FILED: NEW YORK COUNTY CLERK 02/11/2014 INDEX NO. 654009/2013 NYSCEF DOC. NO. 19 RECEIVED NYSCEF: 02/11/2014 PLEDGE AGREEMENT THIS PLEDGE AGREEMENT ("Pledge Agreement") dated as of January 15, 2006, is made by SOLIDUS NETWORKS, INC., a Delaware corporation ("Pledgor"), and PAY By TOUCH CHECKING RESOURCES, INC., a Delaware corporation and a wholly owned subsidiary of Pledgor ("IP Sub"), in favor of BIOPAY, LLC (which shall be known as Whorl, LLC immediately after the Closing), a Virginia limited liability company ("Pledgee"). RECITALS Pledgor, Pledgee, and Tim Robinson ("Robinson") have entered into that Asset Purchase Agreement dated as of December 6, 2005 (as the same may from time to time be amended, modified, supplemented or restated, the "Purchase Agreement") pursuant to which Pledgee has agreed to sell certain assets to Pledgor, upon the terms and subject to the conditions set forth in the Purchase Agreement (the "Asset Sale"). As part of the consideration for the Asset Sale, Pledgor will issue to Pledgee a Secured Convertible Promissory Note (Series C Note) and a Secured Convertible Promissory Note (Series C-3 Note) (collectively, the "Notes"). Pursuant to the Purchase Agreement, Pledgor has agreed to secure the Notes with a pledge of all of the outstanding equity securities (the "Pledged Interests") held by Pledgor in IP Sub. Effective as of the Closing, IP Sub owns all of the Intellectual Property Rights included in the Assets (as such terms are defined in the Purchase Agreement). AGREEMENT NOW, THEREFORE, in consideration of the foregoing recitals and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, and intending to be legally bound, Pledgor and IP Sub hereby represent, warrant, covenant and agree as follows: Section 1. Definitions. All capitalized terms used but not defined herein shall have the respective meanings given to them in the Purchase Agreement. In addition, the following terms not otherwise defined in the Preamble or Recitals of this Pledge Agreement shall have the following meanings: "Act" shall have the meaning set forth in Section 7.2(e), below. "Pledged Collateral" shall have the meaning set forth in Section 2(a), below. "Secured Obligations" shall have the meaning set forth in Section 2(a), below. Section 2. Pledge. (a) As security for the full, prompt and complete payment and performance when due (whether by stated maturity, by acceleration or otherwise) of all payment and performance obligations of Pledgor to Pledgee under the Notes (including any interest that accrues after the commencement of bankruptcy), as they may be amended from time to time, together with, without limitation, the prompt payment of all expenses, including, without 979322 v2/sf 1. COOLSFS 0011462
limitation, reasonable attorneys' fees and disbursements incidental to the collection of the foregoing obligations and the enforcement or protection of Pledgee's security interest in and to the collateral pledged hereunder (the "Secured Obligations"), Pledgor hereby pledges to Pledgee, and grants to Pledgee, a security interest in all of the following (collectively, the "Pledged Collateral"): (i) the Pledged Interests owned or held by Pledgor and the certificates representing the Pledged Interests, and all dividends, cash, interest payments, 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 Interests; (ii) all additional equity securities of IP Sub from time to time acquired by Pledgor in any manner (which additional equity securities shall be deemed to be part of the Pledged Interests), and the certificates representing such additional equity securities, and all dividends, cash, interest payments, 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 additional equity securities; (iii) all voting trust certificates held by Pledgor or hereafter acquired by Pledgor evidencing its beneficial interest in any Pledged Interests subject to any voting trust; and (iv) all proceeds thereof priority. (b) Pledgee's security interest in the Pledged Collateral shall be of first Section 3. Delivery of Pledged Collateral. Pledgor shall deliver to Pledgee on the date hereof all certificates or other instruments representing or evidencing any Pledged Interests, accompanied by appropriate duly executed instruments of transfer or assignment (including, without limitation, stock powers) in blank, all in form and substance satisfactory to Pledgee. Section 4. Representations and Warranties of Pledgor and IP Sub. Pledgor and IP Sub hereby represent and warrant to Pledgee, as follows: (a) Pledgor is the sole holder of record and the sole beneficial owner of the Pledged Collateral pledged to Pledgee by Pledgor under Section 2 of this Pledge Agreement, free and clear of any lien thereon or security interest therein or affecting title thereto, except for the lien and security interest created by this Pledge Agreement and a second priority lien (the "Second Lien") in favor of the holders of Pledgor's outstanding Senior Secured Notes due 2008 issued pursuant to the Amended and Restated Securities Purchase Agreement dated as of December 6, 2005 (the "Senior Note Agreement"). (b) None of the Pledged Interests have been transferred in violation of the securities registration, securities disclosure or similar laws of any jurisdiction to which such transfer may be subject. (c) No consent, approval, authorization or other order of any Person and no consent or authorization of any governmental authority or regulatory body that has not been 979322 v21sf 2. COOLSFS 0011463
