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EXHIBIT 10.7
ACCRUE SOFTWARE, INC.
SETTLEMENT AGREEMENT AND MUTUAL RELEASE
This Settlement Agreement and Mutual Release ("Agreement") is made by
and between Accrue Software, Inc., a Delaware corporation (the "Company"),
and Xxxxx X. Xxx ("Employee").
WHEREAS, Employee is employed by the Company; and
WHEREAS, the Company and Employee have mutually agreed to terminate the
existing employment relationship and to release each other from any claims
arising from or related to the employment relationship.
NOW, THEREFORE, in consideration of the mutual promises made herein, the
Company and Employee (collectively referred to as the "Parties") hereby agree as
follows:
1. RESIGNATION; CONTINUATION OF EMPLOYMENT.
(a) Employee and the Company agree to the following terms with
respect to continuation of Employee's employment by the Company:
(i) that Employee shall continue to work as President and
Chief Executive Officer of the Company and shall remain a Director of the
Company until the earlier of the Termination Date (as defined below) or the date
he is requested to resign by the Company's Board of Directors, at which time
Employee agrees to resign each such position.
(ii) that Employee shall continue to work as a full-time
employee of the Company until the later of April 1, 1998 or such period of time
thereafter as requested by the Company's Board of Directors, but not later than
June 1, 1998 (the "Employment Dates"), provided, however, that the Company may
terminate Employee's employment earlier than the Employment Dates as provided in
Section 2 hereof. The date on which Employee's employment relationship with the
Company terminates shall be the "Termination Date";
(iii) that until the Termination Date Employee shall be
entitled to receive his current base salary (less applicable withholding), plus
accrual of vacation, in accordance with the Company's regular payroll practices;
and
(iv) that as a condition to Employee's continued employment
with the Company, Employee agrees to devote his full-time and business attention
to the Company.
2. SEVERANCE PAYMENT. In consideration for the release of claims set forth
below and other obligations under this Agreement, the Company agrees to pay
Employee a lump sum severance payment of $112,500 (less applicable tax
withholding) within thirty (30) days of the Termination Date; provided, however,
in the event the Company terminates Employee's employment for Cause (as defined
below) or Employee voluntarily terminates his employment prior to the applicable
Employment Date, then Employee shall be entitled only to a lump sum
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severance payment of $75,000. "Cause" for purposes of this Agreement shall mean
Employee's failure to devote his full-time and business attention to the
Company, Employee's breach of this Agreement, the Confidentiality Agreement, or
the Company's employee policies which continues uncured for ten (10) days
following notice thereof, Employee being convicted of a felony, or committing an
act of dishonesty, fraud or intentional illegal conduct against the Company,
Employee's misappropriation of Company property, or Employee's commencement of
employment with another employer while he is an employee of the Company. As
additional consideration for the release of claims set forth below and other
obligations under this Agreement, the Company hereby transfer to Employee all
right, title and interest in and to the notebook computer designated to Employee
as of the date of this Agreement.
3. EMPLOYEE BENEFITS.
(a) Employee shall continue to receive the Company's medical
insurance benefits at Company expense until the Termination Date, which date
shall be the "qualifying event" date under the Consolidated Omnibus Budget
Reconciliation Act of 1985, as amended ("COBRA"). Following such date, Employee
shall have the right to continue coverage under the Company's medical insurance
programs as provided by COBRA. Such continued coverage shall be provided at the
Company's expense until the earlier of twelve months following the Termination
Date or the date on which Employee commences full or part-time employment with a
new employer which provides comparable medical insurance benefits.
(b) Except as otherwise provided above, Employee shall not be
entitled to participate in any of the Company's benefit plans or programs
offered to employees or officers of the Company, including, but not limited to,
any accrual of vacation, after the Termination Date.
