Exhibit 10.4
STOCK PLEDGE AGREEMENT
This Stock Pledge Agreement (this “Agreement”), dated as of February 29, 2008,
among LV ADMINISTRATIVE SERVICES INC., as administrative and collateral agent
for the Creditor Parties (as defined below) (the “Pledgee”), VERICHIP
CORPORATION, a Delaware corporation (“VeriChip”), XMARK CORPORATION, a Canada
corporation (“Xmark” together with VeriChip, each a “Company” and collectively,
the “Companies”), and each of the other parties that become a party hereto
pursuant to Section 16(h) (the Companies and each such other undersigned party,
a “Pledgor” and collectively, the “Pledgors”).
BACKGROUND
The Companies have entered into a Securities Purchase Agreement, dated as of the
date hereof (as amended, modified, restated or supplemented from time to time,
the “Securities Purchase Agreement”), pursuant to which the Creditor Parties (as
defined in the Securities Purchase Agreement) will provide certain financial
accommodations to the Companies.
In order to induce the Creditor Parties to provide or continue to provide the
financial accommodations described in the Securities Purchase Agreement, each
Pledgor has agreed to pledge and grant a security interest in the collateral
described herein to the Pledgee, for the ratable benefit of the Creditor
Parties, on the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the premises and for other good and valuable
consideration the receipt of which is hereby acknowledged, the parties hereto
agree as follows:
1. Defined Terms. All capitalized terms used herein which are not defined shall
have the meanings given to them in the Securities Purchase Agreement.
2. Pledge and Grant of Security Interest. To secure the full and punctual
payment and performance of (the following clauses (a) and (b), collectively, the
“Obligations”) (a) all obligations owing to Pledgee and the other Creditor
Parties under the Securities Purchase Agreement and the Related Agreements
referred to in the Securities Purchase Agreement (the Securities Purchase
Agreement and the Related Agreements, as each may be amended, restated, modified
and/or supplemented from time to time, collectively, the “Documents”) and
(b) all other obligations and liabilities of each Pledgor to the Pledgee and the
other Creditor Parties whether now existing or hereafter arising, direct or
indirect, liquidated or unliquidated, absolute or contingent, due or not due and
whether under, pursuant to or evidenced by a note, agreement, guaranty,
instrument or otherwise (in each case, irrespective of the genuineness,
validity, regularity or enforceability of such Obligations, or of any instrument
evidencing any of the Obligations or of any collateral therefor or of the
existence or extent of such collateral, and irrespective of the allowability,
allowance or disallowance of any or all of such in any case commenced by or
against any Pledgor under Title 11, United States Code (or any comparable
statute of any other relevant jurisdiction), including, without limitation,
obligations of each Pledgor for post-petition interest, fees, costs and charges
that would have accrued or been added to the Obligations but for the
commencement of such case), each Pledgor hereby pledges, assigns, hypothecates,
transfers and grants a security interest to the Pledgee, for the ratable benefit
of the Creditor Parties, in all of its right, title and interest in and to the
following (the “Collateral”):

 

 

