EXHIBIT M
PLEDGE AGREEMENT
THIS PLEDGE AGREEMENT is made and entered into as of December 20, 1995
by ▇▇▇▇▇▇▇ ▇. Lovely (the "Pledgor") in favor of ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇ ("▇▇▇▇▇▇").
1.01 Pledge and Delivery of Property.
(a) In consideration of a loan of $57,268 (the "Indebtedness")
from ▇▇▇▇▇▇ to the Pledgor in connection with the Pledgor's purchase of 200,000
shares of the Common Stock of Computone Corporation ("Computone"), which
Indebtedness is evidenced by the Pledgor's promissory note due on demand after
June 30, 1996 (the "Note"), the Pledgor hereby grants and pledges to ▇▇▇▇▇▇, for
the benefit of ▇▇▇▇▇▇ as security for the Pledgor's Indebtedness to ▇▇▇▇▇▇ (the
"Obligations"), a purchase money security interest in and a lien upon the
200,000 shares of the Common Stock, $.01 par value, of Computone, including any
securities into which such property is converted by merger, consolidation,
acquisition, reorganization, recapitalization, stock split or reverse stock
split, or otherwise, and all rights, titles, interests, privileges and
preferences appertaining or incidental to any of the foregoing and all proceeds
thereof upon sale or otherwise (all of which are herein collectively referred to
as the "Collateral"). The securities referred to above shall be held by
▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq. ("▇▇▇▇▇▇"), of Duane, Morris & Heckscher, 4200 ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, as agent for the Pledgor and
▇▇▇▇▇▇ as their respective interests may appear under this Pledge Agreement
until satisfaction of the Obligations, and the purchase money security interest
granted hereby in such securities shall be subject to Section 3.01 hereof.
(b) The Pledgor agrees that the Collateral shall be delivered
to ▇▇▇▇▇▇, as agent for the Pledgor and ▇▇▇▇▇▇ for ▇▇▇▇▇▇'▇ benefit,
contemporaneously herewith. All securities and instruments delivered to ▇▇▇▇▇▇
under this Pledge Agreement will be in negotiable form suitable for transfer by
delivery except as otherwise provided in any restrictive legend stamped or
imprinted on each certificate of shares. In this regard, the Pledgor is
delivering to ▇▇▇▇▇▇ stock ▇▇▇▇▇▇ duly executed in blank with respect to such
securities.
2.01 Liability to ▇▇▇▇▇▇ and ▇▇▇▇▇▇, Liability of ▇▇▇▇▇▇ and ▇▇▇▇▇▇. Neither
▇▇▇▇▇▇ nor ▇▇▇▇▇▇ shall have any duty to the Pledgor relative to any of the
Collateral; provided, however, that ▇▇▇▇▇▇ and ▇▇▇▇▇▇ shall take the same degree
of care in relation to the Collateral in their respective possession as each
takes with respect to his own securities of a similar type. ▇▇▇▇▇▇ and ▇▇▇▇▇▇
shall not be liable for any action or omission to act on the part of any agent
appointed and selected by ▇▇▇▇▇▇ in good faith to act with respect to the
Collateral, or any part thereof.
3.01 Preservation of Security Interest. The Pledgor will faithfully preserve and
protect ▇▇▇▇▇▇'▇ purchase money security interest for the benefit of ▇▇▇▇▇▇ in
the Collateral and the proceeds thereof and will do all such acts and things and
execute and deliver all such documents and instruments as ▇▇▇▇▇▇ may from time
to time reasonably request to assist in the preservation and perfection of such
security interest. The Pledgor will not otherwise encumber any of the
Collateral. Notwithstanding anything herein to the contrary, the Pledgor shall
be free to offer the Collateral for sale as contemplated by paragraphs 6 and 11
of the December 20, 1995 agreement among Computone, Jaguar Inc., ▇▇▇▇▇▇, the
Pledgor, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ and ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ provided that any such sale is
made at not less than the then prevailing market price of the Collateral as
reported by Nasdaq and further provided that the entire net proceeds of the sale
is applied to the payment of the Obligations.