obtained is required to be made or obtained by Pledgor either (i) for the pledge by Pledgor of the Pledged Collateral pursuant to this Pledge Agreement or for the execution, delivery, or performance of this Pledge Agreement by Pledgor; or (ii) for the exercise by Pledgee of the voting or other rights provided for in this Pledge Agreement or the remedies in respect of the Pledged Collateral pursuant to this Pledge Agreement. (d) The pledge, grant of a security interest in, and delivery of the Pledged Collateral pursuant to this Pledge Agreement will create a valid first priority lien on and security interest in the Pledged Collateral pledged by Pledgor, and the proceeds thereof, securing the payment of the Secured Obligations assuming (i) continued possession of the certificates evidencing the Pledged Interests by Pledgee and (ii) that Pledgee has no notice prior to or on the date of delivery of such Pledged Interests of an adverse claim within the meaning of the California Uniform Commercial Code (the "UCC"). (e) This Pledge Agreement has been duly executed and delivered by Pledgor and constitutes a legal, valid, and binding obligation of Pledgor, enforceable in accordance with its terms. The execution, delivery and performance by the Company and IP Sub of this Agreement and the Notes and the Unsecured Note, will not contravene, conflict with, result in a breach of, or constitute a violation of or default under (i) the organizational and governing documents of the Company and IP Sub, (ii) any applicable law, rule, regulation, judgment, order, writ, injunction or decree of any court or governmental authority or (iii) any agreement or instrument to which the Company or any of its subsidiaries is a party or by which the Company or any of its subsidiaries or their respective properties may be bound or affected. (g) Pledgor is, and Pledgor and its subsidiaries, taken as a whole, are, and after giving effect to the issuance of the Notes and the Unsecured Note, will be, solvent. (h) There is no continuing "Event of Default" under Article 10 of the Senior Note Agreement, and the Company is not aware of any event or circumstance that, with notice or the passage of time, is likely to cause such an "Event of Default." (i) IP Sub is a new corporation formed solely for the purpose of the Purchase Agreement and has engaged in no operations or activities to date other than such activities as are solely necessary for its formation and the approval of the transactions contemplated hereby. (j) IP Sub has good and marketable title to its properties and assets and all such assets are free and clear of any lien thereon or security interest therein or affecting title thereto. (k) IP Sub has no liabilities (whether known or unknown, whether absolute or contingent, whether liquidated or unliquidated and whether due or to become due) other than liabilities assumed pursuant to the Purchase Agreement. The representations and warranties contained in this Pledge Agreement shall be true, accurate and complete at the time of Pledgor's execution of this Pledge Agreement, and shall 979322 v2/sf 3. COOLSFS 0011464
continue to be true, accurate and complete until the Secured Obligations have been paid or otherwise satisfied in full. Section 5. Covenants of Pledgor, IP Sub and Pledgee. Pledgor and/or IP Sub and Pledgee (as specified below) covenant and agree that until termination of this Pledge Agreement: (a) Without the prior written consent of Pledgee, Pledgor shall not sell, assign, transfer, pledge, or otherwise encumber any of Pledgor's rights in or to the Pledged Collateral or any unpaid dividends or other distributions or payments with respect thereto or grant a lien thereon or a security interest therein except as otherwise expressly permitted by this Pledge Agreement. (b) Pledgor shall, at Pledgor's own expense, promptly execute, acknowledge, and deliver all such instruments and take all such action as Pledgee from time to time may reasonably request in order to ensure to Pledgee the benefits of the lien on and security interest in and to the Pledged Collateral intended to be created by this Pledge Agreement. (c) Pledgor