VALICERT INC
FULL-RECOURSE PROMISSORY NOTE AND PLEDGE AND SECURITY AGREEMENT WITH T CONLEY
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<TYPE>EX-10.19
<SEQUENCE>14
<FILENAME>dex1019.htm
<DESCRIPTION>FULL-RECOURSE PROMISSORY NOTE AND PLEDGE AND SECURITY AGREEMENT WITH T CONLEY
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<TITLE>Full-Recourse Promissory Note and Pledge and Security Agreement with T Conley</TITLE>
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<P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000"><B>Exhibit 10.19 </B></FONT></P><P STYLE="margin-top:0px;margin-bottom:-6px"><FONT
SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000"><B>FULL-RECOURSE SECURED PROMISSORY NOTE </B></FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT
SIZE="1">&nbsp;</FONT></P>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="100%" BORDER="0" ALIGN="center">

<TR>
<TD VALIGN="top" WIDTH="50%"> <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:2%; text-indent:-2%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">$24,750.00 (<I>fill in amount</I>)</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right" WIDTH="50%"> <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">3/6/00 (<I>fill in date</I>)</FONT></P></TD></TR>
<TR>
<TD><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right" WIDTH="50%"> <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Mountain View, California</FONT></P></TD></TR>
</TABLE><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">For
value received, the undersigned promises to pay ValiCert, Inc., a Delaware corporation (the &#147;<U>Company</U>&#148;), at its principal office the principal sum of $24,750.00 with interest from the date hereof at a rate of 6% per annum, compounded
annually, on the unpaid balance of such principal sum. Such principal and interest shall be due and payable on the date which is five (5) years from the date hereof, except as set forth below. </FONT></P><P
STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">This Note evidences the undersigned&#146;s payment for the
purchase of certain shares of the Company&#146;s Common Stock. In the event the undersigned sells any such shares prior to payment in full of this Note, a pro rata portion of the principal and interest under this Note shall be due and payable within
five (5) days following such sale. </FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">If the
undersigned&#146;s employment or consulting relationship with the Company is terminated for any reason (including death or disability) prior to payment in full of this Note, this Note shall be immediately due and payable. </FONT></P><P
STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Principal and interest are payable in lawful money of the
United States of America. AMOUNTS DUE UNDER THIS NOTE MAY BE PREPAID AT ANY TIME WITHOUT PREMIUM OR PENALTY. </FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P
STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Should suit be commenced to collect any sums due under this Note, such sum as the Court may deem reasonable shall be added hereto as
attorneys&#146; fees. The undersigned waives presentment for payment, protest, notice of protest and notice of nonpayment of this Note. </FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P
STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">This Note, which is full recourse, is secured by a pledge of certain shares of Common Stock of the Company and is subject to the terms of
a Pledge and Security Agreement between the undersigned and the Company of even date herewith. </FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><DIV STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right">
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="40%" BORDER="0">

<TR>
<TD VALIGN="top" ALIGN="center" WIDTH="40%"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">/s/&nbsp;&nbsp;&nbsp;&nbsp;T<SMALL>IMOTHY</SMALL> G.
C<SMALL>ONLEY&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</SMALL></FONT></P><HR SIZE="1" NOSHADE COLOR="#000000" ALIGN="left"></TD></TR>
<TR>
<TD VALIGN="top" ALIGN="center" WIDTH="40%"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="1" COLOR="#000000"><B>Timothy G. Conley</B></FONT></P></TD></TR>
<TR>
<TD HEIGHT="16"></TD></TR>
<TR>
<TD VALIGN="top" ALIGN="center" WIDTH="40%"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">/s/&nbsp;&nbsp;&nbsp;&nbsp;J<SMALL>OAN</SMALL> C.
C<SMALL>ONLEY&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</SMALL></FONT></P><HR SIZE="1" NOSHADE COLOR="#000000" ALIGN="left"></TD></TR>
<TR>
<TD VALIGN="top" ALIGN="center" WIDTH="40%"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="1" COLOR="#000000"><B>Joan C. Conley</B></FONT></P></TD></TR>
</TABLE></DIV>

<p Style='page-break-before:always'>
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<P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2"
COLOR="#000000"><B>FULL-RECOURSE SECURED PROMISSORY NOTE </B></FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="100%" BORDER="0" ALIGN="center">