4. STOCK OPTIONS. Under the terms of the Stock Option Agreements issued to
Employee over the course of his employment with the Company, Employee was
granted options to purchase 250,000 (the "September 1996 Option") and 168,847
(the "June 1997 Option") shares of the Company's Common Stock under the
Company's 1996 Stock Plan (collectively, the "Options" or "Stock Option
Agreements"). The Parties acknowledge and agree that as of December 1, 1997, the
September 1996 Option had vested as to 93,750 shares, of which 67,708 shares
were exercised effective as of June 27, 1997, and the June 1997 Option had
vested as to 21,106 shares, of which no shares were exercised. In consideration
for the release of claims set forth below and other obligations under this
Agreement, the Parties agree that, the Options shall continue to vest at the
rate and under the terms set forth in the Stock Option Agreements until the
Termination Date. The Parties further agree that on the Termination Date, the
Options shall vest with respect to the number of shares under each Option that
would have vested on the date nine (9) months after the Termination Date if
Employee's employment had continued with the Company through the date nine (9)
months after the Termination Date; provided, however, in the event the Company
terminates Employee's employment for Cause or Employee voluntarily terminates
his employment prior to the applicable Employment Date, then the Options shall
vest only with respect to the number of shares under each Option that would have
vested on the date that is six (6) months after the Termination Date if
Employee's employment had continued with the Company through the date six (6)
months after the Termination Date. Employee
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acknowledges and agrees that if the Options are not exercised within thirty (30)
days of the Termination Date, they will terminate. Employee further acknowledges
and agrees that except as set forth in this Section 4, Employee shall not be
entitled to acceleration of vesting under the Options, including acceleration of
vesting upon change of control as set forth in the Stock Option Agreements.
Employee further acknowledges and agrees that he shall remain bound by all other
terms of the Stock Option Agreements.
5. LOAN. The Company agrees that within thirty (30) days after the
Termination Date, or such earlier date on which Employee notifies the Company of
his desire to draw down the Loan, the Company will loan Employee an amount equal
to the aggregate exercise price of the then vested and unexercised shares under
the Options for the sole purpose of permitting Employee to purchase such shares
(the "Loan" and "Loan Amount"), or in the event the loan is drawn down prior to
thirty (30) days after the Termination Date, the Loan will be based on the
aggregate exercise price of the number of shares Employee would vest if Employee
remains a full-time employee through June 1, 1998 (such unvested but exercised
shares will remain subject to the Company's repurchase option in accordance with
the Option Agreement between Employee and the Company). The Company's obligation
to make the Loan will be subject to the execution by Employee of a Loan and
Security Agreement which shall provide that interest under the Loan shall accrue
at the minimum applicable federal rate (as of the date of the Loan) per year,
compounded semi-annually, and all outstanding principal and interest under the
Loan shall be due and payable in full on the earlier of (i) four (4) years from
the Termination Date, (ii) eighteen (18) months following the Company's initial
public offering of its Common Stock, or (iii) upon the sale of any shares of the
Company's Common Stock held by Employee. The Loan shall be full recourse and
secured by the shares of the Company's Common Stock purchased by Employee upon
exercise of the Options.
6. NO OTHER PAYMENTS DUE. The Company agrees that it will continue to pay
to Employee the salary described in Section 1(a)(iii) through the Termination
Date in accordance with the Company's normal payroll practices, and that the
Company will pay to Employee on or before the Termination Date all salary and
accrued vacation as may then be due to Employee. Employee will execute an
acknowledgment of receipt of all such payments as received and an acknowledgment
that, in light of the payment by the Company of all wages due, or to become due
to Employee, California Labor Code Section 206.5 is not applicable to the
Parties hereto. That section provides in pertinent part as follows:
No employer shall require the execution of any release of any claim
or right on account of wages due, or to become due, or made as an
advance on wages to be earned, unless payment of such wages has been
made.
7. RELEASE OF CLAIMS. In consideration for the obligations of both parties
set forth in this Agreement, Employee and the Company, on behalf of themselves,
and their respective heirs, executors, officers, directors, employees,
investors, stockholders, administrators and assigns, hereby fully and forever
release each other and their respective heirs, executors, officers, directors,
employees, investors, stockholders, administrators and assigns, of and from any
claim, duty, obligation or cause of action relating to any matters of any kind,
whether presently known
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or unknown, suspected or unsuspected, that any of them may possess arising from
any omissions, acts or facts that have occurred up until and including the date
of this Agreement including, without limitation:
(a) any and all claims relating to or arising from Employee's
employment relationship with the Company and the termination of that
relationship;
(b) any and all claims relating to, or arising from, Employee's
right to purchase, or actual purchase of shares of stock of the Company;
(c) any and all claims for wrongful discharge of employment; breach
of contract, both express and implied; breach of a covenant of good faith and
fair dealing, both express and implied; negligent or intentional infliction of
emotional distress; negligent or intentional misrepresentation; negligent or
intentional interference with contract or prospective economic advantage;
negligence; and defamation;
(d) any and all claims for violation of any federal, state or
municipal statute, including, but not limited to, Title VII of the Civil Rights
Act of 1964, the Civil Rights Act of 1991, the Age Discrimination in Employment
Act of 1967, the Americans with Disabilities Act of 1990, and the California
Fair Employment and Housing Act;
(e) any and all claims arising out of any other laws and regulations
relating to employment or employment discrimination; and
(f) any and all claims for attorneys' fees and costs.