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(a) the shares of stock or other equity interests set forth on Schedule A
annexed hereto and expressly made a part hereof (together with any additional
shares of stock or other equity interests acquired by any Pledgor, the “Pledged
Stock”), the certificates representing the Pledged Stock and all dividends,
cash, instruments and other property or proceeds from time to time received,
receivable or otherwise distributed in respect of or in exchange for any or all
of the Pledged Stock;
(b) all additional shares of stock or other equity interests of any issuer
(each, an “Issuer”) of the Pledged Stock from time to time acquired by any
Pledgor in any manner, including, without limitation, stock dividends or a
distribution in connection with any increase or reduction of capital,
reclassification, merger, consolidation, sale of assets, combination of shares,
stock split, spin-off or split-off (which shares shall be deemed to be part of
the Collateral), and the certificates representing such additional shares, and
all dividends, cash, instruments and other property or proceeds from time to
time received, receivable or otherwise distributed in respect of or in exchange
for any or all of such shares; and
(c) all options and rights, whether as an addition to, in substitution of or in
exchange for any shares of any Pledged Stock and all dividends, cash,
instruments and other property or proceeds from time to time received,
receivable or otherwise distributed in respect of or in exchange for any or all
such options and rights.
3. Delivery of Collateral. All certificates representing or evidencing the
Pledged Stock shall be delivered to and held by or on behalf of Pledgee pursuant
hereto and shall be accompanied by duly executed instruments of transfer or
assignments in blank, all in form and substance satisfactory to the Pledgee.
Each Pledgor hereby authorizes the Issuer upon demand by the Pledgee to deliver
any certificates, instruments or other distributions issued in connection with
the Collateral directly to the Pledgee, in each case to be held by the Pledgee,
subject to the terms hereof. Upon the occurrence and during the continuance of
an Event of Default (as defined below) and to the extent permitted by applicable
law, the Pledgee shall have the right, during such time in its discretion and
without notice to the Pledgor, to transfer to or to register in the name of the
Pledgee or any of its nominees any or all of the Pledged Stock. In addition, the
Pledgee shall have the right at such time to exchange certificates or
instruments representing or evidencing Pledged Stock for certificates or
instruments of smaller or larger denominations.
4. Representations and Warranties of the Pledgors. Except as set forth in the
disclosure schedules to the Securities Purchase Agreement or in the Exchange Act
Filings with respect to those representations and warranties set forth below
that have parallel representations and warranties set forth in the Securities
Purchase Agreement which permit exceptions as set forth in the disclosure
schedules and/or the Exchange Act Filings, each Pledgor represents and warrants
to the Pledgee that:
(a) the execution, delivery and performance by such Pledgor of this Agreement
and the pledge of the Collateral hereunder do not and will not result in any
violation of any agreement, indenture, instrument, license, judgment, decree,
order, law, statute, ordinance or other governmental rule or regulation
applicable to such Pledgor which violation has or could reasonably be expected
to have, either individually or in the aggregate, a Material Adverse Effect;

 

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(b) this Agreement constitutes the legal, valid, and binding obligation of each
Pledgor enforceable against such Pledgor in accordance with its terms, except:
(i) as limited by applicable bankruptcy, insolvency, reorganization, moratorium
or other laws of general application affecting enforcement of creditors’ rights;
and
(ii) as limited by general principles of equity that restrict the availability
of equitable or legal remedies;
(c) (i) all Pledged Stock owned by each Pledgor is set forth on Schedule A
hereto and (ii) each Pledgor is the legal and beneficial owner of the Pledged
Stock as set forth on Schedule A;
(d) all of the shares of the Pledged Stock have been duly authorized, validly
issued and are fully paid and non-assessable;
(e) no consent or approval of any person, corporation, governmental body,
regulatory authority or other entity, is or will be necessary for (i) the
execution, delivery and performance of this Agreement, (ii) the exercise by the
Pledgee of any rights with respect to the Collateral or (iii) the pledge and
assignment of, and the grant of a security interest in, the Collateral
hereunder;
(f) there are no pending or, to each of Pledgor’s knowledge, threatened actions
or proceedings before any court, judicial body, administrative agency or
arbitrator which would have, or could reasonably be expected to have, either
individually or in the aggregate, a Material Adverse Effect on the Collateral;
(g) each Pledgor has the requisite power and authority to enter into this
Agreement and to pledge and assign the Collateral to the Pledgee, for the
ratable benefit of the Creditor Parties, in accordance with the terms of this
Agreement;
(i) each Pledgor owns each item of the Collateral and the Collateral shall be,
immediately following the closing of the transactions contemplated by the
Documents, free and clear of any other security interest, mortgage, pledge,
claim, lien, charge, hypothecation, assignment, offset or encumbrance whatsoever
(collectively, “Liens”), other than Permitted Encumbrances;
(h) there are no restrictions on transfer of the Pledged Stock contained in the
certificate of incorporation or by-laws (or equivalent organizational documents)
of the Issuer or otherwise which have not otherwise been enforceably and legally
waived or consented to by the necessary parties; and

 

