Exhibit 10.8
PLEDGE AGREEMENT
This Pledge Agreement is made, as of the 16th day of December, 1997,
by and among, Xxxxxx Xxxxxxx, an individual residing at 0000 Xxxxx Xxxx
Xxxxx, Xxxxx, XX 00000 (the "Pledgor"), and Inso Corporation, a Delaware
corporation having a place of business at 00 Xx. Xxxxx Xxxxxx, Xxxxxx, XX
00000 (the "Pledgee").
WITNESSETH:
WHEREAS, Pledgor has executed and delivered a secured promissory note
(the "Note") of even date herewith in the original principal amount of
$329,998.75 payable to the Pledgee; and
WHEREAS, the Pledgor is the owner of the shares of common stock of the
Pledgee, as set forth on Exhibit A; and
WHEREAS, as collateral security for the obligations of the Pledgor
under the Note, the Pledgor has agreed to pledge and grant to the Pledgee a
first priority security interest in the shares set forth on Exhibit A (the
"Pledged Shares"), as more fully set forth herein;
NOW THEREFORE, the parties hereto agree and acknowledge that the
foregoing recitals are true and correct and to the following:
1. Pledge of Collateral. As collateral security for the performance
of the obligations of the Pledgor under the Note (the "Obligations"), the
Pledgor hereby pledges and grants to the Pledgee a security interest in and
to all of the Pledged Shares held by the Pledgor, as identified in Exhibit
A annexed hereto, along with any and all stock rights, powers and other
distributions, dividends or proceeds thereof (the "Shares"). In addition,
any stock rights, dividends, powers or other distributions or proceeds
received by the Pledgor shall be held in trust for and delivered to the
Pledgee to be held in accordance with the terms of this Agreement, and
shall be included in the Shares described above.
2. Delivery of the Shares. The Shares have been delivered to the
Pledgee on the date hereof, together with undated stock powers executed in
blank. Upon delivery to the Pledgee by the Pledgor of a notice of
Pledgor's intent to sell all or a portion of the Shares (the "Proposed
Shares") and an irrevocable undertaking by the Pledgor and the Pledgor's
broker to remit to the Pledgee the net proceeds to be received by the
Pledgor from the sale of such shares (or such lessor amount as is then
outstanding under the Note), in payment or partial payment of the Note,
within three business days of such sale, the Pledgee shall return to the
Pledgor the Proposed Shares. Upon payment in full of the Note, the Pledgee
shall return to the Pledgor the Shares, undated stock
powers as well as such other instruments, documents, stock certificates,
money and goods as may come into Pledgee's possession from time to time,
whether through delivery by Pledgor or otherwise.
3. Pledgee's Rights and Duties with Respect to the Collateral.
Pledgee's only duty with respect to the Shares shall be to exercise
reasonable care to secure the safe custody thereof all other duties being
hereby expressly disclaimed. Pledgee shall have the right, but not the
obligation, to (a) demand, xxx for, receive and collect all money or money
damages payable on account of any Shares, (b) protect, preserve or assert any
other rights of Pledgor or take any other action with respect to the Shares,
and (c) pay any taxes, liens, assessments, insurance premiums or other
charges pertaining to Shares. Any expenses incurred by Pledgee under the
preceding sentence shall be paid by Pledgor upon demand, become part of the
Obligations secured by the Shares and bear interest at the per annum rate
equal to the Default Rate set forth in the Note until paid. Pledgee shall be
relieved of all responsibility for the Shares upon surrendering them to
Pledgor.
4. Pledgor's Warranties and Indemnity.
4.1 Pledgor represents, warrants and covenants (a) that Pledgor
is the lawful owner of the Shares, (b) that the Shares are fully paid and
nonassessable, (c) that as of the date hereof, the Shares are free and
clear of all liens, encumbrances, and security interests, other than the
security interest granted by the Pledgor hereunder, and this pledge
constitutes a valid and perfected security interest in the Shares
enforceable against the Pledgor, (d) that the Shares are not subject to any
outstanding rights of redemption or options to purchase or sell, (e) that
the Pledgor has the sole right and lawful authority to pledge the Shares
and otherwise to comply with the provisions hereof, (f) no litigation is
pending or threatened against the Pledgor, which if adversely determined,
would have a material adverse effect against the Pledgor or the Pledgee's
rights in respect of the Shares, (g) that the Pledgor agrees to defend the
Pledgee's title in the Shares and the security interest therein against any
and all claims and demands, and (h) this Pledge Agreement constitutes the
legal, valid and binding obligation of the Pledgor, enforceable against the
Pledgor in accordance with its terms.
4.2 If any adverse claim is asserted in respect of the Shares or
any portion thereof, except as such may arise from the wanton or reckless
acts of the Pledgee, the Pledgor agrees to indemnify the Pledgee and hold
the Pledgee harmless from and against any reasonable liabilities or
damages, and reasonable attorney's fees incurred by the Pledgee in
exercising any right, power or remedy of the Pledgee hereunder. Any such
loss, liability or expense so incurred shall be paid by the Pledgor upon
demand, become part of the Obligations secured by the Shares and bear
interest at the per annum rate equal to the Default Rate (as defined in the
Note).
5. Voting of Collateral. While Pledgor is not in default hereunder,
Pledgor may vote the Shares, provided that said voting shall be in
conformity with the Pledgor's performance under this Agreement and the
Note.
6. Dividends and Other Distributions. While Pledgor is not in
default hereunder, Pledgor may receive all cash dividends, payments of
principal and interest, and other distributions payable with respect to
Shares, provided, however, that Pledgor shall immediately inform Pledgee of
the receipt of any such dividend, payment or other distribution and shall
hold the amount thereof in trust for Pledgee unless and until Pledgee shall
in writing release Pledgor from such trust. Pledgor shall cause all
non-cash dividends and distributions with respect to Shares to be
distributed directly to Pledgee, to be held by Pledgee as additional
Shares, and if any such distribution is made to Pledgor he shall receive
such distribution in trust for Pledgee and shall immediately transfer it to
Pledgee.
7. Pledgor's Default. Pledgor shall be in default hereunder upon the
occurrence of any of the following events:
7.1 Any event of default shall occur under the Note;
7.2 If any lien, encumbrance or adverse claim of any nature
whatsoever is asserted with respect to any Shares;
7.3 If any representation or warranty of Pledgor hereunder is or
shall become false; or
7.4 If Pledgor fails to fulfill any obligation hereunder.
8. Pledgee's Rights upon Default. Upon the occurrence of any
default as defined in Section 7 hereof, Pledgee may, if Pledgee so elects
in its sole discretion, take any one or more of the following:
8.1 At any time and from time to time sell, assign and deliver
all or any part of the Shares, or any interest therein, at any public or
private sale, for cash, on credit or for other property, for immediate or
future delivery without any assumption of credit risk, and for such price
or prices and on such terms as Pledgee in its absolute discretion may
determine; provided that (i) at least ten (10) days' notice of the time and
place of any such sale shall be given to Pledgor, and (ii) in the case of
any private sale, such notice shall also contain the terms of the proposed
sale and Pledgee shall sell the Shares proposed to be sold to any purchaser
procured by Pledgor who is ready, willing and able to purchase, and who
prior to the time of such sale tenders the purchase price of, such Shares
on terms more favorable to Pledgee than the terms contained in such notice;
provided, further, the Pledgor acknowledges that the Pledgee may be unable
to
effect a public sale of all or part of the Shares by reason of certain
prohibitions contained in the Securities Act of 1933, as amended, and may
be compelled to resort to one or more private sales to a restricted group
of purchasers who will be obligated to agree, among other things, to
acquire such securities for their own account, for investment, and not with
a view to the distribution or resale thereof. The Pledgor acknowledges
that any such private sale may be at prices and on terms less favorable to
the seller than if sold at public sales and that private sales shall be
deemed to be made in a commercially reasonable manner notwithstanding that
such a private sale may result in a lower sale price.
8.2 Exercise the right to vote, the right to receive cash
dividends and other distributions, and all other rights with respect to the
Shares as though Pledgee were the absolute owner thereof, whether or not
such rights were retained by Pledgor as against Pledgee before default; and
8.3 Exercise all other rights available to a secured party under
the Uniform Commercial Code and other applicable law.
8.4 The rights and remedies available pursuant to this Agreement
are cumulative, and not exclusive of any other rights or remedies otherwise
available to the Pledgee.
9. Application of Sale Proceeds. In the event of a sale of Shares
by the Pledgee in accordance herewith, the proceeds shall first be
applied to the payment of the expenses of the sale, including brokers'
commissions, counsel fees, any taxes or other charges imposed by law upon
the Shares or the transfer thereof and all other charges paid or incurred
by Pledgee pertaining to the sale; and, second, to satisfy outstanding
Obligations, in the order in which Pledgee elects in its sole discretion;
and, third, the surplus (if any) shall be paid to Pledgor.
10. 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 Pledgee or to Pledgor at the
addresses first above written. Notice by mail shall be deemed to have been
made on the date when the notice is deposited in the mail.
11. Heirs, Successors, Etc. This Agreement and all of its terms and
provisions shall benefit and bind the heirs, successors, assigns,
transferees, executors and administrators of each of the parties hereto.
12. Pledgee's Forbearance. Any forbearance, failure or delay by
Pledgee in exercising any right, power or remedy hereunder shall not be
deemed a waiver of such right, power or remedy. Any single or partial
exercise of any right, power or remedy of Pledgee shall continue in full
force and effect until such right, power or remedy is specifically waived
in writing by Pledgee.
13. Further Assurances. The Pledgor covenants and agrees to execute
and deliver, or cause to be executed or delivered, all such other stock
powers, proxies, instruments, and documents, and will take such other
action or actions as the Pledgee may reasonably request from time to time
in order to carry out the provisions and purposes hereof.
14. Termination. This Agreement and the pledge and security interest
represented hereby shall terminate upon the indefeasible payment in full of
the Obligations.
15. Miscellaneous.
(a) This Agreement or any part thereof cannot be changed, waived,
or amended except by an instrument in writing signed by Pledgee; and waiver
on one occasion shall not operate as a waiver on any other occasion.
(b) The Uniform Commercial Code and other laws of the
Commonwealth of Massachusetts shall govern the construction and enforcement
of this Agreement.
(c) If any part of this Agreement or any agreement, document, or
instrument executed in connection herewith shall be deemed invalid or
unenforceable by a court of competent jurisdiction, the remaining
provisions shall remain in full force and effect, and shall continue to be
binding upon the parties.
(d) This Agreement may be executed in one or more counterparts,
each of which shall constitute an original, but all of which, when taken
together, shall constitute one and the same instrument.
16. Jurisdiction. The Pledgor irrevocably submits to the
jurisdiction of the courts of the Commonwealth of Massachusetts and the
United States District Court for the District of Massachusetts for the
purpose of any suit, action or other proceeding brought by the Lender
arising out of or relating to this Agreement, and the Pledgor waives and
agrees not to assert by way of motion, as a defense or otherwise in any
such suit, action or proceeding, any claim that the Pledgor is not
personally subject to the jurisdiction of the courts of the Commonwealth of
Massachusetts or the United States District Court for the District of
Massachusetts or that the Pledgor's property is exempt or immune from
execution or attachment, either prior to judgment or in aid of execution,
that the suit, action or proceeding is brought in an inconvenient forum or
that the venue of the suit, action or proceeding is improper, or that this
Pledge Agreement or the subject matter hereof may not be enforced in or by
such court. THE PLEDGOR HEREBY WAIVES ANY AND ALL RIGHTS TO A TRIAL BY JURY
IN ANY ACTION OR PROCEEDING IN CONNECTION WITH ALL MATTERS
CONTEMPLATED HEREBY AND DOCUMENTS EXECUTED IN CONNECTION HEREWITH.
EXECUTED under seal as of the date first above written.
PLEDGOR:
/s/ Xxxxxx Xxxxxxx
________________________________________
PLEDGEE:
INSO CORPORATION
/s/ Xxxxxx X. Xxxx-Xxxxxx
________________________________________
Its: Chairman and Chief Executive Officer
EXHIBIT A
TO PLEDGE AGREEMENT DATED DECEMBER 16, 1997
Description Number of Shares
------------------------ ----------------
Common Stock of INSO 32,195
CORPORATION, a Delaware
Corporation
PLEDGE AGREEMENT
This Pledge Agreement is made, as of the 16th day of December,
1997, by and among, Xxxxx Xxxx, an individual residing at 00 Xxxxxxxx Xxxx,
Xxxxxxx, XX 00000 (the "Pledgor"), and Inso Corporation, a Delaware
corporation having a place of business at 00 Xx. Xxxxx Xxxxxx, Xxxxxx, XX
00000 (the "Pledgee").
WITNESSETH:
WHEREAS, Pledgor has executed and delivered a secured promissory note
(the "Note") of even date herewith in the original principal amount of
$199,998.00 payable to the Pledgee; and
WHEREAS, the Pledgor is the owner of the shares of common stock of the
Pledgee, as set forth on Exhibit A; and
WHEREAS, as collateral security for the obligations of the Pledgor
under the Note, the Pledgor has agreed to pledge and grant to the Pledgee a
first priority security interest in the shares set forth on Exhibit A (the
"Pledged Shares"), as more fully set forth herein;
NOW THEREFORE, the parties hereto agree and acknowledge that the
foregoing recitals are true and correct and to the following:
1. Pledge of Collateral. As collateral security for the performance
of the obligations of the Pledgor under the Note (the "Obligations"), the
Pledgor hereby pledges and grants to the Pledgee a security interest in and
to all of the Pledged Shares held by the Pledgor, as identified in Exhibit
A annexed hereto, along with any and all stock rights, powers and other
distributions, dividends or proceeds thereof (the "Shares"). In addition,
any stock rights, dividends, powers or other distributions or proceeds
received by the Pledgor shall be held in trust for and delivered to the
Pledgee to be held in accordance with the terms of this Agreement, and
shall be included in the Shares described above.
2. Delivery of the Shares. The Shares have been delivered to the
Pledgee on the date hereof, together with undated stock powers executed in
blank. Upon delivery to the Pledgee by the Pledgor of a notice of
Pledgor's intent to sell all or a portion of the Shares (the "Proposed
Shares") and an irrevocable undertaking by the Pledgor and the Pledgor's
broker to remit to the Pledgee the net proceeds to be received by the
Pledgor from the sale of such shares (or such lessor amount as is then
outstanding under the Note), in payment or partial payment of the Note,
within three business days of such sale, the Pledgee shall return to the
Pledgor the Proposed Shares. Upon payment in full of the Note, the Pledgee
shall return to the Pledgor the Shares, undated stock powers as well as
such other instruments, documents, stock certificates, money and goods as
may
come into Pledgee's possession from time to time, whether through delivery
by Pledgor or otherwise.
3. Pledgee's Rights and Duties with Respect to the Collateral.
Pledgee's only duty with respect to the Shares shall be to exercise
reasonable care to secure the safe custody thereof all other duties being
hereby expressly disclaimed. Pledgee shall have the right, but not the
obligation, to (a) demand, xxx for, receive and collect all money or money
damages payable on account of any Shares, (b) protect, preserve or assert
any other rights of Pledgor or take any other action with respect to the
Shares, and (c) pay any taxes, liens, assessments, insurance premiums or
other charges pertaining to Shares. Any expenses incurred by Pledgee under
the preceding sentence shall be paid by Pledgor upon demand, become part of
the Obligations secured by the Shares and bear interest at the per annum
rate equal to the Default Rate set forth in the Note until paid. Pledgee
shall be relieved of all responsibility for the Shares upon surrendering
them to Pledgor.
