Exhibit 10.4
PLEDGE AND SECURITY AGREEMENT
This Pledge and Security Agreement ("Agreement") is entered into as of
May 27, 1998 by and between Telepad Corporation, a Delaware corporation
("Pledgor"), and Xxxxxxxxx XxXxxxx ("Secured Party").
RECITALS
A. Pursuant to a Share Purchase Agreement dated as of the date hereof
(the "Purchase Agreement"), by and among Pledgor, Secured Party, Xxxx X.
Xxxxxxxxxxx ("Xxxxxxxxxxx") and L&E Mobile Computer Mounts, Inc., a Pennsylvania
corporation ("L&E"), Pledgor purchased on the date hereof from Secured Party 100
shares of common stock, without par value, of L&E (the "Shares"), which
represents approximately 50.5% of L&E's outstanding capital stock which consists
of a total of 198 shares of such common stock. At the Closing, pursuant to the
Purchase Agreement, Pledgor, among other things, (i) paid a specified amount of
cash and issued and delivered 450,000 Telepad Common Shares and 475,000 Telepad
Preferred Shares (together, the "Telepad Shares") to Secured Party; (ii) issued
and delivered a Note to L&E; (iii) agreed to pay on a date to be determined
after the Closing, as additional consideration for the Shares, 50% of an amount
determined pursuant to Sections 2.03 and 2.04 of the Purchase Agreement and
defined therein as "Additional Consideration"; (iv) granted Secured Party the
option, pursuant to Section 8.06 of the Purchase Agreement, to require Pledgor
to repurchase from Secured Party a specified amount of the Telepad Shares; and
(v) agreed to invest up to $666,700 in L&E.
B. As contemplated by the Purchase Agreement, Pledgor desires to secure
Pledgor's obligations (i) to pay principal, interest and other amounts payable
under the Note; (ii) to pay to Secured Party the Additional Consideration under
Sections 2.03 and 2.04 of the Purchase Agreement; (iii) to pay to Secured Party
the repurchase price of the Telepad Shares upon exercise by Secured Party of its
option under Section 8.06 of the Purchase Agreement; and (iv) to invest up to
$666,700 in L&E under Section 8.03 of the Purchase Agreement, (collectively, the
"Secured Obligations") by granting to Secured Party a security interest in the
Shares ("Pledged Shares") and all dividends and other distributions and rights
associated therewith, and all proceeds of the foregoing property (collectively,
including the Pledged Shares and foregoing distributions and proceeds, the
"Collateral").
C. All capitalized terms used but not defined herein shall have the
meaning ascribed to such terms in the Purchase Agreement.
NOW, THEREFORE, for valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto, intending to be legally
bound, agree as follows:
SECTION 1. GRANT AND PERFECTION OF SECURITY INTEREST.
(a) GRANT OF SECURITY INTEREST. To secure payment of the Secured
Obligations, Pledgor hereby grants to Secured Party a security interest in all
of Pledgor's right, title and interest in and
to the Collateral under the Uniform Commercial Code in effect in the
Commonwealth of Pennsylvania (the "Code") and all other applicable laws.
(b) PLEDGED SHARES. Pledgor hereby pledges to Secured Party as the
Collateral for the Secured Obligations all of Pledgor's right, title and
interest in and to the Pledged Shares and in and to all dividends, other
distributions, cash, instruments, stock rights, rights to subscribe and other
property or proceeds in whatever form, from time to time received or receivable
or otherwise distributed in respect of or in exchange for any or all of the
Pledged Shares (collectively, "Distributions").
(c) FINANCING STATEMENTS. Upon the request of Secured Party, Pledgor
will execute and deliver to Secured Party UCC-1 financing statements, suitable
for filing in all appropriate jurisdictions, covering that portion of the
Collateral in which a security interest can or may be perfected under the Code
by filing a UCC-1 financing statement. Secured Party is authorized to file such
financing statements in all places which, in its sole discretion, such filing is
appropriate to protect and perfect its rights hereunder. Secured Party is
irrevocably authorized to execute and file such continuation statements and
other similar documents, which in its sole discretion, it deems appropriate to
protect and perfect its rights.
