EXHIBIT 10.33
COLLATERAL ASSIGNMENT AND AGREEMENT
THIS COLLATERAL ASSIGNMENT AND 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 ("Assignor"), and THE SYSTEM WORKS, INC., a
Georgia corporation ("Assignee").
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
($230,000.00) (the "Note");
WHEREAS, as collateral security for Assignor's obligations and
indebtedness to Assignee under the Loan Agreement and the Note (collectively,
the "Obligations"), Assignor has pledged Thirty-Three Thousand Three Hundred
Thirty-Three (33,333) shares (the "Shares") of Assignee's One Cent ($.01) par
value Class A common stock (the "Common Stock") pursuant to that certain
Stock Pledge Agreement of even date herewith by and between Assignee and
Assignor (the "Pledge Agreement"); and
WHEREAS, Assignor desires to assign his rights (the "Options"), arising
under that certain Nonqualified Stock Option Agreement, dated as of July 29,
1988, by and between Assignee and Assignor, a copy of which is attached
hereto as EXHIBIT "A" and incorporated herein by reference (the "Option
Agreement"), to acquire One Hundred Twelve Thousand Four Hundred Thirty
(112,430) shares of Common Stock, and Assignee has agreed to accept
Assignor's assignment of the Options, 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 ASSIGNMENT. Subject to the terms and
conditions contained in this Agreement, Assignor hereby assigns, transfers
and sets over unto Assignee all of Assignor's existing rights, powers and
privileges with respect to the Options under the Option Agreement as
collateral and security for the due and punctual payment of the Obligations.
Assignor hereby deposits the Option Agreement with Assignee.
2. REPRESENTATION AND WARRANTY OF ASSIGNOR. Assignor hereby represents
and warrants to Assignee 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 Assignee, Assignor: (i) has not made and will not make any pledge,
assignment or transfer of any of the Options; (ii) will not create or permit
to exist any lien, security interest or other charge or encumbrance upon or
with respect to the Options; and (iii) will not exercise any rights, powers
or privileges with respect to the Options under the Option Agreement.
3. FURTHER ASSURANCE. Assignor shall, from time to time hereafter,
execute and deliver such additional instruments, certificates and documents,
and take all such actions, as Assignee shall reasonably request for the
purpose of implementing or effectuating the provisions of this Agreement.
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 Assignor of any provision of this Agreement;
(ii) the entry of a decree or order for relief by a court having
jurisdiction over Assignor 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 Assignor 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) Assignor 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 Pledge
Agreement
(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 Assignor
and Assignee, Assignee's rights and remedies with respect to the Options
shall, in all respects, events and contingencies, be those of a secured party
under the Uniform Commercial Code and
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under any other applicable law, as the same may from time to time be in effect.
(c) Assignee and Assignor hereby agree that, unless and until an
Event of Default shall occur, Assignee shall not exercise or seek to exercise
any of the rights, powers or privileges with respect to the Options under the
Option Agreement.
(d) Pledgor agrees that any notice from Assignee of any sale,
disposition or other intended action hereunder or in connection herewith,
whether required by the Uniform Commercial Code or otherwise, shall
constitute reasonable notice to Assignor 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 Assignor's principal residence or to
any address which Assignor has specified in writing to Assignee as the
address to which notices hereunder shall be given to Assignor.
(e) Assignor agrees to pay all reasonable costs and expenses
(including, without limitation, all court costs and reasonable attorney's
fees) incurred by Assignee 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 all
rights herein assigned shall terminate, and all rights, powers and
privileges with respect to the Options under the Option Agreement shall
revert to Assignor. Assignee shall then return the Option Agreement to
Assignor.
6. MISCELLANEOUS. This Agreement shall not be modified or amended
except through a writing signed by Assignor and Assignee. 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 relating
to the assignment of the rights, powers and privileges associated with the
Options under the Option Agreement. 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.
"Assignor"
/s/ X. X. Blend (SEAL)
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Xxxx X. Blend, III
"Assignee"
THE SYSTEM WORKS, INC.
By: Xxxxx X. Xxxxxx
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Its: President
Attest: Xxxxx X. Xxxxxx
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Its: Secretary
[CORPORATE SEAL]
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