EXHIBIT 10.21
STOCK PLEDGE AGREEMENT
AGREEMENT, made as of June 28, 1996, between Xxxx Xxxxxxx, an
individual residing at the address set forth at the foot of this Agreement, (the
"PLEDGOR"), and Frontier Software Development, Inc., a Delaware corporation (the
"PLEDGEE").
1. CERTAIN DEFINITIONS.
a. The term "PLEDGED SHARES" as used herein means the number of shares
(as determined from time to time as provided herein) of Voting Common
Stock, par value $0.001 per share, of Frontier Software Development,
Inc. (the "COMPANY"). The Pledged Shares shall initially be those
shares represented by the following stock certificate of the Company:
Certificate No. VC-13 for 141,936 shares.
b. The term "OBLIGATIONS" as used herein means all indebtedness,
obligations and liabilities of the Pledgor to the Pledgee, now
existing or hereafter arising, direct or indirect, absolute or
contingent, due or to become due, matured or unmatured, liquidated or
unliquidated, arising under Pledgor's Secured Term Note (Partially
Nonrecourse) dated the date hereof in the principal amount of
US$1,100,000.00 payable to the order of Pledgee (the "NOTE"), as from
time to time amended, revised or assigned.
c. The term "COLLATERAL" as used herein means the Pledged Shares and any
other property at any time, whether now or hereafter, pledged with and
from time to time held by the Pledgee hereunder (whether described
herein or not) and all income therefrom, increases therein and
proceeds thereof.
d. The term "EVENT OF DEFAULT" shall mean Pledgor's failure to pay any
and all amounts due under the Note, an event of default pursuant to
the terms of any of the documents or instruments evidencing any of the
Obligations or the breach of a covenant or agreement herein contained.
2. SECURITY FOR OBLIGATIONS. This Agreement and the pledge of the Collateral
hereunder is made with the Pledgee as security for the Obligations.
3. PLEDGE OF STOCK. For valuable consideration, receipt of which is hereby
acknowledged by the Pledgor, the Pledgor hereby grants a security interest
in and pledges, assigns and delivers the Pledged Shares to the Pledgee, to
be held by the Pledgee subject to the terms and conditions hereinafter set
forth. All of the Pledged Shares, accompanied by a stock power and
assignment duly executed in blank by the Pledgor, have been delivered to
the Pledgee by the Pledgor.
4. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE PLEDGOR.
a. CAPITALIZATION, ETC., OF THE COMPANY. The Pledgor represents and
warrants that the Pledged Shares are fully paid and non-assessable.
b. WARRANTY OF TITLE, ETC. The Pledgor warrants that:
(i) he has good and marketable title to the Pledged Shares, subject
to no pledges, liens, charges, options, restrictions or other
encumbrances except the lien of this Agreement, applicable
securities laws restrictions and restrictions arising under or
described in the investment documentation relating to the
issuance of the Company's Series A Preferred Stock;
(ii) he has the full right and power to enter into this Agreement, to
execute in blank stock powers and assignments covering the
Pledged Shares, and to deliver the Pledged Shares in pledge
hereunder and the accompanying stock powers and assignments duly
executed in blank by the Pledgor, and to take any actions
contemplated or permitted by this Agreement to be taken by him,
and pursuant to this Agreement the Pledgee has a valid,
perfected, first priority security interest in the Collateral in
accordance with the terms hereof;
(iii) neither this Agreement, nor the pledge of the Pledged Shares
hereunder, will violate any agreement or commitment to which the
Pledgor is a party or by which Pledgor or any of Pledgor's
property is bound or affected; and
(iv) this Agreement is binding upon the Pledgor, his successors and
assigns.
c. GENERAL COVENANTS. The Pledgor covenants that he will defend the
Pledgee's rights and security interest hereunder in the Pledged Shares
and against the claims and demands of all persons whomsoever, and that
the Pledgor will have the like title to and right to pledge the
Collateral and will likewise defend the Pledgee's rights and security
interests therein.
5. DIVIDENDS, LIQUIDATION, RECAPITALIZATION, ETC. In case any distribution of
capital or stock dividend shall be made on or in respect of any of the
Pledged Shares or payment of any dividend in cash or other property shall
be made in respect of the Pledged Shares, or any money or property shall
otherwise be distributed upon or with respect to any of the Pledged Shares,
including pursuant to a recapitalization or reclassification of the capital
stock of the Company or pursuant to a reorganization or liquidation or
dissolution of the Company, then the capital stock, dividend, principal,
interest or other money or property so distributed with respect to the
Pledged Shares shall be delivered to the Pledgee to be held by it as part
of the Collateral and as security for the Obligations. All capital stock,
dividends, principal, interest and other sums of money and property, if
any, paid or distributed in respect of the Pledged Shares, which are
received by the Pledgor shall, until
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paid or delivered to the Pledgee, be held in trust for the Pledgee as part
of the Collateral and as security for the Obligations.