(d) DELIVERY OF COLLATERAL; FURTHER ASSURANCES. The Pledged Shares have
been or will be deposited with Secured Party contemporaneously with the
execution of this Agreement or, as the case may be, from time to time,
immediately after Pledgor's receipt of the certificates evidencing the Pledged
Shares. All certificates or instruments evidencing or representing the Pledged
Shares and other Collateral shall be delivered to and held by Secured Party
pursuant thereto and shall be in suitable form for transfer by delivery or, as
applicable, shall be accompanied by Pledgor's endorsement where necessary, or
duly executed instruments of transfer or assignment in blank, all in form and
substance satisfactory to Secured Party. Upon the request of Secured Party, and
at Pledgor's sole expense, Pledgor shall execute and deliver such other
instruments and documents as may, in the reasonable opinion of counsel for
Secured Party, be appropriate to protect and perfect Secured Party's rights
under this Agreement, or otherwise effectuate the purposes of this Agreement.
(e) NONRECOURSE. Notwithstanding anything herein, in the other
Ancillary Agreements or the Purchase Agreement, Secured Party acknowledges and
agrees that Pledgor shall not have any personal or direct obligation or
liability for or otherwise in respect of the Secured Obligations, and Secured
Party's only recourse in respect thereof shall be hereunder against the
Collateral and, as a result, Secured Party shall not enforce the obligation and
liability of Pledgor to perform and observe the Secured Obligations by any
action or judgment wherein a money judgment or specific performance judgment
shall be sought against Pledgor, except Secured Party may bring a foreclosure
action, action for specific performance or other appropriate action or
proceeding solely for the purpose of enabling Secured Party to realize upon the
Collateral. Secured Party shall look solely to the Collateral for payment or
other satisfaction of the Secured Obligations and the satisfaction of any
obligation or liability otherwise arising under or in respect of the Secured
Obligations, and if the Collateral shall be insufficient to pay in full or
otherwise satisfy the Secured
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Obligations or to satisfy any obligations or liabilities arising under this
Agreement, Pledgor and its successors and assigns shall not be held personally
liable or responsible for the payment of any such deficiency.
SECTION 2. REPRESENTATIONS, WARRANTIES AND COVENANTS OF PLEDGOR.
To induce Secured Party to enter into this Agreement, Pledgor
represents and warrants to Secured Party as follows:
(a) FORMAL ACTION. Pledgor has all requisite power and authority to
execute, deliver and perform this Agreement.
(b) ENFORCEABILITY. This Agreement is a legal, valid and binding
obligation of the Pledgor, enforceable against Pledgor in accordance with its
terms.
(c) OWNERSHIP. Pledgor is the sole legal and beneficial owner of the
Pledged Shares and holds the Pledged Shares free and clear of any and all liens,
encumbrances, covenants, conditions, mortgages, security interests, pledges,
claims, options, preemptive rights, transfer restrictions, puts, calls, trusts
and any and all other restrictions of any kind whatsoever (collectively
"Encumbrances"), except for the Permitted Exceptions (as defined below).
"Permitted Exception" shall mean (i) the pledge and security interest hereunder,
(ii) as otherwise provided in the Purchase Agreement and (iii) the subordinate
pledge of the Shares which shall secure the Note, upon its issuance, pursuant to
the Company Pledge Agreement described in Section 0 (xxx "Xxxxxxxxxxx Xxxxxx").
(x) VALID, ENFORCEABLE AND PERFECTED. Secured Party has or, upon the
delivery of the certificates to Secured Party as provided hereby, will have a
valid, enforceable and perfected first priority security interest in all of the
Collateral.
(e) NO TRANSFERS. Except as otherwise provided in Section 7.06 of the
Purchase Agreement, Pledgor shall not sell or otherwise transfer or dispose of
the Pledged Shares or any interest therein during such time as it shall be
pledged to Secured Party hereunder.
