EXHIBIT 10(w)
PLEDGE AGREEMENT
This PLEDGE AGREEMENT (the "Agreement") is entered into this ____ day of
August, 1997 by and between LOOPER, REED, XXXX & XxXXXX INCORPORATED, a Texas
corporation (the "Xxxxxx Xxxx"), and THERMAL MEDICAL IMAGING, INC., a Nevada
corporation ("TMI").
W I T N E S S E T H:
WHEREAS, Computerized Thermal Imaging, Inc. ("CTI") has an outstanding
account balance ("CTI Balance") with Xxxxxx Xxxx representing unpaid fees,
expenses and accrued interest; and
WHEREAS, TMI has agreed to provide collateral to Xxxxxx Xxxx in order to
secure the CTI Balance; and
WHEREAS, TMI and Xxxxxx Xxxx have entered into that certain engagement
agreement dated June 26, 1996 (the "Engagement Agreement") wherein Xxxxxx
Xxxx was hired to provide various legal services to TMI under the terms and
conditions of the Engagement Agreement; and
WHEREAS, TMI has an outstanding account balance ("TMI Balance") under
the terms of the Engagement Agreement representing unpaid fees, expenses and
accrued interest; and
WHEREAS, TMI has requested that Xxxxxx Xxxx continue to provide ongoing
legal services to TMI; and
WHEREAS, TMI owns or claims rights in intellectual property relating to
certain thermal imaging technology; and
WHEREAS, TMI intends to pledge such property as security for the payment
of all present and future indebtedness evidenced in the CTI Balance and TMI
Balance.
NOW, THEREFORE, for and in consideration of the mutual premises and
covenants herein contained, the parties agree as follows:
1. SCOPE. The purpose of the security interest granted hereby is to
secure the payment of any and all indebtedness and liabilities of CTI and TMI
to Xxxxxx Xxxx arising out of or relating to the Engagement Letter or the
performance of legal services for CTI or TMI or as evidenced in the CTI
Balance or TMI Balance, whether direct or indirect, absolute or contingent,
due or to become due, and whether now existing or hereafter arising and
howsoever evidenced or acquired, and any and all modifications, renewals,
rearrangements, and extensions thereof (all of which are hereinafter
sometimes referred to collectively as the "Obligations" and individually as
an "Obligation").
2. SECURITY INTEREST. TMI hereby grants, transfers, assigns and
conveys to Xxxxxx Xxxx a sole first priority security interest in all of the
right, title and interest of TMI in and to the following types (or items) of
property now owned or hereafter acquired by TMI, and all ascensions and
substitutions therefor, and all products and proceeds thereof:
(a) INTELLECTUAL PROPERTY. All intellectual property, including,
without limitation, inventions, discoveries, improvements, creations, trade
secrets, know-how, patents, applications for patents, FDA pre-market
approvals (#3023197 and FDA #K897191 register #21CFR884.2980(a)), licensing
rights, research data, copyrights, trademarks and other proprietary
information which is owned by, claimed by or accruing to TMI.
(b) COLLATERAL. The term "Collateral" shall mean and include all
of the foregoing property, as well as, any accessions, additions and
attachments thereto and the proceeds and products thereof, including without
limitation, all cash, general intangibles, accounts, inventory, equipment,
fixtures, farm products, notes, drafts, acceptances, securities, instruments,
chattel paper and insurance proceeds payable because of loss or damage,
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certificates of deposit, or other property, benefits or rights arising
therefrom, arising from or relating to any of the property described herein
or other proceeds of any sale or other disposition of such property.
(c) REQUIRED DOCUMENTATION. TMI agrees to execute such stock
powers, endorse such instruments, or execute such additional collateral
agreements or assignments, security agreements, pledge agreements, financing
agreements or other documents as may be requested by Xxxxxx Xxxx in order to
effectively xxxxx Xxxxxx Xxxx the security interest in the Collateral. TMI
shall execute, contemporaneously with the execution of this Agreement, the
following documents: (i) Financing statements, attached as EXHIBIT A, and
(iii) a Shareholder resolution, attached as EXHIBIT B, confirming
authorization for the transaction.