6. VOTING, ETC., PRIOR TO MATURITY. Unless and until an Event of Default shall
have occurred and be continuing, and until notice of such Event of Default
has been given by the Pledgee, the Pledgor shall be entitled to vote the
Pledged Shares and to give consents, waivers and ratifications in respect
of the Pledged Shares; PROVIDED, HOWEVER, that no vote shall be cast, or
consent, waiver or ratification given or action taken
which would be inconsistent with or violate any provisions of any of the
documents or instruments evidencing any of the Obligations or of this
Agreement. Until the occurrence of an Event of Default, the Pledgee shall
execute and deliver to the Pledgor such proxies or other documents in
writing as may be necessary to enable the Pledgor to exercise the foregoing
rights. All such rights of the Pledgor to vote and give consents, waivers
and ratifications shall cease forthwith in case an Event of Default shall
have occurred and be continuing, without any notice (except as provided in
this Section 6) or demand by the Pledgee to the Pledgor.
7. REMEDIES. If an Event of Default shall have occurred and be continuing, the
Pledgee shall thereafter have the following rights and remedies (to the
extent permitted by applicable law) in addition to the rights and remedies
of a secured party under the Uniform Commercial Code of The Commonwealth of
Massachusetts, all such rights and remedies being cumulative, not
exclusive, and enforceable alternatively, successively or concurrently, at
such time or times as the Pledgee deems expedient:
a. The Pledgee may vote any or all of the Pledged Shares (whether or not
the same shall have been transferred into its name or the name of its
nominee or nominees) and give all consents, waivers and ratifications
in respect of the Pledged Shares and otherwise act with respect
thereto as though it were the outright owner thereof (the Pledgor
hereby irrevocably constituting and appointing the Pledgee the proxy
and attorney in-fact of the Pledgor, with full power of substitution,
to do so);
b. The Pledgee may demand, xxx for, collect or make any compromise or
settlement the Pledgee deems suitable in respect of any Collateral
held by it hereunder;
c. The Pledgee may sell, resell, assign and deliver, or otherwise dispose
of any or all of the-Collateral, for cash and/or credit and upon such
terms, at such place or places and at such time or times and to such
persons, firms, companies or corporations as the Pledgee deems
expedient, all following demand for performance by and upon notice to
the Pledgor; and
d. The Pledgee may cause all or any part of the Pledged Shares held by it
to be transferred into its name or the name of its nominee or
nominees.
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If any of the Collateral is sold by the Pledgee upon credit or for
future delivery, the Pledgee shall not be liable for the failure of
the purchaser to pay for the same and in such event the Pledgee may
resell such Collateral.
The Pledgee may buy any part or all of the Collateral at any public
sale and if any part or all of the Collateral is of a type customarily
sold in a recognized market or is of the type which is the subject of
widely-distributed standard price quotations, the Pledgee may, in its
sole discretion, buy at private sale and may make payments therefor by
any means including, without limitation, cancellation of indebtedness
secured thereby.
The Pledgee may, in its sole discretion, apply the cash proceeds
actually received from any sale or other disposition to the reasonable
expenses of retaking, holding, preparing for sale, selling and the
like, to reasonable attorneys' fees, and all legal expenses, travel
and other expenses which may be incurred by the Pledgee in attempting
to collect the Obligations or to enforce this Agreement or any
instrument evidencing the Obligations or in the prosecution or defense
of any action or proceeding related to the subject matter of this
Agreement or any instrument evidencing the Obligations, and then to
the Obligations with respect to principal or interest, or both, or
other fees and expenses, in such proportions as the Pledgee, in its
sole discretion, shall determine, and any surplus shall be paid to the
Pledgor.
The Pledgor recognizes that the Pledgee may be unable to effect a
public sale of the Pledged Shares by reason of certain prohibitions
contained in the United States Securities Act of 1933, as amended, or
in other applicable laws, regulations or agreements to which such
Pledged Shares may be subject but may be compelled to resort to one or
more private sales thereof to a restricted group of purchasers. The
Pledgor agrees that any such private sales may be at prices and other
terms less favorable to the seller than if sold at public sales and
that such private sales shall be deemed to have been made in a
commercially reasonable manner. The Pledgee shall be under no
obligation to delay a sale of any of the Pledged Shares for the period
of time necessary to permit the issuer of such securities to register
such securities for public sale under the said Securities Act or other
applicable law, even if the issuer would agree to do so.
8. MARSHALING. The Pledgee shall not be required to marshal any present or
future security for (including but not limited to this Agreement and the
Collateral pledged hereunder), or guaranties of, the Obligations or any of
them, or to resort to such security or guaranties in any particular order;
and all of the rights hereunder and in respect of such securities and
guaranties shall be cumulative and in addition to all other rights, however
existing or arising to the extent that it lawfully may, the Pledgor hereby
agrees that it will not invoke any law relating to the marshaling of
collateral which might cause delay in or impede the enforcement of the
Pledgee's rights under this Agreement or under any other instrument
evidencing any of the Obligations or under which any of the Obligations is
outstanding or by which any of the Obligations is secured or guaranteed,
and to the extent that it lawfully may the Pledgor hereby irrevocably
waives the benefits of all such laws.
