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EXHIBIT 10.2
PLEDGE AND SECURITY AGREEMENT
This Pledge and Security Agreement (the "Agreement"), is made and
entered into this 16th day of June, 2000, by and between H.T.E., INC. (the
"H.T.E.") and THE CITY OF TACOMA, WASHINGTON (the "City").
RECITALS
This Agreement is made and entered into under the following
circumstances:
WHEREAS, H.T.E. is the record shareholder in the aggregate of 750,000
shares (the " Preferred Shares") of Series A preferred stock (face value of
$1,500,000), par value $.01 per share, of XXXXXXXXXX.XXX, INC., a Florida
corporation (the "Company"), such Preferred Shares being represented by
certificate number *1* (for 500,000 shares) and certificate number *2* (for
250,000 shares), and 1,250,00 shares (the "Common Shares") of the Company's
common stock, par value of $.0001 per share, such Common Shares being
represented by certificate number *1* (the share certificates for the Preferred
Shares and the Common Shares shall hereinafter be referred to as the
"Certificates" and the Common Shares and Preferred Shares shall hereinafter be
referred to as the "Shares"); and
WHEREAS, simultaneously herewith H.T.E. has executed on behalf of the
City that certain Secured Promissory Note (the "Note") in the aggregate
principal amount of $1,250,000, dated of even date herewith; and
WHEREAS, the City has required the execution and delivery of this
Agreement to provide security for the obligations of H.T.E. under the Note.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing recitals, and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties agree as follows:
1. Pledge of Shares. H.T.E. hereby pledges its interest in the
Shares as security for its obligations under the Note and performance of all
obligations thereunder and under this Agreement. The City shall have (and is
hereby granted) a security interest in the Shares (and the related Certificates
and all proceeds thereof (collectively, the "Collateral") in order to secure
the obligations of H.T.E. under this Agreement.
2. Ownership Rights. Unless a default has occurred under the
Note or this Agreement, H.T.E. shall have and enjoy all rights and attributes
relating to the Shares, including, without limitation, all voting rights,
rights to dividends, conversion rights, or such other distributions in respect
thereof.
3. Adjustments. Notwithstanding anything herein to the contrary,
in the event that, during the term of this Agreement, any share dividend,
reclassification, readjustment or other change is declared or made in the
capital structure of the Company, all new, substituted and additional shares,
options or other securities issued with respect to the pledged Collateral by
reason of any such change shall be delivered to and held by the City under the
terms of this Agreement in the same manner as the Collateral originally pledged
hereunder.
4. Sale of the Collateral. H.T.E. shall have a right to sell the
Collateral, and the City agrees to cooperate and otherwise facilitate such sale
of the Collateral, under the following specific circumstances:
a. At such time as the aggregate value of the
Collateral exceeds Four Million Dollars, which shall be determined as of the
close of the trading day, for Ten (10) consecutive trading days on the O.T.C.
or NASDAQ Markets, H.T.E. shall have the right to sell a proportionate number
of common shares representing such excess and retain for its own use the
proceeds of such sale; and
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b. H.T.E. shall have the right to sell any portion of
the Collateral that it deems necessary, in its sole and absolute discretion, to
pay down the balance of the Note.
5. Events of Default; City's Remedies.
(a) In the event H.T.E. shall, following the date
hereof, (a) default in any of their material obligations under any of the terms
of the Note, this Agreement or any other instrument or agreement evidencing,
securing or otherwise executed in connection with the issuance of the Note
(collectively, the "Security Documents"), (b) make an assignment for the
benefit of their creditors, (c) commence proceedings in bankruptcy for the
adjustment of H.T.E.'s debts under the Bankruptcy Code or under any law,
whether state or Federal, now or hereafter existing for the relief of debtors,
or (d) have a receiver appointed for any substantial part of H.T.E.'s assets
(each of the foregoing being an "Event of Default"), the City shall have the
rights and remedies provided in the Florida Uniform Commercial Code in effect
on the date of this Agreement (the "Code"), and may sell any such Collateral in
any manner provided under the Code, and the proceeds of any such sale shall be
applied first to the expenses of such sale (including, but not limited to,
reasonable attorneys' fees incurred by the City in connection with any such
default by H.T.E.) and the balance, if any, shall be paid to H.T.E. Further,
following an Event of Default, the City shall have the right, but not the duty,
to thereafter exercise all rights with respect to voting privileges for the
Shares and, upon notice from the City, H.T.E. shall no longer exercise any
voting rights with respect to the Shares, or if so directed by the City, shall
vote the Shares as directed by the City. For purposes of determining, under
this paragraph and under the relevant provisions of the Uniform Commercial Code
of Florida, those costs chargeable against proceeds of the collateral in any
disposition of the same by secured party, such costs shall be deemed to
include, without limitation, all costs incurred by secured party in registering
the collateral (represented principally by restricted securities) with such
federal and state regulatory and other agencies as secured party reasonably
deems necessary in order to comply with all laws, rules and regulations
applicable to the sale of securities, including but not limited to legal,
accounting, printing, and underwriting costs and discounts.