<TR>
<TD VALIGN="top" WIDTH="50%"> <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:2%; text-indent:-2%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">$140,250.00 (<I>fill in amount</I>)</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right" WIDTH="50%"> <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">3/6/00 (<I>fill in date</I>)</FONT></P></TD></TR>
<TR>
<TD><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right" WIDTH="50%"> <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Mountain View, California</FONT></P></TD></TR>
</TABLE><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">For
value received, the undersigned promises to pay ValiCert, Inc., a Delaware corporation (the &#147;<U>Company</U>&#148;), at its principal office the principal sum of $140,250.00 with interest from the date hereof at a rate of 6% per annum,
compounded annually, on the unpaid balance of such principal sum. Such principal and interest shall be due and payable on the date which is five (5) years from the date hereof, except as set forth below. </FONT></P><P
STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">This Note evidences the undersigned&#146;s payment for the
purchase of certain shares of the Company&#146;s Common Stock. In the event the undersigned sells any such shares prior to payment in full of this Note, a pro rata portion of the principal and interest under this Note shall be due and payable within
five (5) days following such sale. </FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">If the
undersigned&#146;s employment or consulting relationship with the Company is terminated for any reason (including death or disability) prior to payment in full of this Note, this Note shall be immediately due and payable. </FONT></P><P
STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Principal and interest are payable in lawful money of the
United States of America. AMOUNTS DUE UNDER THIS NOTE MAY BE PREPAID AT ANY TIME WITHOUT PREMIUM OR PENALTY. </FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P
STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Should suit be commenced to collect any sums due under this Note, such sum as the Court may deem reasonable shall be added hereto as
attorneys&#146; fees. The undersigned waives presentment for payment, protest, notice of protest and notice of nonpayment of this Note. </FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P
STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">This Note, which is full recourse, is secured by a pledge of certain shares of Common Stock of the Company and is subject to the terms of
a Pledge and Security Agreement between the undersigned and the Company of even date herewith. </FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><DIV STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right">
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="40%" BORDER="0">

<TR>
<TD VALIGN="top" ALIGN="center" WIDTH="40%"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">/s/&nbsp;&nbsp;&nbsp;&nbsp;T<SMALL>IMOTHY</SMALL> G.
C<SMALL>ONLEY&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</SMALL></FONT></P><HR SIZE="1" NOSHADE COLOR="#000000" ALIGN="left"></TD></TR>
<TR>
<TD VALIGN="top" ALIGN="center" WIDTH="40%"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="1" COLOR="#000000"><B>Timothy G. Conley</B></FONT></P></TD></TR>
<TR>
<TD HEIGHT="16"></TD></TR>
<TR>
<TD VALIGN="top" ALIGN="center" WIDTH="40%"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">/s/&nbsp;&nbsp;&nbsp;&nbsp;J<SMALL>OAN</SMALL> C.
C<SMALL>ONLEY&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</SMALL></FONT></P><HR SIZE="1" NOSHADE COLOR="#000000" ALIGN="left"></TD></TR>
<TR>
<TD VALIGN="top" ALIGN="center" WIDTH="40%"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="1" COLOR="#000000"><B>Joan C. Conley</B></FONT></P></TD></TR>
</TABLE></DIV>

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<P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000"><B>PLEDGE AND
SECURITY AGREEMENT </B></FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">This Pledge And Security
Agreement (this &#147;Agreement&#148;) is entered into as of March 6, 2000 between ValiCert, Inc., a Delaware corporation (the &#147;<U>Company</U>&#148;), and Timothy Conley (&#147;<U>Purchaser</U>&#148;). </FONT></P><P
STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000"><B>RECITALS </B></FONT></P><P
STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">A. Purchaser is obligated to the Company under a Full-Recourse
Secured Promissory Note of even date herewith (the &#147;<U>Note</U>&#148;). </FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT
FACE="Times New Roman" SIZE="2" COLOR="#000000">B. The Company is willing to advance/loan money in reliance in part upon this Agreement by Purchaser. </FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P
STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000"><B>AGREEMENT </B></FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P
STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">1. <B><U>Grant of Security Interest</U></B>. Purchaser hereby assigns, pledges and grants to the Company, a lien on and first priority
security interest in all of Purchaser&#146;s right, title and interest in and to all of the property described in Section 2 below (the &#147;<U>Collateral</U>&#148;) to secure the full payment and performance of the obligations of Purchaser to the
Company under the Note and all amendments, extensions, or renewals of the Note (the &#147;<U>Obligations</U>&#148;). Purchaser shall execute all documents and take all actions reasonably necessary to perfect the Company&#146;s security interest in
the Collateral. </FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">2. <B><U>Collateral</U></B>. The
Collateral shall consist of all shares of the Company&#146;s Common Stock purchased by Purchaser pursuant to the exercise of Purchaser&#146;s option to purchase the Company&#146;s Common Stock. In the event that Purchaser prepays all or a portion of
the Note in accordance with the provisions thereof, Purchaser intends, unless written notice to the contrary is delivered to the Company, that the Collateral represented by the portion of the Note so repaid, including annual interest thereon, shall
continue to be so held by the Company to serve as independent collateral for the outstanding portion of the Note for the purpose of commencing the holding period set forth in Rule 144(d) promulgated under the Securities Act of 1933, as amended.
</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">3. <B><U>Delivery of Collateral</U></B>.
Concurrently with Purchaser&#146;s delivery to the Company of the Note, Purchaser shall deliver the Collateral to the Company. The Company or its legal counsel shall hold the Collateral as security for Purchaser&#146;s obligations under the Note and
shall not release the Collateral until such obligations are discharged in full to the satisfaction of the Company. </FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P
STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">4. <B><U>Covenants</U></B>. Purchaser hereby covenants and agrees as follows: </FONT></P><P
STYLE="margin-top:0px;margin-bottom:-6px"><FONT SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">(a) Purchaser will do all acts that may be
necessary to maintain, preserve, and protect the Collateral. </FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">3 </FONT></P>


