EXHIBIT 10.32
STOCK PLEDGE AGREEMENT
THIS STOCK PLEDGE AGREEMENT (the "Agreement") is made and entered into as
of the 16th day of September, 1992, by and between XXXX X. BLEND, III, a Georgia
resident ("Pledgor"), and THE SYSTEM WORKS, INC., a Georgia corporation
("Pledgee").
W I T N E S S E T H:
WHEREAS, pursuant to that certain Nonrecourse Loan Agreement of even date
herewith by and between Pledgee and Pledgor (the "Loan Agreement"), Pledgee
has loaned Pledgor Two Hundred Thirty Thousand and No/100 Dollars
($230,000.00), as evidenced by that certain Nonrecourse Promissory Note of
even date herewith made by Pledgor payable to the order of Pledgee in the
principal amount of Two Hundred Thirty Thousand and No/100 Dollars
($230,000.00) (the "Note");
WHEREAS, as collateral security for Pledgor's obligations and
indebtedness to Pledgee under the Loan Agreement and the Note (collectively,
the "Obligations"), Pledgor has assigned his rights (the "Options"), arising
under that certain Nonqualified Stock Option Agreement, dated as of July 29,
1988, by and between Pledgee and Pledgor, to acquire One Hundred Twelve
Thousand Four Hundred Thirty (112,430) shares of Pledgee's One Cent ($.01)
par value Class A common stock (the "Common Stock") pursuant to that certain
Collateral Assignment and Agreement of even date herewith by and between
Pledgee and Pledgor (the "Assignment"); and
WHEREAS, Pledgor desires to pledge Thirty-Three Thousand Three Hundred
Thirty-Three (33,333) shares (the "Shares") of Common Stock, and Pledgee has
agreed to accept Pledgor's pledge of the Shares, as additional collateral and
security for the Obligations;
NOW, THEREFORE, FOR AND IN CONSIDERATION of the premises, the mutual
promises, covenants and agreements contained herein, and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto hereby agree as follows:
1. OBLIGATIONS SECURED AND CREATION OF SECURITY INTEREST. Pledgor
hereby grants Pledgee a first priority security interest in the Shares as
collateral and security for the due and punctual payment of the Obligations.
Pledgor herewith deposits the stock certificate representing the Shares (the
"Certificate"), together with an executed stock power relating to the
Certificate in form and substance satisfactory to Pledgee (the "Stock
Power"), with Pledgee.
2. REPRESENTATION AND WARRANTY OF PLEDGOR. Pledgor hereby represents
and warrants to Pledgee that, as of the date hereof
and at all times until the Obligations are paid in full, except as set forth
herein or as approved by Pledgee, Pledgor has not made and will not make any
pledge, assignment or transfer of any of the Shares and will not create or
permit to exist any lien, security interest or other charge or encumbrance
upon or with respect to the Shares.
3. DIVIDENDS. Pledgor and Pledgee hereby agree that, unless and until
an "Event of Default" (as defined in Section 4(a) hereof) shall occur,
Pledgee shall retain any and all rights with respect to the Shares; provided,
however, that all stock dividends issued on the Shares during the term of
this Agreement shall become additional collateral and security for the due
and punctual payment of the Obligations.
4. EVENTS OF DEFAULT.
(a) The occurrence of any one or more of the following shall
constitute an "Event of Default" hereunder:
(i) a breach by Pledgor of any provision of this Agreement;
(ii) the entry of a decree or order for relief by a court having
jurisdiction over Pledgor in an involuntary case under federal bankruptcy
law, as now constituted or hereafter amended, or any other applicable
federal or state bankruptcy, insolvency or other similar law, and the
continuance of any such decree or order unstayed and in effect for a period
of sixty (60) consecutive days;
(iii) the commencement by Pledgor of a voluntary case under the
federal bankruptcy laws, as now constituted or hereafter amended, or any
other applicable federal or state bankruptcy, insolvency or other similar
law;
(iv) Pledgor becomes insolvent or admits in writing his inability
to pay his debts as they mature; or
(v) an "Event of Default" under the Loan Agreement or the
Assignment.
(b) Upon the occurrence of an Event of Default, and subject to the
terms and conditions set forth in Section 5.2 of the Loan Agreement, in
addition to those rights and remedies available at law, in equity, granted
herein or in any other agreement now or hereafter in effect between Pledgor
and Pledgee, Pledgee's rights and remedies with respect to the Shares shall,
in all respects, events and contingencies, be those of a secured party under
the Uniform Commercial Code and under any other applicable law, as the same
may from time to time be in effect.
(c) Pledgor agrees that any notice from Pledgee of any sale,
disposition or other intended action hereunder or in connection herewith,
whether required by the Uniform Commercial
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Code or otherwise, shall constitute reasonable notice to Pledgor if such
notice is personally delivered or mailed by regular or certified mail,
postage prepaid, at least ten (10) days prior to such action, to Pledgor's
principal residence or to any address which Pledgor has specified in writing
to Pledgee as the address to which notices hereunder shall be given to
Pledgor.
(d) Pledgor agrees to pay all reasonable costs and expenses
(including, without limitation, all court costs and reasonable attorney's
fees) incurred by Pledgee in exercising any of its rights or remedies under
this Agreement following the occurrence of an Event of Default hereunder.
5. TERM. This Agreement shall remain in full force and effect until
the Obligations are satisfied. At that time, both this Agreement and the
pledge of the Shares hereunder shall terminate, and Pledgee shall immediately
transfer and deliver the Certificate and the Stock Power to Pledgor or to
whosoever shall be lawfully entitled to the same, with the Certificate marked
"Terminated --Underlying Obligations Satisfied" and dated and signed by
Pledgee.
6. NO WAIVER. Pledgee shall not be deemed to have waived any of its
rights or remedies arising hereunder or otherwise unless such waiver shall be
contained in a writing executed by Pledgee. No delay on the part of Pledgee
in exercising any power or right hereunder shall operate as a waiver thereof,
nor shall any single or partial exercise of any power or right hereunder
preclude any other or further exercise thereof or the exercise of any other
power or right.
7. MISCELLANEOUS. This Agreement shall not be modified or amended
except through a writing signed by Pledgee and Pledgor. This Agreement shall
in all respects be governed by and construed in accordance with the laws of
the State of Georgia. This Agreement may be executed in multiple
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same agreement. This Agreement
represents the full and complete understanding of the parties hereto with
respect to the pledge of the Shares hereunder. All of the terms, covenants
and conditions contained herein shall be binding upon and shall inure to the
benefit of each of the parties hereto and their permitted heirs, successors
and assignees.
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IN WITNESS WHEREOF, the parties hereto have executed, or caused their
duly authorized representatives to execute, this Agreement under seal as of
the day and year first above written.
"Pledgor"
/s/ Xxxx X. Blend, III (SEAL)
-----------------------------
Xxxx X. Blend, III
"Pledgee"
THE SYSTEM WORKS, INC.
By: /s/ Xxxxx X. Xxxxxx
--------------------------
Its: President
Attest: /s/ Xxxxx X. Xxxxxx
--------------------------
Its: Secretary
[CORPORATE SEAL]
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