3. GENERAL COVENANTS
(a) The security interest granted hereby shall in no way be
affected by any indulgence or indulgences, extension or extensions, change or
changes in the form, evidence, maturity, rate of interest or otherwise of any
of the Obligations secured hereby, nor by want of presentment, notice,
protest, suit or indulgence upon any of such Obligations, nor shall any
release of, or failure to perfect the security interest or lien in, any
security for or of any of the parties liable for the payment of any of the
Obligations secured hereby in any manner affect or impair TMI's obligations
hereunder; the same shall continue in full force and effect in accordance
with the terms hereof until all of the Obligations have been fully paid;
(b) Any and all securities and other properties heretofore, now or
hereafter delivered to Xxxxxx Xxxx to secure payment and/or performance of
the Obligations shall be held and construed to be a part of the Collateral
hereunder to the same extent as fully described herein;
(c) Xxxxxx Xxxx shall have the power to endorse and is hereby
appointed TMI's agent and attorney in fact for the purpose of endorsing, in
the name of TMI, any instrument or documents constituting Collateral or which
may be received in payment of or on account of the Collateral, and TMI shall
furnish to Xxxxxx Xxxx such stock powers and other instruments as may be
required by Xxxxxx Xxxx to assure the transferability of the Collateral when
and as often as may be reasonably requested by Xxxxxx Xxxx;
(d) TMI agrees that in the event of a default Xxxxxx Xxxx may, in
its sole discretion, surrender for payment, and obtain payment of, any
portion of the Collateral, whether such have matured or the exercise of
Xxxxxx Xxxx'x rights results in loss of interest or principal, and even
though there may be a substantial interest penalty for early withdrawal, and
in connection therewith, cause payment to be made directly to Xxxxxx Xxxx;
4. WARRANTIES AND COVENANTS OF TMI
TMI hereby represents, warrants, covenants and agrees that:
(a) TMI is the owner of the Collateral free of any adverse claim,
lien, security interest, encumbrance or restriction on transfer of any type;
(b) TMI will not sell, offer to sell, assign, pledge, hypothecate,
encumber or otherwise transfer the Collateral or any interest therein without
the prior written consent of Xxxxxx Xxxx;
(c) TMI will keep the Collateral free from any and all adverse
liens, security interests and encumbrances;
(d) TMI will defend the Collateral against all claims and demands
of all persons at any time claiming the same or any interest therein other
than Xxxxxx Xxxx;
(e) TMI agrees to pay Xxxxxx Xxxx all expenses and expenditures,
including reasonable attorneys' fees and legal expenses, incurred or paid by
Xxxxxx Xxxx in exercising or protecting its interests, rights and remedies
under this Agreement. TMI additionally agrees to pay interest on such
amounts on the same terms as set forth in the Engagement Letter;
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(f) All Securities and certificates representing the Securities
are genuine, duly and validly authorized, issued, and outstanding, fully
paid, and nonassessable, and all the Collateral is hereby duly and validly
pledged and hypothecated to Xxxxxx Xxxx in accordance with applicable law;
(g) The Collateral is not subject to any interest, option, or
right of any third person, and is in compliance with applicable law
concerning form, content, manner of preparation and execution, and TMI
granting interests in the Collateral acquired and hold the Collateral in
compliance with all applicable laws and regulations;
(h) TMI agrees to notify Xxxxxx Xxxx of any change in the location or
status of the Collateral;
(i) This Agreement is legal, valid, and binding, and enforceable
against TMI and the Collateral in accordance with its terms.