4. Pledgor's Warranties and Indemnity.
4.1 Pledgor represents, warrants and covenants (a) that Pledgor
is the lawful owner of the Shares, (b) that the Shares are fully paid and
nonassessable, (c) that as of the date hereof, the Shares are free and
clear of all liens, encumbrances, and security interests, other than the
security interest granted by the Pledgor hereunder, and this pledge
constitutes a valid and perfected security interest in the Shares
enforceable against the Pledgor, (d) that the Shares are not subject to any
outstanding rights of redemption or options to purchase or sell, (e) that
the Pledgor has the sole right and lawful authority to pledge the Shares
and otherwise to comply with the provisions hereof, (f) no litigation is
pending or threatened against the Pledgor, which if adversely determined,
would have a material adverse effect against the Pledgor or the Pledgee's
rights in respect of the Shares, (g) that the Pledgor agrees to defend the
Pledgee's title in the Shares and the security interest therein against any
and all claims and demands, and (h) this Pledge Agreement constitutes the
legal, valid and binding obligation of the Pledgor, enforceable against the
Pledgor in accordance with its terms.
4.2 If any adverse claim is asserted in respect of the Shares or
any portion thereof, except as such may arise from the wanton or reckless
acts of the Pledgee, the Pledgor agrees to indemnify the Pledgee and hold
the Pledgee harmless from and against any reasonable liabilities or
damages, and reasonable attorney's fees incurred by the Pledgee in
exercising any right, power or remedy of the Pledgee hereunder. Any such
loss, liability or expense so incurred shall be paid by the Pledgor upon
demand, become part of the Obligations secured by the Shares and bear
interest at the per annum rate equal to the Default Rate (as defined in the
Note).
5. Voting of Collateral. While Pledgor is not in default hereunder,
Pledgor may vote the Shares, provided that said voting shall be in
conformity with the Pledgor's performance under this Agreement and the
Note.
6. Dividends and Other Distributions. While Pledgor is not in
default hereunder, Pledgor may receive all cash dividends, payments of
principal and interest, and other distributions payable with respect to
Shares, provided, however, that Pledgor shall immediately inform Pledgee of
the receipt of any such dividend, payment or other distribution and shall
hold the amount thereof in trust for Pledgee unless and until Pledgee shall
in writing release Pledgor from such trust. Pledgor shall cause all
non-cash dividends and distributions with respect to Shares to be
distributed directly to Pledgee, to be held by Pledgee as additional
Shares, and if any such distribution is made to Pledgor he shall receive
such distribution in trust for Pledgee and shall immediately transfer it to
Pledgee.
7. Pledgor's Default. Pledgor shall be in default hereunder upon the
occurrence of any of the following events:
7.1 Any event of default shall occur under the Note;
7.2 If any lien, encumbrance or adverse claim of any nature
whatsoever is asserted with respect to any Shares;
7.3 If any representation or warranty of Pledgor hereunder is or
shall become false; or
7.4 If Pledgor fails to fulfill any obligation hereunder.
8. Pledgee's Rights upon Default. Upon the occurrence of any
default as defined in Section 7 hereof, Pledgee may, if Pledgee so elects
in its sole discretion, take any one or more of the following:
8.1 At any time and from time to time sell, assign and deliver
all or any part of the Shares, or any interest therein, at any public or
private sale, for cash, on credit or for other property, for immediate or
future delivery without any assumption of credit risk, and for such price
or prices and on such terms as Pledgee in its absolute discretion may
determine; provided that (i) at least ten (10) days' notice of the time and
place of any such sale shall be given to Pledgor, and (ii) in the case of
any private sale, such notice shall also contain the terms of the proposed
sale and Pledgee shall sell the Shares proposed to be sold to any purchaser
procured by Pledgor who is ready, willing and able to purchase, and who
prior to the time of such sale tenders the purchase price of, such Shares
on terms more favorable to Pledgee than the terms contained in such notice;
provided, further, the Pledgor acknowledges that the Pledgee may be unable to
effect a public sale of all or part of the Shares by reason of certain
prohibitions contained in the Securities Act of 1933, as amended, and may be
compelled to resort to one or more private sales to a restricted group of
purchasers who will be obligated to agree, among other things, to acquire
such securities for their own account, for investment, and not with a view to
the distribution or resale thereof. The Pledgor acknowledges that any such
private sale may be at prices and on terms less favorable to the seller than
if sold at public sales and that private sales shall be deemed to be made in
a commercially reasonable manner notwithstanding that such a private sale may
result in a lower sale price.
8.2 Exercise the right to vote, the right to receive cash
dividends and other distributions, and all other rights with respect to the
Shares as though Pledgee were the absolute owner thereof, whether or not
such rights were retained by Pledgor as against Pledgee before default; and
8.3 Exercise all other rights available to a secured party under
the Uniform Commercial Code and other applicable law.
8.4 The rights and remedies available pursuant to this Agreement
are cumulative, and not exclusive of any other rights or remedies otherwise
available to the Pledgee.
9. Application of Sale Proceeds. In the event of a sale of Shares
by the Pledgee in accordance herewith, the proceeds shall first be applied
to the payment of the expenses of the sale, including brokers' commissions,
counsel fees, any taxes or other charges imposed by law upon the Shares or
the transfer thereof and all other charges paid or incurred by Pledgee
pertaining to the sale; and, second, to satisfy outstanding Obligations, in
the order in which Pledgee elects in its sole discretion; and, third, the
surplus (if any) shall be paid to Pledgor.
10. 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 Pledgee or to Pledgor at the
addresses first above written. Notice by mail shall be deemed to have been
made on the date when the notice is deposited in the mail.
11. Heirs, Successors, Etc. This Agreement and all of its terms and
provisions shall benefit and bind the heirs, successors, assigns,
transferees, executors and administrators of each of the parties hereto.
12. Pledgee's Forbearance. Any forbearance, failure or delay by
Pledgee in exercising any right, power or remedy hereunder shall not be
deemed a waiver of such right, power or remedy. Any single or partial
exercise of any right, power
or remedy of Pledgee shall continue in full force and effect until such
right, power or remedy is specifically waived in writing by Pledgee.
13. Further Assurances. The Pledgor covenants and agrees to execute
and deliver, or cause to be executed or delivered, all such other stock
powers, proxies, instruments, and documents, and will take such other action
or actions as the Pledgee may reasonably request from time to time in order
to carry out the provisions and purposes hereof.
14. Termination. This Agreement and the pledge and security interest
represented hereby shall terminate upon the indefeasible payment in full of
the Obligations.
15. Miscellaneous.
(a) This Agreement or any part thereof cannot be changed, waived,
or amended except by an instrument in writing signed by Pledgee; and waiver
on one occasion shall not operate as a waiver on any other occasion.
(b) The Uniform Commercial Code and other laws of the
Commonwealth of Massachusetts shall govern the construction and enforcement
of this Agreement.
(c) If any part of this Agreement or any agreement, document, or
instrument executed in connection herewith shall be deemed invalid or
unenforceable by a court of competent jurisdiction, the remaining
provisions shall remain in full force and effect, and shall continue to be
binding upon the parties.
(d) This Agreement may be executed in one or more counterparts,
each of which shall constitute an original, but all of which, when taken
together, shall constitute one and the same instrument.
16. Jurisdiction. The Pledgor irrevocably submits to the
jurisdiction of the courts of the Commonwealth of Massachusetts and the
United States District Court for the District of Massachusetts for the
purpose of any suit, action or other proceeding brought by the Lender
arising out of or relating to this Agreement, and the Pledgor waives and
agrees not to assert by way of motion, as a defense or otherwise in any
such suit, action or proceeding, any claim that the Pledgor is not
personally subject to the jurisdiction of the courts of the Commonwealth of
Massachusetts or the United States District Court for the District of
Massachusetts or that the Pledgor's property is exempt or immune from
execution or attachment, either prior to judgment or in aid of execution,
that the suit, action or proceeding is brought in an inconvenient forum or
that the venue of the suit, action or proceeding is improper, or that this
Pledge Agreement or the subject matter hereof may not be enforced in or by
such court. THE PLEDGOR
HEREBY WAIVES ANY AND ALL RIGHTS TO A TRIAL BY JURY IN ANY ACTION OR
PROCEEDING IN CONNECTION WITH ALL MATTERS CONTEMPLATED HEREBY AND DOCUMENTS
EXECUTED IN CONNECTION HEREWITH.
EXECUTED under seal as of the date first above written.
PLEDGOR:
/s/ Xxxxx Xxxx
--------------------------------------
PLEDGEE:
INSO CORPORATION
/s/ Xxxxxx X. Xxxx-Xxxxxx
--------------------------------------
Its: Chairman and Chief Executive Officer
EXHIBIT A
TO PLEDGE AGREEMENT DATED DECEMBER 16, 1997
Description Number of Shares
----------------------- -----------------
Common Stock of INSO 19,512
CORPORATION, a Delaware
Corporation
PLEDGE AGREEMENT
This Pledge Agreement is made, as of the 16th day of December, 1997, by
and among, Xxxxxx Xxxxxxxx, an individual residing at 00 Xxxxxx Xx.,
Xxxxxxxxx, XX 00000 (the "Pledgor"), and Inso Corporation, a Delaware
corporation having a place of business at 00 Xx. Xxxxx Xxxxxx, Xxxxxx, XX
00000 (the "Pledgee").
WITNESSETH:
WHEREAS, Pledgor has executed and delivered a secured promissory note
(the "Note") of even date herewith in the original principal amount of
$149,998.50 payable to the Pledgee; and
WHEREAS, the Pledgor is the owner of the shares of common stock of the
Pledgee, as set forth on Exhibit A; and
WHEREAS, as collateral security for the obligations of the Pledgor under
the Note, the Pledgor has agreed to pledge and grant to the Pledgee a first
priority security interest in the shares set forth on Exhibit A (the "Pledged
Shares"), as more fully set forth herein;
NOW THEREFORE, the parties hereto agree and acknowledge that the
foregoing recitals are true and correct and to the following:
1. Pledge of Collateral. As collateral security for the performance of
the obligations of the Pledgor under the Note (the "Obligations"), the
Pledgor hereby pledges and grants to the Pledgee a security interest in and
to all of the Pledged Shares held by the Pledgor, as identified in Exhibit A
annexed hereto, along with any and all stock rights, powers and other
distributions, dividends or proceeds thereof (the "Shares"). In addition,
any stock rights, dividends, powers or other distributions or proceeds
received by the Pledgor shall be held in trust for and delivered to the
Pledgee to be held in accordance with the terms of this Agreement, and shall
be included in the Shares described above.
2. Delivery of the Shares. The Shares have been delivered to the
Pledgee on the date hereof, together with undated stock powers executed in
blank. Upon delivery to the Pledgee by the Pledgor of a notice of Pledgor's
intent to sell all or a portion of the Shares (the "Proposed Shares") and an
irrevocable undertaking by the Pledgor and the Pledgor's broker to remit to
the Pledgee the net proceeds to be received by the Pledgor from the sale of
such shares (or such lessor amount as is then outstanding under the Note), in
payment or partial payment of the Note, within three business days of such
sale, the Pledgee shall return to the Pledgor the Proposed Shares. Upon
payment in full of the Note, the Pledgee shall return to the Pledgor the
Shares, undated stock powers as well as such other instruments, documents,
stock certificates, money
and goods as may come into Pledgee's possession from time to time, whether
through delivery by Pledgor or otherwise.
3. Pledgee's Rights and Duties with Respect to the Collateral. Pledgee's
only duty with respect to the Shares shall be to exercise reasonable care to
secure the safe custody thereof all other duties being hereby expressly
disclaimed. Pledgee shall have the right, but not the obligation, to (a)
demand, xxx for, receive and collect all money or money damages payable on
account of any Shares, (b) protect, preserve or assert any other rights of
Pledgor or take any other action with respect to the Shares, and (c) pay any
taxes, liens, assessments, insurance premiums or other charges pertaining to
Shares. Any expenses incurred by Pledgee under the preceding sentence shall
be paid by Pledgor upon demand, become part of the Obligations secured by the
Shares and bear interest at the per annum rate equal to the Default Rate set
forth in the Note until paid. Pledgee shall be relieved of all responsibility
for the Shares upon surrendering them to Pledgor.
4. Pledgor's Warranties and Indemnity.
4.1 Pledgor represents, warrants and covenants (a) that Pledgor is
the lawful owner of the Shares, (b) that the Shares are fully paid and
nonassessable, (c) that as of the date hereof, the Shares are free and clear
of all liens, encumbrances, and security interests, other than the security
interest granted by the Pledgor hereunder, and this pledge constitutes a
valid and perfected security interest in the Shares enforceable against the
Pledgor, (d) that the Shares are not subject to any outstanding rights of
redemption or options to purchase or sell, (e) that the Pledgor has the sole
right and lawful authority to pledge the Shares and otherwise to comply with
the provisions hereof, (f) no litigation is pending or threatened against the
Pledgor, which if adversely determined, would have a material adverse effect
against the Pledgor or the Pledgee's rights in respect of the Shares, (g)
that the Pledgor agrees to defend the Pledgee's title in the Shares and the
security interest therein against any and all claims and demands, and (h)
this Pledge Agreement constitutes the legal, valid and binding obligation of
the Pledgor, enforceable against the Pledgor in accordance with its terms.
4.2 If any adverse claim is asserted in respect of the Shares or
any portion thereof, except as such may arise from the wanton or reckless
acts of the Pledgee, the Pledgor agrees to indemnify the Pledgee and hold the
Pledgee harmless from and against any reasonable liabilities or damages, and
reasonable attorney's fees incurred by the Pledgee in exercising any right,
power or remedy of the Pledgee hereunder. Any such loss, liability or expense
so incurred shall be paid by the Pledgor upon demand, become part of the
Obligations secured by the Shares and bear interest at the per annum rate
equal to the Default Rate (as defined in the Note).
5. Voting of Collateral. While Pledgor is not in default hereunder,
Pledgor may vote the Shares, provided that said voting shall be in conformity
with the Pledgor's performance under this Agreement and the Note.
6. Dividends and Other Distributions. While Pledgor is not in default
hereunder, Pledgor may receive all cash dividends, payments of principal and
interest, and other distributions payable with respect to Shares, provided,
however, that Pledgor shall immediately inform Pledgee of the receipt of any
such dividend, payment or other distribution and shall hold the amount
thereof in trust for Pledgee unless and until Pledgee shall in writing
release Pledgor from such trust. Pledgor shall cause all non-cash dividends
and distributions with respect to Shares to be distributed directly to
Pledgee, to be held by Pledgee as additional Shares, and if any such
distribution is made to Pledgor he shall receive such distribution in trust
for Pledgee and shall immediately transfer it to Pledgee.
