxxxxx
Xxxx, XX 00000
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Attention:
Xxxxx
Xxxxxxxx, Esq.
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Telephone: (000)
000-0000
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Facsimile: (000)
000-0000
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Any
such
notice shall be effective (a) when delivered, if delivered by hand delivery
or overnight courier service, or (b) five (5) days after deposit in the
United States mail, as applicable.
Binding
Effect.
All of the covenants and obligations contained herein shall be binding upon
and
shall inure to the benefit of the respective parties, their successors and
assigns.
Governing
Law; Venue; Service of Process.
The validity, interpretation and performance of this Agreement shall be
determined in accordance with the laws of the State of New Jersey applicable
to
contracts made and to be performed wholly within that state except to the extent
that Federal law applies. The parties hereto agree that any disputes, claims,
disagreements, lawsuits, actions or controversies of any type or nature
whatsoever that, directly or indirectly, arise from or relate to this Agreement,
including, without limitation, claims relating to the inducement, construction,
performance or termination of this Agreement, shall be brought in the state
superior courts located in Xxxxxx County, New Jersey or Federal district courts
located in Newark, New Jersey, and the parties hereto agree not to challenge
the
selection of that venue in any such proceeding for any reason, including,
without limitation, on the grounds that such venue is an inconvenient forum.
The
parties hereto specifically agree that service of process may be made, and
such
service of process shall be effective if made, pursuant to Section 8
hereto.
Enforcement
Costs.
If any legal action or other proceeding is brought for the enforcement of this
Agreement, or because of an alleged dispute, breach, default or
misrepresentation in connection with any provisions of this Agreement, the
successful or prevailing party or parties shall be entitled to recover
reasonable attorneys’ fees, court costs and all expenses even if not taxable as
court costs (including, without limitation, all such fees, costs and expenses
incident to appeals), incurred in that action or proceeding, in addition to
any
other relief to which such party or parties may be
entitled.
4
Remedies
Cumulative.
No remedy herein conferred upon any party is intended to be exclusive of any
other remedy, and each and every such remedy shall be cumulative and shall
be in
addition to every other remedy given hereunder or now or hereafter existing
at
law, in equity, by statute, or otherwise. No single or partial exercise by
any
party of any right, power or remedy hereunder shall preclude any other or
further exercise thereof.
Counterparts.
This Agreement may be executed in one or more counterparts, each of which shall
be deemed an original, but all of which together shall constitute the same
instrument.
No
Penalties.
No provision of this Agreement is to be interpreted as a penalty upon any party
to this Agreement.
JURY
TRIAL.
EACH OF THE COLATERAL AGENT AND THE PLEDGOR HEREBY KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVES THE RIGHT WHICH IT MAY HAVE TO A TRIAL BY JURY OF ANY
CLAIM, DEMAND, ACTION OR CAUSE OF ACTION BASED HEREON, OR ARISING OUT OF, UNDER
OR IN ANY WAY CONNECTED WITH THE DEALINGS BETWEEN THE BUYER AND PLEDGOR, THIS
PLEDGE AND ESCROW AGREEMENT OR ANY DOCUMENT EXECUTED IN CONNECTION HEREWITH,
OR
ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN)
OR ACTIONS OF ANY PARTY HERETO OR THERETO IN EACH CASE WHETHER NOW EXISTING
OR
HEREAFTER ARISING, AND WHETHER IN CONTRACT, TORT, EQUITY OR OTHERWISE.
[REMAINDER
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5
IN
WITNESS WHEREOF,
the
Pledgor has caused this Pledge and Escrow Agreement to be executed by its
respective duly authorized officer, as of the date first above
written.
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NEOMEDIA
TECHNOLOGIES,
INC.
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| By: | /s/ Xxxxx X. Dodge | |
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Name:
Xxxxx X. Dodge
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| Title: CFO | ||
6
IN
WITNESS WHEREOF,
the
undersigned acknowledge and agree to the terms and conditions of this Pledge
and
Escrow Agreement as of the date first above written.
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CORNELL
CAPITAL
PARTNERS,
L.P.
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| By: | Yorkville Advisors, LLC | |
| Its: | Investment Manager | |
| By: | /s/ Xxxx Xxxxxx | |
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Name: Xxxx
Xxxxxx
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Title: Portfolio
Manager
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ESCROW
AGENT
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| By: | /s/ Xxxxx Xxxxxxxx | |
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Name: Xxxxx Xxxxxxxx, Esq. |
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7