(f) NO ENCUMBRANCES. Pledgor shall keep the Pledged Shares free from
any and all Encumbrances, except for the Permitted Exceptions, and shall defend
such Pledged Shares against all claims and demands of all Persons at any time
claiming any interest therein.
SECTION 3. DISTRIBUTIONS AND RIGHT TO VOTE.
(a) DISTRIBUTIONS. Pledgor shall not be entitled to receive and retain
any distributions payable in respect of the Pledged Interests except that, so
long as (i) an Event of Default (as defined below) shall not have occurred and
be continuing and (ii) Secured Party has not in respect of such Event of Default
caused a transfer of the Pledged Shares, pursuant to Section 4(c), Pledgor shall
be entitled to receive and retain all cash dividends payable on the Pledged
Shares, including the dividends paid pursuant to Section 8.01(d) of the Purchase
Agreement. Secured Party shall execute
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and deliver to Pledgor all such powers of attorney, dividend orders, and other
instruments as Pledgor may request for the purpose of enabling Pledgor to
receive the dividends which it is authorized to receive and retain pursuant to
this Section 3(a).
(b) RIGHT TO VOTE. Pledgor shall not have the right to exercise voting
powers pertaining to the Pledged Shares and other Distributions, except that, so
long as (i) an Event of Default shall not have occurred and be continuing and
(ii) Secured Party has not in respect of such Event of Default caused a transfer
of the Pledged Shares, pursuant to Section 4(c), Pledgor shall have the right to
exercise all voting powers pertaining to the Pledged Shares and all other
Distributions.
SECTION 4. EVENTS OF DEFAULT; REMEDIES.
(a) DEFAULT. Each of the following events shall constitute an event of
default ("Event of Default") under this Agreement:
(1) Any material default of Pledgor in respect of payment of
the Secured Obligations.
(2) The failure of Pledgor to perform any of Pledgor's other
material obligations under this Agreement when such performance is due.
(3) As of the 271st day after the Closing Date, the Telepad
Preferred Shares held by Secured Party have not been converted into Telepad
Common Stock pursuant to the Certificate of Designations and Telepad has not
purchased all of the Telepad Preferred Shares that were both (i) issued to
Secured Party at the Closing and, (ii) as of such 271st day, held beneficially
and of record by Secured Party.
(b) ACCELERATION. Upon the occurrence and continuation of an Event of
Default, Secured Party may declare, upon five business day's notice to Pledgor,
all Secured Obligations immediately due and payable, whereupon they shall become
due and payable in their entirety.
(c) UNIFORM COMMERCIAL CODE AND OTHER REMEDIES. Subject to the
provisions of Sections 1(e) and 3, upon the occurrence and continuation of an
Event of Default, Secured Party shall have all of the rights and remedies of a
secured party in respect of the Collateral under the Code and all other
applicable laws, including the following:
(1) Secured Party may transfer the Collateral to itself,
receive all Distributions thereon and hold the Distributions as Collateral or
apply the Distributions to any of the Secured Obligations, and Secured Party may
at any time demand, xxx for, collect or make any compromise or settlement with
reference to the Collateral as Secured Party, in its sole discretion, chooses
and exercise all the rights, powers and privileges of ownership of all Pledged
Shares.
(2) Secured Party shall have the right to receive any and all
cash dividends paid in respect of the Pledged Shares and make application
thereof to the Secured Obligations, and all
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Pledged Shares shall, upon the request of Secured Party, be registered in the
name of Secured Party and Secured Party may thereafter exercise (A) all voting,
corporate and other rights pertaining to such Pledged Shares at any meeting of
stockholders or otherwise and (B) any and all rights of conversion, exchange,
subscription and any other rights, privileges or options pertaining to the
Pledged Shares as if Secured Party was the absolute owner thereof (including the
right to exchange at its discretion any and all of the Pledged Shares upon the
merger, consolidation, reorganization, recapitalization or other fundamental
change in L&E's corporate structure, or upon the exercise by Pledgor of any
right, privilege or option pertaining to the Pledged Shares).