7. Pledgor's Default. Pledgor shall be in default hereunder upon the
occurrence of any of the following events:
7.1 Any event of default shall occur under the Note;
7.2 If any lien, encumbrance or adverse claim of any nature
whatsoever is asserted with respect to any Shares;
7.3 If any representation or warranty of Pledgor hereunder is or
shall become false; or
7.4 If Pledgor fails to fulfill any obligation hereunder.
8. Pledgee's Rights upon Default. Upon the occurrence of any default
as defined in Section 7 hereof, Pledgee may, if Pledgee so elects in its sole
discretion, take any one or more of the following:
8.1 At any time and from time to time sell, assign and deliver all
or any part of the Shares, or any interest therein, at any public or private
sale, for cash, on credit or for other property, for immediate or future
delivery without any assumption of credit risk, and for such price or prices
and on such terms as Pledgee in its absolute discretion may determine;
provided that (i) at least ten (10) days' notice of the time and place of any
such sale shall be given to Pledgor, and (ii) in the case of any private
sale, such notice shall also contain the terms of the proposed sale and
Pledgee shall sell the Shares proposed to be sold to any purchaser procured
by Pledgor who is ready, willing and able to purchase, and who prior to the
time of such sale tenders the purchase price of, such Shares on terms more
favorable to Pledgee than the terms contained in such notice; provided,
further, the Pledgor acknowledges that the Pledgee may be unable to effect a
public sale of all or part of the Shares by reason of certain prohibitions
contained in the Securities Act of 1933, as amended, and may be compelled to
resort to one or more private sales to a restricted group of purchasers who
will be obligated to agree, among other things, to acquire such securities
for their own account, for investment, and not with a view to the
distribution or resale thereof. The Pledgor acknowledges that any such
private sale may be at prices and on terms less favorable to the seller than
if sold at public sales and that private sales shall be deemed to be made in
a commercially reasonable manner notwithstanding that such a private sale may
result in a lower sale price.
8.2 Exercise the right to vote, the right to receive cash
dividends and other distributions, and all other rights with respect to the
Shares as though Pledgee were the absolute owner thereof, whether or not such
rights were retained by Pledgor as against Pledgee before default; and
8.3 Exercise all other rights available to a secured party under
the Uniform Commercial Code and other applicable law.
8.4 The rights and remedies available pursuant to this Agreement
are cumulative, and not exclusive of any other rights or remedies otherwise
available to the Pledgee.
9. Application of Sale Proceeds. In the event of a sale of Shares
by the Pledgee in accordance herewith the proceeds shall first be applied
to the payment of the expenses of the sale, including brokers' commissions,
counsel fees, any taxes or other charges imposed by law upon the Shares or
the transfer thereof and all other charges paid or incurred by Pledgee
pertaining to the sale; and, second, to satisfy outstanding Obligations, in
the order in which Pledgee elects in its sole discretion; and, third, the
surplus (if any) shall be paid to Pledgor.
10. 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 Pledgee or to Pledgor at the
addresses first above written. Notice by mail shall be deemed to have been
made on the date when the notice is deposited in the mail.
11. Heirs, Successors, Etc. This Agreement and all of its terms and
provisions shall benefit and bind the heirs, successors, assigns,
transferees, executors and administrators of each of the parties hereto.
12. Pledgee's Forbearance. Any forbearance, failure or delay by Pledgee
in exercising any right, power or remedy hereunder shall not be deemed a
waiver of such right, power or remedy. Any single or partial exercise of any
right, power or remedy of Pledgee shall continue in full force and effect
until such right, power or remedy is specifically waived in writing by
Pledgee.
13. Further Assurances. The Pledgor covenants and agrees to execute and
deliver, or cause to be executed or delivered, all such other stock powers,
proxies, instruments, and documents, and will take such other action or
actions as the Pledgee may reasonably request from time to time in order to
carry out the provisions and purposes hereof.
14. Termination. This Agreement and the pledge and security interest
represented hereby shall terminate upon the indefeasible payment in full of
the Obligations.
15. Miscellaneous.
(a) This Agreement or any part thereof cannot be changed, waived,
or amended except by an instrument in writing signed by Pledgee; and waiver
on one occasion shall not operate as a waiver on any other occasion.
(b) The Uniform Commercial Code and other laws of the Commonwealth
of Massachusetts shall govern the construction and enforcement of this
Agreement.
(c) If any part of this Agreement or any agreement, document, or
instrument executed in connection herewith shall be deemed invalid or
unenforceable by a court of competent jurisdiction, the remaining provisions
shall remain in full force and effect, and shall continue to be binding upon
the parties.
(d) This Agreement may be executed in one or more counterparts,
each of which shall constitute an original, but all of which, when taken
together, shall constitute one and the same instrument.
16. Jurisdiction. The Pledgor irrevocably submits to the jurisdiction
of the courts of the Commonwealth of Massachusetts and the United States
District Court for the District of Massachusetts for the purpose of any suit,
action or other proceeding brought by the Lender arising out of or relating
to this Agreement, and the Pledgor waives and agrees not to assert by way of
motion, as a defense or otherwise in any such suit, action or proceeding, any
claim that the Pledgor is not personally subject to the jurisdiction of the
courts of the Commonwealth of Massachusetts or the United States District
Court for the District of Massachusetts or that the Pledgor's property is
exempt or immune from execution or attachment, either prior to judgment or in
aid of execution, that the suit, action or proceeding is brought in an
inconvenient forum or that the venue of the suit, action or proceeding is
improper, or that this Pledge Agreement or the subject matter hereof may not
be enforced in or by such court. THE PLEDGOR HEREBY WAIVES ANY AND ALL RIGHTS
TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING IN CONNECTION WITH ALL MATTERS
CONTEMPLATED HEREBY AND DOCUMENTS EXECUTED IN CONNECTION HEREWITH.
EXECUTED under seal as of the date first above written.
PLEDGOR:
/s/ Xxxxxx Xxxxxxxx
---------------------------------------------
PLEDGEE:
INSO CORPORATION
/s/ Xxxxxx X. Xxxx-Xxxxxx
----------------------------------------------
Its: Chairman and Chief Executive Officer
EXHIBIT A
TO PLEDGE AGREEMENT DATED DECEMBER 16, 1997
Description Number of Shares
Common Stock of INSO 14,634
CORPORATION, a Delaware
Corporation
PLEDGE AGREEMENT
This Pledge Agreement is made, as of the 16th day of December, 1997,
by and among, Xxxxxxx Xxxxxx, an individual residing at 00 Xxxxx Xxxx,
Xxxxxxxxx, XX 00000 (the "Pledgor"), and Inso Corporation, a Delaware
corporation having a place of business at 00 Xx. Xxxxx Xxxxxx, Xxxxxx, XX
00000 (the "Pledgee").
WITNESSETH:
WHEREAS, Pledgor has executed and delivered a secured promissory note
(the "Note") of even date herewith in the original principal amount of
$269,995.25 payable to the Pledgee; and
WHEREAS, the Pledgor is the owner of the shares of common stock of the
Pledgee, as set forth on Exhibit A; and
WHEREAS, as collateral security for the obligations of the Pledgor under
the Note, the Pledgor has agreed to pledge and grant to the Pledgee a first
priority security interest in the shares set forth on Exhibit A (the "Pledged
Shares"), as more fully set forth herein;
NOW THEREFORE, the parties hereto agree and acknowledge that the
foregoing recitals are true and correct and to the following:
1. Pledge of Collateral. As collateral security for the performance of
the obligations of the Pledgor under the Note (the "Obligations"), the
Pledgor hereby pledges and grants to the Pledgee a security interest in and
to all of the Pledged Shares held by the Pledgor, as identified in Exhibit A
annexed hereto, along with any and all stock rights, powers and other
distributions, dividends or proceeds thereof (the "Shares"). In addition,
any stock rights, dividends, powers or other distributions or proceeds
received by the Pledgor shall be held in trust for and delivered to the
Pledgee to be held in accordance with the terms of this Agreement, and shall
be included in the Shares described above.
2. Delivery of the Shares. The Shares have been delivered to the
Pledgee on the date hereof, together with undated stock powers executed in
blank. Upon delivery to the Pledgee by the Pledgor of a notice of Pledgor's
intent to sell all or a portion of the Shares (the "Proposed Shares") and an
irrevocable undertaking by the Pledgor and the Pledgor's broker to remit to
the Pledgee the net proceeds to be received by the Pledgor from the sale of
such shares (or such lessor amount as is then outstanding under the Note), in
payment or partial payment of the Note, within three business days of such
sale, the Pledgee shall return to the Pledgor the Proposed Shares. Upon
payment in full of the Note, the Pledgee shall return to the Pledgor the
Shares, undated stock
powers as well as such other instruments, documents, stock certificates,
money and goods as may come into Pledgee's possession from time to time,
whether through delivery by Pledgor or otherwise.
3. Pledgee's Rights and Duties with Respect to the Collateral.
Pledgee's only duty with respect to the Shares shall be to exercise
reasonable care to secure the safe custody thereof all other duties being
hereby expressly disclaimed. Pledgee shall have the right, but not the
obligation, to (a) demand, xxx for, receive and collect all money or money
damages payable on account of any Shares, (b) protect, preserve or assert any
other rights of Pledgor or take any other action with respect to the Shares,
and (c) pay any taxes, liens, assessments, insurance premiums or other
charges pertaining to Shares. Any expenses incurred by Pledgee under the
preceding sentence shall be paid by Pledgor upon demand, become part of the
Obligations secured by the Shares and bear interest at the per annum rate
equal to the Default Rate set forth in the Note until paid. Pledgee shall be
relieved of all responsibility for the Shares upon surrendering them to
Pledgor.
4. Pledgor's Warranties and Indemnity.
4.1 Pledgor represents, warrants and covenants (a) that Pledgor is
the lawful owner of the Shares, (b) that the Shares are fully paid and
nonassessable, (c) that as of the date hereof, the Shares are free and clear
of all liens, encumbrances, and security interests, other than the security
interest granted by the Pledgor hereunder, and this pledge constitutes a
valid and perfected security interest in the Shares enforceable against the
Pledgor, (d) that the Shares are not subject to any outstanding rights of
redemption or options to purchase or sell, (e) that the Pledgor has the sole
right and lawful authority to pledge the Shares and otherwise to comply with
the provisions hereof, (f) no litigation is pending or threatened against the
Pledgor, which if adversely determined, would have a material adverse effect
against the Pledgor or the Pledgee's rights in respect of the Shares, (g)
that the Pledgor agrees to defend the Pledgee's title in the Shares and the
security interest therein against any and all claims and demands, and (h)
this Pledge Agreement constitutes the legal, valid and binding obligation of
the Pledgor, enforceable against the Pledgor in accordance with its terms.
4.2 If any adverse claim is asserted in respect of the Shares or
any portion thereof, except as such may arise from the wanton or reckless
acts of the Pledgee, the Pledgor agrees to indemnify the Pledgee and hold the
Pledgee harmless from and against any reasonable liabilities or damages, and
reasonable attorney's fees incurred by the Pledgee in exercising any right,
power or remedy of the Pledgee hereunder. Any such loss, liability or expense
so incurred shall be paid by the Pledgor upon demand, become part of the
Obligations secured by the Shares and bear interest at the per annum rate
equal to the Default Rate (as defined in the Note).
5. Voting of Collateral. While Pledgor is not in default hereunder,
Pledgor may vote the Shares, provided that said voting shall be in conformity
with the Pledgor's performance under this Agreement and the Note.
6. Dividends and Other Distributions. While Pledgor is not in default
hereunder, Pledgor may receive all cash dividends, payments of principal and
interest, and other distributions payable with respect to Shares, provided,
however, that Pledgor shall immediately inform Pledgee of the receipt of any
such dividend, payment or other distribution and shall hold the amount
thereof in trust for Pledgee unless and until Pledgee shall in writing
release Pledgor from such trust. Pledgor shall cause all non-cash dividends
and distributions with respect to Shares to be distributed directly to
Pledgee, to be held by Pledgee as additional Shares, and if any such
distribution is made to Pledgor he shall receive such distribution in trust
for Pledgee and shall immediately transfer it to Pledgee.
7. Pledgor's Default. Pledgor shall be in default hereunder upon the
occurrence of any of the following events:
7.1 Any event of default shall occur under the Note;
7.2 If any lien, encumbrance or adverse claim of any nature
whatsoever is asserted with respect to any Shares;
7.3 If any representation or warranty of Pledgor hereunder is or
shall become false; or
7.4 If Pledgor fails to fulfill any obligation hereunder.
8. Pledgee's Rights upon Default. Upon the occurrence of any default as
defined in Section 7 hereof, Pledgee may, if Pledgee so elects in its sole
discretion, take any one or more of the following:
8.1 At any time and from time to time sell, assign and deliver
all or any part of the Shares, or any interest therein, at any public or
private sale, for cash, on credit or for other property, for immediate or
future delivery without any assumption of credit risk, and for such price
or prices and on such terms as Pledgee in its absolute discretion may
determine; provided that (i) at least ten (10) days' notice of the time and
place of any such sale shall be given to Pledgor, and (ii) in the case of
any private sale, such notice shall also contain the terms of the proposed
sale and Pledgee shall sell the Shares proposed to be sold to any purchaser
procured by Pledgor who is ready, willing and able to purchase, and who
prior to the time of such sale tenders the purchase price of, such Shares
on terms more favorable to Pledgee than the terms contained in such notice;
provided, further, the Pledgor acknowledges that the Pledgee may be unable
to
effect a public sale of all or part of the Shares by reason of certain
prohibitions contained in the Securities Act of 1933, as amended, and may be
compelled to resort to one or more private sales to a restricted group of
purchasers who will be obligated to agree, among other things, to acquire
such securities for their own account, for investment, and not with a view to
the distribution or resale thereof. The Pledgor acknowledges that any such
private sale may be at prices and on terms less favorable to the seller than
if sold at public sales and that private sales shall be deemed to be made in
a commercially reasonable manner notwithstanding that such a private sale may
result in a lower sale price.
8.2 Exercise the right to vote, the
right to receive cash dividends and other distributions, and all other rights
with respect to the Shares as though Pledgee were the absolute owner thereof,
whether or not such rights were retained by Pledgor as against Pledgee before
default; and
8.3 Exercise all other rights available to a secured party under
the Uniform Commercial Code and other applicable law.
8.4 The rights and remedies available pursuant to this Agreement
are cumulative, and not exclusive of any other rights or remedies otherwise
available to the Pledgee.
9. Application of Sale Proceeds. In the event of a sale of Shares by
the Pledgee in accordance herewith, the proceeds shall first be applied to
the payment of the expenses of the sale, including brokers' commissions,
counsel fees, any taxes or other charges imposed by law upon the Shares or
the transfer thereof and all other charges paid or incurred by Pledgee
pertaining to the sale; and, second, to satisfy outstanding Obligations, in
the order in which Pledgee elects in its sole discretion; and, third, the
surplus (if any) shall be paid to Pledgor.
10. 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 Pledgee or to Pledgor at the
addresses first above written. Notice by mail shall be deemed to have been
made on the date when the notice is deposited in the mail.
11. Heirs, Successors, Etc. This Agreement and all of its terms and
provisions shall benefit and bind the heirs, successors, assigns,
transferees, executors and administrators of each of the parties hereto.
12. Pledgee's Forbearance. Any forbearance, failure or delay by Pledgee
in exercising any right, power or remedy hereunder shall not be deemed a
waiver of such right, power or remedy. Any single or partial exercise of any
right, power or remedy of Pledgee shall continue in full force and effect
until such right, power or remedy is specifically waived in writing by
Pledgee.
13. Further Assurances. The Pledgor covenants and agrees to execute and
deliver, or cause to be executed or delivered, all such other stock powers,
proxies, instruments, and documents, and will take such other action or
actions as the Pledgee may reasonably request from time to time in order to
carry out the provisions and purposes hereof.