shall maintain, preserve and defend the title to the Pledged Collateral and the lien of Pledgee thereon and the security interest of Pledgee therein against the claim of any other Person. (d) Pledgor shall, upon obtaining any additional equity securities of IP Sub promptly deliver to Pledgee all certificates and voting trust certificates respecting such additional equity securities and executed instruments of transfer or assignment (including, without limitation, stock powers) executed in blank, in respect of the additional equity securities which are to be pledged pursuant hereto. (e) Pledgor shall (i) cause IP Sub to continue to be the owner of all of the Intellectual Property Rights included in the Assets, (ii) permit Robinson together with one individual designated by Pledgor to jointly manage the patent prosecution activities of IP Sub, (iii) make available to IP Sub an amount of cash (not to exceed $250,000 in any period of 12 consecutive months) sufficient for reasonable patent prosecution activities, and (iv) grant Robinson customary institutional investor observer rights (subject to customary limitations) at meetings of Pledgor's Board of Directors and committees thereof. For purposes of the rights granted to Pledgee under this Section 5(e), Robinson shall be entitled to act first in the best interests of Pledgee and secondarily in the interests of Pledgor or IP Sub without any claim by Pledgor or IP Sub that Robinson has violated his obligations, fiduciary or otherwise, to Pledgor or IP Sub by reason of his priorities being so ordered. Each of the Pledgor and IP Sub will do or cause to be done, all things necessary to preserve and keep in full force and effect IP Sub's existence and its franchise, licenses and patents. (g) IP Sub will comply, and Pledgor will cause IP Sub to comply, with all applicable statutes, regulations and orders of, all applicable restrictions imposed by, all governmental bodies, domestic or foreign, in respect of the conduct of its business and the ownership of its property. 979322 v2/sf 4. COOLSFS 0011465
(h) Pledgor and IP Sub will pay and discharge all material (individually or in the aggregate) taxes, assessments and governmental charges or levies imposed upon it or upon its income or profits, or upon any properties belonging to it, prior to the date on which penalties attach thereto, and all lawful claims for sums that have become due and payable that, if unpaid, might become a lien on claim against the property of IP Sub, provided that Pledgor and IP Sub shall not be required to pay any such tax, assessment, charge, levy or claim that is being contested in good faith and by proper proceedings if it has maintained adequate reserves with respect thereto in accordance with generally accepted accounting principles. Pledgor and IP Sub will satisfy customary corporate formalities with respect to IP Sub, including the holding a regular board of directors' and shareholders' meeting or action by directors or shareholders without a meeting and the maintenance of corporate offices and records. Neither Pledgor nor IP Sub shall take any action, or conduct its or IP Sub's affairs in a manner, that is reasonably likely to result in the corporate existence of IP Sub being ignored, or in the assets and liabilities of IP Sub being substantively consolidated with those of any person in a bankruptcy, reorganization, or other insolvency proceeding. (j) IP Sub will not, and Pledgor will not permit IP Sub to, (i) create, incur, assume or permit to exist any liens upon or with respect to any of IP Sub's assets, whether now owned or hereafter acquired, or on any income or revenues or rights in respect of any thereof, except for the following: (i) inchoate liens for taxes, assessment or governmental charges or levies not yet due and payable or liens for taxes, assessments or governmental charges or levies being contested in good faith and by appropriate proceedings for which adequate reserves have been established in accordance with GAAP; (ii) liens in respect of property of IP Sub imposed by law, that were incurred in the ordinary course of business and do not secure indebtedness for borrowed money, such as carriers, warehousemen's, materialmen's and mechanics' liens and other similar liens arising in the ordinary course of business and (A) that do not in the aggregate materially impair the use thereof in the operation of the business of IP Sub or (B) that are being contested in good faith by appropriate proceedings, which proceedings (or orders entered in connection with proceedings) have the effect of preventing the forfeiture or sale of the property subject to any such lien and are discharged or bonded within 30 days of notice thereof to IP Sub or the Pledgor; and (iii) liens arising pursuant to non-exclusive licenses, leases or subleases (A) granted to persons other than Pledgor or its subsidiaries in the ordinary course of business, (B) not materially interfering with the conduct of the business of IP Sub, (C) not resulting in material deterioration in the value of the property covered and (D) with respect to non-exclusive licenses, granted incidentally to customers of the Pledgor or IP Sub in the ordinary course of business in connection with the sale of products or services to such customers, where such non-exclusive licenses to such customers are solely for the purpose of using products or services purchased by such customers from Pledgor or IP Sub; 979322 v2isf 5. COOLSFS 0011466