(3) Secured Party, without demand of performance or other
demand, presentment or protest of any kind (except the notice provisions set
forth below) to or upon Pledgor or (all and each of which demands, defenses,
advertisements and notices are hereby waived), may in such circumstances
forthwith collect, receive, appropriate and realize upon the Collateral, or any
part thereof, and/or may forthwith sell, assign, give option or options to
purchase or otherwise dispose of and deliver the Collateral or any part thereof
(or contract to do any of the foregoing), in one or more parts at public or
private sale or sales, in the over-the-counter market, at any exchange, broker's
board or elsewhere upon such terms and conditions as Secured Party may deem
advisable and at such prices as they may deem best, for cash or on credit or for
future delivery without assumption of any credit risk. Secured Party shall have
the right upon any such public sale or sales, and, upon any such private sale or
sales, to purchase the whole or any part of the Collateral so sold, free of any
right or equity of redemption in Pledgor which right or equity is hereby waived
or released. Notwithstanding the "nonrecourse" nature of the Secured
Obligations, notice of a proposed sale or other disposition of Collateral shall
be given at least 10 business days before such sale or other disposition.
(4) Pledgor recognizes that, in the absence of registration
under the Securities Act of 1933, as amended (the "Securities Act"), and
applicable state securities laws, Secured Party may be unable to effect a public
sale of any or all the Pledged Shares, by reason of certain prohibitions
contained in the Securities Act and applicable state securities laws or
otherwise, and may be compelled to resort to one or more private sales thereof
to a restricted group of purchasers which will be obliged to agree, among other
things, to acquire such securities for their own account for investment and not
with a view to the distribution or resale thereof. Pledgor acknowledges and
agrees that any such private sale may result in prices and other terms less
favorable than if such sale were a public sale and, notwithstanding such
circumstances, agrees that any such private sale shall be deemed to have been
made in a commercially reasonable manner. Secured Party shall be under no
obligation to delay a sale of any of the Pledged Shares for the period of time
necessary to permit Pledgor to register such securities for public sale under
the Securities Act, or under applicable state securities laws. Secured Party
shall be entitled to sell all or any part of the Pledged Shares at a price which
it may determine.
(5) Secured Party may take title to all Collateral without
judicial process pursuant to Section 9-503 of the Code, and in such event, as in
the case of any other sale or transfer of the Collateral hereunder, all of the
Secured Obligations shall be deemed for all purposes to be satisfied fully and
terminated and null and void, and Pledgor shall have no right, title and
interest in and to
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the Collateral, nor any claim in respect thereof, even if the value of the
Collateral is greater than the Secured Obligations.
(6) Secured Party may sell or otherwise dispose of all
Collateral pursuant to Section 9-504 of the Code. Any notification required by
Section 9-504 shall be reasonable if given at least 10 business days before the
date of sale.
(7) Secured Party may bid for and purchase the Collateral at
any public or private sale. In any case in which Secured Party purchases any
Collateral, Secured Party shall be entitled to credit to the purchase price of
such Collateral all or any portion of the amounts due to them under this
Agreement or in respect of the Secured Obligations. Nothing herein is intended
to prevent Pledgor from bidding for or purchasing the Collateral at any such
private or public sale.
(8) Secured Party may enforce its rights hereunder without
resort to prior judicial process or judicial hearing, and Pledgor expressly
waives, renounces and knowingly relinquishes any right under the laws of the
United States or any state thereof which might otherwise require a Secured Party
to enforce its rights by judicial process. In so providing for a nonjudicial
remedy, Pledgor recognizes and concedes that such a remedy is consistent with
the usage of the trade, is responsive to commercial necessity, and is the result
of bargain at arm's length. Nothing herein is intended to prevent Pledgor or
Secured Party from resorting to judicial process at either party's option.
