EXHIBIT 10.12
PLEDGE AND SECURITY AGREEMENT
This Pledge and Security Agreement (the "Agreement") is entered into
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this 1st day of November, 1999 by and between Aeneid Corporation, a California
corporation (the "Company") and Xxxxxxx X. Xxxxxxx ("Purchaser").
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RECITALS
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In connection with Purchaser's purchase of certain shares of the
Company's Common Stock (the "Shares") pursuant to a Restricted Stock Purchase
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Agreement dated November 1, 1999 between Purchaser and the Company, Purchaser is
delivering a promissory note of even date herewith (the "Note") in full or
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partial payment of the exercise price for the Shares. The company requires that
the Note be secured by a pledge of the Shares on the terms set forth below.
AGREEMENT
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In consideration of the Company's acceptance of the Note as full or
partial payment of the exercise price of the Shares, and for other good and
valuable consideration, the receipt of which is hereby acknowledged, the parties
hereto agree as follows:
1. The Note shall become payable in full on November 1, 2004.
2. Purchaser shall deliver to the Secretary of the Company, or his
or her designee (hereinafter referred to as the "Pledge Holder"), all
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certificates representing the Shares, together with an Assignment Separate from
Certificate in the form attached to this Agreement as Attachment A executed by
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Purchaser and by Purchaser's spouse (if required for transfer), in blank, for
use in transferring all or a portion of the Shares to the Company if, as and
when required pursuant to this Agreement. In addition, if Purchaser is married,
Purchaser's spouse shall execute the signature page attached to this Agreement.
3. As security for the payment of the Note and any renewal,
extension or modification of the Note, Purchaser hereby grants to the Company a
security interest in and pledges with and delivers to the Company Purchaser's
Shares (sometimes referred to herein as the "Collateral").
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4. 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 Pledge Holder, that the Shares
represented by the portion of the Note so repaid, including annual interest
thereon, shall continue to be so held by the Pledge Holder, to serve as
independent collateral for the outstanding portion of the Note.
5. In the event of any foreclosure of the security interest created
by this Agreement, the Company may sell the Shares at a private sale or may
repurchase the Shares itself. The parties agree that, prior to the
establishment of a public market for the Shares of the Company, the securities
laws affecting sale of the Shares make a public sale of the Shares commercially
unreasonable. The parties further agree that the repurchasing of such Shares by
the
Company, or by any person to whom the Company may have assigned its rights
under this Agreement, is commercially reasonable if made at a price determined
by the Board of Directors in its discretion, fairly exercised, representing what
would be the fair market value of the Shares, taking into effect any limitation
on transferability, whether due to the size of the block of shares or the
restrictions of applicable securities laws..
6. In the event of default in payment when due of any indebtedness
under the Note, the Company may elect then, or at any time thereafter, to
exercise all rights available to a secured party under the California Commercial
Code including the right to sell the Collateral at a private or public sale or
repurchase the Shares as provided above. The proceeds of any sale shall be
applied in the following order:
(a) To the extent necessary, proceeds shall be used to pay all
reasonable expenses of the Company in enforcing this Agreement and the Note,
including, without limitation, reasonable attorney's fees and legal expenses
incurred by the Company.
(b) To the extent necessary, proceeds shall be used to satisfy any
remaining indebtedness under Purchaser's Note.
(c) Any remaining proceeds shall be delivered to Purchaser.
7. Upon full payment by Purchaser of all amounts due under the Note,
Pledge Holder shall deliver to Purchaser all Shares in Pledge Holder's
possession belonging to Purchaser, and Pledge Holder shall thereupon be
discharged of all further obligations under this Agreement; provided, however,
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that Pledge Holder shall nevertheless retain the Shares as escrow agent if at
the time of full payment by Purchaser said Shares are still subject to a
Repurchase Option in favor of the Company.
8. This Agreement shall be governed by, and construed in accordance
with, the laws of the State of California without regard to conflicts of laws
principles.
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The parties have executed this Pledge and Security Agreement as of the
date first set forth above.
COMPANY:
AENEID CORPORATION
By: /s/ Xxxx Xxxxx
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Name: Xxxx Xxxxx
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(print)
Title: Treasurer
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Address:
000 0/xx/ Xxxxxx, Xxxxx 000
Xxx Xxxxxxxxx, XX 00000
PURCHASER:
XXXXXXX X. XXXXXXX
/s/ Xxxxxxx X. Xxxxxxx
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(Signature)
Address: 00000 Xxxxxxxxx Xxx
Xxxxxxx, XX 00000
ATTACHMENT A
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ASSIGNMENT SEPARATE FROM CERTIFICATE
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FOR VALUE RECEIVED and pursuant to that certain Pledge and Security
Agreement between the undersigned ("Borrower") and Aeneid Corporation (the
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"Company") dated January 28, 2000 (the "Agreement"), Borrower hereby sells,
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assigns and transfers unto the Company _____________________________ (________)
shares of the Common Stock of the Company standing in Borrower's name on the
books of the Company and represented by Certificate No. ___, and hereby
irrevocably appoints _____________________________ to transfer said stock on the
books of the Company with full power of substitution in the premises. THIS
ASSIGNMENT MAY ONLY BE USED AS AUTHORIZED BY THE AGREEMENT AND THE ATTACHMENTS
THERETO.
Dated: ___________________.
Signature:
____________________________________________
Xxxxxxx X. Xxxxxxx
____________________________________________
Spouse of Xxxxxxx X. Xxxxxxx (if applicable)
Instruction: Please do not fill in any blanks other than the signature line.
The purpose of this assignment is to enable the Company to transfer shares to
the Company if, as and when required under the Pledge and Security Agreement
without requiring additional signatures on the part of Borrower.