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(i) none of the Pledged Stock has been issued or transferred in violation of the
securities registration, securities disclosure or similar laws of any
jurisdiction to which such issuance or transfer may be subject.
5. Covenants. Each Pledgor covenants that, until the Obligations shall be
indefeasibly satisfied in full:
(a) Such Pledgor will not sell, assign, transfer, convey, or otherwise dispose
of its rights in or to the Collateral or any interest therein; nor will such
Pledgor create, incur or permit to exist any Lien whatsoever with respect to any
of the Collateral or the proceeds thereof other than that created hereby.
(b) Such Pledgor will, at its expense, defend the Pledgee’s right, title and
security interest in and to the Collateral against the claims of any other
party.
(c) Such Pledgor shall at any time, and from time to time, upon the written
request of the Pledgee, execute and deliver such further documents and do such
further acts and things as the Pledgee may reasonably request in order to
effectuate the purposes of this Agreement including, but without limitation,
delivering to the Pledgee, upon the occurrence of an Event of Default,
irrevocable proxies in respect of the Collateral in form satisfactory to the
Pledgee. Until receipt thereof, upon an Event of Default that has occurred and
is continuing beyond any applicable grace period, this Agreement shall
constitute such Pledgor’s proxy to the Pledgee or its nominee to vote all shares
of Collateral then registered in such Pledgor’s name.
(d) Notwithstanding anything to the contrary in this Agreement, each Pledgor
expressly acknowledges and agrees that all dividends and distributions declared
by any Issuer in respect of the Collateral and otherwise payable to such Pledgor
shall be applied toward prepayment of the Notes, and such Pledgor shall not
receive any such dividends or distributions, except to the extent necessary to
satisfy such Pledgor’s income tax obligations with respect thereto. No Pledgor
will consent to or approve the issuance of (i) any additional shares of any
class of capital stock or other equity interests of any Issuer; or (ii) any
securities convertible either voluntarily by the holder thereof or automatically
upon the occurrence or nonoccurrence of any event or condition into, or any
securities exchangeable for, any such shares, unless, in either case such
capital stock issued or issuable to such Pledgor as a result of such transaction
are pledged and delivered to Pledgee as Collateral pursuant to this Agreement in
such proportion as shall be determined by multiplying the amount of Pledged
Stock of such Issuer by a fraction, the numerator of which shall be the number
of shares of capital stock of such Issuer pledged to Pledgee hereunder
immediately prior to such event and the denominator of which shall be the number
of shares of Common Stock of such issuer issued or issuable to such Pledgor
immediately after such event. The product so obtained shall thereafter be the
number of additional shares of such Issuer’s capital stock that shall
immediately be pledged and delivered to Pledgee as additional Pledged Stock and
Collateral pursuant to this Agreement.

 

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6. Voting Rights and Dividends.
(a) So long as no Event of Default occurs and remains continuing:
(i) Each Pledgor shall be entitled to exercise any and all voting and other
consensual rights pertaining to the Collateral, or any part thereof, for any
purpose not inconsistent with the terms of this Agreement; provided, however,
without the prior written consent of the Pledgee, that such Pledgor shall not
exercise, or shall refrain from exercising, any such right if it would result in
an Event of Default. Following the occurrence of an Event of Default, all rights
of each Pledgor to vote and to give consents, waivers and ratifications in
respect of the Collateral shall cease.
(ii) Any and all dividends or distributions declared in respect of the
Collateral shall be applied toward payment of the Notes.
(b) In addition to the Pledgee’s rights and remedies set forth in Section 8
hereof, in case an Event of Default shall have occurred and be continuing,
beyond any applicable cure period, the Pledgee shall (i) be entitled to vote the
Collateral, (ii) be entitled to give consents, waivers and ratifications in
respect of the Collateral (each Pledgor hereby irrevocably constituting and
appointing the Pledgee, with full power of substitution, the proxy and
attorney-in-fact of such Pledgor for such purposes) and (iii) be entitled to
collect and receive for its own use cash dividends paid on the Collateral.
Unless and until there shall have occurred and be continuing an Event of
Default, each Pledgor shall be permitted to exercise or refrain from exercising
any voting rights or other powers; provided that, in each case, no vote shall be
cast or any consent, waiver or ratification given or any action taken or omitted
to be taken if, in the reasonable judgment of the Pledgee, such action would
have a material adverse effect on the value of the Collateral or any part
thereof; and, provided, further, that such Pledgor shall give at least five
(5) days’ written notice of the manner in which such Pledgor intends to
exercise, or the reasons for refraining from exercising, any voting rights or
other powers other than with respect to any election of directors and voting
with respect to any incidental matters. Following the occurrence of an Event of
Default, all rights of each Pledgor to vote and to give consents, waivers and
ratifications shall cease and all dividends and all other distributions in
respect of any of the Collateral, shall be delivered to the Pledgee to hold as
Collateral and shall, if received by any Pledgor, be received in trust for the
benefit of the Pledgee, be segregated from the other property or funds of any
other Pledgor, and be forthwith delivered to the Pledgee as Collateral in the
same form as so received (with any necessary endorsement).
7. Event of Default. An “Event of Default” under this Agreement shall occur upon
the happening of any of the following events:
(a) An “Event of Default” under the Documents shall have occurred and be
continuing beyond any applicable cure period;
(b) Any representation or warranty of the Pledgors made herein, in the
Securities Purchase Agreement or the Notes shall be false or misleading in any
material respect as of the date hereof or as the date made if such date is not
the date hereof;
(c) Any portion of the Collateral is subjected to a material post-judgment levy
of execution, attachment, distraint or other judicial process or any portion of
the Collateral is the subject of a claim (other than by the Pledgee) of a Lien
or other right or interest in or to the Collateral and such levy or claim shall
not be cured, disputed or stayed within a period of thirty (30) business days
after the occurrence thereof; or