(9) Secured Party, as attorney-in-fact pursuant to Section 5
may, in the name and stead of Pledgor, make and execute all conveyances,
assignments and transfers of the Pledged Shares sold in accordance with this
Agreement. Pledgor shall, if so reasonably requested by Pledgor, ratify and
confirm any sale or sales by executing and delivering to Secured Party, or to
such purchaser or purchasers (including Secured Party), all such instruments as
may, in the reasonable judgment of Secured Party, be advisable for such purpose.
(10) The receipt of Secured Party of the purchase money paid
at any such sale of Pledged Shares made by it shall be a sufficient discharge
therefor to any purchaser (including Secured Party) of the Pledged Shares, or
any portion thereof, sold as aforesaid; and no such purchaser or representatives
or assigns (other than Secured Party), after paying such purchase money and
receiving such receipt, shall be bound to see to the application of such
purchase money or any misapplication or non-application of any such purchase
money, or any misapplication or non-application of any such purchase money, or
any part thereof, or be bound to inquire as to the authorization, necessity,
expediency or regularity of any such sale.
(d) NO OTHER REMEDIES; CONDITION PRECEDENT TO ENFORCEMENT OF REMEDIES.
Except for the remedies set forth in this Section 4, upon the occurrence of an
Event of Default, Secured Party shall not be entitled to any other remedies
provided by law. Notwithstanding anything herein to the contrary, Secured Party
shall be required to transfer and assign to Pledgor, free and clear of any
Encumbrances, 475,000 Telepad Preferred Shares, plus a written instrument
executed by Secured Party irrevocably relinquishing all accrued and unpaid
dividends with respect to such shares, as a
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condition precedent to Secured Party's right to seek, or take any action as, a
remedy hereunder with respect to any one or more Events of Default (i) which
occur on or before the first anniversary of the Closing Date, or (ii) which
arise out of, or results from, Pledgor's failure on or before the Determination
Date (as defined in the Purchase Agreement) if such date occurs on or prior to
the first anniversary of the Closing Date, (a) to pay principal, interest and
other amounts payable under the Note; (b) to pay the Additional Consideration
under Section 2.03 of the Acquisition Agreement; (c) to pay the repurchase price
of the Telepad Shares upon exercise by Secured Party of its option under Section
8.06 of the Purchase Agreement; or (d) to invest up to $666,700 in L&E under
Section 8.03 of the Purchase Agreement; provided, however, if (i) the Telepad
Preferred Shares issued to Secured Party pursuant to the Purchase Agreement
shall have converted into Telepad Common Stock, or (ii) a portion of such shares
shall have been redeemed by Pledgor, or sold to Pledgor pursuant to Secured
Party's rights under the Purchase Agreement, resulting in Secured Party owning
fewer than 475,000 Telepad Preferred Shares, then any shortfall in such shares
shall be satisfied by Secured Party transferring and assigning to Pledgor an
equal number of shares of Telepad Common Stock.
(e) PROCEEDS. Secured Party shall apply the cash proceeds actually
received from any foreclosure sale, lease, collection or other disposition of
the Collateral as follows: (1) first, to reasonable attorneys' fees and all
expenses (including court costs, advertising expenses, auctioneer's fees,
premiums for any required bonds, auditor's fees, amounts advanced for taxes and
other expenses) incurred by Secured Party in attempting to enforce the Secured
Obligations or this Agreement or in the prosecution or defense of any action or
proceeding related to the subject matter of this Agreement; (2) second, to the
discharge of the Secured Obligations, and (3) further, to pay any remaining
surplus to Pledgor.
(f) COSTS OF ENFORCEMENT. If an Event of Default occurs, whether or not
Secured Party pursues any of the remedies set forth in this Section 4, Pledgor
shall be responsible for and shall pay on demand all costs and expenses incurred
by Secured Party in protecting or enforcing its rights hereunder, including
reasonable attorneys' fees, all of which obligations are secured by and subject
to this Agreement, including Sections 1(e) and 4(d).