The Company and Employee agree that the release set forth in this Section
7 shall be and remain in effect in all respects as a complete general release as
to the matters released. This release does not extend to any obligations
incurred or specified under this Agreement.
8. CIVIL CODE SECTION 1542. The Parties represent that they are not aware
of any claim by either of them other than the claims that are released by this
Agreement. Employee and the Company acknowledge that they have been advised by
legal counsel and are familiar with the provisions of California Civil Code
Section 1542, which provides as follows:
A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT
KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE
RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS
SETTLEMENT WITH THE DEBTOR.
Employee and the Company, being aware of said Code section, agree to
expressly waive any rights they may have thereunder, as well as under any other
statute or common law principles of similar effect.
9. NONDISCLOSURE OF CONFIDENTIAL AND PROPRIETARY INFORMATION. Employee
understands and agrees that his obligations to the Company under his existing
Proprietary
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Information and Inventions Assignment and Confidentiality Agreement between
Employee and the Company (the "Confidentiality Agreement"), a copy of which is
attached hereto as Exhibit A, shall continue through the Termination Date and
shall survive termination of his relationship with the Company under this
Agreement and that Employee shall continue to maintain the confidentiality of
all confidential and proprietary information of the Company as provided by the
Confidentiality Agreement. Employee agrees that at all times hereafter, he shall
not intentionally divulge, furnish or make available to any party any of the
trade secrets, patents, patent applications, price decisions or determinations,
inventions, customers, proprietary information or other intellectual property of
the Company, until after such time as such information has become publicly known
otherwise than by act of collusion of Employee. Employee further agrees that he
will return all the Company's property and confidential and proprietary
information in his possession to the Company within five (5) days from the
Termination Date.
10. NONCOMPETITION AND NONSOLICITATION. Employee agrees that through the
Termination Date, Employee shall not, without the prior written consent of the
Company, at any time, directly or indirectly, whether or not for compensation,
engage in, or have any interest in any person, firm, corporation or business
(whether as an employee, officer, director, agent, security holder, creditor,
consultant, partner or otherwise) that engages in any activity that is in direct
competition with the Company. Employee further agrees that for a period of one
year after the Termination Date, Employee shall not induce or attempt to induce
any employee of the Company to leave the employ of the Company or solicit the
business of any client or customer of the Company (other than on behalf of the
Company) existing as of the Termination Date in a manner competitive with the
Company.
The Parties intend that the covenant contained in the preceding paragraph
shall be construed as a series of separate covenants, one for each county or
other geographic or political subdivision of each jurisdiction in which the
Company conducts business. If, in any judicial proceeding, a court shall refuse
to enforce any of the separate covenants deemed included in this paragraph, then
the unenforceable covenant shall be deemed eliminated from the provisions for
the purpose of those proceedings to the extent necessary to permit the remaining
separate covenants to be enforced.
11. NON-DISPARAGEMENT. Each Party agrees to refrain from any
disparagement, defamation, slander of the other, or tortious interference with
the contracts and relationships of the other.
12. TAX CONSEQUENCES. The Company makes no representations or warranties
with respect to the tax consequences of the payment of any sums to Employee
under the terms of this Agreement. Employee agrees and understands that he is
responsible for payment, if any, of local, state and/or federal taxes on the
sums paid or the indebtedness canceled hereunder by the Company and any
penalties or assessments thereon. Employee further agrees to indemnify and hold
the Company harmless from any claims, demands, deficiencies, penalties,
assessments, executions, judgments, or recoveries by any government agency
against the Company for any amounts claimed due on account of Employee's failure
to pay federal or state taxes or damages sustained by the Company by reason of
any such claims, including reasonable attorneys' fees.
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13. NO ADMISSION OF LIABILITY. The Parties understand and acknowledge that
this Agreement constitutes a compromise and settlement of claims. No action
taken by the Parties hereto, or either of them, either previously or in
connection with this Agreement shall be deemed or construed to be (a) an
admission of the truth or falsity of any claims heretofore made or (b) an
acknowledgment or admission by either Party of any fault or liability whatsoever
to the other Party or to any third party.