5. EVENTS OF DEFAULT
Default under this Pledge Agreement shall occur upon the happening of
any of the following events or conditions ("Defaults" or "Events of Default"):
(a) Failure by CTI to make payments to Xxxxxx Xxxx based on the
following schedule:
(i) Full payment of the CTI Balance as of August 30, 1997
(estimated to be in excess of $260,000.00, plus accrued
interest) by October 15, 1997; or
(ii) After August 30, 1997, failure to pay any invoices presented
by Xxxxxx Xxxx to CTI, pursuant to the Engagement Agreement,
which evidence the Account Balance and are not paid within
sixty (60) days of receipt.
(b) Failure by TMI to pay any invoices presented by Xxxxxx Xxxx to
TMI, pursuant to the Engagement Agreement, which evidence the TMI Balance and
are not paid within sixty (60) days of receipt.
(c) Any deterioration or impairment of the Collateral or any part
thereof or any decline or depreciation in the market price thereof (whether
actual or reasonably anticipated) which, in the reasonable judgment of Xxxxxx
Xxxx, causes the Collateral to become unsatisfactory as to value or character
and which is not replaced by other suitable collateral within ten (10) days
after TMI's receipt of written notice from Xxxxxx Xxxx of such deterioration
or impairment;
(d) The prosecution of any material lawsuit, arbitration,
injunctive order, attachment, execution, garnishment or other process against
TMI or any of the Collateral in connection with any material liability, tax
lien, debt, judgment, assessment or obligation of TMI that is not dismissed
within thirty (30) days from the date of such filing;
(e) Death, dissolution, termination of existence, insolvency or
business failure of TMI, or any endorser, guarantor or surety of any of the
Obligations, or the commission of an act of bankruptcy by, or the appointment
of a receiver or other legal representative for any part of the property of,
assignment for the benefit of creditors by, or the commencement of any
proceedings under any bankruptcy or insolvency law by or against TMI, or any
endorser, guarantor or surety for any of the Obligations;
(f) Default in the performance of any other covenant or agreement
of TMI to Xxxxxx Xxxx and such default continues unremedied beyond the
expiration of any applicable grace period which may be expressly allowed,
whether under this Agreement or otherwise;
(g) The occurrence of any event which under the terms of any
promissory note, indenture, loan agreement, security agreement or similar
instrument permits the acceleration of maturity of any indebtedness of TMI to
Xxxxxx Xxxx; or the receipt by Xxxxxx Xxxx of notice that another person has
or expects to acquire a security interest in the Collateral or any part
thereof.
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6. REMEDIES
In the event of a Default under this Agreement, or any modification,
renewal, extension, or rearrangement thereof, and at any time thereafter, at
the option of Xxxxxx Xxxx, any or all of the Obligations shall become
immediately due and payable without presentment, demand, notice of intention
to accelerate, notice of acceleration, notice of non-payment, protest, notice
of dishonor, or any other notice whatsoever to TMI or any person obligated
thereon, and Xxxxxx Xxxx shall have and may exercise with reference to the
Collateral and Obligations any and all of the rights and remedies of a
secured party under the Uniform Commercial Code as then in effect in the
State of Texas, and as otherwise granted or under any other applicable law or
under any other agreement executed by TMI (all of which rights and remedies
shall be cumulative), including, without limitation, the right and power to
sell, at public or private sale or sales, or otherwise dispose of or utilize
the Collateral and any part or parts thereof in any manner authorized or
permitted under this Agreement or under the Uniform Commercial Code after
default, and to apply the proceeds thereof toward payment of any costs and
expenses and reasonable attorneys' fees and legal expenses thereby incurred
by Xxxxxx Xxxx and toward payment of the Obligations, except as otherwise
provided herein, in such order or manner as Xxxxxx Xxxx may elect. To the
extent permitted by law, TMI expressly waives any notice of sale or other
disposition of the Collateral and any other rights or remedies of TMI or
formalities prescribed by law relative to sale or disposition of the
Collateral or exercise of any other right or remedy of Xxxxxx Xxxx existing
after default hereunder, and to the extent any such notice is required and
cannot be waived, TMI agrees that if such notice is mailed, postage prepaid,
to TMI at the address shown hereinbelow at least five (5) days before the
time of the sale or disposition or transmitted via confirmed telefax to TMI
at least five (5) days before the time of sale or disposition, such notice
shall be deemed reasonable and shall fully satisfy any requirement for giving
of said notice.