(g) SATISFACTION. Upon the performance in full of the Secured
Obligations in accordance with their respective terms, on the date thereof (i)
all of the pledge and security and other interests of Secured Party hereunder to
and otherwise in respect of the Collateral shall be released and terminated, and
(ii) Secured Party shall return the Collateral to Pledgor free of any and all
Encumbrances.
SECTION 5. ATTORNEY-IN-FACT.
Pledgor hereby appoints Xxxxxxxxx XxXxxxx, her successors and assigns
and all other Persons deriving title under Secured Party, severally, which
appointment is irrevocable and coupled with an interest, as Pledgor's lawful
attorney-in-fact, with full power of substitution, in the name of Pledgor, for
the sole use and benefit of Secured Party while any Event of Default shall be
continuing, to exercise all or any of the following actions with respect to all
or any of the Pledged Shares:
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(i) to vote the Pledged Shares for the purposes of electing and
removing members of L&E's Board of Directors;
(ii) to demand, xxx for, collect, receive and give acquittance for any
and all monies due or to become due;
(iii) to settle, compromise, initiate, prosecute or defend any action
or proceedings with respect thereto; and
(iv) to sign, seal and deliver any transfer or other documents or form
in the name of Pledgor which may be necessary or desirable for or in connection
with the perfecting of Secured Party title to or for vesting the Pledged Shares
or its nominee(s), or in any purchaser in any sale of the Pledged Shares, and
otherwise generally to sign, seal and deliver and otherwise perfect any other
pledge, charge, or other obligation referred to in this Agreement provided that
Secured Party shall give Pledgor not fewer than 10 business days prior written
notice of the time and place of any sale or other intended disposition of any
Pledged Shares.
SECTION 6. NOTICE OF BAILMENT FOR SUBORDINATE PLEDGE.
The parties agree and acknowledge that the Collateral is the subject of
a subordinate pledge by Pledgor to L&E to secure Pledgor's obligations under the
Note pursuant to a Pledge and Security Agreement between Pledgor and L&E dated
of even date herewith (the "Company Pledge Agreement"). Secured Party agrees
that it shall hold the Collateral, first as a secured party under this
Agreement, and secondly as bailee and agent for L&E. The parties agree that the
obligations secured by the Company Pledge Agreement are inferior and subordinate
in priority to the interests of Secured Party. The subordination and priorities
herein specified are applicable irrespective of the time or order of attachment
or perfection of security interest; the time or order of filing or recording of
financing statements, deeds, deeds of trust, or mortgages, or the time of giving
or failure to give notice of acquisition or expected acquisition of
purchase-money or other security interests. Until the Secured Obligations have
been satisfied in full, Secured Party shall not be required to enforce any
interests with respect to this Agreement or the Collateral. Until the Secured
Obligations been satisfied in full, Secured Party shall not be obligated, or
have a duty hereunder, to enforce any interests under this Agreement or in or to
the Collateral for the benefit of L&E nor to attach, levy upon, execute against,
exercise any rights to, assert any claim on or interest in, take any action
against, or institute any proceedings with respect to Pledgor or any of
Pledgor's assets. Secured Party may waive, delay or fail to take any action
either to enforce its rights with respect to the Secured Obligations or to
exercise any right or remedy against Pledgor or its assets, without any loss of
any rights by Secured Party in the Secured Obligations, and without affecting
the subordination and priority hereunder, and Secured Party may surrender or
release any Collateral, change, alter, renew, extend, forbear, continue,
compromise, or waive any rights or claims, extend further credit or engage in
other dealings, and fail to, or refuse to, act with respect to any of the
foregoing, without giving rise to any duties or obligations, fiduciary or
otherwise, to L&E, regardless of the effect on the value of the Collateral.
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SECTION 7. MISCELLANEOUS.