14. COSTS. The Parties shall each bear their own costs, expert fees,
attorneys' fees and other fees incurred in connection with this Agreement,
except that the Company will pay up to $2,500 of Employee's legal fees in
connection with the negotiation and execution of this Agreement.
15. AUTHORITY. The Company represents and warrants that the undersigned
has the authority to act on behalf of the Company and to bind the Company and
all who may claim through it to the terms and conditions of this Agreement.
Employee represents and warrants that he has the capacity to act on his own
behalf and on behalf of all who might claim through him to bind them to the
terms and conditions of this Agreement, including without limitation the Xxx
Family Trust U/A DTD 10/16/96 and Xxxxx X. Xxx. Each Party warrants and
represents that there are no liens or claims of lien or assignments in law or
equity or otherwise of or against any of the claims or causes of action released
herein.
16. NO REPRESENTATIONS. Each Party represents that it has had the
opportunity to consult with an attorney, and has carefully read and understands
the scope and effect of the provisions of this Agreement. Neither Party has
relied upon any representations or statements made by the other Party hereto
which are not specifically set forth in this Agreement.
17. SEVERABILITY. In the event that any provision hereof becomes or is
declared by a court or other tribunal of competent jurisdiction to be illegal,
unenforceable or void, this Agreement shall continue in full force and effect
without said provision.
18. ARBITRATION. The Parties shall attempt to settle all disputes arising
in connection with this Agreement through good faith consultation. In the event
no agreement can be reached on such dispute within fifteen (15) days after
notification in writing by either Party to the other concerning such dispute,
the dispute shall be settled by binding arbitration to be conducted in Santa
Xxxxx County before the American Arbitration Association under its California
Employment Dispute Resolution Rules, or by a judge to be mutually agreed upon.
The arbitration decision shall be final, conclusive and binding on both Parties
and any arbitration award or decision may be entered in any court having
jurisdiction. The Parties agree that the prevailing party in any arbitration
shall be entitled to injunctive relief in any court of competent jurisdiction to
enforce the arbitration award. The Parties further agree that the prevailing
Party in any such proceeding shall be awarded reasonable attorneys' fees and
costs. This Section 18 shall not apply to the Confidentiality Agreement. The
Parties hereby waive any rights they may have to trial by jury in regard to
arbitrable claims.
19. ENTIRE AGREEMENT. This Agreement, and the exhibit hereto, represent
the entire agreement and understanding between the Company and Employee
concerning Employee's
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separation from the Company, and supersede and replace any and all prior
agreements and understandings concerning Employee's relationship with the
Company and his compensation by the Company, including the Letter Agreement
between Employee and the Company dated May 18, 1996, other than the Stock Option
Agreements described in Section 4 (and all exhibits thereto), the Exercise
Notice and Investment Representation Statement each dated June 27, 1997 under
the September 1996 Option, the Confidentiality Agreement described in Section
10, and the Indemnification Agreement between the Company and Employee dated
____.
20. NO ORAL MODIFICATION. This Agreement may only be amended in writing
signed by Employee and the Company.
21. GOVERNING LAW. This Agreement shall be governed by the laws of the
State of California, without regard to its conflicts of law provisions.
22. EFFECTIVE DATE. This Agreement is effective seven days after it
has been signed by both Parties and such date is referred to herein as the
"Effective Date."
23. COUNTERPARTS. This Agreement may be executed in counterparts, and each
counterpart shall have the same force and effect as an original and shall
constitute an effective, binding agreement on the part of each of the
undersigned.
24. ASSIGNMENT. This Agreement may not be assigned by Employee or the
Company without the prior written consent of the other party. Notwithstanding
the foregoing, this Agreement may be assigned by the Company (including an
assignment by operation of law) to a purchaser of all or substantially all of
the Company's assets, or to a successor corporation in connection with a merger
or similar transaction in which the Company's stockholders immediately prior to
such merger or similar transaction represent less than 50% of the voting power
of the successor corporation.
25. VOLUNTARY EXECUTION OF AGREEMENT. This Agreement is executed
voluntarily and without any duress or undue influence on the part or behalf of
the Parties hereto, with the full intent of releasing all claims. The Parties
acknowledge that:
(a) they have read this Agreement;
(b) they have been represented in the preparation, negotiation, and
execution of this Agreement by legal counsel of their own choice or that they
have voluntarily declined to seek such counsel;
(c) and they understand the terms and consequences of this Agreement
and of the releases it contains;
(d) they are fully aware of the legal and binding effect of this
Agreement.