 

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(d) Any Pledgor shall (i) apply for, consent to, or suffer to exist the
appointment of, or the taking of possession by, a receiver, custodian, trustee,
liquidator or other fiduciary of itself or of all or a substantial part of its
property, (ii) make a general assignment for the benefit of creditors,
(iii) commence a voluntary case under any state or federal bankruptcy laws (as
now or hereafter in effect), (iv) be adjudicated a bankrupt or insolvent,
(v) file a petition seeking to take advantage of any other law providing for the
relief of debtors, (vi) acquiesce to, or fail to have dismissed, within thirty
(30) days, any petition filed against it in any involuntary case under such
bankruptcy laws, or (vii) take any action for the purpose of effecting any of
the foregoing.
8. Remedies. In case an Event of Default shall have occurred and is continuing,
the Pledgee may:
(a) Transfer any or all of the Collateral into its name, or into the name of its
nominee or nominees;
(b) Exercise all corporate rights with respect to the Collateral including,
without limitation, all rights of conversion, exchange, subscription or any
other rights, privileges or options pertaining to any shares of the Collateral
as if it were the absolute owner thereof, including, but without limitation, the
right to exchange, at its discretion, any or all of the Collateral upon the
merger, consolidation, reorganization, recapitalization or other readjustment of
the Issuer thereof, or upon the exercise by such Issuer of any right, privilege
or option pertaining to any of the Collateral, and, in connection therewith, to
deposit and deliver any and all of the Collateral with any committee,
depository, transfer agent, registrar or other designated agent upon such terms
and conditions as it may determine, all without liability except to account for
property actually received by it; and
(c) Subject to any requirement of applicable law, sell, assign and deliver the
whole or, from time to time, any part of the Collateral at the time held by the
Pledgee, at any private sale or at public auction, with or without demand,
advertisement or notice of the time or place of sale or adjournment thereof or
otherwise (all of which are hereby waived, except such notice as is required by
applicable law and cannot be waived), for cash or credit or for other property
for immediate or future delivery, and for such price or prices and on such terms
as the Pledgee in its sole discretion may determine, or as may be required by
applicable law.
Each Pledgor hereby waives and releases any and all right or equity of
redemption, whether before or after sale hereunder. At any such sale, unless
prohibited by applicable law, the Pledgee may bid for and purchase the whole or
any part of the Collateral so sold free from any such right or equity of
redemption. All moneys received by the Pledgee hereunder, whether upon sale of
the Collateral or any part thereof or otherwise, shall be held by the Pledgee
and applied by it as provided in Section 10 hereof. No failure or delay on the
part of the Pledgee in exercising any rights hereunder shall operate as a waiver
of any such rights nor shall any single or partial exercise of any such rights
preclude any other or future exercise thereof or the exercise of any other
rights hereunder.