14. Termination. This Agreement and the pledge and security interest
represented hereby shall terminate upon the indefeasible payment in full of
the Obligations.
15. Miscellaneous.
(a) This Agreement or any part thereof cannot be changed, waived,
or amended except by an instrument in writing signed by Pledgee; and waiver
on one occasion shall not operate as a waiver on any other occasion.
(b) The Uniform Commercial Code and other laws of the Commonwealth
of Massachusetts shall govern the construction and enforcement of this
Agreement.
(c) If any part of this Agreement or any agreement, document, or
instrument executed in connection herewith shall be deemed invalid or
unenforceable by a court of competent jurisdiction, the remaining provisions
shall remain in full force and effect, and shall continue to be binding upon
the parties.
(d) This Agreement may be executed in one or more counterparts,
each of which shall constitute an original, but all of which, when taken
together, shall constitute one and the same instrument.
16. Jurisdiction. The Pledgor irrevocably submits to the jurisdiction
of the courts of the Commonwealth of Massachusetts and the United States
District Court for the District of Massachusetts for the purpose of any suit,
action or other proceeding brought by the Lender arising out of or relating
to this Agreement, and the Pledgor waives and agrees not to assert by way of
motion, as a defense or otherwise in any such suit, action or proceeding, any
claim that the Pledgor is not personally subject to the jurisdiction of the
courts of the Commonwealth of Massachusetts or the United States District
Court for the District of Massachusetts or that the Pledgor's property is
exempt or immune from execution or attachment, either prior to judgment or in
aid of execution, that the suit, action or proceeding is brought in an
inconvenient forum or that the venue of the suit, action or proceeding is
improper, or that this Pledge Agreement or the subject matter hereof may not
be enforced in or by such court. THE PLEDGOR HEREBY WAIVES ANY AND ALL RIGHTS
TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING IN CONNECTION WITH ALL MATTERS
CONTEMPLATED HEREBY AND DOCUMENTS EXECUTED IN CONNECTION HEREWITH.
EXECUTED under seal as of the date first above written.
PLEDGOR:
/s/ Xxxxxxx Xxxxxx
---------------------------------------
PLEDGEE:
INSO CORPORATION
/s/ Xxxxxx X. Xxxx-Xxxxxx
---------------------------------------
Its: Chairman and Chief Executive Officer
EXHIBIT A
TO PLEDGE AGREEMENT DATED DECEMBER 16, 1997
Description Number of Shares
Common Stock of INSO 26,341
CORPORATION, a Delaware
Corporation
PLEDGE AGREEMENT
This Pledge Agreement is made, as of the 16th day of December,
1997, by and among, Michael Melody, an individual residing at 00 Xxxxxxx
Xx., Xxxxxx, XX 00000 (the "Pledgor"), and Inso Corporation, a Delaware
corporation having a place of business at 00 Xx. Xxxxx Xxxxxx, Xxxxxx, XX
00000 (the "Pledgee").
WITNESSETH:
WHEREAS, Pledgor has executed and delivered a secured promissory note
(the "Note") of even date herewith in the original principal amount of
$299,997.00 payable to the Pledgee; and
WHEREAS, the Pledgor is the owner of the shares of common stock of the
Pledgee, as set forth on Exhibit A; and
WHEREAS, as collateral security for the obligations of the Pledgor
under the Note, the Pledgor has agreed to pledge and grant to the Pledgee a
first priority security interest in the shares set forth on Exhibit A (the
"Pledged Shares"), as more fully set forth herein;
NOW THEREFORE, the parties hereto agree and acknowledge that the
foregoing recitals are true and correct and to the following:
1. Pledge of Collateral. As collateral security for the performance
of the obligations of the Pledgor under the Note (the "Obligations"), the
Pledgor hereby pledges and grants to the Pledgee a security interest in and
to all of the Pledged Shares held by the Pledgor, as identified in Exhibit
A annexed hereto, along with any and all stock rights, powers and other
distributions, dividends or proceeds thereof (the "Shares"). In addition,
any stock rights, dividends, powers or other distributions or proceeds
received by the Pledgor shall be held in trust for and delivered to the
Pledgee to be held in accordance with the terms of this Agreement, and
shall be included in the Shares described above.
2. Delivery of the Shares. The Shares have been delivered to the
Pledgee on the date hereof, together with undated stock powers executed in
blank. Upon delivery to the Pledgee by the Pledgor of a notice of
Pledgor's intent to sell all or a portion of the Shares (the "Proposed
Shares") and an irrevocable undertaking by the Pledgor and the Pledgor's
broker to remit to the Pledgee the net proceeds to be received by the
Pledgor from the sale of such shares (or such lessor amount as is then
outstanding under the Note), in payment or partial payment of the Note,
within three business days of such sale, the Pledgee shall return to the
Pledgor the Proposed Shares. Upon payment in full of the Note, the Pledgee
shall return to the Pledgor the Shares, undated stock powers as well as
such other instruments, documents, stock certificates, money and goods as
may
come into Pledgee's possession from time to time, whether through delivery
by Pledgor or otherwise.
3. Pledgee's Rights and Duties with Respect to the Collateral.
Pledgee's only duty with respect to the Shares shall be to exercise
reasonable care to secure the safe custody thereof all other duties being
hereby expressly disclaimed. Pledgee shall have the right, but not the
obligation, to (a) demand, xxx for, receive and collect all money or money
damages payable on account of any Shares, (b) protect, preserve or assert
any other rights of Pledgor or take any other action with respect to the
Shares, and (c) pay any taxes, liens, assessments, insurance premiums or
other charges pertaining to Shares. Any expenses incurred by Pledgee under
the preceding sentence shall be paid by Pledgor upon demand, become part of
the Obligations secured by the Shares and bear interest at the per annum
rate equal to the Default Rate set forth in the Note until paid. Pledgee
shall be relieved of all responsibility for the Shares upon surrendering
them to Pledgor.
4. Pledgor's Warranties and Indemnity.
4.1 Pledgor represents, warrants and covenants (a) that Pledgor
is the lawful owner of the Shares, (b) that the Shares are fully paid and
nonassessable, (c) that as of the date hereof, the Shares are free and
clear of all liens, encumbrances, and security interests, other than the
security interest granted by the Pledgor hereunder, and this pledge
constitutes a valid and perfected security interest in the Shares
enforceable against the Pledgor, (d) that the Shares are not subject to any
outstanding rights of redemption or options to purchase or sell, (e) that
the Pledgor has the sole right and lawful authority to pledge the Shares
and otherwise to comply with the provisions hereof, (f) no litigation is
pending or threatened against the Pledgor, which if adversely determined,
would have a material adverse effect against the Pledgor or the Pledgee's
rights in respect of the Shares, (g) that the Pledgor agrees to defend the
Pledgee's title in the Shares and the security interest therein against any
and all claims and demands, and (h) this Pledge Agreement constitutes the
legal, valid and binding obligation of the Pledgor, enforceable against the
Pledgor in accordance with its terms.
4.2 If any adverse claim is asserted in respect of the Shares or
any portion thereof, except as such may arise from the wanton or reckless
acts of the Pledgee, the Pledgor agrees to indemnify the Pledgee and hold
the Pledgee harmless from and against any reasonable liabilities or
damages, and reasonable attorney's fees incurred by the Pledgee in
exercising any right, power or remedy of the Pledgee hereunder. Any such
loss, liability or expense so incurred shall be paid by the Pledgor upon
demand, become part of the Obligations secured by the Shares and bear
interest at the per annum rate equal to the Default Rate (as defined in the
Note).
5. Voting of Collateral. While Pledgor is not in default hereunder,
Pledgor may vote the Shares, provided that said voting shall be in
conformity with the Pledgor's performance under this Agreement and the
Note.
6. Dividends and Other Distributions. While Pledgor is not in
default hereunder, Pledgor may receive all cash dividends, payments of
principal and interest, and other distributions payable with respect to
Shares, provided, however, that Pledgor shall immediately inform Pledgee of
the receipt of any such dividend, payment or other distribution and shall
hold the amount thereof in trust for Pledgee unless and until Pledgee shall
in writing release Pledgor from such trust. Pledgor shall cause all
non-cash dividends and distributions with respect to Shares to be
distributed directly to Pledgee, to be held by Pledgee as additional
Shares, and if any such distribution is made to Pledgor he shall receive
such distribution in trust for Pledgee and shall immediately transfer it to
Pledgee.
7. Pledgor's Default. Pledgor shall be in default hereunder upon the
occurrence of any of the following events:
7.1 Any event of default shall occur under the Note;
7.2 If any lien, encumbrance or adverse claim of any nature
whatsoever is asserted with respect to any Shares;
7.3 If any representation or warranty of Pledgor hereunder is or
shall become false; or
7.4 If Pledgor fails to fulfill any obligation hereunder.
8. Pledgee's Rights upon Default. Upon the occurrence of any
default as defined in Section 7 hereof, Pledgee may, if Pledgee so elects
in its sole discretion, take any one or more of the following:
8.1 At any time and from time to time sell, assign and deliver
all or any part of the Shares, or any interest therein, at any public or
private sale, for cash, on credit or for other property, for immediate or
future delivery without any assumption of credit risk, and for such price
or prices and on such terms as Pledgee in its absolute discretion may
determine; provided that (i) at least ten (10) days' notice of the time and
place of any such sale shall be given to Pledgor, and (ii) in the case of
any private sale, such notice shall also contain the terms of the proposed
sale and Pledgee shall sell the Shares proposed to be sold to any purchaser
procured by Pledgor who is ready, willing and able to purchase, and who
prior to the time of such sale tenders the purchase price of, such Shares
on terms more favorable to Pledgee than the terms contained in such notice;
provided, further, the Pledgor acknowledges that the Pledgee may be unable
to effect a public sale of all or part of the Shares by reason of certain
prohibitions
contained in the Securities Act of 1933, as amended, and may be compelled
to resort to one or more private sales to a restricted group of purchasers
who will be obligated to agree, among other things, to acquire such
securities for their own account, for investment, and not with a view to
the distribution or resale thereof. The Pledgor acknowledges that any such
private sale may be at prices and on terms less favorable to the seller
than if sold at public sales and that private sales shall be deemed to be
made in a commercially reasonable manner notwithstanding that such a
private sale may result in a lower sale price.
8.2 Exercise the right to vote, the right to receive cash
dividends and other distributions, and all other rights with respect to the
Shares as though Pledgee were the absolute owner thereof, whether or not
such rights were retained by Pledgor as against Pledgee before default; and
8.3 Exercise all other rights available to a secured party under
the Uniform Commercial Code and other applicable law.
8.4 The rights and remedies available pursuant to this Agreement
are cumulative, and not exclusive of any other rights or remedies otherwise
available to the Pledgee.
9. Application of Sale Proceeds. In the event of a sale of Shares
by the Pledgee in accordance herewith, the proceeds shall first be applied
to the payment of the expenses of the sale, including brokers' commissions,
counsel fees, any taxes or other charges imposed by law upon the Shares or
the transfer thereof and all other charges paid or incurred by Pledgee
pertaining to the sale; and, second, to satisfy outstanding Obligations, in
the order in which Pledgee elects in its sole discretion; and, third, the
surplus (if any) shall be paid to Pledgor.
10. 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 Pledgee or to Pledgor at the
addresses first above written. Notice by mail shall be deemed to have been
made on the date when the notice is deposited in the mail.
11. Heirs, Successors, Etc. This Agreement and all of its terms and
provisions shall benefit and bind the heirs, successors, assigns,
transferees, executors and administrators of each of the parties hereto.
12. Pledgee's Forbearance. Any forbearance, failure or delay by
Pledgee in exercising any right, power or remedy hereunder shall not be
deemed a waiver of such right, power or remedy. Any single or partial
exercise of any right, power or remedy of Pledgee shall continue in full
force and effect until such right, power or remedy is specifically waived
in writing by Pledgee.
13. Further Assurances. The Pledgor covenants and agrees to execute
and deliver, or cause to be executed or delivered, all such other stock
powers, proxies, instruments, and documents, and will take such other
action or actions as the Pledgee may reasonably request from time to time
in order to carry out the provisions and purposes hereof.
14. Termination. This Agreement and the pledge and security interest
represented hereby shall terminate upon the indefeasible payment in full of
the Obligations.
15. Miscellaneous.
(a) This Agreement or any part thereof cannot be changed, waived,
or amended except by an instrument in writing signed by Pledgee; and waiver
on one occasion shall not operate as a waiver on any other occasion.
(b) The Uniform Commercial Code and other laws of the
Commonwealth of Massachusetts shall govern the construction and enforcement
of this Agreement.
(c) If any part of this Agreement or any agreement, document, or
instrument executed in connection herewith shall be deemed invalid or
unenforceable by a court of competent jurisdiction, the remaining
provisions shall remain in full force and effect, and shall continue to be
binding upon the parties.
(d) This Agreement may be executed in one or more counterparts,
each of which shall constitute an original, but all of which, when taken
together, shall constitute one and the same instrument.
16. Jurisdiction. The Pledgor irrevocably submits to the
jurisdiction of the courts of the Commonwealth of Massachusetts and the
United States District Court for the District of Massachusetts for the
purpose of any suit, action or other proceeding brought by the Lender
arising out of or relating to this Agreement, and the Pledgor waives and
agrees not to assert by way of motion, as a defense or otherwise in any
such suit, action or proceeding, any claim that the Pledgor is not
personally subject to the jurisdiction of the courts of the Commonwealth of
Massachusetts or the United States District Court for the District of
Massachusetts or that the Pledgor's property is exempt or immune from
execution or attachment, either prior to judgment or in aid of execution,
that the suit, action or proceeding is brought in an inconvenient forum or
that the venue of the suit, action or proceeding is improper, or that this
Pledge Agreement or the subject matter hereof may not be enforced in or by
such court. THE PLEDGOR HEREBY WAIVES ANY AND ALL RIGHTS TO A TRIAL BY JURY
IN ANY ACTION OR PROCEEDING IN CONNECTION WITH ALL MATTERS
CONTEMPLATED HEREBY AND DOCUMENTS EXECUTED IN CONNECTION HEREWITH.
EXECUTED under seal as of the date first above written.
PLEDGOR:
/s/ Michael Melody
_______________________________
PLEDGEE:
INSO CORPORATION
/s/ Xxxxxx X. Xxxx-Xxxxxx
_______________________________
Its: Chairman and Chief Executive Officer
EXHIBIT A
---------
TO PLEDGE AGREEMENT DATED DECEMBER 16, 1997
--------------------------------------------
Description Number of Shares
--------------------------------------------
Common Stock of INSO 29,268
CORPORATION, a Delaware
Corporation
PLEDGE AGREEMENT
This Pledge Agreement is made, as of the 16th day of December,
1997, by and among, Xxxxx Xxxxxx, an individual residing at 0000 Xxxxxx
Xxxx Xxxxx, Xxxxxx, XX 00000 (the "Pledgor"), and Inso Corporation, a
Delaware corporation having a place of business at 00 Xx. Xxxxx Xxxxxx,
Xxxxxx, XX 00000 (the "Pledgee").