[Signature Page Follows]
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IN WITNESS WHEREOF, the Parties have executed this Agreement and Mutual
Release on the respective dates set forth below.
ACCRUE SOFTWARE, INC.
Dated as of March __, 1998 By: /s/ Xxxxx X. Xxxxxxxxx
-------------------------------
Title: President and Chief
Executive Officer
XXXXX X. XXX, AN INDIVIDUAL
Dated as of March 3, 1998 /s/ Xxxxx X. Xxx
--------------------------------------
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EXHIBIT A
CONFIDENTIALITY AGREEMENT
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AMENDMENT NO. 1 TO
ACCRUE SOFTWARE, INC.
SETTLEMENT AGREEMENT AND MUTUAL RELEASE
This Amendment No. 1 to Settlement Agreement and Mutual Release
("Amendment") is made by and between Accrue Software, Inc., a Delaware
corporation (the "Company"), and Xxxxx X. Xxx ("Employee") and amends the
Settlement Agreement and Mutual Release dated March 3, 1998 (the "Agreement")
entered into between the Company and Employee.
WHEREAS, the Company and Employee wish to extend the period of time during
which Employee will remain employed by the Company; and
WHEREAS, the Company and Employee wish to modify certain additional terms
of the Agreement as set forth in this Amendment.
NOW, THEREFORE, in consideration of the mutual promises made herein, the
Company and Employee (collectively referred to as the "Parties") hereby agree as
follows:
1. RESIGNATION; CONTINUATION OF EMPLOYMENT. Section 1 of the Agreement
shall be modified to read in its entirety as follows:
"(a) Employee and the Company agree to the following terms with
respect to continuation of Employee's employment by the Company:
(i) that Employee hereby resigns as President and Chief
Executive Officer of the Company, and as a Director of the Company, effective at
end of business May 1, 1998;
(ii) that Employee shall continue to work as a part-time
employee of the Company until July 1, 1998, and shall make himself available to
the Company as reasonably requested by the Company (the "Termination Date") and;
(iii) that until the Termination Date Employee shall be
entitled to receive his current base salary (less applicable withholding), plus
accrual of vacation, in accordance with the Company's regular payroll
practices."
2. SEVERANCE PAYMENT. The first and second sentences of Section 2 of the
Agreement shall be modified to read in their entirety as follows: "In
consideration for the release of claims set forth below and other obligations
under this Agreement, the Company agrees to pay Employee a lump sum severance
payment of $87,500 (less applicable tax withholding) within thirty (30) days of
May 1, 1998."
3. STOCK OPTIONS. The fourth sentence of Section 4 of the Agreement shall
be modified to read in its entirety as follows: "The Parties further agree that
on the Termination Date, the Options shall vest with respect to the number of
shares under each Option that would
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have vested on the date seven (7) months after the Termination Date if
Employee's employment had continued with the Company through the date seven (7)
months after the Termination Date." In addition, Employee acknowledges and
agrees that if the Options are not exercised within thirty (30) days of the
Termination Date, they will terminate. Employee further acknowledges and agrees
that except as set forth in this Section 3, Employee shall not be entitled to
acceleration of vesting under the Options, including acceleration of vesting
upon change of control as set forth in the Stock Option Agreements. Employee
further acknowledges and agrees that he shall remain bound by all other terms of
the Stock Option Agreements.
4. NO MODIFICATION. Except as amended by this Amendment, all terms of the
Agreement shall remain in full force and effect and are herein incorporated by
reference.
5. VOLUNTARY EXECUTION OF AMENDMENT. This Amendment is executed
voluntarily and without any duress or undue influence on the part or behalf of
the Parties hereto, with the full intent of releasing all claims. The Parties
acknowledge that:
(a) they have read this Amendment;
(b) they have been represented in the preparation, negotiation, and
execution of this Amendment by legal counsel of their own choice or that they
have voluntarily declined to seek such counsel;
(c) they understand the terms and consequences of this Amendment and
its effect on the Agreement; and
(d) they are fully aware of the legal and binding effect of this
Amendment.
[Signature Page Follows]
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IN WITNESS WHEREOF, the Parties have executed this Amendment No. 1 to the
Agreement and Mutual Release dated March 3, 1998 on the respective dates set
forth below.
ACCRUE SOFTWARE, INC.