Notwithstanding any provision hereof to the contrary, Xxxxxx Xxxx is
hereby authorized by TMI, but not obligated, to sell all or any part of the
Collateral at one or more private sales, restricting the prospective bidders
or purchasers of the Stock to persons who will represent and agree that they
are purchasing the Stock for their own account for investment and not with a
view to distribution or resale of any of the Stock or in any manner which
will require the Stock or any part thereof, to be registered in accordance
with the Securities Act of 1933, as amended, or the rules and regulations
promulgated thereunder, or any other law or regulation.
TMI hereby agrees to cooperate fully with Xxxxxx Xxxx in order to permit
Xxxxxx Xxxx to sell, at foreclosure or other private sale, the Collateral
pledged hereunder. Specifically, TMI agrees to fully comply with the
securities laws of the United States and of the State of Texas and to take
such action as may be necessary to permit Xxxxxx Xxxx to sell or otherwise
transfer the securities pledged hereunder in compliance with such laws.
7. APPLICATION OF PROCEEDS
The proceeds of sale of Collateral sold pursuant to the terms hereof,
shall be applied by Xxxxxx Xxxx as follows:
FIRST: To payment of the costs and expenses of such sale, including the
out-of-pocket costs and expenses of Xxxxxx Xxxx and the reasonable fees and
out-of-pocket costs and expenses of counsel employed in connection therewith,
and to the payment of all advances made by Xxxxxx Xxxx for the account of TMI
and the payment of all costs and expenses incurred by Xxxxxx Xxxx in
connection with the administration and enforcement of this Agreement, to the
extent that such advances, costs, and expenses shall not have been reimbursed
to Xxxxxx Xxxx;
SECOND: To the payment in full of Obligations; and
THIRD: The balance, if any, of such proceeds shall be paid pro rata to
TMI, its successors and assigns, or as a court of competent jurisdiction may
direct.
No one of TMI shall be subrogated to any rights of Xxxxxx Xxxx until the
Obligations are paid in full.
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8. MISCELLANEOUS
Xxxxxx Xxxx, may at its option, demand, xxx for, collect or make any
compromise or settlement it deems desirable with reference to the Collateral.
Xxxxxx Xxxx shall not be obligated to take any steps necessary to preserve
any rights in the Collateral against prior parties, which TMI hereby agrees
to do.
TMI hereby authorizes Xxxxxx Xxxx to apply all or any part of the
Collateral to the payment of any or all of the indebtedness secured hereby in
such manner and such order as Xxxxxx Xxxx in its reasonable discretion may
elect.
No delay or omission on the part of Xxxxxx Xxxx in exercising any rights
hereunder shall operate as a waiver of any such right or any other right. A
waiver on any one or more occasions shall not be construed as a bar to or
waiver of any right or remedy on any future occasion.
It is the intention of the parties hereto to comply with applicable
usury laws; accordingly, it is agreed that notwithstanding any provision to
the contrary in this Agreement, or in any of the documents evidencing the
Obligations or otherwise relating thereto, no such provision shall require
the payment or permit the collection of interest in excess of the maximum
permitted by such laws. If any excess of interest in such respect is provided
for, or shall be adjudicated to be so provided for, in this Agreement, or in
any of the documents evidencing the Obligations or otherwise relating
thereto, then in such event (a) neither TMI, any guarantors, nor their
respective heirs, executors, administrators, legal representatives,
successors or assigns or any other party liable for the payment hereof, shall
be obligated to pay the amount of such interest to the extent that it is in
excess of the maximum amount permitted by such laws, (b) any such excess
which may have been collected shall be, at the option of Xxxxxx Xxxx, either
applied as a credit against the then unpaid principal amount thereof or
refunded to the party paying such excess, and (c) the effective rate of
interest shall be automatically subject to reduction to the maximum lawful
rate allowed to be lawfully contracted for by TMI under applicable usury laws
as now or hereafter construed by the courts having jurisdiction.