WITNESSETH:
WHEREAS, Pledgor has executed and delivered a secured promissory note
(the "Note") of even date herewith in the original principal amount of
$99,999.00 payable to the Pledgee; and
WHEREAS, the Pledgor is the owner of the shares of common stock of the
Pledgee, as set forth on Exhibit A; and
WHEREAS, as collateral security for the obligations of the Pledgor
under the Note, the Pledgor has agreed to pledge and grant to the Pledgee a
first priority security interest in the shares set forth on Exhibit A (the
"Pledged Shares"), as more fully set forth herein;
NOW THEREFORE, the parties hereto agree and acknowledge that the
foregoing recitals are true and correct and to the following:
1. Pledge of Collateral. As collateral security for the performance
of the obligations of the Pledgor under the Note (the "Obligations"), the
Pledgor hereby pledges and grants to the Pledgee a security interest in and
to all of the Pledged Shares held by the Pledgor, as identified in Exhibit
A annexed hereto, along with any and all stock rights, powers and other
distributions, dividends or proceeds thereof (the "Shares"). In addition,
any stock rights, dividends, powers or other distributions or proceeds
received by the Pledgor shall be held in trust for and delivered to the
Pledgee to be held in accordance with the terms of this Agreement, and
shall be included in the Shares described above.
2. Delivery of the Shares. The Shares have been delivered to the
Pledgee on the date hereof, together with undated stock powers executed in
blank. Upon delivery to the Pledgee by the Pledgor of a notice of
Pledgor's intent to sell all or a portion of the Shares (the "Proposed
Shares") and an irrevocable undertaking by the Pledgor and the Pledgor's
broker to remit to the Pledgee the net proceeds to be received by the
Pledgor from the sale of such shares (or such lessor amount as is then
outstanding under the Note), in payment or partial payment of the Note,
within three business days of such sale, the Pledgee shall return to the
Pledgor the Proposed Shares. Upon payment in full of the Note, the Pledgee
shall return to the Pledgor the Shares, undated stock
powers as well as such other instruments, documents, stock certificates,
money and goods as may come into Pledgee's possession from time to time,
whether through delivery by Pledgor or otherwise.
3. Pledgee's Rights and Duties with Respect to the Collateral.
Pledgee's only duty with respect to the Shares shall be to exercise
reasonable care to secure the safe custody thereof all other duties being
hereby expressly disclaimed. Pledgee shall have the right, but not the
obligation, to (a) demand, xxx for, receive and collect all money or money
damages payable on account of any Shares, (b) protect, preserve or assert
any other rights of Pledgor or take any other action with respect to the
Shares, and (c) pay any taxes, liens, assessments, insurance premiums or
other charges pertaining to Shares. Any expenses incurred by Pledgee under
the preceding sentence shall be paid by Pledgor upon demand, become part of
the Obligations secured by the Shares and bear interest at the per annum
rate equal to the Default Rate set forth in the Note until paid. Pledgee
shall be relieved of all responsibility for the Shares upon surrendering
them to Pledgor.
4. Pledgor's Warranties and Indemnity.
4.1 Pledgor represents, warrants and covenants (a) that Pledgor
is the lawful owner of the Shares, (b) that the Shares are fully paid and
nonassessable, (c) that as of the date hereof, the Shares are free and
clear of all liens, encumbrances, and security interests, other than the
security interest granted by the Pledgor hereunder, and this pledge
constitutes a valid and perfected security interest in the Shares
enforceable against the Pledgor, (d) that the Shares are not subject to any
outstanding rights of redemption or options to purchase or sell, (e) that
the Pledgor has the sole right and lawful authority to pledge the Shares
and otherwise to comply with the provisions hereof, (f) no litigation is
pending or threatened against the Pledgor, which if adversely determined,
would have a material adverse effect against the Pledgor or the Pledgee's
rights in respect of the Shares, (g) that the Pledgor agrees to defend the
Pledgee's title in the Shares and the security interest therein against any
and all claims and demands, and (h) this Pledge Agreement constitutes the
legal, valid and binding obligation of the Pledgor, enforceable against the
Pledgor in accordance with its terms.
4.2 If any adverse claim is asserted in respect of the Shares or
any portion thereof, except as such may arise from the wanton or reckless
acts of the Pledgee, the Pledgor agrees to indemnify the Pledgee and hold
the Pledgee harmless from and against any reasonable liabilities or
damages, and reasonable attorney's fees incurred by the Pledgee in
exercising any right, power or remedy of the Pledgee hereunder. Any such
loss, liability or expense so incurred shall be paid by the Pledgor upon
demand, become part of the Obligations secured by the Shares and bear
interest at the per annum rate equal to the Default Rate (as defined in the
Note).
5. Voting of Collateral. While Pledgor is not in default hereunder,
Pledgor may vote the Shares, provided that said voting shall be in
conformity with the Pledgor's performance under this Agreement and the
Note.
6. Dividends and Other Distributions. While Pledgor is not in
default hereunder, Pledgor may receive all cash dividends, payments of
principal and interest, and other distributions payable with respect to
Shares, provided, however, that Pledgor shall immediately inform Pledgee of
the receipt of any such dividend, payment or other distribution and shall
hold the amount thereof in trust for Pledgee unless and until Pledgee shall
in writing release Pledgor from such trust. Pledgor shall cause all
non-cash dividends and distributions with respect to Shares to be
distributed directly to Pledgee, to be held by Pledgee as additional
Shares, and if any such distribution is made to Pledgor he shall receive
such distribution in trust for Pledgee and shall immediately transfer it to
Pledgee.
7. Pledgor's Default. Pledgor shall be in default hereunder upon the
occurrence of any of the following events:
7.1 Any event of default shall occur under the Note;
7.2 If any lien, encumbrance or adverse claim of any nature
whatsoever is asserted with respect to any Shares;
7.3 If any representation or warranty of Pledgor hereunder is or
shall become false; or
7.4 If Pledgor fails to fulfill any obligation hereunder.
8. Pledgee's Rights upon Default. Upon the occurrence of any
default as defined in Section 7 hereof, Pledgee may, if Pledgee so elects
in its sole discretion, take any one or more of the following:
8.1 At any time and from time to time sell, assign and deliver
all or any part of the Shares, or any interest therein, at any public or
private sale, for cash, on credit or for other property, for immediate or
future delivery without any assumption of credit risk, and for such price
or prices and on such terms as Pledgee in its absolute discretion may
determine; provided that (i) at least ten (10) days' notice of the time and
place of any such sale shall be given to Pledgor, and (ii) in the case of
any private sale, such notice shall also contain the terms of the proposed
sale and Pledgee shall sell the Shares proposed to be sold to any purchaser
procured by Pledgor who is ready, willing and able to purchase, and who
prior to the time of such sale tenders the purchase price of, such Shares
on terms more favorable to Pledgee than the terms contained in such notice;
provided, further, the Pledgor acknowledges that the Pledgee may be unable
to
effect a public sale of all or part of the Shares by reason of certain
prohibitions contained in the Securities Act of 1933, as amended, and may
be compelled to resort to one or more private sales to a restricted group
of purchasers who will be obligated to agree, among other things, to
acquire such securities for their own account, for investment, and not with
a view to the distribution or resale thereof. The Pledgor acknowledges
that any such private sale may be at prices and on terms less favorable to
the seller than if sold at public sales and that private sales shall be
deemed to be made in a commercially reasonable manner notwithstanding that
such a private sale may result in a lower sale price.
8.2 Exercise the right to vote, the right to receive cash
dividends and other distributions, and all other rights with respect to the
Shares as though Pledgee were the absolute owner thereof, whether or not
such rights were retained by Pledgor as against Pledgee before default; and
8.3 Exercise all other rights available to a secured party under
the Uniform Commercial Code and other applicable law.
8.4 The rights and remedies available pursuant to this Agreement
are cumulative, and not exclusive of any other rights or remedies otherwise
available to the Pledgee.
9. Application of Sale Proceeds. In the event of a sale of Shares
by the Pledgee in accordance herewith, the proceeds shall first be applied
to the payment of the expenses of the sale, including brokers' commissions,
counsel fees, any taxes or other charges imposed by law upon the Shares or
the transfer thereof and all other charges paid or incurred by Pledgee
pertaining to the sale; and, second, to satisfy outstanding Obligations, in
the order in which Pledgee elects in its sole discretion; and, third, the
surplus (if any) shall be paid to Pledgor.
10. 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 Pledgee or to Pledgor at the
addresses first above written. Notice by mail shall be deemed to have been
made on the date when the notice is deposited in the mail.
11. Heirs, Successors, Etc. This Agreement and all of its terms and
provisions shall benefit and bind the heirs, successors, assigns,
transferees, executors and administrators of each of the parties hereto.
12. Pledgee's Forbearance. Any forbearance, failure or delay by
Pledgee in exercising any right, power or remedy hereunder shall not be
deemed a waiver of such right, power or remedy. Any single or partial
exercise of any right, power or remedy of Pledgee shall continue in full
force and effect until such right, power or remedy is specifically waived
in writing by Pledgee.
13. Further Assurances. The Pledgor covenants and agrees to execute
and deliver, or cause to be executed or delivered, all such other stock
powers, proxies, instruments, and documents, and will take such other
action or actions as the Pledgee may reasonably request from time to time
in order to carry out the provisions and purposes hereof.
14. Termination. This Agreement and the pledge and security interest
represented hereby shall terminate upon the indefeasible payment in full of
the Obligations.
15. Miscellaneous.
(a) This Agreement or any part thereof cannot be changed, waived,
or amended except by an instrument in writing signed by Pledgee; and waiver
on one occasion shall not operate as a waiver on any other occasion.
(b) The Uniform Commercial Code and other laws of the
Commonwealth of Massachusetts shall govern the construction and enforcement
of this Agreement.
(c) If any part of this Agreement or any agreement, document, or
instrument executed in connection herewith shall be deemed invalid or
unenforceable by a court of competent jurisdiction, the remaining
provisions shall remain in full force and effect, and shall continue to be
binding upon the parties.
(d) This Agreement may be executed in one or more counterparts,
each of which shall constitute an original, but all of which, when taken
together, shall constitute one and the same instrument.
16. Jurisdiction. The Pledgor irrevocably submits to the
jurisdiction of the courts of the Commonwealth of Massachusetts and the
United States District Court for the District of Massachusetts for the
purpose of any suit, action or other proceeding brought by the Lender
arising out of or relating to this Agreement, and the Pledgor waives and
agrees not to assert by way of motion, as a defense or otherwise in any
such suit, action or proceeding, any claim that the Pledgor is not
personally subject to the jurisdiction of the courts of the Commonwealth of
Massachusetts or the United States District Court for the District of
Massachusetts or that the Pledgor's property is exempt or immune from
execution or attachment, either prior to judgment or in aid of execution,
that the suit, action or proceeding is brought in an inconvenient forum or
that the venue of the suit, action or proceeding is improper, or that this
Pledge Agreement or the subject matter hereof may not be enforced in or by
such court. THE PLEDGOR HEREBY WAIVES ANY AND ALL RIGHTS TO A TRIAL BY JURY
IN ANY ACTION OR PROCEEDING IN CONNECTION WITH ALL MATTERS
CONTEMPLATED HEREBY AND DOCUMENTS EXECUTED IN CONNECTION HEREWITH.
EXECUTED under seal as of the date first above written.
PLEDGOR:
/s/ Xxxxx X. Xxxxxx
________________________________
PLEDGEE:
INSO CORPORATION
/s/ Xxxxxx X. Xxxx-Xxxxxx
_______________________________
Its: Chairman and Chief Executive Officer
EXHIBIT A
---------
TO PLEDGE AGREEMENT DATED DECEMBER 16, 1997
-------------------------------------------
Description Number of Shares
-------------------------------------------
Common Stock of INSO 9,756
CORPORATION, a Delaware
Corporation
PLEDGE AGREEMENT
This Pledge Agreement is made, as of the 16th day of December,
1997, by and among, Xxxxxx Xxxxxxxxx, an individual residing at 00 Xxxxxxxx
Xx., Xxxxxxxxxx, XX 00000 (the "Pledgor"), and Inso Corporation, a Delaware
corporation having a place of business at 00 Xx. Xxxxx Xxxxxx, Xxxxxx, XX
00000 (the "Pledgee").
WITNESSETH:
WHEREAS, Pledgor has executed and delivered a secured promissory note
(the "Note") of even date herewith in the original principal amount of
$99,999.00 payable to the Pledgee; and
WHEREAS, the Pledgor is the owner of the shares of common stock of the
Pledgee, as set forth on Exhibit A; and
WHEREAS, as collateral security for the obligations of the Pledgor
under the Note, the Pledgor has agreed to pledge and grant to the Pledgee a
first priority security interest in the shares set forth on Exhibit A (the
"Pledged Shares"), as more fully set forth herein;
NOW THEREFORE, the parties hereto agree and acknowledge that the
foregoing recitals are true and correct and to the following:
1. Pledge of Collateral. As collateral security for the performance
of the obligations of the Pledgor under the Note (the "Obligations"), the
Pledgor hereby pledges and grants to the Pledgee a security interest in and
to all of the Pledged Shares held by the Pledgor, as identified in Exhibit
A annexed hereto, along with any and all stock rights, powers and other
distributions, dividends or proceeds thereof (the "Shares"). In addition,
any stock rights, dividends, powers or other distributions or proceeds
received by the Pledgor shall be held in trust for and delivered to the
Pledgee to be held in accordance with the terms of this Agreement, and
shall be included in the Shares described above.
2. Delivery of the Shares. The Shares have been delivered to the
Pledgee on the date hereof, together with undated stock powers executed in
blank. Upon delivery to the Pledgee by the Pledgor of a notice of
Pledgor's intent to sell all or a portion of the Shares (the "Proposed
Shares") and an irrevocable undertaking by the Pledgor and the Pledgor's
broker to remit to the Pledgee the net proceeds to be received by the
Pledgor from the sale of such shares (or such lessor amount as is then
outstanding under the Note), in payment or partial payment of the Note,
within three business days of such sale, the Pledgee shall return to the
Pledgor the Proposed Shares. Upon payment in full of the Note, the Pledgee
shall return to the Pledgor the Shares, undated stock
powers as well as such other instruments, documents, stock certificates,
money and goods as may come into Pledgee's possession from time to time,
whether through delivery by Pledgor or otherwise.
3. Pledgee's Rights and Duties with Respect to the Collateral.
Pledgee's only duty with respect to the Shares shall be to exercise
reasonable care to secure the safe custody thereof all other duties being
hereby expressly disclaimed. Pledgee shall have the right, but not the
obligation, to (a) demand, xxx for, receive and collect all money or money
damages payable on account of any Shares, (b) protect, preserve or assert
any other rights of Pledgor or take any other action with respect to the
Shares, and (c) pay any taxes, liens, assessments, insurance premiums or
other charges pertaining to Shares. Any expenses incurred by Pledgee under
the preceding sentence shall be paid by Pledgor upon demand, become part of
the Obligations secured by the Shares and bear interest at the per annum
rate equal to the Default Rate set forth in the Note until paid. Pledgee
shall be relieved of all responsibility for the Shares upon surrendering
them to Pledgor.
4. Pledgor's Warranties and Indemnity.
4.1 Pledgor represents, warrants and covenants (a) that Pledgor
is the lawful owner of the Shares, (b) that the Shares are fully paid and
nonassessable, (c) that as of the date hereof, the Shares are free and
clear of all liens, encumbrances, and security interests, other than the
security interest granted by the Pledgor hereunder, and this pledge
constitutes a valid and perfected security interest in the Shares
enforceable against the Pledgor, (d) that the Shares are not subject to any
outstanding rights of redemption or options to purchase or sell, (e) that
the Pledgor has the sole right and lawful authority to pledge the Shares
and otherwise to comply with the provisions hereof, (f) no litigation is
pending or threatened against the Pledgor, which if adversely determined,
would have a material adverse effect against the Pledgor or the Pledgee's
rights in respect of the Shares, (g) that the Pledgor agrees to defend the
Pledgee's title in the Shares and the security interest therein against any
and all claims and demands, and (h) this Pledge Agreement constitutes the
legal, valid and binding obligation of the Pledgor, enforceable against the
Pledgor in accordance with its terms.
