EXHIBIT 10.30
SECURITY AGREEMENT
This Security Agreement is made as of October 1, 2001 between Novadigm,
Inc., a Delaware corporation ("Pledgee"), and Xxxxxxx Xxxx ("Pledgor").
Recitals
A. Pursuant to Pledgor's purchase of Shares under a Stock Option
Agreement (the "Agreement"), between Pledgor and Pledgee and Pledgor's election
to pay for such shares with funds from Pledgor's promissory note (the "Note"),
Pledgor has purchased 35,000 shares of Pledgee's Common Stock (the "Shares") at
a price of $5.25 per share, for a total purchase price of $183,750.00, and the
advance of $13,656.00 by Pledgee for payment of related income taxes of
Pledgor. The Note and the obligations thereunder are as set forth in Exhibit A
attached hereto.
B. In consideration of the loan evidenced by the Note, the Pledgor
wishes to grant the Pledgee a security interest in certain property of the
Pledgor.
NOW, THEREFORE, it is agreed as follows:
1. Creation and Description of Security Interest. In consideration of the
transfer of the Shares to Pledgor under the Agreement, Pledgor, pursuant to the
California Commercial Code, hereby pledges Shares (herein sometimes referred to
as the "Collateral") represented by certificate numbers ,
duly endorsed in blank or with executed stock powers, and herewith delivers
said certificate to the Secretary of Pledgee ("Pledgeholder"), who shall hold
said certificate subject to the terms and conditions of this Security Agreement.
The pledged stock (together with an executed blank stock assignment,
attached hereto as Exhibit B, for use in transferring all or a portion of the
Shares to Pledgee if, as and when required pursuant to this Security Agreement)
shall be held by the Pledgeholder as security for the repayment of the Note, and
any extensions or renewals thereof, to be executed by Pledgor pursuant to the
terms of the Agreement, and the Pledgeholder shall not encumber or dispose of
such Shares except in accordance with the provisions of this Security Agreement.
2. Pledgor's Representations and Covenants. To induce Pledgee to enter
into this Security Agreement, Pledgor represents and covenants to Pledgee, its
successors and assigns, as follows:
(a) Payment of Indebtedness. Pledgor will pay the principal sum of
the Note secured hereby, together with interest thereon, at the time and in the
manner provided in the Note.
(b) Encumbrances. The Shares are free of all other encumbrances,
defenses and liens (other than restrictions on transfer imposed by applicable
securities laws), and Pledgor will not further encumber the Shares without the
prior written consent of Pledgee.
(c) Margin Regulations. In the event that Pledgee's Common Stock is
now or later becomes margin-listed by the Federal Reserve Board and Pledgee is
classified as a "lender" within the meaning of the regulations under Part 207
of Title 12 of the Code of Federal Regulations
("Regulation G"), Pledgor agrees to cooperate with Pledgee in making any
amendments to the Note or providing any additional collateral as may be
necessary to comply with such regulations.
3. Voting Rights. During the term of this pledge and so long as all
payments of principal and interest are made as they become due under the terms
of the Note, Pledgor shall have the right to vote all of the Shares pledged
hereunder.
4. Stock Adjustments. In the event that during the term of the pledge any
stock dividend, reclassification, readjustment or other changes are declared or
made in the capital structure of Pledgee, all new, substituted and additional
shares or other securities issued by reason of any such change shall be
delivered to and held by the Pledgee under the terms of this Security Agreement
in the same manner as the Shares originally pledged hereunder. In the event of
substitution of such securities, Pledgor, Pledgee and Pledgeholder shall
cooperate and execute such documents as are reasonable so as to provide for the
substitution of such Collateral and, upon such substitution, references to
"Shares" in this Security Agreement shall include the substituted shares of
capital stock of Pledgor as a result thereof.
5. Options and Rights. In the event that, during the term of this pledge,
subscription Options or other rights or options shall be issued in connection
with the pledged Shares, such rights, Options and options shall be the property
of Pledgor and, if exercised by Pledgor, all new stock or other securities so
acquired by Pledgor as it relates to the pledged Shares then held by
Pledgeholder shall be immediately delivered to Pledgeholder, to be held under
the terms of this Security Agreement in the same manner as the Shares pledged.
6. Default. Pledgor shall be deemed to be in default of the Note and of
this Security Agreement in the event:
(a) Payment of principal or interest on the Note shall be delinquent
for a period of 45 days or more; or
(b) Pledgor fails to perform any of the covenants set forth in the
Agreement or contained in this Security Agreement for a period of 10 days after
written notice thereof from Pledgee.
In the case of an event of Default, as set forth above, Pledgee shall have
the right to accelerate payment of the Note upon notice to Pledgor, and Pledgee
shall thereafter be entitled to pursue its remedies under the California
Commercial Code.