 

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The Pledgee shall have no duty as to the collection or protection of the
Collateral or any income thereon nor any duty as to preservation of any rights
pertaining thereto, except to apply the funds in accordance with the
requirements of Section 10 hereof. The Pledgee may exercise its rights with
respect to property held hereunder without resort to other security for or
sources of reimbursement for the Obligations. In addition to the foregoing,
Pledgee shall have all of the rights, remedies and privileges of a secured party
under the Uniform Commercial Code of New York (the “UCC”) regardless of the
jurisdiction in which enforcement hereof is sought.
9. Private Sale. Each Pledgor recognizes that the Pledgee may be unable to
effect (or to do so only after delay which would adversely affect the value that
might be realized from the Collateral) a public sale of all or part of the
Collateral by reason of certain prohibitions contained in the Securities Act,
and may be compelled to resort to one or more private sales to a restricted
group of purchasers who will be obliged to agree, among other things, to acquire
such Collateral for their own account, for investment and not with a view to the
distribution or resale thereof. Each Pledgor agrees that any such private sale
may be at prices and on terms less favorable to the seller than if sold at
public sales and that such private sales shall be deemed to have been made in a
commercially reasonable manner. Each Pledgor agrees that the Pledgee has no
obligation to delay sale of any Collateral for the period of time necessary to
permit the Issuer to register the Collateral for public sale under the
Securities Act.
(a) Proceeds of Sale. The proceeds of any collection, recovery, receipt,
appropriation, realization or sale of the Collateral shall be applied by the
Pledgee as set forth in Section 10 of the Master Security Agreement.
In the event that the proceeds of any collection, recovery, receipt,
appropriation, realization or sale are insufficient to satisfy the Obligations,
the Pledgors shall be jointly and severally liable for the deficiency plus the
costs and fees of any attorneys employed by the Pledgee to collect such
deficiency.
10. Waiver of Marshaling. Each Pledgor hereby waives any right to compel any
marshaling of any of the Collateral.
11. No Waiver. Any and all of the Pledgee’s rights with respect to the Liens
granted under this Agreement shall continue unimpaired, and each Pledgor shall
be and remain obligated in accordance with the terms hereof, notwithstanding
(a) the bankruptcy, insolvency or reorganization of such Pledgor, (b) the
release or substitution of any item of the Collateral at any time, or of any
rights or interests therein, or (c) any delay, extension of time, renewal,
compromise or other indulgence granted by the Pledgee in reference to any of the
Obligations. Each Pledgor hereby waives all notice of any such delay, extension,
release, substitution, renewal, compromise or other indulgence, and hereby
consents to be bound hereby as fully and effectively as if such Pledgor had
expressly agreed thereto in advance. No delay or extension of time by the
Pledgee in exercising any power of sale, option or other right or remedy
hereunder, and no failure by the Pledgee to give notice or make demand, shall
constitute a waiver thereof, or limit, impair or prejudice the Pledgee’s right
to take any action against such Pledgor or to exercise any other power of sale,
option or any other right or remedy.

 

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12. Expenses. The Collateral shall secure, and the Pledgors shall pay, on
demand, all reasonable costs and expenses, (including but not limited to,
reasonable attorneys’ fees and costs, taxes, and all transfer, recording, filing
and other charges) of, or incidental to, the custody, care, transfer,
administration of the Collateral or any other collateral, or in any way relating
to the enforcement, protection or preservation of the rights or remedies of the
Pledgee under this Agreement.
13. The Pledgee Appointed Attorney-In-Fact and Performance by the Pledgee. If an
Event of Default shall have occurred and is continuing, each Pledgor hereby
irrevocably constitutes and appoints the Pledgee as such Pledgor’s true and
lawful attorney-in-fact, with full power of substitution, to execute,
acknowledge and deliver any instruments and to do in such Pledgor’s name, place
and stead, all such acts, things and deeds for and on behalf of and in the name
of such Pledgor, which such Pledgor could or might do or which the Pledgee may
deem necessary, desirable or convenient to accomplish the purposes of this
Agreement, including, without limitation, to execute such instruments of
assignment or transfer or orders and to register, convey or otherwise transfer
title to the Collateral into the Pledgee’s name. Each Pledgor hereby ratifies
and confirms all that said attorney-in-fact may so do and hereby declares this
power of attorney to be coupled with an interest and irrevocable. If any Pledgor
fails to perform any agreement herein contained, upon the occurrence and during
the continuance of an Event of Default, the Pledgee may itself perform or cause
performance thereof, and any costs and expenses of the Pledgee incurred in
connection therewith shall be paid by the Pledgors as provided in Section 10
hereof.
14. Recapture. Notwithstanding anything to the contrary in this Agreement, if
the Pledgee or any other Creditor Party receives any payment or payments on
account of the Obligations, which payment or payments or any part thereof are
subsequently invalidated, declared to be fraudulent or preferential, set aside
and/or required to be repaid to a trustee, receiver, or any other party under
the United States Bankruptcy Code, as amended, or any other federal, state or
provincial bankruptcy, reorganization, moratorium or insolvency law relating to
or affecting the enforcement of creditors’ rights generally, common law or
equitable doctrine, then to the extent of any sum not finally retained by the
Pledgee or such other Creditor Party, the Pledgors’ obligations to the Pledgee
and the other Creditor Parties shall be reinstated and this Agreement shall
remain in full force and effect (or be reinstated) until payment shall have been
made to the Pledgee and the other Creditor Parties, which payment shall be due
on demand.
15. Waivers. THE PARTIES HERETO DESIRES THAT THEIR DISPUTES BE RESOLVED BY A
JUDGE APPLYING SUCH APPLICABLE LAWS. THEREFORE, TO ACHIEVE THE BEST COMBINATION
OF THE BENEFITS OF THE JUDICIAL SYSTEM AND OF ARBITRATION, THE PARTIES HERETO
WAIVE ALL RIGHTS TO TRIAL BY JURY IN ANY ACTION, SUIT, OR PROCEEDING BROUGHT TO
RESOLVE ANY DISPUTE, WHETHER ARISING IN CONTRACT, TORT, OR OTHERWISE BETWEEN
PLEDGEE, AND/OR ANY PLEDGOR ARISING OUT OF, CONNECTED WITH, RELATED OR
INCIDENTAL TO THE RELATIONSHIP ESTABLISHED BETWEEN THEM IN CONNECTION WITH THIS
AGREEMENT, ANY OTHER DOCUMENT OR THE TRANSACTIONS RELATED HERETO OR THERETO.