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<P STYLE="margin-top:0px;margin-bottom:-6px"><FONT SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2"
COLOR="#000000">(b) Purchaser will keep the Collateral free of all other liens or charges except those provided herein. </FONT></P><P STYLE="margin-top:0px;margin-bottom:-6px"><FONT SIZE="1">&nbsp;</FONT></P><P
STYLE="margin-top:0px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">(c) Purchaser will not sell, transfer, redeem, exchange, convey, pledge or otherwise dispose or surrender (other than to
the Company) the Collateral or any interest therein. </FONT></P><P STYLE="margin-top:0px;margin-bottom:-6px"><FONT SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT FACE="Times New Roman"
SIZE="2" COLOR="#000000">(d) Purchaser will defend any proceeding which may affect its title to or the Company&#146;s interest in the Collateral. </FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P
STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">5. <B><U>Authorized Action by the Company</U></B>. Purchaser hereby irrevocably appoints the Company as its attorney-in-fact to do at any
time prior to or subsequent to an Event of Default (as defined below) any act which Purchaser is obligated by this Agreement to do (but the Company shall not be obligated to nor shall it incur any liability to Purchaser or any third parties for
failure so to do). In addition, at any time after the occurrence of an Event of Default, the Company is authorized: </FONT></P><P STYLE="margin-top:0px;margin-bottom:-6px"><FONT SIZE="1">&nbsp;</FONT></P><P
STYLE="margin-top:0px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">(a) to exercise such rights and powers as Purchaser might exercise with respect to the Collateral; </FONT></P><P
STYLE="margin-top:0px;margin-bottom:-6px"><FONT SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">(b) to make any compromise and take any
action the Company deems advisable with respect to the Collateral; and </FONT></P><P STYLE="margin-top:0px;margin-bottom:-6px"><FONT SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT
FACE="Times New Roman" SIZE="2" COLOR="#000000">(c) to transfer the Collateral to its own name or its nominee&#146;s name in accordance with applicable law. </FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P
STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">The appointment granted herein is irrevocable and coupled with an interest. </FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT
SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">6. <B><U>Voting Rights</U></B>. In the absence of an Event of Default, Purchaser shall be entitled to
exercise all voting and or consensual powers pertaining to the Collateral for all purposes not inconsistent with this Agreement. </FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P
STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">7. <B><U>Event of Default</U></B>. At the option of the Company, the following shall constitute an &#147;Event of Default&#148; under this
Agreement: </FONT></P><P STYLE="margin-top:0px;margin-bottom:-6px"><FONT SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">(a) If Purchaser
fails to pay when due any amount owed under the Note. </FONT></P><P STYLE="margin-top:0px;margin-bottom:-6px"><FONT SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT FACE="Times New Roman"
SIZE="2" COLOR="#000000">(b) If Purchaser breaches of any provision of this Agreement. </FONT></P><P STYLE="margin-top:0px;margin-bottom:-6px"><FONT SIZE="1">&nbsp;</FONT></P><P
STYLE="margin-top:0px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">(c) If any representation or warranty given by Purchaser herein is false or inaccurate in any material respect at the time
given. </FONT></P><P STYLE="margin-top:0px;margin-bottom:-6px"><FONT SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">(d) If Purchaser makes
an assignment for the benefit of creditors. </FONT></P><P STYLE="margin-top:0px;margin-bottom:-6px"><FONT SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2"
COLOR="#000000">(e) If Purchaser (i) becomes insolvent or (ii) files any application or petition in any tribunal for the appointment of a trustee or receiver, or (iii) commences any proceeding under any bankruptcy or reorganization statute, or under
any provision of the United States Bankruptcy Code, or under any insolvency law, or under any dissolution or liquidation law whether now or hereafter in effect. </FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT
SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">8. <B><U>Remedies Upon Default</U></B>. Upon the occurrence of any Event of Default, the Company shall have
the rights specified in Articles Eight and Nine of the California Commercial </FONT>
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<FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Code and any other rights provided by law by virtue of this Agreement or by virtue of any judgment obtained by the Company. Purchaser shall
remain obligated for any deficiency remaining after foreclosure upon the Collateral. </FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT
FACE="Times New Roman" SIZE="2" COLOR="#000000">9. <B><U>Application of Proceeds</U></B>. The proceeds of any sale or other disposition of the Collateral following the occurrence of an Event of Default shall be applied by the Company as follows:
</FONT></P><P STYLE="margin-top:0px;margin-bottom:-6px"><FONT SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">(a) First, to the reasonable
expenses of redeeming, collecting, retaking, holding, preparing for sale, selling and the like and the reasonable attorneys&#146; fees and legal expenses incurred by the Company. </FONT></P><P STYLE="margin-top:0px;margin-bottom:-6px"><FONT
SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">(b) Thereafter, to the satisfaction of the Obligations. </FONT></P><P
STYLE="margin-top:0px;margin-bottom:-6px"><FONT SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">(c) Thereafter, any remaining proceeds shall
be delivered to Purchaser. </FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">10.
<B><U>Termination</U></B>. This Agreement, except for the representations and warranties herein, shall terminate when all the Obligations have been fully paid. </FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P
STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">11. <B><U>No Waiver</U></B>. the Company shall not by any act or omission be deemed to have waived any rights, powers or remedies
hereunder unless such waiver be in writing and signed by the Company and then only to the extent specifically set forth therein; a waiver of one event shall not be construed as a bar to or waiver of such right or remedy on a subsequent event.
</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">12. <B><U>Binding Agreement; Assignment</U></B>.
This Agreement shall be binding upon and inure to the benefit of the parties hereto and their successors and assigns, except that Purchaser shall not be permitted to assign this Agreement herein or any obligation hereunder. </FONT></P><P
STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">13. <B><U>Governing Law</U></B>. This Agreement and all acts
and transactions pursuant hereto and the rights and obligations of the parties hereto shall be governed, construed and interpreted in accordance with the laws of the State of California, without giving effect to principles of conflicts of law.
</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">14. <B><U>Amendment</U></B>. This Agreement may
be altered, amended or repealed, in whole or in part, only by the written consent of all the parties to this Agreement at the time of such amendment. </FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P
STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">15. <B><U>Counterparts</U></B>. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original and
all of which together shall constitute one instrument. </FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2"
COLOR="#000000">[Signature Page Follows] </FONT></P>