provided, however, that, until termination of this Pledge Agreement, Pledgor shall have a paidup, worldwide, exclusive right and license, with the right to grant sublicenses (including through multiple tiers of sublicensees) (provided the term of any such sublicense may not extend beyond the term of this license), under all of IP Sub's Intellectual Property Rights, whether now owned or hereafter developed or acquired, to (i) distribute, reproduce, make derivative works of publicly perform and publicly display in any form or medium, whether now known or later developed, or otherwise use IP Sub's Intellectual Property Rights and (ii) make, have made, use, sell, import and offer for sale any product or service incorporating all or any part of IP Sub's Intellectual Property Rights or of any derivative work thereof; provided, further, that such sublicensees shall not be considered third-party beneficiaries with respect to the license granted hereunder. (k) IP Sub will not, and Pledgor shall not permit IP Sub to, wind up, liquidate or dissolve its affairs or enter into any transaction of merger or consolidation, or convey, sell, lease, license (except for as provided in Section 5(j) above) or otherwise dispose of (or agree to do any of the foregoing at any future time) all or any part of its property, capital stock, or enter into any sale-leaseback transactions, or purchase or otherwise acquire (in one or a series of related transactions) any part of the property (other than purchases or other acquisitions of inventory, materials, equipment and intangible assets in the ordinary course of business) of any person. (1) IP Sub will not, and Pledgor shall not permit IP Sub to, contract, create, incur, assume or suffer or permit to exist any indebtedness of IP Sub except: (i) the ordinary course of business; and accrued expenses and trade accounts payable incurred in and its other subsidiaries. (ii) bona fide intercompany indebtedness of IP Sub to Pledgor (m) IP Sub will not, and Pledgor shall not permit IP Sub to, lend money or credit or make advances to any person, or purchase or acquire any stock, obligations or securities of, or any other interest in, or make any capital contribution to, any other person, except that the following shall be permitted: (i) IP Sub may acquire and hold accounts receivable, notes receivable, retention balances, deposits and advances owing to it; and (ii) IP Sub may acquire and hold cash and cash equivalents; (iii) IP Sub may make intercompany loans, advances or cash contributions to Pledgor or any wholly-owned subsidiary of Pledgor. (n) IP Sub will not, and Pledgor shall not permit IP Sub to, enter into any transaction or series of related transactions with any affiliates of Pledgor or any of its subsidiaries, other than (i) in the ordinary course of business and on terms and conditions substantially as favorable to IP Sub as would reasonably be obtained by IP Sub or the Pledgor at 979322 v2/sf 6. COOLSFS 0011467
that time in comparable arms-length transactions with a person other than an affiliate, or (ii) as provided in Section 5(j) above. (o) IP Sub will not, and Pledgor shall not permit IP Sub to, engage in any business other than Pledgor's business or as contemplated by the Purchase Agreement. (p) Pledgor will use Best Efforts to obtain a standstill agreement from the Agent and/or the Holders (as such terms are defined in the Senior Note Agreement) pursuant to which the Agent and/or the Holders, as applicable, that no foreclosure or similar action will be taken with respect to the Second Lien in the absence of a foreclosure or similar action by the Pledgee hereunder. (q) Defense of Intellectual Property (1) IP Sub will not, and Pledgor shall not permit IP Sub to, nor will either of them permit any of their respective licensees to, do any act or omit to do any act requested by Pledgee, as a foreseeable consequence of which any patent held by IP Sub would reasonably be expected to become invalidated or dedicated to the public. Pledgor will and, will cause IP Sub to take all commercially reasonable steps in any proceeding before the United States Patent and Trademark Office, United States Copyright