 

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16. Termination. Immediately following the payment in full in cash of the
Obligations, Pledgee shall deliver to Pledgors the Collateral pledged by
Pledgors at the time subject to this Agreement and all instruments of assignment
executed in connection therewith, free and clear of the Liens hereof and, except
as otherwise provided herein, all of each Pledgor’s obligations hereunder shall
at such time terminate.
17. Captions. All captions in this Agreement are included herein for convenience
of reference only and shall not constitute part of this Agreement for any other
purpose.
18. Miscellaneous.
(a) This Agreement constitutes the entire and final agreement among the parties
with respect to the subject matter hereof and may not be changed, terminated or
otherwise varied except by a writing duly executed by the parties hereto.
(b) No waiver of any term or condition of this Agreement, whether by delay,
omission or otherwise, shall be effective unless in writing and signed by the
party sought to be charged, and then such waiver shall be effective only in the
specific instance and for the purpose for which given.
(c) In the event that any provision of this Agreement or the application thereof
to any Pledgor or any circumstance in any jurisdiction governing this Agreement
shall, to any extent, be invalid or unenforceable under any applicable statute,
regulation, or rule of law, such provision shall be deemed inoperative to the
extent that it may conflict therewith and shall be deemed modified to conform to
such statute, regulation or rule of law, and the remainder of this Agreement and
the application of any such invalid or unenforceable provision to parties,
jurisdictions, or circumstances other than to whom or to which it is held
invalid or unenforceable shall not be affected thereby, nor shall same affect
the validity or enforceability of any other provision of this Agreement.
(d) This Agreement shall be binding upon each Pledgor, and the Pledgors’
successors and assigns, and shall inure to the benefit of the Pledgee and its
successors and assigns for the ratable benefit of the Creditor Parties.
(e) Any notice or other communication required or permitted pursuant to this
Agreement shall be given in accordance with the Securities Purchase Agreement.
(f) THIS AGREEMENT AND THE OTHER DOCUMENTS SHALL BE GOVERNED BY AND CONSTRUED
AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO
CONTRACTS MADE AND PERFORMED IN SUCH STATE, WITHOUT REGARD TO PRINCIPLES OF
CONFLICTS OF LAW.