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<P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">The parties
have as caused this Pledge and Security Agreement to be duly executed and delivered as of the date first above written. </FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
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<TD VALIGN="top" COLSPAN="3" WIDTH="45%"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">VALICERT, INC. </FONT></P></TD></TR>
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<TD VALIGN="top" ALIGN="center" WIDTH="45%"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">/s/&nbsp;&nbsp;&nbsp;&nbsp;T<SMALL>IMOTHY</SMALL>
C<SMALL>ONLEY&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</SMALL></FONT></P><HR SIZE="1" NOSHADE COLOR="#000000" ALIGN="left"></TD>
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<TD VALIGN="top" WIDTH="4%"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">By:</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top" ALIGN="center" WIDTH="45%"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">/s/&nbsp;&nbsp;&nbsp;&nbsp;J<SMALL>OSEPH</SMALL>
A<SMALL>MRAM&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</SMALL></FONT></P><HR SIZE="1" NOSHADE COLOR="#000000" ALIGN="left"></TD></TR>
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<TD VALIGN="top" ALIGN="center" WIDTH="45%"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="1" COLOR="#000000"><B>Timothy Conley</B></FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;</FONT></TD>
<TD><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top" WIDTH="4%"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="1" COLOR="#000000"><B>Name:</B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="1"
COLOR="#000000"><B>Title:</B></FONT></P></TD>
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<TD VALIGN="top" ALIGN="center" WIDTH="45%"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="1" COLOR="#000000"><B>Joseph Amram</B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"
ALIGN="center"><FONT FACE="Times New Roman" SIZE="1" COLOR="#000000"><B>President</B></FONT></P></TD></TR>
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<TD VALIGN="top" ALIGN="center" WIDTH="45%"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">/s/&nbsp;&nbsp;&nbsp;&nbsp;J<SMALL>OAN</SMALL>
C<SMALL>ONLEY&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</SMALL></FONT></P><HR SIZE="1" NOSHADE COLOR="#000000" ALIGN="left"></TD>
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<TD VALIGN="top" ALIGN="center" WIDTH="45%"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="1" COLOR="#000000"><B>Spouse of Timothy Conley (if applicable)</B></FONT></P></TD>
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