Office or any office or agency in any political subdivision of the United States or in any other country or any political subdivision thereof, to maintain and pursue each material application relating to the patents, trademarks and copyrights held by IP Sub (and to obtain the relevant grant or registration) and to maintain each issued patent and each registration of the trademarks and copyrights held by IP Sub, including timely filings of applications for renewal, affidavits of use, affidavits of incontestability and payment of maintenance fees, and, if consistent with good business judgment, to initiate opposition, interference and cancellation proceedings against third parties. In the event that Pledgor has reason to believe that any Pledged Collateral consisting of a patent, trademark or copyright has been or is about to be infringed, misappropriated or diluted by a third party, Pledgor shall notify Robinson and Pledgee and shall, if consistent with good business judgment, promptly sue for infringement, misappropriation or dilution, as appropriate, and to recover any and all damages for infringement, misappropriation or dilution, and take such other actions as are commercially reasonable under the circumstances to protect the Pledged Collateral. (ii) In the event that Robinson disagrees with Pledgor's or IP Sub's business decisions under Section 5(q)(i) above with respect to whether to take actions which are "consistent with good business judgment," Pledgor shall cause its Chief Executive Officer or his designee to negotiate in good faith with Robinson for the purpose of resolving such disagreement to the parties' mutual satisfaction. If such disagreement continues after a reasonable period of time for its resolution through such negotiation, Pledgor and IP Sub shall, at the request of Pledgee, transfer the rights to pursue such actions to Pledgee, which Pledgee may prosecute at its own expense. If successful in such actions, Pledgee shall have the right to retain all proceeds and other rights, arising out of the successful prosecution of such actions. (r) So long as IP Sub or Pledgor, or their respective subsidiaries, own the Pledged Collateral, Pledgee shall indemnify and hold harmless Pledgor and IP Sub and their respective officers, directors, employees, agents and stockholders from and against any and all 979322 v2/sf 7. COOLSFS 0011468
losses, costs and liability arising from any patent action (e.g., infringement, invalidity, declaratory action for non-infringement) in respect of any Intellectual Property Rights included in the Pledged Collateral brought against any of such parties by Robinson, Pledgee or any member, officer, director, manager, employee and/or contractor of Pledgee. Section 6. Pledgor's Rights. So long as no Event of Default shall have occurred and be continuing, Pledgor shall have the right, from time to time, to vote and give consents with respect to the Pledged Collateral or any part thereof for all purposes not inconsistent with the provisions of this Pledge Agreement; provided, however, that no vote shall be cast, and no consent shall be given or action taken, which would have the effect of impairing the position or interest of Pledgee in respect of the Pledged Collateral. Section 7. Defaults and Remedies. 7.1 Events of Default. The occurrence of an Event of Default under or as defined in the Notes shall be an "Event of Default" hereunder. 7.2 Remedies. Upon the occurrence of an Event of Default and so long as the same shall be continuing, and in addition to the other remedies available under the Notes: (a) All or any portion of the Secured Obligations may, at the option of Pledgee and without demand, notice, or legal process of any kind, be declared, and immediately shall become, due and payable. (b) Pledgee (personally or through an agent) is hereby authorized and empowered to transfer and register in its name or in the name of its nominee the whole or any part of the Pledged Collateral, to exchange certificates or instruments representing or evidencing Pledged Interests for certificates or instruments of smaller or larger denominations, to exercise the voting rights with respect thereto, to collect and receive all cash dividends and other distributions made thereon, to sell in one or more sales after ten (10) days' prior written notice of the time and place of any public sale or of the time after which a private sale is to take place (which notice Pledgor agrees is commercially reasonable), but without any previous notice or advertisement, the whole or any part of the Pledged Collateral and to otherwise act with respect to the Pledged Collateral as though Pledgee were the outright owner thereof, Pledgor hereby irrevocably constituting and appointing Pledgee the proxy and attorney-in-fact of Pledgor, with full power of substitution (which appointment is coupled with an interest) to take all such actions permitted hereunder or otherwise permitted by law; provided, however, Pledgee shall not have any duty to exercise any such right or to preserve the same and shall not be liable for any failure to do so or for any delay in doing so. Any sale shall be made at a public or private sale at such location as Pledgee may reasonably select, and Pledgee may be the purchaser of the whole or any part of the Pledged Collateral so sold and hold the same thereafter in its own right free from any claim of Pledgor or any right of redemption. Each sale shall be made to the highest bidder, but Pledgee reserves the right to reject any and all bids at such sale which it, in its sole discretion, shall deem inadequate. Except as otherwise provided herein, Pledgor hereby waives demand of performance, notices of sale, advertisements, and the presence of the Pledged Collateral at any sale thereof Any sale hereunder may be conducted by an auctioneer or any officer or agent of Pledgee. 979322 v2/sf 8. COOLSFS 0011469
(c) If, at the original time or times appointed for the sale of the whole or any part of the Pledged Collateral, the highest bid shall be inadequate to discharge in full all the Secured Obligations if there be but one sale, or if the Pledged Collateral be offered for sale in lots, if at any of such sales, the highest bid for the lot offered for sale would indicate to Pledgee, in its sole discretion, the unlikelihood of the proceeds of the sales of the whole of the Pledged Collateral being sufficient to discharge all the Secured Obligations, Pledgee may, on one or more occasions and in its sole discretion, postpone any of said sales by public announcement at the time of sale, and no other notice of such postponement or postponements of sale need be given, any other notice being hereby waived; provided, however, that if a sale is postponed for more than sixty (60) days, Pledgee shall re-notice Pledgor of any subsequent sale of the affected Pledged Collateral in accordance with Section 7.2(b), above. (d) In the event of any sales hereunder, Pledgee shall, after deducting all costs or expenses of every kind (including, without limitation, reasonable attorneys' fees, costs and other legal expenses) for care, safekeeping, collection, sale, delivery, or otherwise, apply the residue of the proceeds of the sales to the payment or reduction, either in whole or in part, of the Secured Obligations in accordance with the agreements and instruments governing and evidencing such Secured Obligations, returning the surplus, if any, to Pledgor. (e) If, at any time when Pledgee shall determine to exercise its right to sell the whole or any part of the Pledged Collateral hereunder, such Pledged Collateral or the part thereof to be sold shall not, for any reason whatsoever, be effectively registered under the Securities Act of 1933, as amended (the "Act"), Pledgee may, in its discretion (subject only to applicable requirements of law), sell such Pledged Collateral or part thereof by private sale in such manner and under such circumstances as Pledgee may deem necessary or advisable, but subject to the other requirements of this Section 7, and shall not be required to effect such registration or cause the same to be effected. Without limiting the generality of the foregoing, in any such event Pledgee may, in its sole discretion, (i) in accordance with applicable securities laws, proceed to make such private sale notwithstanding that a registration statement for the purpose of registering such Pledged Collateral or part thereof could be or shall have been filed under the Act; (ii) approach and negotiate with a single possible purchaser to effect such sale; and (iii) restrict such sale to a purchaser who will represent and agree that such purchaser is purchasing for its own account, for investment, and not with a view to the distribution or sale of such Pledged Collateral or part thereof. In addition to a private sale as provided above in this Section 7, if any of the Pledged Collateral shall not be freely distributable to the public without registration under the Act at the time of any proposed sale hereunder, then Pledgee shall not be required to effect such registration or cause the same to be effected but may, in its sole discretion (subject only to applicable requirements of law), require that any sale hereunder (including a sale at auction) be conducted subject to such restrictions as Pledgee may, in its sole discretion, deem necessary or appropriate in order that such sale (notwithstanding any failure so to register) may be effected in compliance with the federal bankruptcy code and other laws affecting the enforcement of creditors' rights and the Act and all applicable state securities laws. Pledgor agrees that a breach of any covenants contained in this Section 7 with the effect of denying Pledgee the realization of the practical benefits to be provided by this Section 7 will cause irreparable injury to Pledgee, that in such event Pledgee would have no adequate remedy at law in respect of such breach and, as a consequence, agrees 979322 v2'sf 9. COOLSFS 0011470