All rights of Xxxxxx Xxxx hereunder shall inure to the benefit of its
successors and assigns; and all obligations of TMI shall bind its respective
heirs, executors, administrators, successors or permitted assigns. The
rights and remedies of Xxxxxx Xxxx hereunder are cumulative, and the exercise
of any one or more of the remedies provided herein shall not be construed as
a waiver of any of the other remedies of Xxxxxx Xxxx.
In no event shall TMI be deemed to have any right to a release of any of
the liens or security interests covering the Collateral until the Obligations
have been paid in full.
This Agreement and the security interests herein granted are in addition
to, and not in substitution, novation or discharge of, any and all prior or
contemporaneous collateral agreements, security agreements and security
interests in favor of Xxxxxx Xxxx or assigned to Xxxxxx Xxxx by others. All
rights, powers and remedies of Xxxxxx Xxxx in all such collateral agreements
or security agreements are cumulative, but in the event of actual conflict in
terms and conditions, the terms and conditions of the latest agreement shall
govern and control.
Any provision found to be invalid under the laws of the State of Texas,
or any other State having jurisdiction or other applicable law, shall be
invalid only with respect to the offending provision. All words used herein
shall be construed of such gender or number as the circumstances require. The
law of the State of Texas and the United States of America shall apply to
this Agreement and its construction and interpretation.
TMI hereby acknowledges that it has been given a reasonable opportunity
to seek to advice of independent counsel to advise TMI on this matter, and
that Xxxxxx Xxxx has recommended that TMI seek such advice.
TMI hereby waives (a) notice of acceptance hereof (which acceptance is
conclusively presumed by delivery to Xxxxxx Xxxx); (b) notice of and/or any
right to grace, demand, presentment, and protest with respect to the Obligations
or to any instrument, agreement or document evidencing or creating same; (c)
notice of nonpayment or other default under the Obligations or intention to
accelerate or actual acceleration of the Obligations; (d) notice of and/or any
right to consent or object to (i) the assignment of any interest in the
Obligations, (ii) the creation, advancement, accrual, renewal, increase,
extension, or rearrangement of the Obligations, or (iii) the amendment and/or
modification of any of the instruments, agreements or documents executed in
connection with the Obligations; (e) filing
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of suit or diligence by Xxxxxx Xxxx in collection or enforcement of the
Obligations; (f) any other notice regarding the Obligations; and (g) all
rights of redemption in and to the Collateral in the event any of the
Collateral is sold at public or private sale after any Default hereunder.
TMI hereby agrees that Xxxxxx Xxxx may at any time, and from time to
time, at Xxxxxx Xxxx'x discretion and with or without notice or consideration
to or consent from any party: (a) allow substitution or withdrawal of any
collateral or other security for the Obligations; (b) sell, exchange,
release, subordinate its lien on, surrender, release upon or otherwise deal
with in any manner and in any order any property at any time pledged or
mortgaged to secure or securing the Obligations or any liabilities incurred
directly or indirectly hereunder or any offset against any of said
liabilities; (c) release any party liable on the Obligations including TMI or
any other guarantor; (d) extend, renew, or rearrange all or any part of the
Obligations at any time and from time to time, whether or not for a term or
terms in excess of the original term thereof; (e) modify or amend any of the
instruments, agreements, or documents executed in connection with the
Obligations; or (f) exercise or refrain from exercising any rights against
TMI or others, or otherwise act or refrain from acting. Any of such actions
may be taken without impairing or diminishing the Obligations of TMI
hereunder.