4.01 Voting; Dividends; Proceeds.
(a) Unless and until an Event of Default (as described in
Section 5.01 hereof) shall have occurred and notice has been given pursuant to
Section 4.01(b) hereof, the Pledgor shall be entitled to exercise all voting and
consensual powers pertaining to any part of the Collateral.
(b) Upon the occurrence and during the continuance of an Event
of Default (as described in Section 5.01 hereof), ▇▇▇▇▇▇ may at his option at
any time provide notice to the Pledgor that all rights of the Pledgor to
exercise the voting or consensual rights and powers which the Pledgor is
entitled to exercise pursuant to Section 4.01(a) hereof shall cease, and all
such rights shall thereupon become vested in ▇▇▇▇▇▇ (for the benefit of ▇▇▇▇▇▇)
who shall have the sole and exclusive right and authority to exercise the voting
or consensual rights and powers relating or pertaining to the Collateral or any
part thereof.
(c) Upon the giving of notice by the Pledgor as contemplated
by Section 4.01(b) hereof following the occurrence and during the continuance of
an Event of Default, the Pledgor hereby appoints ▇▇▇▇▇▇ as his true and lawful
attorney and proxy with full power to exercise on the Pledgor's behalf the
voting or consensual rights and powers specified in Section 4.01(b) hereof, it
being understood that this appointment is coupled with an interest and is
irrevocable during the continuance of the Event of Default. Any proxy granted by
virtue of the preceding sentence shall terminate as specified therein but in no
event later than the termination of this Pledge Agreement pursuant to Section
8.01 hereof or the release of the Collateral pursuant to Section 9.01 hereof.
Notwithstanding the foregoing, ▇▇▇▇▇▇ shall not have any responsibility to the
Pledgor or any other person for his exercise or failure to exercise such voting
or consensual rights and powers. Upon such Event of Default being cured to the
satisfaction of ▇▇▇▇▇▇, the Pledgor shall be entitled to exercise the voting
rights pursuant to Section 4.01(a) hereof.
(d) Unless and until an Event of Default (as described in
Section 5.01 hereof) shall have occurred and be continuing and notice
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has been given pursuant to Section 4.01(b) hereof, the Pledgor shall be entitled
to any and all dividends on the Collateral or any part thereof, provided,
however, that all dividends in stock or property, and all liquidating dividends
or distributions or returns of capital upon or in respect of the Collateral or
any part thereof or resulting from any split, reverse split, revision or
reclassification of the Collateral or any part thereof or received in exchange
for the Collateral or any part thereof as a result of a merger, consolidation or
otherwise, shall be deemed to be Collateral under and subject to the terms of
this Pledge Agreement and shall be paid, transferred or delivered directly to
▇▇▇▇▇▇, and shall be held by ▇▇▇▇▇▇ for the benefit of ▇▇▇▇▇▇ as additional
Collateral pledged under and subject to the terms of this Pledge Agreement.
5.01 Events of Default. The occurrence of any of the following
shall constitute an Event of Default hereunder:
(a) Failure of the Pledgor to pay any Obligation when due;
(b) The occurrence of any other default under the Promis-
sory Note of the Pledgor to ▇▇▇▇▇▇ the payment of which is secured by
this Pledge Agreement; and
(c) The insolvency of the Pledgor; the admission by the
Pledgor of his inability to pay his debts as they become due; the commencement
of any case by or against the Pledgor under any bankruptcy or insolvency law
which remains undismissed for a period of 30 days or more; the making by the
Pledgor of any assignment for the benefit of creditors; or the entering of any
order for relief which remains undismissed for a period of 30 days or more.
