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EXHIBIT 10.34
PLEDGE AGREEMENT
THIS PLEDGE AGREEMENT (as amended from time to time, this "Agreement"),
dated as of ________, 2001, is made by ______________ ("Pledgor"), in favor of
Unisphere Networks, Inc., a Delaware corporation ("Secured Party").
In order to induce Secured Party to make the loan contemplated by the
promissory note of even date herewith in the amount of $_________ as the same
may be amended, replaced, restated or otherwise modified from time to time (the
"Note"), Pledgor hereby agrees as follows:
ARTICLE 1. THE PLEDGE.
Section 1.1. Pledge. Pledgor hereby pledges to Secured Party, and grants to
Secured Party a security interest in, the following (the "Pledged Collateral"):
(a) __________ shares of Common Stock of the Secured Party now owned by the
Pledgor and acquired with the loan contemplated by the promissory note (the
"Pledged Securities"), and all stock dividends and other property and proceeds
from time to time received, receivable or otherwise distributed in respect of or
in exchange for or upon sale of any or all of the Pledged Securities; and
(b) all additional securities or other consideration from time to time
acquired by Pledgor in substitution for or in respect of the Pledged Securities,
and the certificates representing such additional securities, and all stock
dividends and other property from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of such securities.
Section 1.2. Security for Obligations. This Agreement secures the payment of all
obligations of the Pledgor now or hereafter existing under the Note (all such
obligations being the "Obligations").
Section 1.3. Delivery of Pledged Collateral; Sale of Pledged Collateral. All
certificates or instruments representing or evidencing the Pledged Collateral
shall be delivered to Secured Party to be held by Secured Party (or to the
Escrow Agent under the Company's 1999 Stock Incentive Plan) and shall be in
suitable form for transfer by delivery, or shall be accompanied by duly executed
instruments of transfer or assignment in blank, all in form and substance
satisfactory to Secured Party. Secured Party shall have the right, at any time
following an Event of Default, in its sole discretion and without notice to
Pledgor, to sell or to transfer to or to register in the name of Secured Party,
or any of Secured Party's nominees (or to direct the Escrow Agent to sell or to
so transfer) any or all of the Pledged Collateral, subject only to the revocable
rights specified in Section 4.2(a). Secured Party shall send notice to Pledgor
of any such sale, transfer, registration or exchange of the Pledged Collateral
promptly after such event.
Section 1.4. Continuing Agreement. This Agreement shall create a continuing
security interest in the Pledged Collateral and shall remain in full force and
effect until payment in full of the Obligations. Upon the payment in full of the
Obligations, in cash, Pledgor shall be entitled to the return and re-transfer to
him, upon his request and at his expense, of such of the Pledged
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Collateral as shall not have been sold or otherwise applied pursuant to the
terms hereof.
Section 1.5. Security Interest Absolute. All rights of Secured Party and
security interests hereunder, and all obligations of Pledgor hereunder shall be
absolute and unconditional, irrespective of any defenses whatsoever available to
the Pledgor.
ARTICLE 2. COVENANTS.
Section 2.1. Further Assurances. Pledgor agrees that at any time and from time
to time, at Pledgor's expense, Pledgor will promptly execute and deliver all
further instruments and documents, and take all further action, that may be
necessary or desirable, or that Secured Party may reasonably request, in order
to perfect and protect any security interest granted or purported to be granted
hereby or under the Note or to enable Secured Party to exercise and enforce
Secured Party's rights and remedies hereunder or under the Note with respect to
any Pledged Collateral.
ARTICLE 3. SECURED PARTY.
Section 3.1. Attorney-in-Fact. Pledgor hereby irrevocably appoints the Secured
Party as the Pledgor's attorney-in-fact with full power of substitution and with
full authority in the place and stead of Pledgor and in the name of Pledgor or
otherwise, from time to time in Secured Party's discretion to take any action
and to execute any instrument which Secured Party may reasonably deem necessary
or advisable to accomplish the purposes of this Agreement, including without
limitation to receive, endorse and collect all instruments made payable to
Pledgor representing any dividend, interest payment or other distribution in
respect of the Pledged Collateral or any part thereof and to give full discharge
for the same.
Section 3.2. Right To Perform. If Pledgor fails to perform any agreement
contained herein, Secured Party may perform, or cause performance of, such
agreement.
ARTICLE 4. DEFAULT.
Section 4.1. Default; Event of Default.
For purposes of this Agreement the terms "Default" and "Event of Default"
shall have the following meanings:
(a) "Default" means the occurrence of any event or condition that with the
passage of time or giving of notice, or both, would constitute an Event of
Default.
