FORM OF
PLEDGE AGREEMENT
This PLEDGE AGREEMENT (this "Agreement") is dated as of July
6, 1997 and entered into by and between ACACIA RESEARCH
CORPORATION, a California corporation ("Pledgor"), and __________
_________, an individual ("Secured Party").
PRELIMINARY STATEMENTS
A. Pledgor is a party to that certain Common Stock
Purchase Agreement with Secured Party dated as of July 6, 1997 (the
"Purchase Agreement"), pursuant to which Pledgor received
1,312,500 shares of Soundview Technologies Incorporated common
stock in exchange for Pledgor's agreement to pay Secured Party $700,000
in cash and 200,000 shares of Acacia Research Corporation common
stock (the "Acacia Shares").
B. As of the date hereof, Pledgor has paid $250,000 of
the $700,000 cash payment to Secured Party and agreed to issue the
Acacia Shares. Pledgor has executed a non-recourse promissory
note in the principal amount of $450,000 (the "Note") in order to
satisfy its remaining payment obligations for the 1,312,500
shares of Soundview Technologies Incorporated common stock
originally purchased.
C. This Agreement is intended to provide Secured Party with
security for the payment of the Note.
NOW, THEREFORE, in consideration of the premises and in
order to induce Secured Party to accept the Note and for other
good and valuable consideration, the receipt and adequacy of
which are hereby acknowledged, Pledgor hereby agrees with Secured
Party as follows:
SECTION 1 Pledge of Security. Pledgor hereby pledges and
assigns to Secured Party, and hereby grants to Secured Party a
security interest in, all of Pledgor's right, title and interest
in and to:
(a) 421,875 shares of Soundview Technologies
Incorporated common stock (the "Pledged Shares");
(b) Subject to the provisions of Section 5(a) and
Section 5(b), all cash, securities, dividends and
other property at any time and from time to
time received, receivable or otherwise distributed
in respect of or in exchange for any or all of the
Pledged Shares (the Pledged Shares and the pledged
property identified in this subsection (b) are
collectively referred to hereinafter as the
"Pledged Collateral"); and
(c) The Pledged Collateral will be reduced and released
to Pledgor with any principal payment of this Note,
in whole or in part, on a pro rata basis.
SECTION 2 Security for Obligations. This Agreement secures,
and the Pledged Collateral is collateral security for, the prompt
payment or performance in full when due, whether at stated
maturity, prepayment, acceleration or otherwise, of all
obligations and liabilities of Pledgor arising out of or in
connection with the Note and all extensions or renewals thereof,
whether for principal or interest, and all obligations of Pledgor
now or hereafter existing under this Agreement, including without
limitation obligations under Section 12 hereof (all such
obligations of Pledgor being the "Secured Obligations").
SECTION 3 Covenants as to the Pledged Collateral. So long
as any of the Secured Obligations shall remain outstanding,
Pledgor shall not, unless Secured Party shall otherwise consent
in writing, sell, assign, exchange or otherwise dispose of any of
the Pledged Collateral or any interest therein or create or
suffer to exist any lien, security interest or other charge or
encumbrance upon or with respect to any of the Pledged
Collateral, except for the pledge hereunder and the security
interest created hereby; provided, however, that Pledgor shall be
entitled to transfer the Pledged Shares so long as (a) such
transfer is permitted by the terms of the Pledge Agreement, (b)
such transfer is subject to the lien of and the other terms and
conditions of this Pledge Agreement, (c) any such assignee
becomes a party to this Pledge Agreement and agrees to be bound
by the terms hereof and thereof, (d)Secured Party is given
possession of any new certificate representing such Pledged
Shares and executed transfer power evidencing the transfer of
such Pledged Shares to such assignee, and (e) any such assignee
shall take such further actions and execute such further
documents as shall be necessary to perfect or evidence a security
interest of Secured Party in the Pledged Collateral.
SECTION 4 Further Assurances. Pledgor agrees that from time
to time, Pledgor will execute and deliver all further instruments
and documents, and take all further action that Secured Party may
reasonably request, in order to perfect and protect any security
interest granted or purported to be granted hereby or to enable
Secured Party to exercise and enforce its rights and remedies
hereunder with respect to any Pledged Collateral.