(b) No delay or omission on the part of City in
exercising any right granted hereunder shall operate as a waiver of such right
or any other right. A waiver on any one occasion by City shall not be construed
as a bar to or waiver of any right on any future occasion. All rights and
remedies of City, whether granted herein or by the Note, shall be cumulative
and may be exercised separately or concurrently.
6. Termination of Pledge; Release of Shares. Subject to the
provisions in Paragraph 4 above, the pledge created hereby shall terminate upon
the later of (i) full payment or other satisfaction by H.T.E. of all
outstanding amounts owed by the H.T.E. to the City under the Note, or (ii)
performance of all of H.T.E.'s obligations under the Security Documents. Upon
termination of the pledge created hereby arising from such full payment and
satisfaction of obligations, City shall immediately release its security
interest in the Collateral and shall deliver to H.T.E. the Certificates and, if
applicable, any stock powers relating thereto, and any other Collateral
remaining in City's possession.
7. Amendment. This Agreement may be amended at any time by a
writing which refers to this Agreement and is executed by each of the parties
hereto.
8. Entire Agreement. Except as expressly set forth herein or in
an instrument in writing signed by the party to be bound thereby which makes
specific reference to any of the Security Documents, this Agreement sets forth
the entire understanding of the parties hereto concerning the subject matter
hereof, and supersedes all prior contracts, arrangements, communications,
discussions, representations and warranties, whether oral or written, among the
parties relating to the subject matter of this Agreement.
9. Notices. All notices, requests, consents and other
communications hereunder shall be in writing and delivered to the person to
whom the notice is directed, either (i) in person, (ii) by U.S. Mail, as
registered or certified item with return receipt requested, (iii) delivered by
delivery service, or (iv) sent by facsimile, telex or telecopy. Notices
delivered by mail shall be deemed to be given when deposited in a post office
or other depository under the care or custody of the United States Postal
Service, enclosed in a wrapper, addressed properly with proper postage affixed
or when received at the address set forth herein if delivered or sent by
facsimile. All notices shall be addressed as follows:
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If to H.T.E.: H.T.E., Inc.
0000 Xxxxxxxx Xxxxxx Xxxxx
Xxxx Xxxx, Xxxxxxx 00000
Attention: Chief Financial Officer
with a copy to: X.X. Xxxxxx, Jr., Esquire
000-X Xxxxx Xxxxxxxxx Xxxxxx
Xxxxxxx Xxxxx, Xxxxxxx 00000
If to City: The City of Tacoma, Washington
0000 Xxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxxxx 00000-0000
Attention: Xxxxxxx Xxxxxxxx, Esquire
or to such other address or addresses as the party addressed may from time to
time designate to the others in writing in accordance with this paragraph.
10. Jurisdiction and Governing Law. This Agreement shall in all
respects be interpreted, governed by and construed in accordance with the laws
of the State of Florida, without giving effect to principles of conflicts of
laws. Any suit file to enforce the terms of this Agreement may only be brought
in the Circuit Court in and for Seminole County, Florida.
11. Severability. Each Section, subsection, and lesser section of
this Agreement constitutes a separate and distinct undertaking, covenant or
provision hereof. In the event that any provision of this Agreement shall
finally be determined to be unlawful, such provision shall be deemed limited by
construction in scope and effect to the minimum extent necessary to render the
same valid and enforceable, and, if such a limiting construction is not
possible, any such provision shall be deemed severed from this Agreement, but
every other provision of this Agreement shall remain in full force and effect.
12. Third Parties. Nothing expressed or implied in this Agreement
is intended, or shall be construed, to confer upon or give any other person or
entity other than the parties hereto any rights or remedies under or by reason
of this Agreement, except as otherwise provided in the Note.
13. Headings. The headings in this Agreement are intended solely
for convenience or reference and shall not be given any effect in the
construction or interpretation of this Agreement regarding assignments.
14. Counterparts. This Agreement may be executed and delivered in
two or more counterparts, each of which shall be deemed an original but all of
which shall constitute one and the same Agreement.
IN WITNESS WHEREOF, the undersigned have hereunto set their hands on
the date first written above.
H.T.E., INC.
Witness: /s/ Xxxxx Xxxxxx By: /s/ X. X. Xxxxxx, Jr.
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Print Name: Xxxxx Xxxxxx Name: X. X. Xxxxxx, Jr.
Title: Executive Vice President
Witness: /s/ Xxxxxxx Xxxxxxx
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Print Name: Xxxxxxx Xxxxxxx
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THE CITY
Witness: /s/ By: /s/
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Print Name: Name:
Title:
Witness: /s/
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Print Name:
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