6.01 Rights upon Default, etc.
(a) Rights of ▇▇▇▇▇▇; Sale of Collateral. Upon the occurrence
and during the continuance of an Event of Default (as defined in Section 5.01
hereof), ▇▇▇▇▇▇ may at his option declare all of the Obligations to be
immediately due in full, and ▇▇▇▇▇▇, for his benefit, shall thereupon have all
of the rights and remedies provided to him as a secured party under the Uniform
Commercial Code in effect in Delaware or in such other jurisdictions in which
any Collateral is located, and the Pledgor further agrees that (i) in the event
that ▇▇▇▇▇▇ determines in his sole discretion to give notice of disposition of
the Collateral, written notice mailed to the Pledgor at the address described in
Section 13.01 hereof ten days prior to the date of public sale of the Collateral
or prior to the date after which private sale or other disposition of said
property will be made, shall constitute reasonable notice, but notice given in
any other reasonable manner or at any other time shall be sufficient and (ii)
without precluding any other method of sale, the sale of the Collateral shall
have been made in a commercially reasonable manner if conducted in conformity
with reasonable commercial practices of banks disposing of similar property.
(b) Private Sale. The Pledgor recognizes that ▇▇▇▇▇▇,
after an Event of Default, may be unable to effect public sale of all
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or a portion of the Collateral by reason of certain prohibitions contained in
the Securities Act of 1933, as amended (or any successor federal statute), and
applicable state securities laws, but may be compelled to resort to one or more
private sales to a restricted group of purchasers who will be obliged to
represent, among other things, that they are acquiring such Collateral for their
own account for investment and not with a view to distribution. The Pledgor
agrees that private sales so made may be made at prices and on other terms less
favorable to the Pledgor (as seller) than if such Collateral were sold at public
sale and that ▇▇▇▇▇▇ has no obligation to delay sale of any such Collateral for
the period of time necessary to permit the issuers of such Collateral, even if
such issuers would agree, to register or qualify such Collateral for public sale
under the Securities Act of 1933, as amended, and applicable state securities
laws. The Pledgor agrees that private sales made under the foregoing
circumstances and in compliance with applicable federal and state securities
laws shall be deemed to have been made in a commercially reasonable manner under
the Uniform Commercial Code as in effect in Delaware or in such other
jurisdiction in which Collateral may be located.
(c) In effecting any sale of Collateral pursuant to the
provisions hereof, ▇▇▇▇▇▇ agrees to sell only that number of shares of the
Collateral as is necessary to pay to ▇▇▇▇▇▇ the full amount of the Obligations
secured hereby.
(d) ▇▇▇▇▇▇ agrees that, notwithstanding anything to the
contrary herein, in the Note or in any other document, instrument or agreement
executed and delivered in connection herewith or therewith, the Pledgor shall
not be personally liable for the payment of any of the Obligations, and ▇▇▇▇▇▇
further agrees that the liability of the Pledgor in respect of the Obligations,
and the recourse of ▇▇▇▇▇▇ hereunder and under the Note, shall be limited solely
to the Collateral in accordance with the terms and conditions hereof.
7.01 ▇▇▇▇▇▇ as Attorney-in-Fact. Upon the occurrence and during the continuance
of an Event of Default and after notice pursuant to Section 4.01(b) hereof, the
Pledgor hereby appoints ▇▇▇▇▇▇ as his agent and attorney-in-fact for the purpose
of carrying out the provisions of this Pledge Agreement and taking any action
and executing any instruments which ▇▇▇▇▇▇ may ▇▇▇▇ necessary or advisable to
accomplish the purposes hereof, which appointment as agent and attorney-in-fact
is irrevocable and coupled with an interest. Without limiting the generality of
the foregoing, after the occurrence of an Event of Default, ▇▇▇▇▇▇ shall have
the right to receive, collect and endorse all checks made payable to the Pledgor
or his order representing any dividend, payment of interest or other
distribution in respect of the Collateral or any part thereof and to give full
discharge for the same.
8.01 Continuing Agreement. This is a continuing agreement and shall remain in
full force and effect and be binding upon the Pledgor, and his personal
representatives, successors and assigns, until all Obligations of the Pledgor to
▇▇▇▇▇▇, whether now existing or hereafter arising, shall have been fully
satisfied and discharged.