(a) GOVERNING LAW; INTERPRETATION. This Agreement shall be governed by
the laws of the Commonwealth of Pennsylvania applicable to contracts executed
and performed within the Commonwealth of Pennsylvania (other than the law
governing conflict of law questions). All terms used in this Agreement which are
defined in the Code shall be construed in accordance with such definitions
unless otherwise required by the context.
(b) ENTIRE AGREEMENT. This Agreement embodies the entire agreement and
understanding of the parties hereto in respect of the subject matter contained
herein. There are no restrictions, promises, representations, warranties,
covenants, or undertakings other than those expressly set forth or referred to
herein. This Agreement supersedes any and all prior agreements and
understandings between the parties with respect to such subject matter.
(c) AMENDMENT. This Agreement may be amended only in a writing signed
by each of the parties.
(d) WAIVER. No waiver shall be effective against any party unless it is
in a writing signed by that party. No waiver by Secured Party of any breach of
any term or covenant contained in this Agreement shall operate as a waiver of
such term or covenant itself, or of any subsequent breach thereof.
(e) COUNTERPARTS. This Agreement may be executed in counterparts, each
of which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
(f) SUCCESSORS AND ASSIGNS. This Agreement shall inure to the benefit
of and be binding upon the parties hereto and their respective successors,
heirs, executors or administrators, representatives and assigns.
(g) CUMULATION OF RIGHTS AND REMEDIES. No right or remedy of Secured
Party under this Agreement is intended to be exclusive of any other right or
remedy contained in this Agreement, or in any instrument or document delivered
in connection with or pursuant to this Agreement and every such right or remedy
shall be cumulative and shall be in addition to every other such right or remedy
contained herein and therein or now or hereafter existing at law or in equity or
by statute, or otherwise.
(h) NOTICE. All notices, requests, consents, demands and other
communications with respect to this Agreement shall be in writing and shall be
deemed duly given when delivered (or refused upon attempted delivery in
accordance herewith), personally or mailed by certified mail, return receipt
requested, postage prepaid, or by an overnight carrier that provides a written
confirmation of delivery, addressed as follows (or at such other address for
Secured Party or Pledgor as shall be specified by like notice):
Secured Party: Xxxxxxxxx XxXxxxx
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0 Xxxxxxx Xxxxx
Xxxxxxxx, Xxxxxxxxxxxx 00000
with a copy to: Xxxx & Xxxxxxxxx, P.C.
Suite IC-44
0000 Xxxxxxxxxxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxx, Esq.
Pledgor: Telepad Corporation
000 Xxxxxxx Xxxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxx, Chairman and
Chief Executive Officer
with copy to:
Arent Fox Xxxxxxx Xxxxxxx & Xxxx, PLLC
0000 Xxxxxxxxxxx Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000-0000
Attention: Carter Strong, Esquire
(i) WAIVER OF CERTAIN DEFENSES. Regardless of consideration, and
without the necessity for any notice to or consent by the holder of any
subordinate lien or security interest on the Collateral, Secured Party may
release the Secured Obligations, may release any Person at any time liable for
any of the Secured Obligations, or may release any part of the security held for
the Secured Obligations and may extend the time of payment or otherwise modify
the terms of the Secured Obligations or this Agreement without in any way
impairing or affecting the existence or priority of the lien and security
interest of this Agreement. Secured Party may resort for the payment of the
Secured Obligations to the Collateral in such order and manner as Secured Party
may elect.
(j) HEADINGS. The headings in this Agreement are intended solely for
convenience of reference and shall be given no effect in the construction or
interpretation of this Agreement.
(k) SEPARABILITY. The invalidity or unenforceability of any provisions
of this Agreement shall not impair the validity or enforceability of any other
provision.