7. Release of Collateral. Subject to any applicable contrary rules under
Regulation G, there shall be released from this pledge a portion of the pledged
Shares held by Pledgeholder hereunder upon payments of the principal of the
Note. The number of the pledged Shares which shall be released shall be that
number of full Shares which bears the same proportion to the initial number of
Shares pledged hereunder as the payment of principal bears to the initial full
principal amount of the Note.
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8. Withdrawal or Substitution of Collateral. Pledgor shall not sell,
withdraw, pledge, substitute or otherwise dispose of all or any part of the
Collateral without the prior written consent of Pledgee.
9. Term. The within pledge of Shares shall continue until the payment of
all indebtedness secured hereby, at which time the remaining pledged stock shall
be promptly delivered to Pledgor, subject to the provisions for prior release of
a portion of the Collateral as provided in paragraph 7 above.
10. Insolvency. Pledgor agrees that if a bankruptcy or insolvency
proceeding is instituted by or against it, or if a receiver is appointed for the
property of Pledgor, or if Pledgor makes an assignment for the benefit of
creditors, the entire amount unpaid on the Note shall become immediately due and
payable, and Pledgee may proceed as provided in the case of default.
11. Pledgeholder Liability. In the absence of willful or gross
negligence, Pledgeholder shall not be liable to any party for any of his acts,
or omissions to act, as Pledgeholder.
12. Invalidity of Particular Provisions. Pledgor and Pledgee agree that
the enforceability or invalidity of any provision or provisions of this
Security Agreement shall not render any other provision or provisions herein
contained unenforceable or invalid.
13. Successors or Assigns. Pledgor and Pledgee agree that all of the
terms of this Security Agreement shall be binding on their respective
successors and assigns, and that the term "Pledgor" and the term "Pledgee"
as used herein shall be deemed to include, for all purposes, the respective
designees, successors, assigns, heirs, executors and administrators.
14. Governing Law. This Security Agreement shall be interpreted and
governed under the laws of the State of California.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
"PLEDGOR"
/s/ Xxxxxxx Xxxx
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Xxxxxxx Xxxx
Address: 0000 XX 000 Xxxxxxx
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Xxxxx, XX 00000
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"PLEDGEE"
NOVADIGM, INC., a Delaware corporation
By: /s/ Xxxxxx X. Xxxx
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Print Name: Xxxxxx X. Xxxx
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Title: Vice President
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"PLEDGEHOLDER"
/s/ Xxxxxx Xxxxxxxx
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Secretary of Novadigm, Inc.
PROMISSORY NOTE
October 1, 2001
$197,406.00
For value received, the undersigned promises to pay to Novadigm, Inc., a
Delaware corporation (the "Company"), the principal sum of $197,406.00 with
simple interest thereon at the rate of 3.58% per annum, compounded annually, on
the unpaid balance of the principal sum. Said principal and interest shall be
due on the first anniversary of the date of this Note.
Should the undersigned fail to make full payment of any installment of
principal or interest for a period of 45 days or more after the due date
thereof, the whole unpaid balance on this Note of principal and interest shall
become immediately due at the option of the holder of this Note.
This Note is subject to the terms of the Security Agreement, dated as of
October 1, 2001. This Note is secured by a pledge of the Company's Common Stock
under the terms of a Security Agreement dated October 1, 2001, and is subject
to all the provisions thereof.
The holder of this Note shall have full recourse against the undersigned,
and shall not be required to proceed against the collateral securing this Note
in the event of default.
In the event the undersigned shall cease to be an employee of the Company
for any reason, this Note shall, at the option of the Company, be accelerated,
and the whole unpaid balance on this Note of principal and accrued interest
shall be immediately due and payable.
Principal payable in lawful money of the United States of America. THE
PRIVILEGE IS RESERVED TO PREPAY ANY PORTION OF THIS NOTE AT ANY TIME.
Should suit be commenced to collect this Note or any portion thereof, such
sum as the Court may deem reasonable shall be added hereto as attorneys' fees.
The maker waives presentment for payment, protest, notice of protest and notice
of non-payment of this Note.
/s/ Xxxxxxx X. Xxxx
__________________________
Xxxxxxx X. Xxxx
EXHIBIT B
ASSIGNMENT SEPARATE FROM CERTIFICATE
FOR VALUE RECEIVED I, Xxxxxxx Xxxx, hereby sell, assign and transfer unto
Novadigm, Inc. 35,000 shares of the Common Stock of Novadigm, Inc. standing in
my name on the books of said corporation represented by Certificate Nos. ______
herewith and do hereby irrevocably constitute and appoint ChaseMellon
Shareholder Services to transfer the said stock on the books of the within named
corporation with full power of substitution in the premises.
This Stock Assignment may be used only in accordance with the Security
Agreement between Novadigm, Inc. and the undersigned dated October 1, 2001.
Dated: 10/1/01
/s/ Xxxxxxx Xxxx
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Xxxxxxx Xxxx
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