SECTION 5 Voting Rights; Distributions; Etc.
(a) So long as no Event of Default shall have
occurred and be continuing:
(i) Pledgor shall be entitled to exercise any
and all voting and other consensual rights and powers
relating or pertaining to the Pledged Collateral or any
part thereof for any purpose not inconsistent with the
terms of this Agreement; and
(ii) Pledgor shall be entitled to recognize
all incidents of ownership in respect of the Pledged
Shares; and
(iii) any and all liquidating distributions
made on or in respect of the Pledged Collateral,
whether resulting from a subdivision, combination or
reclassification of the outstanding interests of any
issuer thereof or received in exchange for such Pledged
Collateral or any part thereof or as a result of any
merger, consolidation, acquisition or other exchange of
assets to which any such issuer may be a party or
otherwise, and any and all cash and other property
received in payment of the principal of or in
redemption of or in exchange for any Pledged Collateral
(either at maturity, upon call for redemption or
otherwise), shall be and become part of the Pledged
Collateral and, if received by the Pledgor, shall be
held in trust for the benefit of the Secured Party and
shall forthwith be delivered to the Secured Party or
its designated agent (accompanied by property
instruments of assignment and/or stock and/or bond
powers executed by such in accordance with the
Secured Party's instructions) to be held subject to the
terms of this Pledge Agreement.
(b) Upon the occurrence and during the
continuance of an Event of Default, upon written notice from
Secured Party to Pledgor, all rights of Pledgor to exercise the
voting and other consensual rights which it would otherwise be
entitled to exercise pursuant to Section 5(a)(i) shall cease, and
all such rights (so long as an Event of Default is continuing)
shall thereupon become vested in Secured Party who shall
thereupon have the sole right to exercise such voting and other
consensual rights. For the avoidance of doubt, the parties
acknowledge that if, as a result of an Event of Default, Secured
Party is entitled to exercise its remedies as provided hereunder
with respect to the Pledged Shares, such remedies shall include
the right to receive all profits with respect to the Pledged
Shares that have accrued from the date of this Agreement through
the date of any such Event of Default that remain undistributed
as of such date.
SECTION 6 Secured Party Appointed Attorney-in-Fact. Pledgor
hereby irrevocably appoints Secured Party as Pledgor's attorney-
in-fact, with full authority in the place and stead of Pledgor
and in the name of Pledgor or otherwise, from time to time in
Secured Party's discretion during any period in which an Event of
Default is continuing, to take any action and to execute any
instrument which Secured Party deems reasonably necessary or
advisable to accomplish the purpose of this Agreement which
appointment is, irrevocable and coupled with an interest.
SECTION 7 Secured Party May Perform. If Pledgor fails to
perform any agreement contained herein, Secured Party may itself
perform, or cause performance of, such agreement or obligation,
and the reasonable expenses of Secured Party incurred in
connection therewith shall be payable by Pledgor.
SECTION 8 Standard of Care. Secured Party shall exercise
reasonable care in the custody of any of the Pledged Collateral
in its possession or control and shall be deemed to have
exercised such reasonable care if such Pledged Collateral is
accorded treatment substantially equal to that which Secured
Party accords its own property or if Secured Party takes such
action with respect to the Pledged Collateral as Pledgor shall
reasonably request in writing (which action Secured Party shall
endeavor to take if it determines, in its sole discretion, that
such action will not adversely affect the value as collateral of
the Pledged Collateral and such request is received by Secured
Party in time), but no failure to comply with any such request,
nor any omission to do any such act requested by the undersigned,
shall be deemed a failure to exercise reasonable care, nor shall
any failure of Secured Party to take necessary steps to preserve
rights against any parties with respect to any of the Pledged
Collateral in its possession or control be deemed a failure to
exercise reasonable care.