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9. PLEDGOR'S OBLIGATIONS NOT AFFECTED. The obligations of the Pledgor
hereunder shall remain in full force and effect without regard to, and
shall not be impaired by (a) any bankruptcy, insolvency, arrangement,
readjustment, composition or the like of the Pledgor; (b) any exercise or
non-exercise, or any waiver, by the Pledgee of any right, remedy, power or
privilege under or in respect of any of the Obligations or any security
therefor (including this Agreement); (c) any amendment to or modification
of any of the Obligations; (d) any amendment to or modification of any
instrument (other than this Agreement) evidencing or securing or
guaranteeing any of the Obligations; or (e) the taking of additional
security for, or any guaranty of, any of the Obligations or the release or
discharge or termination of any security or guaranty for any of the
Obligations; whether or not the Pledgor shall have notice or knowledge of
any of the foregoing.
10. FURTHER ASSURANCES. The Pledgor will do all such acts, and will furnish to
the Pledgee all such financing statements, certificates, legal opinions and
other documents and will obtain such governmental consents and approvals
and will do or cause to be done all such other things, including without
limitation the execution and delivery of further agreements and
instruments, as the Pledgee may reasonably request from time to time in
order to give full effect to this Agreement and to secure the rights of the
Pledgee hereunder.
11. PLEDGEE'S EXONERATION. Under no circumstances shall the Pledgee be deemed
to assume any responsibility for or obligation or duty with respect to any
part or all of the Collateral of any nature or kind, or any matter or
proceedings arising out of or relating thereto, but the same shall be at
the Pledgor's sole risk at all times. The Pledgee shall not be required to
take any action of any kind to collect, preserve or protect its or the
Pledgor's rights in the Collateral or against other parties thereto. The
Pledgee's prior recourse to any part or all of the Collateral shall not
constitute a condition of any demand, suit or proceeding for payment or
collection of the Obligations.
12. NO WAIVER, ETC. No act, failure or delay by the Pledgee shall constitute a
waiver of its rights and remedies hereunder or otherwise. No single or
partial waiver by the Pledgee of any default or right or remedy which it
may have shall operate a waiver of any other default, right or remedy or of
the same default, night or remedy on a future occasion. The Pledgor hereby
waives presentment, notice of dishonor and protest of all instruments,
included in or evidencing any of the Obligations or the Collateral, and any
and all other notices and demands whatsoever (except as expressly provided
herein).
13. NOTICES, ETC. All notices, requests and other communications hereunder
shall be in writing and shall be delivered in hand or by telex or telecopy
or where telex or telecopy communication is not possible, by mail, return
receipt requested, or by a nationally known overnight courier service
addressed as follows:
a. If to the Pledgor:
To the address set forth at the foot of this agreement
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with a copy to such person or persons as Pledgor may designate
from time to time
b. If to the Pledgee:
Frontier Software Development, Inc.
000 Xxxxxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxxxxxxxx 00000
with a copy to such person or persons as Pledgee may designate
from time to time
or to such other address as the party to receive any such communication or
notice may have designated by written notice to the other party from time
to time.
14. TERMINATION. Upon payment and performance in full of the Obligations in
accordance with their terms and the performance by the Pledgor of all of
his covenants and agreements hereunder, this Agreement shall terminate and
the Pledgor shall be entitled to the return, at the Pledgor's expense, of
such of the Collateral in the possession or control of the Pledgee as has
not theretofore been disposed of pursuant to the provisions hereof,
together with any moneys and other property at the time held by the Pledgee
hereunder.
15. MISCELLANEOUS PROVISIONS. Neither this Agreement nor any term hereof may be
changed, waived, discharged or terminated except
by a written instrument expressly referring to this Agreement and to the
provisions so modified or limited, and executed by the party to be charged
therewith. This Agreement and all obligations of the Pledgor hereunder
shall be binding upon the successors and assigns of the Pledgor, and shall,
together with the rights and remedies of the Pledgee hereunder, inure to
the benefit of the Pledgee and the Pledgee's successors and assigns. This
Agreement and the obligations of the Pledgor hereunder shall be governed by
and construed in accordance with the laws of The Commonwealth of
Massachusetts. The descriptive section headings herein have been inserted
for convenience of reference only and do not define or limit the provisions
hereof. If any terms of this Agreement shall be held to be invalid, illegal
or unenforceable, the validity of all other terms hereof shall be in no way
affected thereby, and this Agreement shall be construed and be enforceable
as if such invalid, illegal or unenforceable term had not been included
herein. The Pledgor acknowledges receipt of a copy of this Agreement. Terms
used herein without definition which are defined in the Uniform Commercial
Code of The Commonwealth of Massachusetts have such defined meanings
herein, unless the context otherwise indicate or requires.
IN WITNESS WHEREOF, the Pledgor and the Pledgee have caused this
Agreement to be duly executed, as an instrument under seal, as of the date first
above written.
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PLEDGOR:
/s/ Xxxx Xxxxxxx
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Xxxx Xxxxxxx
Address: 00 XXXXXX XXXXXX
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Xxxxxxxxx, XX 00000
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PLEDGEE:
FRONTIER SOFTWARE DEVELOPMENT, INC.
By: /s/ Xxxxxxx X. Xxxxxxx
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Title: VP Finance
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