4.2 If any adverse claim is asserted in respect of the Shares or
any portion thereof, except as such may arise from the wanton or reckless
acts of the Pledgee, the Pledgor agrees to indemnify the Pledgee and hold
the Pledgee harmless from and against any reasonable liabilities or
damages, and reasonable attorney's fees incurred by the Pledgee in
exercising any right, power or remedy of the Pledgee hereunder. Any such
loss, liability or expense so incurred shall be paid by the Pledgor upon
demand, become part of the Obligations secured by the Shares and bear
interest at the per annum rate equal to the Default Rate (as defined in the
Note).
5. Voting of Collateral. While Pledgor is not in default hereunder,
Pledgor may vote the Shares, provided that said voting shall be in
conformity with the Pledgor's performance under this Agreement and the
Note.
6. Dividends and Other Distributions. While Pledgor is not in
default hereunder, Pledgor may receive all cash dividends, payments of
principal and interest, and other distributions payable with respect to
Shares, provided, however, that Pledgor shall immediately inform Pledgee of
the receipt of any such dividend, payment or other distribution and shall
hold the amount thereof in trust for Pledgee unless and until Pledgee shall
in writing release Pledgor from such trust. Pledgor shall cause all
non-cash dividends and distributions with respect to Shares to be
distributed directly to Pledgee, to be held by Pledgee as additional
Shares, and if any such distribution is made to Pledgor he shall receive
such distribution in trust for Pledgee and shall immediately transfer it to
Pledgee.
7. Pledgor's Default. Pledgor shall be in default hereunder upon the
occurrence of any of the following events:
7.1 Any event of default shall occur under the Note;
7.2 If any lien, encumbrance or adverse claim of any nature
whatsoever is asserted with respect to any Shares;
7.3 If any representation or warranty of Pledgor hereunder is or
shall become false; or
7.4 If Pledgor fails to fulfill any obligation hereunder.
8. Pledgee's Rights upon Default. Upon the occurrence of any
default as defined in Section 7 hereof, Pledgee may, if Pledgee so elects
in its sole discretion, take any one or more of the following:
8.1 At any time and from time to time sell, assign and deliver
all or any part of the Shares, or any interest therein, at any public or
private sale, for cash, on credit or for other property, for immediate or
future delivery without any assumption of credit risk, and for such price
or prices and on such terms as Pledgee in its absolute discretion may
determine; provided that (i) at least ten (10) days' notice of the time and
place of any such sale shall be given to Pledgor, and (ii) in the case of
any private sale, such notice shall also contain the terms of the proposed
sale and Pledgee shall sell the Shares proposed to be sold to any purchaser
procured by Pledgor who is ready, willing and able to purchase, and who
prior to the time of such sale tenders the purchase price of, such Shares
on terms more favorable to Pledgee than the terms contained in such notice;
provided, further, the Pledgor acknowledges that the Pledgee may be unable
to
effect a public sale of all or part of the Shares by reason of certain
prohibitions contained in the Securities Act of 1933, as amended, and may
be compelled to resort to one or more private sales to a restricted group
of purchasers who will be obligated to agree, among other things, to
acquire such securities for their own account, for investment, and not with
a view to the distribution or resale thereof. The Pledgor acknowledges
that any such private sale may be at prices and on terms less favorable to
the seller than if sold at public sales and that private sales shall be
deemed to be made in a commercially reasonable manner notwithstanding that
such a private sale may result in a lower sale price.
8.2 Exercise the right to vote, the right to receive cash
dividends and other distributions, and all other rights with respect to the
Shares as though Pledgee were the absolute owner thereof, whether or not
such rights were retained by Pledgor as against Pledgee before default; and
8.3 Exercise all other rights available to a secured party under
the Uniform Commercial Code and other applicable law.
8.4 The rights and remedies available pursuant to this Agreement
are cumulative, and not exclusive of any other rights or remedies otherwise
available to the Pledgee.
9. Application of Sale Proceeds. In the event of a sale of Shares
by the Pledgee in accordance herewith, the proceeds shall first be applied
to the payment of the expenses of the sale, including brokers' commissions,
counsel fees, any taxes or other charges imposed by law upon the Shares or
the transfer thereof and all other charges paid or incurred by Pledgee
pertaining to the sale; and, second, to satisfy outstanding Obligations, in
the order in which Pledgee elects in its sole discretion; and, third, the
surplus (if any) shall be paid to Pledgor.
10. 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 Pledgee or to Pledgor at the
addresses first above written. Notice by mail shall be deemed to have been
made on the date when the notice is deposited in the mail.
11. Heirs, Successors, Etc. This Agreement and all of its terms and
provisions shall benefit and bind the heirs, successors, assigns,
transferees, executors and administrators of each of the parties hereto.
12. Pledgee's Forbearance. Any forbearance, failure or delay by
Pledgee in exercising any right, power or remedy hereunder shall not be
deemed a waiver of such right, power or remedy. Any single or partial
exercise of any right, power or remedy of Pledgee shall continue in full
force and effect until such right, power or remedy is specifically waived
in writing by Pledgee.
13. Further Assurances. The Pledgor covenants and agrees to execute
and deliver, or cause to be executed or delivered, all such other stock
powers, proxies, instruments, and documents, and will take such other
action or actions as the Pledgee may reasonably request from time to time
in order to carry out the provisions and purposes hereof.
14. Termination. This Agreement and the pledge and security interest
represented hereby shall terminate upon the indefeasible payment in full of
the Obligations.
15. Miscellaneous.
(a) This Agreement or any part thereof cannot be changed, waived,
or amended except by an instrument in writing signed by Pledgee; and waiver
on one occasion shall not operate as a waiver on any other occasion.
(b) The Uniform Commercial Code and other laws of the
Commonwealth of Massachusetts shall govern the construction and enforcement
of this Agreement.
(c) If any part of this Agreement or any agreement, document, or
instrument executed in connection herewith shall be deemed invalid or
unenforceable by a court of competent jurisdiction, the remaining
provisions shall remain in full force and effect, and shall continue to be
binding upon the parties.
(d) This Agreement may be executed in one or more counterparts,
each of which shall constitute an original, but all of which, when taken
together, shall constitute one and the same instrument.
16. Jurisdiction. The Pledgor irrevocably submits to the
jurisdiction of the courts of the Commonwealth of Massachusetts and the
United States District Court for the District of Massachusetts for the
purpose of any suit, action or other proceeding brought by the Lender
arising out of or relating to this Agreement, and the Pledgor waives and
agrees not to assert by way of motion, as a defense or otherwise in any
such suit, action or proceeding, any claim that the Pledgor is not
personally subject to the jurisdiction of the courts of the Commonwealth of
Massachusetts or the United States District Court for the District of
Massachusetts or that the Pledgor's property is exempt or immune from
execution or attachment, either prior to judgment or in aid of execution,
that the suit, action or proceeding is brought in an inconvenient forum or
that the venue of the suit, action or proceeding is improper, or that this
Pledge Agreement or the subject matter hereof may not be enforced in or by
such court. THE PLEDGOR HEREBY WAIVES ANY AND ALL RIGHTS TO A TRIAL BY JURY
IN ANY ACTION OR PROCEEDING IN CONNECTION WITH ALL MATTERS
CONTEMPLATED HEREBY AND DOCUMENTS EXECUTED IN CONNECTION HEREWITH.
EXECUTED under seal as of the date first above written.
PLEDGOR:
/s/ Xxxxxx Xxxxxxxxx
-------------------------------------------
PLEDGEE:
INSO CORPORATION
/s/ Xxxxxx X. Xxxx-Xxxxxx
-------------------------------------------
Its: Chairman and Chief Executive Officer
EXHIBIT A
TO PLEDGE AGREEMENT DATED DECEMBER 16, 1997
Description Number of Shares
-------------------------------------- ----------------
Common Stock of INSO................... 9,756
CORPORATION, a Delaware
Corporation
PLEDGE AGREEMENT
This Pledge Agreement is made, as of the 16th day of December,
1997, by and among, Xxxxx Xxxxxx, an individual residing at 00 Xxxxx Xxx.,
Xxxxxxxxx XX 00000 (the "Pledgor"), and Inso Corporation, a Delaware
corporation having a place of business at 00 Xx. Xxxxx Xxxxxx, Xxxxxx, XX
00000 (the "Pledgee").
WITNESSETH:
WHEREAS, Pledgor has executed and delivered a secured promissory note
(the "Note") of even date herewith in the original principal amount of
$205,000.00 payable to the Pledgee; and
WHEREAS, the Pledgor is the owner of the shares of common stock of the
Pledgee, as set forth on Exhibit A; and
WHEREAS, as collateral security for the obligations of the Pledgor
under the Note, the Pledgor has agreed to pledge and grant to the Pledgee a
first priority security interest in the shares set forth on Exhibit A (the
"Pledged Shares"), as more fully set forth herein;
NOW THEREFORE, the parties hereto agree and acknowledge that the
foregoing recitals are true and correct and to the following:
1. Pledge of Collateral. As collateral security for the performance
of the obligations of the Pledgor under the Note (the "Obligations"), the
Pledgor hereby pledges and grants to the Pledgee a security interest in and
to all of the Pledged Shares held by the Pledgor, as identified in Exhibit
A annexed hereto, along with any and all stock rights, powers and other
distributions, dividends or proceeds thereof (the "Shares"). In addition,
any stock rights, dividends, powers or other distributions or proceeds
received by the Pledgor shall be held in trust for and delivered to the
Pledgee to be held in accordance with the terms of this Agreement, and
shall be included in the Shares described above.
2. Delivery of the Shares. The Shares have been delivered to the
Pledgee on the date hereof, together with undated stock powers executed in
blank. Upon delivery to the Pledgee by the Pledgor of a notice of
Pledgor's intent to sell all or a portion of the Shares (the "Proposed
Shares") and an irrevocable undertaking by the Pledgor and the Pledgor's
broker to remit to the Pledgee the net proceeds to be received by the
Pledgor from the sale of such shares (or such lessor amount as is then
outstanding under the Note), in payment or partial payment of the Note,
within three business days of such sale, the Pledgee shall return to the
Pledgor the Proposed Shares. Upon payment in full of the Note, the Pledgee
shall return to the Pledgor the Shares, undated stock powers as well as
such other instruments, documents, stock certificates, money and goods as
may
come into Pledgee's possession from time to time, whether through delivery
by Pledgor or otherwise.
3. Pledgee's Rights and Duties with Respect to the Collateral.
Pledgee's only duty with respect to the Shares shall be to exercise
reasonable care to secure the safe custody thereof all other duties being
hereby expressly disclaimed. Pledgee shall have the right, but not the
obligation, to (a) demand, xxx for, receive and collect all money or money
damages payable on account of any Shares, (b) protect, preserve or assert
any other rights of Pledgor or take any other action with respect to the
Shares, and (c) pay any taxes, liens, assessments, insurance premiums or
other charges pertaining to Shares. Any expenses incurred by Pledgee under
the preceding sentence shall be paid by Pledgor upon demand, become part of
the Obligations secured by the Shares and bear interest at the per annum
rate equal to the Default Rate set forth in the Note until paid. Pledgee
shall be relieved of all responsibility for the Shares upon surrendering
them to Pledgor.
4. Pledgor's Warranties and Indemnity.
4.1 Pledgor represents, warrants and covenants (a) that Pledgor
is the lawful owner of the Shares, (b) that the Shares are fully paid and
nonassessable, (c) that as of the date hereof, the Shares are free and
clear of all liens, encumbrances, and security interests, other than the
security interest granted by the Pledgor hereunder, and this pledge
constitutes a valid and perfected security interest in the Shares
enforceable against the Pledgor, (d) that the Shares are not subject to any
outstanding rights of redemption or options to purchase or sell, (e) that
the Pledgor has the sole right and lawful authority to pledge the Shares
and otherwise to comply with the provisions hereof, (f) no litigation is
pending or threatened against the Pledgor, which if adversely determined,
would have a material adverse effect against the Pledgor or the Pledgee's
rights in respect of the Shares, (g) that the Pledgor agrees to defend the
Pledgee's title in the Shares and the security interest therein against any
and all claims and demands, and (h) this Pledge Agreement constitutes the
legal, valid and binding obligation of the Pledgor, enforceable against the
Pledgor in accordance with its terms.
4.2 If any adverse claim is asserted in respect of the Shares or
any portion thereof, except as such may arise from the wanton or reckless
acts of the Pledgee, the Pledgor agrees to indemnify the Pledgee and hold
the Pledgee harmless from and against any reasonable liabilities or
damages, and reasonable attorney's fees incurred by the Pledgee in
exercising any right, power or remedy of the Pledgee hereunder. Any such
loss, liability or expense so incurred shall be paid by the Pledgor upon
demand, become part of the Obligations secured by the Shares and bear
interest at the per annum rate equal to the Default Rate (as defined in the
Note).
5. Voting of Collateral. While Pledgor is not in default hereunder,
Pledgor may vote the Shares, provided that said voting shall be in
conformity with the Pledgor's performance under this Agreement and the
Note.
6. Dividends and Other Distributions. While Pledgor is not in
default hereunder, Pledgor may receive all cash dividends, payments of
principal and interest, and other distributions payable with respect to
Shares, provided, however, that Pledgor shall immediately inform Pledgee of
the receipt of any such dividend, payment or other distribution and shall
hold the amount thereof in trust for Pledgee unless and until Pledgee shall
in writing release Pledgor from such trust. Pledgor shall cause all
non-cash dividends and distributions with respect to Shares to be
distributed directly to Pledgee, to be held by Pledgee as additional
Shares, and if any such distribution is made to Pledgor he shall receive
such distribution in trust for Pledgee and shall immediately transfer it to
Pledgee.
7. Pledgor's Default. Pledgor shall be in default hereunder upon the
occurrence of any of the following events:
7.1 Any event of default shall occur under the Note;
7.2 If any lien, encumbrance or adverse claim of any nature
whatsoever is asserted with respect to any Shares;
7.3 If any representation or warranty of Pledgor hereunder is or
shall become false; or
7.4 If Pledgor fails to fulfill any obligation hereunder.
8. Pledgee's Rights upon Default. Upon the occurrence of any
default as defined in Section 7 hereof, Pledgee may, if Pledgee so elects
in its sole discretion, take any one or more of the following:
8.1 At any time and from time to time sell, assign and deliver
all or any part of the Shares, or any interest therein, at any public or
private sale, for cash, on credit or for other property, for immediate or
future delivery without any assumption of credit risk, and for such price
or prices and on such terms as Pledgee in its absolute discretion may
determine; provided that (i) at least ten (10) days' notice of the time and
place of any such sale shall be given to Pledgor, and (ii) in the case of
any private sale, such notice shall also contain the terms of the proposed
sale and Pledgee shall sell the Shares proposed to be sold to any purchaser
procured by Pledgor who is ready, willing and able to purchase, and who
prior to the time of such sale tenders the purchase price of, such Shares
on terms more favorable to Pledgee than the terms contained in such notice;
provided, further, the Pledgor acknowledges that the Pledgee may be unable
to effect a public sale of all or part of the Shares by reason of certain
prohibitions
contained in the Securities Act of 1933, as amended, and may be compelled
to resort to one or more private sales to a restricted group of purchasers
who will be obligated to agree, among other things, to acquire such
securities for their own account, for investment, and not with a view to
the distribution or resale thereof. The Pledgor acknowledges that any such
private sale may be at prices and on terms less favorable to the seller
than if sold at public sales and that private sales shall be deemed to be
made in a commercially reasonable manner notwithstanding that such a
private sale may result in a lower sale price.