SECTION 9 Events of Default. The occurrence of any of the
following events shall constitute an "Event of Default":
(a) Failure of Pledgor to pay any principal or
interest under the Note when due, whether at stated
maturity, prepayment, acceleration or otherwise; or
(b) Failure of Pledgor to perform or observe any
material term, covenant or agreement contained in this
Pledge Agreement or the Note and such failure is not cured
within 60 days after written notice thereof from Secured
Party.
SECTION 10 Remedies. If any Event of Default shall have
occurred and be continuing, following the expiration of any
applicable cure period, the Pledgor shall forfeit its Pledged
Collateral in consideration of the extinguishment of the
Pledgor's debt to Secured Party. Upon such forfeiture and except as
otherwise specifically provided herein, the Note shall be fully
discharged, and Pledgor shall have no further obligation or
liability to Secured Party or otherwise in respect of the Note or
this Pledge Agreement.
SECTION 11 Application of Proceeds. Except as expressly
provided elsewhere in this Agreement, all proceeds received by
Secured Party in respect of any sale of, collection from, or
other realization upon all or any part of the Pledged Collateral
may, in the discretion of Secured Party, be held by Secured Party
as Pledged Collateral for, and/or then, or at any time
thereafter, applied in full or in part by Secured Party against,
the Secured Obligations in the following order of priority:
FIRST: To the payment of all of the Secured Obligations;
SECOND: To the payment of all reasonable costs and expenses
of such sale, collection or other realization and all amounts for
which Secured Party is entitled to indemnification hereunder, and
to the payment of all reasonable costs and expenses paid or
incurred by Secured Party in connection with the exercise of any
right or remedy hereunder, all in accordance with Section 12; and
THIRD: To the payment to or upon the order of Pledgor, or
to whosoever may be lawfully entitled to receive the same or as
a court of competent jurisdiction may direct, of any surplus then
remaining from such proceeds.
SECTION 12 Indemnity and Expenses. Notwithstanding anything
in the Note or this Pledge Agreement to the contrary (including
the provisions of Section 14 hereof), Pledgor agrees to reimburse
the Secured Party, on demand, for all costs and expenses incurred
by the Secured Party in enforcing the Note or this Pledge
Agreement (including the reasonable fees and expenses of its
agents and counsel), to the extent such costs and expenses result
from the breach of any warranty or covenant hereunder by the
Pledgor. Pledgor agrees to indemnify and hold harmless the
Secured Party from and against any and all liability incurred by
the Secured Party in good faith hereunder (as a result of such
breach or misrepresentation) other than any liability arising as
a result of the Secured Party's negligence, recklessness or
willful misconduct.
SECTION 13 Continuing Security Interest. This Agreement
shall create a continuing security interest in the Pledged
Collateral and shall (a)remain in full force and effect until the
payment in full of all Secured Obligations, (b)be binding upon
Pledgor, its successors and assigns, and (c)inure, together with
the rights and remedies of Secured Party hereunder, to the
benefit of Secured Party and its successors, transferees and
assigns. Upon the payment in full of all Secured Obligations,
the security interest granted hereby shall terminate and all
rights to the Pledged Collateral shall revert to Pledgor. Upon
any such termination Secured Party will, at Pledgor's expense,
execute and deliver to Pledgor such documents as Pledgor shall
reasonably request to evidence such termination and Pledgor shall
be entitled to the return, upon its request and at its expense,
against receipt and without recourse to Secured Party, of such of
the Pledged Collateral as shall not have been sold or otherwise
applied pursuant to the terms hereof.
SECTION 14 No Recourse. Notwithstanding anything to the
contrary in this Agreement (except Section 12), no recourse shall
be had, whether by levy or execution, or under any law, or by the
enforcement of any assessment or penalty or otherwise, for the
payment of any of the Secured Obligations, against Pledgor
individually or personally, or any successor, assign or affiliate
of Pledgor, or any of the assets of the aforesaid persons, it
being expressly understood that the sole remedies available to
Secured Party pursuant to this Agreement with respect to the
Secured Obligations shall be against the Pledged Collateral.