This Agreement is intended for and shall inure to the benefit of Xxxxxx
Xxxx and each and every person who shall from time to time be or become the
holder or owner of all or any part of the Obligations, and each and every
reference hereto to "Xxxxxx Xxxx" shall include and refer to each and every
successor or assignee of Xxxxxx Xxxx at any time holding or owning any part
of or interest in any part of the Obligations. This Agreement shall be
transferable and negotiable with the same force and effect, and to the same
extent, that the Obligations are transferable and negotiable, it being
understood and stipulated that upon assignment or transfer by Xxxxxx Xxxx of
any of the Obligations, the legal holder or owner of said Obligations (or a
part thereof or interest therein thus transferred or assigned) shall (except
as otherwise stipulated by Xxxxxx Xxxx in its assignment) have and may
exercise all of the rights granted to Xxxxxx Xxxx under this Agreement to the
extent of that part of or interest in the Obligations thus assigned or
transferred. TMI expressly waives notice of transfer or assignment of the
Obligations, or any part thereof, or of the rights of Xxxxxx Xxxx hereunder.
This Agreement may be executed in one or more counterparts, with each
counterpart being deemed an original, and all of which together shall
constitute one and the same document.
THIS AGREEMENT, AND ALL DOCUMENTS AND INSTRUMENTS CONTEMPLATED THEREIN
REPRESENT THE FINAL AGREEMENT BETWEEN TMI AND XXXXXX XXXX AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES.
EXECUTED as of the day and year first written above.
THERMAL MEDICAL IMAGING, INC.
Address:
0000 Xxxxx Xxxxxxxxx Xxxx
Xxxxx 000
Xxxxxxxxxx Xxxxx, Xxxxxxxx 00000
By: /s/ Xxxxxxx X. Xxxx
-------------------------------------
Xxxxxxx X. Xxxx, President
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LOOPER, REED, XXXX & McGRAW
INCORPORATED
Address:
Nine Xxxxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000 By: /s/ Xxxxxx X. Xxxxxx
------------------------------------
Xxxxxx X. Xxxxxx
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EXHIBIT "A"
FINANCING STATEMENTS
EXHIBIT "B"
WRITTEN CONSENT OF SHAREHOLDER
OF THERMAL MEDICAL IMAGING, INC.
August ___, 1997
The undersigned, Computerized Thermal Imaging, Inc., a Nevada
corporation ("CTI"), as shareholder and record owner of 30,450,000 shares of
common stock, $.001 per share, in Thermal Medical Imaging, Inc., a Nevada
corporation (the "Corporation"), does hereby approve and consent to the
adoption of the following resolutions which, pursuant to the rights granted
by N.R.S. 78.320 or a similar successor provision, shall have the same force
and effect as if adopted at a formal meeting of the shareholders of the
Corporation.
RESOLVED, that Xxxxxxx X. Xxxx, President of Thermal Medical Imaging,
Inc., is hereby authorized and instructed to execute the Pledge
Agreement, in substantially the same form attached hereto as EXHIBIT
"A", with Looper, Reed, Xxxx & McGraw Incorporated ("Xxxxxx Xxxx")
securing all present and future indebtedness relating to the
performance of legal services by Xxxxxx Xxxx for Computerized Thermal
Imaging, Inc. and Thermal Medical Imaging, Inc.; and
RESOLVED FURTHER, that the proper officers of the Corporation be and
hereby are, authorized, in the name and on behalf of this Corporation,
and under its corporate seal or otherwise, to execute and deliver any
and all agreements, certificates, instruments and documents and to do
and perform, or cause to be done and performed, all such acts and
things as may be necessary or appropriate, as they deem advisable, to
carry out the intent and accomplish the purposes of the foregoing
resolution and the transaction contemplated thereby.
IN WITNESS WHEREOF the undersigned has executed this Consent of Shareholder
of Thermal Medical Imaging, Inc. as of the date first written above.
COMPUTERIZED THERMAL IMAGING, INC.,
a Nevada corporation
By:
---------------------------------------------
Xxxxxxx X. Xxxxxx, Chief Operating Officer