 

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(g) EACH PLEDGOR HEREBY CONSENTS AND AGREES THAT THE STATE OR FEDERAL COURTS
LOCATED IN THE COUNTY OF NEW YORK, STATE OF NEW YORK SHALL HAVE EXCLUSIVE
JURISDICTION TO HEAR AND DETERMINE ANY CLAIMS OR DISPUTES BETWEEN SUCH PLEDGOR,
ON THE ONE HAND, AND THE PLEDGEE AND/OR ANY OTHER CREDITOR PARTY, ON THE OTHER
HAND, PERTAINING TO THIS AGREEMENT OR ANY OF THE OTHER DOCUMENTS OR TO ANY
MATTER ARISING OUT OF OR RELATED TO THIS AGREEMENT OR ANY OF THE OTHER
DOCUMENTS, PROVIDED, THAT EACH PLEDGOR ACKNOWLEDGES THAT ANY APPEALS FROM THOSE
COURTS MAY HAVE TO BE HEARD BY A COURT LOCATED OUTSIDE OF THE COUNTY OF NEW
YORK, STATE OF NEW YORK; AND FURTHER PROVIDED, THAT NOTHING IN THIS AGREEMENT
SHALL BE DEEMED OR OPERATE TO PRECLUDE THE PLEDGEE OR ANY OTHER CREDITOR PARTY
FROM BRINGING SUIT OR TAKING OTHER LEGAL ACTION IN ANY OTHER JURISDICTION TO
COLLECT THE INDEBTEDNESS, TO REALIZE ON THE COLLATERAL OR ANY OTHER SECURITY FOR
THE INDEBTEDNESS, OR TO ENFORCE A JUDGMENT OR OTHER COURT ORDER IN FAVOR OF THE
PLEDGEE. EACH PLEDGOR EXPRESSLY SUBMITS AND CONSENTS IN ADVANCE TO SUCH
JURISDICTION IN ANY ACTION OR SUIT COMMENCED IN ANY SUCH COURT, AND EACH PLEDGOR
HEREBY WAIVES ANY OBJECTION THAT IT MAY HAVE BASED UPON LACK OF PERSONAL
JURISDICTION, IMPROPER VENUE OR FORUM NON CONVENIENS. EACH PLEDGOR HEREBY WAIVES
PERSONAL SERVICE OF THE SUMMONS, COMPLAINT AND OTHER PROCESS ISSUED IN ANY SUCH
ACTION OR SUIT AND AGREES THAT SERVICE OF SUCH SUMMONS, COMPLAINT AND OTHER
PROCESS MAY BE MADE BY REGISTERED OR CERTIFIED MAIL ADDRESSED TO SUCH PLEDGOR AT
THE ADDRESS SET FORTH IN THE SECURITIES PURCHASE AGREEMENT AND THAT SERVICE SO
MADE SHALL BE DEEMED COMPLETED UPON SUCH PLEDGOR’S ACTUAL RECEIPT THEREOF.
(h) It is understood and agreed that any person or entity that desires to become
a Pledgor hereunder, or is required to execute a counterpart of this Agreement
after the date hereof pursuant to the requirements of any Document, shall become
a Pledgor hereunder by (x) executing a Joinder Agreement in form and substance
satisfactory to the Pledgee, (y) delivering supplements to such exhibits and
annexes to such Documents as the Pledgee shall reasonably request and/or set
forth in such Joinder Agreement and (z) taking all actions as specified in this
Agreement as would have been taken by such Pledgor had it been an original party
to this Agreement, in each case with all documents required above to be
delivered to the Pledgee and with all documents and actions required above to be
taken to the reasonable satisfaction of the Pledgee.
(i) This Agreement may be executed in one or more counterparts, each of which
shall be deemed an original and all of which when taken together shall
constitute one and the same agreement. Any signature delivered by a party by
facsimile or electronic transmission shall be deemed an original signature
hereto.
[Remainder of Page Intentionally Left Blank]

 

10

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IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the day
and year first written above.

            VERICHIP CORPORATION
      By:   /s/ William J. Caragol         Name:   William J. Caragol       
Title:   President and Chief Financial Officer     

            XMARK CORPORATION
      By:   /s/ William J. Caragol         Name:   William J. Caragol       
Title:   Chief Financial Officer and Secretary     

            LV ADMINISTRATIVE SERVICES INC.,
as Agent
      By:   /s/ Scott Bluestein         Name:   Scott Bluestein        Title:  
Authorized Signatory     

signature page to
stock pledge agreement

 

 

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SCHEDULE A
Pledged Stock

                                  Stock       % of         Class of  
Certificate   Number of   Outstanding Pledgor   Issuer   Stock   Number   Shares
  Shares VeriChip   Xmark                 Corporation   Corporation   Common   1
  10,265,178   100%