Except as aforesaid, in an Event of Default, the Secured Party
shall look for payment solely to the Pledged Collateral and will
not make any claim or institute any action or proceeding against
the Pledgor (or its successors or assigns of affiliates) for
payment of the Secured Obligations (or for any deficiency
remaining after application of the Pledged Collateral). Nothing
contained herein, however, shall be construed to release or
impair the lien upon the Pledged Collateral, or preclude the
application of the Pledged Collateral to the payment of the
Secured Obligations in accordance with the terms of this Pledge
Agreement.
SECTION 15 Amendments; Etc. No amendment, modification,
termination or waiver of any provision of this Agreement, and no
consent to any departure by Pledgor therefrom, shall in any event
be effective unless the same shall be in writing and signed by
Secured Party and, in the case of any such amendment or
modification, by Pledgor. Any such waiver or consent shall be
effective only in the specific instance and for the specific
purpose for which it was given.
SECTION 16 Notices. Any notice or other communication herein
required or permitted to be given shall be in writing and may be
personally served, telexed or sent by telecopy or United States
mail or courier service and shall be deemed to have been given
when delivered in person or by courier service, upon receipt of
telecopy or telex, or three Business Days after depositing it in
the United States mail with postage prepaid and properly
addressed. For the purposes hereof, the address of each party
hereto shall be as set forth below or, as to either party, such
other address as shall be designated by such party in a written
notice delivered to the other party hereto:
If to Pledgor:
Xx. Xxxx X. Xxxx
Acacia Research Corporation
00 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxx 00000
If to Secured Party:
_____________________________
_____________________________
_____________________________
_____________________________
SECTION 17 Failure or Indulgence Not Waiver; Remedies
Cumulative. No failure or delay on the part of Secured Party in
the exercise of any power, right or privilege hereunder shall
impair such power, right or privilege or be construed to be a
waiver of any default or acquiescence therein, nor shall any
single or partial exercise of any such power, right or privilege
preclude any other or further exercise thereof or of any other
power, right or privilege. All rights and remedies existing
under this Agreement are cumulative to, and not exclusive of, any
rights or remedies otherwise available.
SECTION 18 Severability. In case any provision in or
obligation under this Agreement shall be invalid, illegal or
unenforceable in any jurisdiction, the validity, legality and
enforceability of the remaining provisions or obligations, or of
such provision or obligation in any other jurisdiction, shall not
in any way be affected or impaired thereby.
SECTION 19 Headings. Section and subsection headings in this
Agreement are included herein for convenience of reference only
and shall not constitute a part of this Agreement for any other
purpose or be given any substantive effect.
SECTION 20 Governing Law; Terms. THIS AGREEMENT AND THE
RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED
BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE
INTERNAL LAWS OF THE STATE OF CALIFORNIA, WITHOUT REGARD TO
CONFLICTS OF LAWS PRINCIPLES, EXCEPT TO THE EXTENT THAT THE
UNIFORM COMMERCIAL CODE OF THE STATE OF CALIFORNIA PROVIDES THAT
THE VALIDITY OR PERFECTION OF THE SECURITY INTEREST HEREUNDER, OR
REMEDIES HEREUNDER, IN RESPECT OF ANY PARTICULAR PLEDGED
COLLATERAL ARE GOVERNED BY THE LAWS OF A JURISDICTION OTHER THAN
THE STATE OF CALIFORNIA. Unless otherwise defined herein or in
the Note, terms used in Articles 8 and 9 of such Code are used
herein as therein defined.
SECTION 21 Counterparts. This Agreement may be executed in
one or more counterparts and by different parties hereto in
separate counterparts, each of which when so executed and
delivered shall be deemed an original, but all such counterparts
together shall constitute but one and the same instrument;
signature pages may be detached from multiple separate
counterparts and attached to a single counterpart so that all
signature pages are physically attached to the same document.
IN WITNESS WHEREOF, Pledgor and Secured Party have caused
this Agreement to be duly executed and delivered by their
respective officers thereunto duly authorized as of the date
first written above.
ACACIA RESEARCH CORPORATION, as Pledgor
By: Xxxx X. Xxxx
Its: President and Chief Executive
Officer
______________, as Secured Party
By: ______________