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9.01 Release of Lien; Delivery of Collateral. Upon full and final satisfaction
of the Obligations and in connection with the sale of any Collateral permitted
pursuant to Section 3.01 hereof, ▇▇▇▇▇▇ shall, at the Pledgor's expense,
immediately deliver to the Pledgor the Collateral together with such documents
or instruments as the Pledgor may reasonably request to evidence discharge and
satisfaction of the purchase money security interest and lien created hereby.
10.01 Costs and Expenses. In the event that an Event of Default shall occur and
be continuing, the Pledgor will pay, immediately upon demand, to ▇▇▇▇▇▇ all
reasonable costs and expenses, including reasonable attorneys' fees, related or
incidental to the care, holding, retaking, preparing for sale, selling or
collection of, or realization upon, any of the Collateral or relating or
incidental to establishing, reserving or enforcing the rights of ▇▇▇▇▇▇
hereunder or in respect of any of the Collateral and obtaining legal advice with
regard to any of the foregoing, whether or not suit be brought. Further, the net
proceeds of the Collateral resulting from sale, collection or otherwise and
other available monies coming into the hands of ▇▇▇▇▇▇ may be applied by him,
before or after default, to the satisfaction or reduction of any of the
Obligations as he may see fit, whether or not matured.
11.01 No Waiver; Cumulative Rights. No failure on the part of ▇▇▇▇▇▇ to
exercise, and no delay in exercising, any right, remedy or power hereunder shall
operate as a waiver thereof, nor shall any single or partial exercise by ▇▇▇▇▇▇
of any right, remedy or power hereunder preclude any other or future exercise of
any other right, remedy or power. Each and every right, remedy and power hereby
granted to ▇▇▇▇▇▇ or allowed him by any other agreement shall be cumulative and
not exclusive the one of any other, and may be exercised by ▇▇▇▇▇▇ from time to
time. No modification or waiver of any provision of this Pledge Agreement and no
consent to any departure by the Pledgor therefrom shall in any event be
effective unless the same shall be in writing and signed by ▇▇▇▇▇▇, and then
such waiver or consent shall be effective only in the specific instance and for
the purpose for which given. No executory agreement, in whole or in part, shall
be effective to change, modify or discharge, in whole or in part, this Pledge
Agreement unless such agreement shall be in writing and signed by ▇▇▇▇▇▇. No
notice to or demand on the Pledgor in any case shall, of itself, entitle the
Pledgor to any other or further notice or demand in similar or other
circumstances.
12.01 Choice of Law. Except as expressly otherwise herein provided, this Pledge
Agreement shall be governed by, and construed in accordance with, the laws of
Delaware (except for the choice of law provisions thereof).
13.01 Addresses for Notices. All notices or other communications required or
permitted hereunder shall be in writing and shall be given by confirmed telex or
telecopy or registered mail addressed, if to the Pledgor to: ▇▇▇▇▇▇▇ ▇. Lovely,
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇; if to ▇▇▇▇▇▇ to: ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇, Pennsylvania Merchant Group Ltd, ▇▇▇▇▇ ▇▇▇, ▇▇▇ ▇▇▇▇▇▇-▇▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇; and in either case, with a copy to
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▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇▇ & Heckscher, ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
14.01 Severability. The provisions of this Pledge Agreement are severable, and
if any clause or provision shall be held invalid or unenforceable in whole or in
part in any jurisdiction, then such invalidity or unenforceability shall affect
only such clause or provision or part thereof in such jurisdiction and shall not
in any manner affect such clause or provision in any other jurisdiction or any
other clause or provision in this Pledge Agreement in any jurisdiction.
15.01 Miscellaneous. The terms, provisions, covenants and agreements,
representations and warranties contained herein shall be binding upon and shall
inure to the benefit of the Pledgor, ▇▇▇▇▇▇, and their respective successors and
assigns.
IN WITNESS WHEREOF, the undersigned has executed this instrument as of
the date first above written.
Witness:
/s/ ▇. ▇▇▇▇▇ /s/ ▇▇▇▇▇▇▇ ▇. Lovely
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▇▇▇▇▇▇▇ ▇. Lovely
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