Dated as of April __, 1998 By: /s/ Xxxxx X. Xxxxxxxxx
-------------------------------
Title: President and Chief
Executive Officer
XXXXX X. XXX, AN INDIVIDUAL
Dated as of April 29, 1998 /s/ Xxxxx X. Xxx
--------------------------------------
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PLEDGE AND SECURITY AGREEMENT
This Pledge and Security Agreement (the "Agreement") is entered into this
29th day of July, 1998 by and between Accrue Software, Inc., a Delaware
corporation (the "Company") and Xxxxx X. Xxx ("Purchaser").
RECITALS
In connection with Purchaser's exercise of options to purchase certain
shares of the Company's Common Stock (the "Shares") pursuant to Option
Agreements dated September 9, 1996 and June 27, 1997 between Purchaser and the
Company, Purchaser is delivering a promissory note of even date herewith (the
"Note") in full or partial payment of the exercise price for the Shares. The
company requires that the Note be secured by a pledge of the Shares or the terms
set forth below.
AGREEMENT
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 on the earlier of (i) July 1, 2002, (ii)
twelve (12) months following the date of the Company's initial public offering
of its Common Stock, or (iii) upon the sale of any shares of the Company's
Common Stock held by the undersigned, unless otherwise agreed in writing by the
Company.
2. Purchaser shall deliver to the Secretary of the Company, or his or her
designee (hereinafter referred to as the "Pledge Holder"), all certificates
representing the Shares, together with an Assignment Separate from Certificate
in the form attached to this Agreement as Attachment A executed by 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,
which shall be binding on Purchaser's spouse to the same extent as Purchaser.
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").
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 for the purpose of
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commencing the holding period set forth in Rule 144(d) promulgated under the
Securities Act of 1933, as amended (the "Securities Act").
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 reduced by 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.
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The parties have executed this Pledge and Security Agreement as of the date
first set forth above.
COMPANY:
Accrue Software, Inc.
By: /s/ Xxxx Xxxxxxx
---------------------------
Name: Xxxx Xxxxxxx
--------------------------
(print)
Title: CEO
-------------------------
Address: 0000 Xxxxxxx Xxxxx
Xxxxxxxxx, XX 00000
PURCHASER:
Xxxxx Xxx
/s/ Xxxxx Xxx
---------------------------
(Signature)
Xxxxx Xxx
---------------------------
(Print Name)
Address:
---------------------------
---------------------------
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ACCEPTED AND AGREED:
Spouse of Xxxxx Xxx
/s/ Xxxxx Xxx
---------------------------
(Signature)
Xxxxx Xxx
---------------------------
(Print Name)
Address (if different than Purchaser):
---------------------------
---------------------------
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ATTACHMENT A
ASSIGNMENT SEPARATE FROM CERTIFICATE
FOR VALUE RECEIVED and pursuant to that certain Pledge and Security
Agreement between the undersigned ("Purchaser") and Accrue Software, Inc., dated
July 29, 1998, (the "Agreement"), Purchaser hereby sells, assigns and transfers
unto _______________________________ (________) shares of the Common Stock of
Accrue Software, Inc., standing in Purchaser's name on the books of said
corporation represented by Certificate No. ___ herewith and hereby irrevocably
appoints _____________________________ to transfer said stock on the books of
the within-named corporation with full power of substitution in the premises.
THIS ASSIGNMENT MAY ONLY BE USED AS AUTHORIZED BY THE AGREEMENT.
Dated: ____________
Signature:
/s/ Xxxxx X. Xxx
---------------------------
Xxxxx X. Xxx
/s/ Xxxxx Xxx
---------------------------
Spouse of (if applicable)
Instruction: Please do not fill in any blanks other than the signature line. The
purpose of this assignment is to perfect the security interest of the Company
pursuant to the Agreement.
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PROMISSORY NOTE
$20,488.43 ___________, California
July 29, 1998
For value received, the undersigned promise to pay Accrue Software, Inc., a
Delaware corporation (the "Company"), at its principal office the principal sum
of $20,488.43 with interest from the date hereof at a rate of 6.00% per annum,
compounded semiannually, on the unpaid balance of such principal sum. Such
principal and interest shall be due and payable on the earlier of (i) July 1,
2002, (ii) twelve (12) months following the date of the Company's initial public
offering of its Common Stock, or (iii) upon the sale of any shares of the
Company's Common Stock held by the undersigned, unless otherwise agreed in
writing by the Company.
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.
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' fees. The
makers and endorsers have severally waived presentment for payment, protest,
notice of protest and notice of nonpayment of this Note.
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.
/s/ Xxxxx X. Xxx
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Xxxxx X. Xxx
/s/ Xxxxx X. Xxx
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Xxxxx X. Xxx