8.2 Exercise the right to vote, the right to receive cash
dividends and other distributions, and all other rights with respect to the
Shares as though Pledgee were the absolute owner thereof, whether or not
such rights were retained by Pledgor as against Pledgee before default; and
8.3 Exercise all other rights available to a secured party under
the Uniform Commercial Code and other applicable law.
8.4 The rights and remedies available pursuant to this Agreement
are cumulative, and not exclusive of any other rights or remedies otherwise
available to the Pledgee.
9. Application of Sale Proceeds. In the event of a sale of Shares
by the Pledgee in accordance herewith, the proceeds shall first be applied
to the payment of the expenses of the sale, including brokers' commissions,
counsel fees, any taxes or other charges imposed by law upon the Shares or
the transfer thereof and all other charges paid or incurred by Pledgee
pertaining to the sale; and, second, to satisfy outstanding Obligations, in
the order in which Pledgee elects in its sole discretion; and, third, the
surplus (if any) shall be paid to Pledgor.
10. 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 Pledgee or to Pledgor at the
addresses first above written. Notice by mail shall be deemed to have been
made on the date when the notice is deposited in the mail.
11. Heirs, Successors, Etc. This Agreement and all of its terms and
provisions shall benefit and bind the heirs, successors, assigns,
transferees, executors and administrators of each of the parties hereto.
12. Pledgee's Forbearance. Any forbearance, failure or delay by
Pledgee in exercising any right, power or remedy hereunder shall not be
deemed a waiver of such right, power or remedy. Any single or partial
exercise of any right, power or remedy of Pledgee shall continue in full
force and effect until such right, power or remedy is specifically waived
in writing by Pledgee.
13. Further Assurances. The Pledgor covenants and agrees to execute
and deliver, or cause to be executed or delivered, all such other stock
powers, proxies, instruments, and documents, and will take such other
action or actions as the Pledgee may reasonably request from time to time
in order to carry out the provisions and purposes hereof.
14. Termination. This Agreement and the pledge and security interest
represented hereby shall terminate upon the indefeasible payment in full of
the Obligations.
15. Miscellaneous.
(a) This Agreement or any part thereof cannot be changed, waived,
or amended except by an instrument in writing signed by Pledgee; and waiver
on one occasion shall not operate as a waiver on any other occasion.
(b) The Uniform Commercial Code and other laws of the
Commonwealth of Massachusetts shall govern the construction and enforcement
of this Agreement.
(c) If any part of this Agreement or any agreement, document, or
instrument executed in connection herewith shall be deemed invalid or
unenforceable by a court of competent jurisdiction, the remaining
provisions shall remain in full force and effect, and shall continue to be
binding upon the parties.
(d) This Agreement may be executed in one or more counterparts,
each of which shall constitute an original, but all of which, when taken
together, shall constitute one and the same instrument.
16. Jurisdiction. The Pledgor irrevocably submits to the
jurisdiction of the courts of the Commonwealth of Massachusetts and the
United States District Court for the District of Massachusetts for the
purpose of any suit, action or other proceeding brought by the Lender
arising out of or relating to this Agreement, and the Pledgor waives and
agrees not to assert by way of motion, as a defense or otherwise in any
such suit, action or proceeding, any claim that the Pledgor is not
personally subject to the jurisdiction of the courts of the Commonwealth of
Massachusetts or the United States District Court for the District of
Massachusetts or that the Pledgor's property is exempt or immune from
execution or attachment, either prior to judgment or in aid of execution,
that the suit, action or proceeding is brought in an inconvenient forum or
that the venue of the suit, action or proceeding is improper, or that this
Pledge Agreement or the subject matter hereof may not be enforced in or by
such court. THE PLEDGOR HEREBY WAIVES ANY AND ALL RIGHTS TO A TRIAL BY JURY
IN ANY ACTION OR PROCEEDING IN CONNECTION WITH ALL MATTERS
CONTEMPLATED HEREBY AND DOCUMENTS EXECUTED IN CONNECTION HEREWITH.
EXECUTED under seal as of the date first above written.
PLEDGOR:
/s/ Xxxxx X. Xxxxxx
-------------------------------------------
PLEDGEE:
INSO CORPORATION
/s/ Xxxxxx X. Xxxx-Xxxxxx
-------------------------------------------
Its: Chairman and Chief Executive Officer
EXHIBIT A
TO PLEDGE AGREEMENT DATED DECEMBER 16, 1997
Description Number of Shares
------------------------------------ -----------------
Common Stock of INSO................ 20,000
CORPORATION, a Delaware
Corporation
PLEDGE AGREEMENT
This Pledge Agreement is made, as of the 16th day of December,
1997, by and among, Xxxx Xxxxxx, an individual residing at 00 Xxxxx Xxxx,
Xxxxxxx, XX 00000 (the "Pledgor"), and Inso Corporation, a Delaware
corporation having a place of business at 00 Xx. Xxxxx Xxxxxx, Xxxxxx, XX
00000 (the "Pledgee").
WITNESSETH:
WHEREAS, Pledgor has executed and delivered a secured promissory note
(the "Note") of even date herewith in the original principal amount of
$102,500.00 payable to the Pledgee; and
WHEREAS, the Pledgor is the owner of the shares of common stock of the
Pledgee, as set forth on Exhibit A; and
WHEREAS, as collateral security for the obligations of the Pledgor
under the Note, the Pledgor has agreed to pledge and grant to the Pledgee a
first priority security interest in the shares set forth on Exhibit A (the
"Pledged Shares"), as more fully set forth herein;
NOW THEREFORE, the parties hereto agree and acknowledge that the
foregoing recitals are true and correct and to the following:
1. Pledge of Collateral. As collateral security for the performance
of the obligations of the Pledgor under the Note (the "Obligations"), the
Pledgor hereby pledges and grants to the Pledgee a security interest in and
to all of the Pledged Shares held by the Pledgor, as identified in Exhibit
A annexed hereto, along with any and all stock rights, powers and other
distributions, dividends or proceeds thereof (the "Shares"). In addition,
any stock rights, dividends, powers or other distributions or proceeds
received by the Pledgor shall be held in trust for and delivered to the
Pledgee to be held in accordance with the terms of this Agreement, and
shall be included in the Shares described above.
2. Delivery of the Shares. The Shares have been delivered to the
Pledgee on the date hereof, together with undated stock powers executed in
blank. Upon delivery to the Pledgee by the Pledgor of a notice of
Pledgor's intent to sell all or a portion of the Shares (the "Proposed
Shares") and an irrevocable undertaking by the Pledgor and the Pledgor's
broker to remit to the Pledgee the net proceeds to be received by the
Pledgor from the sale of such shares (or such lessor amount as is then
outstanding under the Note), in payment or partial payment of the Note,
within three business days of such sale, the Pledgee shall return to the
Pledgor the Proposed Shares. Upon payment in full of the Note, the Pledgee
shall return to the Pledgor the Shares, undated stock powers as well as
such other instruments, documents, stock certificates, money and goods as
may
come into Pledgee's possession from time to time, whether through delivery
by Pledgor or otherwise.
3. Pledgee's Rights and Duties with Respect to the Collateral.
Pledgee's only duty with respect to the Shares shall be to exercise
reasonable care to secure the safe custody thereof all other duties being
hereby expressly disclaimed. Pledgee shall have the right, but not the
obligation, to (a) demand, xxx for, receive and collect all money or money
damages payable on account of any Shares, (b) protect, preserve or assert
any other rights of Pledgor or take any other action with respect to the
Shares, and (c) pay any taxes, liens, assessments, insurance premiums or
other charges pertaining to Shares. Any expenses incurred by Pledgee under
the preceding sentence shall be paid by Pledgor upon demand, become part of
the Obligations secured by the Shares and bear interest at the per annum
rate equal to the Default Rate set forth in the Note until paid. Pledgee
shall be relieved of all responsibility for the Shares upon surrendering
them to Pledgor.
4. Pledgor's Warranties and Indemnity.
4.1 Pledgor represents, warrants and covenants (a) that Pledgor
is the lawful owner of the Shares, (b) that the Shares are fully paid and
nonassessable, (c) that as of the date hereof, the Shares are free and
clear of all liens, encumbrances, and security interests, other than the
security interest granted by the Pledgor hereunder, and this pledge
constitutes a valid and perfected security interest in the Shares
enforceable against the Pledgor, (d) that the Shares are not subject to any
outstanding rights of redemption or options to purchase or sell, (e) that
the Pledgor has the sole right and lawful authority to pledge the Shares
and otherwise to comply with the provisions hereof, (f) no litigation is
pending or threatened against the Pledgor, which if adversely determined,
would have a material adverse effect against the Pledgor or the Pledgee's
rights in respect of the Shares, (g) that the Pledgor agrees to defend the
Pledgee's title in the Shares and the security interest therein against any
and all claims and demands, and (h) this Pledge Agreement constitutes the
legal, valid and binding obligation of the Pledgor, enforceable against the
Pledgor in accordance with its terms.
4.2 If any adverse claim is asserted in respect of the Shares or
any portion thereof, except as such may arise from the wanton or reckless
acts of the Pledgee, the Pledgor agrees to indemnify the Pledgee and hold
the Pledgee harmless from and against any reasonable liabilities or
damages, and reasonable attorney's fees incurred by the Pledgee in
exercising any right, power or remedy of the Pledgee hereunder. Any such
loss, liability or expense so incurred shall be paid by the Pledgor upon
demand, become part of the Obligations secured by the Shares and bear
interest at the per annum rate equal to the Default Rate (as defined in the
Note).
5. Voting of Collateral. While Pledgor is not in default hereunder,
Pledgor may vote the Shares, provided that said voting shall be in
conformity with the Pledgor's performance under this Agreement and the
Note.
6. Dividends and Other Distributions. While Pledgor is not in
default hereunder, Pledgor may receive all cash dividends, payments of
principal and interest, and other distributions payable with respect to
Shares, provided, however, that Pledgor shall immediately inform Pledgee of
the receipt of any such dividend, payment or other distribution and shall
hold the amount thereof in trust for Pledgee unless and until Pledgee shall
in writing release Pledgor from such trust. Pledgor shall cause all
non-cash dividends and distributions with respect to Shares to be
distributed directly to Pledgee, to be held by Pledgee as additional
Shares, and if any such distribution is made to Pledgor he shall receive
such distribution in trust for Pledgee and shall immediately transfer it to
Pledgee.
7. Pledgor's Default. Pledgor shall be in default hereunder upon the
occurrence of any of the following events:
7.1 Any event of default shall occur under the Note;
7.2 If any lien, encumbrance or adverse claim of any nature
whatsoever is asserted with respect to any Shares;
7.3 If any representation or warranty of Pledgor hereunder is or
shall become false; or
7.4 If Pledgor fails to fulfill any obligation hereunder.
8. Pledgee's Rights upon Default. Upon the occurrence of any
default as defined in Section 7 hereof, Pledgee may, if Pledgee so elects
in its sole discretion, take any one or more of the following:
8.1 At any time and from time to time sell, assign and deliver
all or any part of the Shares, or any interest therein, at any public or
private sale, for cash, on credit or for other property, for immediate or
future delivery without any assumption of credit risk, and for such price
or prices and on such terms as Pledgee in its absolute discretion may
determine; provided that (i) at least ten (10) days' notice of the time and
place of any such sale shall be given to Pledgor, and (ii) in the case of
any private sale, such notice shall also contain the terms of the proposed
sale and Pledgee shall sell the Shares proposed to be sold to any purchaser
procured by Pledgor who is ready, willing and able to purchase, and who
prior to the time of such sale tenders the purchase price of, such Shares
on terms more favorable to Pledgee than the terms contained in such notice;
provided, further, the Pledgor acknowledges that the Pledgee may be unable
to effect a public sale of all or part of the Shares by reason of certain
prohibitions
contained in the Securities Act of 1933, as amended, and may be compelled
to resort to one or more private sales to a restricted group of purchasers
who will be obligated to agree, among other things, to acquire such
securities for their own account, for investment, and not with a view to
the distribution or resale thereof. The Pledgor acknowledges that any such
private sale may be at prices and on terms less favorable to the seller
than if sold at public sales and that private sales shall be deemed to be
made in a commercially reasonable manner notwithstanding that such a
private sale may result in a lower sale price.
8.2 Exercise the right to vote, the right to receive cash
dividends and other distributions, and all other rights with respect to the
Shares as though Pledgee were the absolute owner thereof, whether or not
such rights were retained by Pledgor as against Pledgee before default; and
8.3 Exercise all other rights available to a secured party under
the Uniform Commercial Code and other applicable law.
8.4 The rights and remedies available pursuant to this Agreement
are cumulative, and not exclusive of any other rights or remedies otherwise
available to the Pledgee.
9. Application of Sale Proceeds. In the event of a sale of Shares
by the Pledgee in accordance herewith, the proceeds shall first be applied
to the payment of the expenses of the sale, including brokers' commissions,
counsel fees, any taxes or other charges imposed by law upon the Shares or
the transfer thereof and all other charges paid or incurred by Pledgee
pertaining to the sale; and, second, to satisfy outstanding Obligations, in
the order in which Pledgee elects in its sole discretion; and, third, the
surplus (if any) shall be paid to Pledgor.
10. 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 Pledgee or to Pledgor at the
addresses first above written. Notice by mail shall be deemed to have been
made on the date when the notice is deposited in the mail.
11. Heirs, Successors, Etc. This Agreement and all of its terms and
provisions shall benefit and bind the heirs, successors, assigns,
transferees, executors and administrators of each of the parties hereto.
12. Pledgee's Forbearance. Any forbearance, failure or delay by
Pledgee in exercising any right, power or remedy hereunder shall not be
deemed a waiver of such right, power or remedy. Any single or partial
exercise of any right, power or remedy of Pledgee shall continue in full
force and effect until such right, power or remedy is specifically waived
in writing by Pledgee.
13. Further Assurances. The Pledgor covenants and agrees to execute
and deliver, or cause to be executed or delivered, all such other stock
powers, proxies, instruments, and documents, and will take such other
action or actions as the Pledgee may reasonably request from time to time
in order to carry out the provisions and purposes hereof.
14. Termination. This Agreement and the pledge and security interest
represented hereby shall terminate upon the indefeasible payment in full of
the Obligations.
15. Miscellaneous.
(a) This Agreement or any part thereof cannot be changed, waived,
or amended except by an instrument in writing signed by Pledgee; and waiver
on one occasion shall not operate as a waiver on any other occasion.
(b) The Uniform Commercial Code and other laws of the
Commonwealth of Massachusetts shall govern the construction and enforcement
of this Agreement.
(c) If any part of this Agreement or any agreement, document, or
instrument executed in connection herewith shall be deemed invalid or
unenforceable by a court of competent jurisdiction, the remaining
provisions shall remain in full force and effect, and shall continue to be
binding upon the parties.