that in such event each and every covenant contained in this Section 7 shall be specifically enforceable against Pledgor, and Pledgor hereby waives and agrees not to assert any defenses against an action for specific performance of such covenants except for a defense that the Secured Obligations are not then due and payable. Section 8. Termination. Immediately upon repayment or conversion in full of both Notes or ten (10) calendar days after a Designated Liquidity Event (as such term is defined in the Notes), whichever first occurs, Pledgee shall deliver to Pledgor the Pledged Collateral pledged by Pledgor at the time subject to this Pledge Agreement and all instruments of assignment executed in connection therewith, free and clear of the lien hereof, and this Pledge Agreement and all of Pledgor's obligations hereunder shall at such time automatically terminate. Section 9. Consent of Governmental Authorities. Notwithstanding anything to the contrary contained herein, to the extent that the exercise of any power granted, or remedy available, to Pledgee hereunder requires the prior approval of any governmental authority, then Pledgee hereby agrees that it may not and shall not exercise any such right or avail itself of any such remedy, until the required consent has been obtained. Section 10. Miscellaneous. 10.1 Entire Agreement. This Pledge Agreement constitutes and contains the entire agreement of the parties and supersedes any and all prior and contemporaneous agreements, negotiations, correspondence, understandings and communications between the parties, whether written or oral, respecting the subject matter hereof. 10.2 Assignability. This Pledge Agreement shall be binding upon and inure to the benefit of Pledgor and Pledgee and their respective successors and assigns, except that Pledgor shall not have the right to assign its rights hereunder or any interest herein without the prior written consent of Pledgee. 10.3 Notices. Any notice or other communication hereunder to any party shall be addressed and delivered (and shall be deemed given) in accordance with the Purchase Agreement. 10.4 No Waiver; Amendments. No failure on the part of Pledgee to exercise, no delay in exercising and no course of dealing with respect to, any right hereunder shall operate as a waiver thereof; nor shall any single or partial exercise of any right hereunder preclude any other or further exercise thereof or the exercise of any other right. The remedies herein provided are cumulative and not exclusive of any remedies provided by law. This Pledge Agreement may not be amended or modified except by written agreement between Pledgor and Pledgee, and no consent or waiver hereunder shall be valid unless in writing and signed by Pledgee. 10.5 Severability. If any provision of this Pledge Agreement is held to be unenforceable for any reason, it shall be adjusted, if possible, rather than voided in order to achieve the intent of the parties to the extent possible. In any event, all other provisions of this Pledge Agreement shall be deemed valid and enforceable to the full extent possible. 979322 v2/sf 10. COOLSFS 0011471
10.6 Governing Law. This Pledge Agreement has been delivered to Pledgee and accepted by Pledgee in the State of California. IN ALL RESPECTS, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE, THIS PLEDGE AGREEMENT AND THE OBLIGATIONS ARISING HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF CALIFORNIA APPLICABLE TO CONTRACTS MADE AND PERFORMED IN SUCH STATE, WITHOUT REGARD TO THE PRINCIPLES THEREOF REGARDING CONFLICT OF LAWS, AND ANY APPLICABLE LAWS OF THE UNITED STATES OF AMERICA. [REMINDER OF PAGE INTENTIONALLY LEFT BLANK] 979322 v2/sf 11. COOLSFS 0011472
IN WITNESS WHEREOF, Pledgor has caused this Pledge Agreement to be duly executed as of the date first written above. PLEDGOR: SOLIDUS NETWORKS, INC. panos utive Vice President IP SUB: PAY BY TOUCH CHECKING RESOURCES, INC. By: Spanos cutive Vice President Agreed and Accepted: BIOPAY, LLC By: Name: Title: [Signature page to Pledge Agreement] COOLSFS 0011473
IN WITNESS WHEREOF, Pledgor has caused this Pledge Agreement to be duly executed as of the date first written above. PLEDGOR: SOLIDUS NETWORKS, INC. By: Name: Steve Zelinger Title: Executive Vice President and General Counsel IP SUB: PAY BY TOUCH CHECKING RESOURCES, INC. By: Name: Steve Zelinger Title: General Counsel and Secretary Agreed and Accepted: BIOPAY, LLC Name: Title: [Signature page to Pledge Agreement] COOLSFS 0011474