(b) The occurrence of any one or more of the following events or conditions
shall constitute an "Event of Default" under this Agreement:
(i) Failure of the Pledgor to make any payment of principal or interest
when due under the Note;
(ii) If Pledgor violates the non-competition or confidentiality
provisions of
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any employment contract, confidentiality and nondisclosure agreement or other
agreement between the Pledgor and the Secured Party;
(iii) Breach of or failure in the due observance or performance of any
covenant, condition or agreement on the part of Pledgor to be observed or
performed pursuant to this Agreement or the Note, which such breach or failure
is not cured within 30 days after written notice thereof;
(iv) if Pledgor is not paying his or her debts as they become due,
becomes insolvent, files or has filed against him or her a petition under any
chapter of the United States Bankruptcy Code, 11 U.S.C. Section 101 et seq. (or
any similar petition under any insolvency law of any jurisdiction), proposes any
liquidation, composition or financial reorganization with his creditors, makes
an assignment or trust mortgage for the benefit of creditors, or if a receiver,
trustee, custodian or similar agent is appointed or takes possession with
respect to any property or business of Pledgor; or
(v) if any lien, encumbrance or adverse claim of any nature whatsoever
is asserted with respect to any Shares.
Section 4.2. Voting Rights; Dividends; Etc.
(a) So long as no Default or Event of Default shall have occurred which has
not been expressly waived:
(i) Pledgor shall be entitled to exercise any and all voting and other
consensual rights pertaining to the Pledged Collateral or any part thereof for
any purpose not inconsistent with the terms of this Agreement or the Note; and
(ii) Pledgor shall be entitled to receive and retain any and all cash
dividends paid in respect of the Pledged Collateral.
(b) Upon the occurrence of a Default or Event of Default and thereafter
unless expressly waived:
(i) All rights of Pledgor to exercise the voting and other consensual
rights which Pledgor would otherwise be entitled to exercise pursuant to Section
4.2.(a)(i) and to receive the dividends which Pledgor would otherwise be
authorized to receive and retain pursuant to Section 4.2.(a)(ii) shall cease,
and all such rights shall thereupon become vested in Secured Party who shall
thereupon have the sole right to exercise such voting and other consensual
rights and to receive and hold as Pledged Collateral such dividends.
(ii) All dividends which are received by Pledgor contrary to the
provisions of Section 4.2.(b)(i) shall be received in trust for the benefit of
Secured Party, shall be segregated from other funds of Pledgor, and shall be
forthwith paid over to Secured Party as Pledged Collateral in the same form as
so received (with any necessary endorsement).
Section 4.3. Remedies Upon Default. If any Event of Default shall have occurred
which has
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not been expressly waived:
(a) Secured Party may exercise in respect of the Pledged Collateral, in
addition to other rights and remedies provided for herein or otherwise available
to Secured Party, all the rights and remedies of a secured party on default
under the Uniform Commercial Code (the "UCC") in effect in the Commonwealth of
Massachusetts at that time.
(b) Any cash held by Secured Party as Pledged Collateral and all cash
proceeds received by Secured Party in respect of any sale of, collection from or
other realization upon all or any part of the Pledged Collateral may, in the
discretion of Secured Party be held by Secured Party as collateral for, and/or
then or at any time thereafter applied in whole or in part by Secured Party
against, all or any part of the Obligations in such order as Secured Party shall
elect. Any surplus of such cash or cash proceeds held by Secured Party and
remaining after payment in full of all the Obligations shall be paid over to
Pledgor or to whomsoever may be lawfully entitled to receive such surplus.
ARTICLE 5. MISCELLANEOUS.
Section 5.1. Amendments, Etc. No amendment or waiver of any provision of this
Agreement nor consent to any departure by Pledgor herefrom, shall in any event
be effective unless the same shall be in writing and signed by Secured Party,
and then such waiver or consent shall be effective only in the specific instance
and for the specific purpose for which given. No failure on the part of Secured
Party to exercise, and no delay in exercising, any right hereunder shall operate
as a waiver thereof or preclude any other or further exercise thereof or the
exercise of any other right. The remedies provided herein are cumulative and not
exclusive of any remedies provided at law.
Section 5.2. Notices. All notices made or required to be made hereunder shall be
sent by United States first class or certified or registered mail, with postage
prepaid, or delivered by hand to the Pledgor or the Secured Party, as the case
may be, at the respective address first written above. Notice by mail shall be
deemed to have been made on the date when the notice is deposited in the mail.
Section 5.3. Binding Nature. This Agreement shall (a) be binding upon Pledgor,
his heirs, executors, personal representatives and assigns, and (b) inure,
together with the rights and remedies of Secured Party hereunder, to the benefit
of Secured Party's successors, transferees and assigns.
Section 5.4. Governing Law; Terms. This Agreement shall be governed by and
construed and enforced in accordance with the laws of the Commonwealth of
Massachusetts. Unless otherwise defined herein, terms defined in Article 9 of
the Uniform Commercial Code in the Commonwealth of Massachusetts are used herein
as therein defined.
Section 5.5. Headings for Convenience. The underlined or capitalized captions of
this Agreement are for convenience of reference only and shall not be deemed to
define or limit the provisions hereof or to affect their construction or
application.
Section 5.6. Termination. This Agreement shall terminate on the payment in full
of the
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Obligations.
[Signature Page to Follow]
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IN WITNESS WHEREOF, Pledgor and Secured Party have caused this Agreement to
be duly executed and delivered as of the date first above written.
PLEDGOR
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[name]
UNISPHERE NETWORKS, INC.
By: ____________________________
Its: President and Chief Executive Officer
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