1
Exhibit 10.33
SECURITY AGREEMENT
This Security Agreement is made effective February 8, 2000 between Geoworks
Corporation, a Delaware corporation duly qualified to transact business in
California ("Pledgee" or "Corporation") and Xxxxxxx X. Xxxxx ("Pledgor").
RECITALS
A. Pledgor has elected to purchase 51,563 incentive stock option shares of the
Corporation's Common Stock issued pursuant to the Corporation's Stock Option
Plan (the "Shares") for a total purchase price of $94,337.13.
B. Pledgor has elected to pay for such Shares with a promissory note (the
"Note") and the Corporation has agreed to accept the Note provided that Pledgor
enters into this Security Agreement and that certain Short Form Deed of Trust
and Assignment of Rents ("Deed of Trust") of even date herewith to secure the
payment and performance of Pledgor under the Note. The Note and the obligations
thereunder are as set forth in Exhibit A hereto.
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 this Security Agreement and the Note,
Pledgor, pursuant to the California Commercial Code, hereby pledges all of such
Shares (herein sometimes referred to as the "Collateral") represented by
certificate number SFU4757, duly endorsed in blank or with executed stock
powers, and herewith delivers said certificate to the Secretary of Corporation
who shall hold said certificate subject to the terms and conditions of this
Security Agreement.
The Pledgor 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 Corporation to enter into
this Security Agreement, Pledgor represents and covenants to Corporation, 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 and will remain free of all other
encumbrances, defenses and liens, and except for financing to pay for the
Shares, Pledgor will not further encumber the Shares without the prior written
consent of Corporation.
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.
67
2
4. Default. Pledgor shall be deemed to be in default of the Note, this Security
Agreement, and the Deed of Trust (a "Default") in the event:
a. Payment of principal or interest on the Note shall be delinquent for
a period of 30 days or more;
b. Pledgor fails to perform any of the covenants set forth in this
Security Agreement for a period of 30 days after written notice thereof from
Corporation; or
c. Pledgor fails to perform any of the covenants set forth in the Deed
of Trust for a period of 30 days after written notice thereof from Corporation.
In the case of an event of Default, as set forth above, Corporation shall have
the right to accelerate payment of the Note upon notice to Pledgor, and
Corporation shall thereafter be entitled to pursue its remedies under the
California Commercial Code or any other remedy at law or in equity.
5. 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.
6. 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 Corporation.
7. 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 5 above.
5. Insolvency. Pledgor agrees that if a bankruptcy or insolvency proceeding is
instituted by or against him, 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
Corporation may proceed as provided in the case of default.
6. Invalidity of Particular Provisions. Pledgor and Corporation 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.
7. Successors or Assigns. Pledgor and Corporation 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 "Corporation" as used herein
shall be deemed to include, for all purposes, the respective designees,
successors, assigns, heirs, executors and administrators.
8. Governing Law. This Security Agreement shall be interpreted and governed
under the laws of the State of California.
68
3
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day and year first above written.
"PLEDGOR"
/s/ Xxxxxxx X. Xxxxx
-------------------------------------
Xxxxxxx X. Xxxxx
"CORPORATION" GEOWORKS CORPORATION
a Delaware corporation
By: /s/ Xxxxx X. Xxxxxxx
----------------------------------
Xxxxx X. Xxxxxxx
President/CEO
69
4
Exhibit A
PROMISSORY NOTE
$94,337.13 Alameda, California
February 8, 2000
FOR VALUE RECEIVED, Xxxxxxx X. Xxxxx promises to pay to Geoworks Corporation, a
Delaware corporation (the "Company" or "Holder"), or order, the principal sum of
Ninety-Four Thousand Three Hundred Thirty-Seven Dollars and Thirteen Cents
($94,227.13), together with interest on the unpaid principal hereof from the
date hereof at the rate of 6.0% per annum, compounded annually.
Principal and interest shall be due and payable on February 8, 2005. Should the
undersigned fail to make full payment of principal or interest for a period of
10 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. Payments of principal and interest shall be made in lawful
money of the United States of America.
The undersigned may at any time prepay without penalty all or any portion of the
principal or interest owing hereunder.
This Note is secured by a pledge of the Company's Common Stock under the terms
of a Security Agreement of even date herewith and by a mortgage of the real
property described in the Short Form Deed of Trust and Assignment of Rents
("Deed of Trust") of even date herewith. This Note is subject to all the
provisions of the Security Agreement and Deed of Trust.
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.
Should any action be instituted for the collection of this Note, the reasonable
costs and attorneys' fees therein of the holder shall be paid by the
undersigned. This Note shall be governed and construed in accordance with the
laws of the State of California.
/s/ Xxxxxxx X. Xxxxx
-----------------------------
Xxxxxxx X. Xxxxx
70