(l) GENERAL INTERPRETIVE RULES. For purposes of this Agreement, except
as otherwise expressly provided or unless the context otherwise requires, (1)
the use of any gender herein shall be deemed to include the other genders; (2)
references herein to "Sections" and other subdivisions without reference to a
document are to designated Sections and other subdivisions of this
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Agreement; (3) reference to a Subsection without further reference to a Section
is a reference to such Subsection contained in the same Section in which the
reference appears and this rule shall also apply to paragraphs and other
subdivisions; (4) "including" means "including but not limited to"; (5) the
words "herein," hereof," "hereunder" and other words of similar import refer to
this Agreement as a whole and not to any particular provision; and (6) the words
"business day" shall mean any day other than a Saturday, a Sunday or a day on
which commercial banks in Philadelphia, Pennsylvania are required or authorized
to close.
(m) JURISDICTION. PLEDGOR (A) HEREBY IRREVOCABLY SUBMITS TO THE
JURISDICTION OF THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF
PENNSYLVANIA AND OF ANY COMMONWEALTH OF PENNSYLVANIA COURT SITTING IN THE CITY
OF PHILADELPHIA OVER ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS
AGREEMENT, AND HEREBY IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF SUCH
ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH CIRCUIT COURT OR
FEDERAL COURT; (B) IRREVOCABLY CONSENTS TO THE SERVICE OF ANY AND ALL PROCESS IN
ANY SUCH ACTION OR PROCEEDING BY MAILING COPIES OF SUCH PROCESS TO MAKER IN THE
MANNER PROVIDED IN SECTION 6 ABOVE; AND (C) AGREES THAT A FINAL JUDGMENT IN ANY
SUCH ACTION OR PROCEEDING, NOT SUBJECT TO FURTHER APPEAL, SHALL BE CONCLUSIVE
AND MAY BE ENFORCED IN ANY OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY
OTHER MANNER PROVIDED BY LAW.
WAIVER OF JURY TRIAL. PLEDGOR HEREBY (I) COVENANTS AND AGREES NOT
TO ELECT A TRIAL BY JURY OF ANY ISSUE TRIABLE OF RIGHT BY A JURY, AND (II)
WAIVES ANY RIGHT TO TRIAL BY JURY FULLY TO THE EXTENT THAT ANY SUCH RIGHT SHALL
NOW OR HEREAFTER EXIST. THIS WAIVER OF RIGHT TO TRIAL BY JURY IS SEPARATELY
GIVEN, KNOWINGLY AND VOLUNTARILY, BY PLEDGOR, AND THIS WAIVER IS INTENDED TO
ENCOMPASS INDIVIDUALLY EACH INSTANCE AND EACH ISSUE AS TO WHICH THE RIGHT TO A
TRIAL BY JURY WOULD OTHERWISE ACCRUE. SECURED PARTY IS HEREBY AUTHORIZED AND
REQUESTED TO SUBMIT THIS AGREEMENT TO ANY COURT HAVING JURISDICTION OVER THE
SUBJECT MATTER AND THE PARTIES HERETO, SO AS TO SERVE AS CONCLUSIVE EVIDENCE OF
PLEDGOR'S HEREIN CONTAINED WAIVER OF THE RIGHT TO TRIAL BY JURY. FURTHER,
PLEDGOR HEREBY CERTIFIES THAT NO REPRESENTATIVE OR AGENT OF SECURED PARTY
(INCLUDING SECURED PARTY'S COUNSEL) HAS REPRESENTED, EXPRESSLY OR OTHERWISE, TO
PLEDGOR THAT SECURED PARTY WILL NOT SEEK TO ENFORCE THIS WAIVER OF RIGHT TO
TRIAL BY JURY PROVISION.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
PLEDGOR:
ATTEST: TELEPAD CORPORATION,
/s/ Xxxxxx X. Xxxxxxx a Delaware corporation
____________________________
Xxxxxx X. Xxxxxxx, Secretary
By: /s/ Xxxxxx X. Xxxxxxx
____________________________________________
Xxxxxx X. Xxxxxxx, Chairman of the Board and
Chief Executive Officer
SECURED PARTY:
/s/ Xxxxxxxxx XxXxxxx
__________________________________
Xxxxxxxxx XxXxxxx
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