(d) This Agreement may be executed in one or more counterparts,
each of which shall constitute an original, but all of which, when taken
together, shall constitute one and the same instrument.
16. Jurisdiction. The Pledgor irrevocably submits to the
jurisdiction of the courts of the Commonwealth of Massachusetts and the
United States District Court for the District of Massachusetts for the
purpose of any suit, action or other proceeding brought by the Lender
arising out of or relating to this Agreement, and the Pledgor waives and
agrees not to assert by way of motion, as a defense or otherwise in any
such suit, action or proceeding, any claim that the Pledgor is not
personally subject to the jurisdiction of the courts of the Commonwealth of
Massachusetts or the United States District Court for the District of
Massachusetts or that the Pledgor's property is exempt or immune from
execution or attachment, either prior to judgment or in aid of execution,
that the suit, action or proceeding is brought in an inconvenient forum or
that the venue of the suit, action or proceeding is improper, or that this
Pledge Agreement or the subject matter hereof may not be enforced in or by
such court. THE PLEDGOR HEREBY WAIVES ANY AND ALL RIGHTS TO A TRIAL BY JURY
IN ANY ACTION OR PROCEEDING IN CONNECTION WITH ALL MATTERS
CONTEMPLATED HEREBY AND DOCUMENTS EXECUTED IN CONNECTION HEREWITH.
EXECUTED under seal as of the date first above written.
PLEDGOR:
/s/ Xxxx Xxxxxx
_________________________________________
PLEDGEE:
INSO CORPORATION
/s/ Xxxxxx X. Xxxx-Xxxxxx
________________________________________
Its: Chairman and Chief Executive Officer
EXHIBIT A
TO PLEDGE AGREEMENT DATED DECEMBER 16, 1997
Description Number of Shares
------------------------ -----------------
Common Stock of INSO 10,000
CORPORATION, a Delaware
Corporation
PLEDGE AGREEMENT
This Pledge Agreement is made, as of the 16th day of December,
1997, by and among, Xxxxx Xxxx, an individual residing at 00 Xxxxxxxxxx
Xx., Xxxxx, XX 00000 (the "Pledgor"), and Inso Corporation, a Delaware
corporation having a place of business at 00 Xx. Xxxxx Xxxxxx, Xxxxxx, XX
00000 (the "Pledgee").
WITNESSETH:
WHEREAS, Pledgor has executed and delivered a secured promissory note
(the "Note") of even date herewith in the original principal amount of
$256,250.00 payable to the Pledgee; and
WHEREAS, the Pledgor is the owner of the shares of common stock of the
Pledgee, as set forth on Exhibit A; and
WHEREAS, as collateral security for the obligations of the Pledgor
under the Note, the Pledgor has agreed to pledge and grant to the Pledgee a
first priority security interest in the shares set forth on Exhibit A (the
"Pledged Shares"), as more fully set forth herein;
NOW THEREFORE, the parties hereto agree and acknowledge that the
foregoing recitals are true and correct and to the following:
1. Pledge of Collateral. As collateral security for the performance
of the obligations of the Pledgor under the Note (the "Obligations"), the
Pledgor hereby pledges and grants to the Pledgee a security interest in and
to all of the Pledged Shares held by the Pledgor, as identified in Exhibit
A annexed hereto, along with any and all stock rights, powers and other
distributions, dividends or proceeds thereof (the "Shares"). In addition,
any stock rights, dividends, powers or other distributions or proceeds
received by the Pledgor shall be held in trust for and delivered to the
Pledgee to be held in accordance with the terms of this Agreement, and
shall be included in the Shares described above.
2. Delivery of the Shares. The Shares have been delivered to the
Pledgee on the date hereof, together with undated stock powers executed in
blank. Upon delivery to the Pledgee by the Pledgor of a notice of
Pledgor's intent to sell all or a portion of the Shares (the "Proposed
Shares") and an irrevocable undertaking by the Pledgor and the Pledgor's
broker to remit to the Pledgee the net proceeds to be received by the
Pledgor from the sale of such shares (or such lessor amount as is then
outstanding under the Note), in payment or partial payment of the Note,
within three business days of such sale, the Pledgee shall return to the
Pledgor the Proposed Shares. Upon payment in full of the Note, the Pledgee
shall return to the Pledgor the Shares, undated stock powers as well as
such other instruments, documents, stock certificates, money and goods as
may
come into Pledgee's possession from time to time, whether through delivery
by Pledgor or otherwise.
3. Pledgee's Rights and Duties with Respect to the Collateral.
Pledgee's only duty with respect to the Shares shall be to exercise
reasonable care to secure the safe custody thereof all other duties being
hereby expressly disclaimed. Pledgee shall have the right, but not the
obligation, to (a) demand, xxx for, receive and collect all money or money
damages payable on account of any Shares, (b) protect, preserve or assert
any other rights of Pledgor or take any other action with respect to the
Shares, and (c) pay any taxes, liens, assessments, insurance premiums or
other charges pertaining to Shares. Any expenses incurred by Pledgee under
the preceding sentence shall be paid by Pledgor upon demand, become part of
the Obligations secured by the Shares and bear interest at the per annum
rate equal to the Default Rate set forth in the Note until paid. Pledgee
shall be relieved of all responsibility for the Shares upon surrendering
them to Pledgor.
4. Pledgor's Warranties and Indemnity.
4.1 Pledgor represents, warrants and covenants (a) that Pledgor
is the lawful owner of the Shares, (b) that the Shares are fully paid and
nonassessable, (c) that as of the date hereof, the Shares are free and
clear of all liens, encumbrances, and security interests, other than the
security interest granted by the Pledgor hereunder, and this pledge
constitutes a valid and perfected security interest in the Shares
enforceable against the Pledgor, (d) that the Shares are not subject to any
outstanding rights of redemption or options to purchase or sell, (e) that
the Pledgor has the sole right and lawful authority to pledge the Shares
and otherwise to comply with the provisions hereof, (f) no litigation is
pending or threatened against the Pledgor, which if adversely determined,
would have a material adverse effect against the Pledgor or the Pledgee's
rights in respect of the Shares, (g) that the Pledgor agrees to defend the
Pledgee's title in the Shares and the security interest therein against any
and all claims and demands, and (h) this Pledge Agreement constitutes the
legal, valid and binding obligation of the Pledgor, enforceable against the
Pledgor in accordance with its terms.
4.2 If any adverse claim is asserted in respect of the Shares or
any portion thereof, except as such may arise from the wanton or reckless
acts of the Pledgee, the Pledgor agrees to indemnify the Pledgee and hold
the Pledgee harmless from and against any reasonable liabilities or
damages, and reasonable attorney's fees incurred by the Pledgee in
exercising any right, power or remedy of the Pledgee hereunder. Any such
loss, liability or expense so incurred shall be paid by the Pledgor upon
demand, become part of the Obligations secured by the Shares and bear
interest at the per annum rate equal to the Default Rate (as defined in the
Note).
5. Voting of Collateral. While Pledgor is not in default hereunder,
Pledgor may vote the Shares, provided that said voting shall be in
conformity with the Pledgor's performance under this Agreement and the
Note.
6. Dividends and Other Distributions. While Pledgor is not in
default hereunder, Pledgor may receive all cash dividends, payments of
principal and interest, and other distributions payable with respect to
Shares, provided, however, that Pledgor shall immediately inform Pledgee of
the receipt of any such dividend, payment or other distribution and shall
hold the amount thereof in trust for Pledgee unless and until Pledgee shall
in writing release Pledgor from such trust. Pledgor shall cause all
non-cash dividends and distributions with respect to Shares to be
distributed directly to Pledgee, to be held by Pledgee as additional
Shares, and if any such distribution is made to Pledgor he shall receive
such distribution in trust for Pledgee and shall immediately transfer it to
Pledgee.
7. Pledgor's Default. Pledgor shall be in default hereunder upon the
occurrence of any of the following events:
7.1 Any event of default shall occur under the Note;
7.2 If any lien, encumbrance or adverse claim of any nature
whatsoever is asserted with respect to any Shares;
7.3 If any representation or warranty of Pledgor hereunder is or
shall become false; or
7.4 If Pledgor fails to fulfill any obligation hereunder.
8. Pledgee's Rights upon Default. Upon the occurrence of any
default as defined in Section 7 hereof, Pledgee may, if Pledgee so elects
in its sole discretion, take any one or more of the following:
8.1 At any time and from time to time sell, assign and deliver
all or any part of the Shares, or any interest therein, at any public or
private sale, for cash, on credit or for other property, for immediate or
future delivery without any assumption of credit risk, and for such price
or prices and on such terms as Pledgee in its absolute discretion may
determine; provided that (i) at least ten (10) days' notice of the time and
place of any such sale shall be given to Pledgor, and (ii) in the case of
any private sale, such notice shall also contain the terms of the proposed
sale and Pledgee shall sell the Shares proposed to be sold to any purchaser
procured by Pledgor who is ready, willing and able to purchase, and who
prior to the time of such sale tenders the purchase price of, such Shares
on terms more favorable to Pledgee than the terms contained in such notice;
provided, further, the Pledgor acknowledges that the Pledgee may be unable
to effect a public sale of all or part of the Shares by reason of certain
prohibitions
contained in the Securities Act of 1933, as amended, and may be compelled
to resort to one or more private sales to a restricted group of purchasers
who will be obligated to agree, among other things, to acquire such
securities for their own account, for investment, and not with a view to
the distribution or resale thereof. The Pledgor acknowledges that any such
private sale may be at prices and on terms less favorable to the seller
than if sold at public sales and that private sales shall be deemed to be
made in a commercially reasonable manner notwithstanding that such a
private sale may result in a lower sale price.
8.2 Exercise the right to vote, the right to receive cash
dividends and other distributions, and all other rights with respect to the
Shares as though Pledgee were the absolute owner thereof, whether or not
such rights were retained by Pledgor as against Pledgee before default; and
8.3 Exercise all other rights available to a secured party under
the Uniform Commercial Code and other applicable law.
8.4 The rights and remedies available pursuant to this Agreement
are cumulative, and not exclusive of any other rights or remedies otherwise
available to the Pledgee.
9. Application of Sale Proceeds. In the event of a sale of Shares
by the Pledgee in accordance herewith, the proceeds shall first be applied
to the payment of the expenses of the sale, including brokers' commissions,
counsel fees, any taxes or other charges imposed by law upon the Shares or
the transfer thereof and all other charges paid or incurred by Pledgee
pertaining to the sale; and, second, to satisfy outstanding Obligations, in
the order in which Pledgee elects in its sole discretion; and, third, the
surplus (if any) shall be paid to Pledgor.
10. 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 Pledgee or to Pledgor at the
addresses first above written. Notice by mail shall be deemed to have been
made on the date when the notice is deposited in the mail.
11. Heirs, Successors, Etc. This Agreement and all of its terms and
provisions shall benefit and bind the heirs, successors, assigns,
transferees, executors and administrators of each of the parties hereto.
12. Pledgee's Forbearance. Any forbearance, failure or delay by
Pledgee in exercising any right, power or remedy hereunder shall not be
deemed a waiver of such right, power or remedy. Any single or partial
exercise of any right, power or remedy of Pledgee shall continue in full
force and effect until such right, power or remedy is specifically waived
in writing by Pledgee.
13. Further Assurances. The Pledgor covenants and agrees to execute
and deliver, or cause to be executed or delivered, all such other stock
powers, proxies, instruments, and documents, and will take such other
action or actions as the Pledgee may reasonably request from time to time
in order to carry out the provisions and purposes hereof.
14. Termination. This Agreement and the pledge and security interest
represented hereby shall terminate upon the indefeasible payment in full of
the Obligations.
15. Miscellaneous.
(a) This Agreement or any part thereof cannot be changed, waived,
or amended except by an instrument in writing signed by Pledgee; and waiver
on one occasion shall not operate as a waiver on any other occasion.
(b) The Uniform Commercial Code and other laws of the
Commonwealth of Massachusetts shall govern the construction and enforcement
of this Agreement.
(c) If any part of this Agreement or any agreement, document, or
instrument executed in connection herewith shall be deemed invalid or
unenforceable by a court of competent jurisdiction, the remaining
provisions shall remain in full force and effect, and shall continue to be
binding upon the parties.
(d) This Agreement may be executed in one or more counterparts,
each of which shall constitute an original, but all of which, when taken
together, shall constitute one and the same instrument.
16. Jurisdiction. The Pledgor irrevocably submits to the
jurisdiction of the courts of the Commonwealth of Massachusetts and the
United States District Court for the District of Massachusetts for the
purpose of any suit, action or other proceeding brought by the Lender
arising out of or relating to this Agreement, and the Pledgor waives and
agrees not to assert by way of motion, as a defense or otherwise in any
such suit, action or proceeding, any claim that the Pledgor is not
personally subject to the jurisdiction of the courts of the Commonwealth of
Massachusetts or the United States District Court for the District of
Massachusetts or that the Pledgor's property is exempt or immune from
execution or attachment, either prior to judgment or in aid of execution,
that the suit, action or proceeding is brought in an inconvenient forum or
that the venue of the suit, action or proceeding is improper, or that this
Pledge Agreement or the subject matter hereof may not be enforced in or by
such court. THE PLEDGOR HEREBY WAIVES ANY AND ALL RIGHTS TO A TRIAL BY JURY
IN ANY ACTION OR PROCEEDING IN CONNECTION WITH ALL MATTERS
CONTEMPLATED HEREBY AND DOCUMENTS EXECUTED IN CONNECTION HEREWITH.
EXECUTED under seal as of the date first above written.
PLEDGOR:
/s/ Xxxxx Xxxx
_________________________________________
PLEDGEE:
INSO CORPORATION
/s/ Xxxxxx X. Xxxx-Xxxxxx
________________________________________
Its: Chairman and Chief Executive Officer
EXHIBIT A
TO PLEDGE AGREEMENT DATED DECEMBER 16, 1997
Description Number of Shares
---------------------- ----------------
Common Stock of INSO 25,000
CORPORATION, a Delaware
Corporation
PLEDGE AGREEMENT
This Pledge Agreement is made, as of the 16th day of December,
1997, by and among, Xxxxxx Xxxx-Xxxxxx, an individual residing at 00 Xx.
Xxxxxx Xx., Xxxxxx, XX 00000 (the "Pledgor"), and Inso Corporation, a
Delaware corporation having a place of business at 00 Xx. Xxxxx Xxxxxx,
Xxxxxx, XX 00000 (the "Pledgee").
WITNESSETH:
WHEREAS, Pledgor has executed and delivered a secured promissory note
(the "Note") of even date herewith in the original principal amount of
$479,997.25 payable to the Pledgee; and
WHEREAS, the Pledgor is the owner of the shares of common stock of the
Pledgee, as set forth on Exhibit A; and
WHEREAS, as collateral security for the obligations of the Pledgor
under the Note, the Pledgor has agreed to pledge and grant to the Pledgee a
first priority security interest in the shares set forth on Exhibit A (the
"Pledged Shares"), as more fully set forth herein;
NOW THEREFORE, the parties hereto agree and acknowledge that the
foregoing recitals are true and correct and to the following:
1. Pledge of Collateral. As collateral security for the performance
of the obligations of the Pledgor under the Note (the "Obligations"), the
Pledgor hereby pledges and grants to the Pledgee a security interest in and
to all of the Pledged Shares held by the Pledgor, as identified in Exhibit
A annexed hereto, along with any and all stock rights, powers and other
distributions, dividends or proceeds thereof (the "Shares"). In addition,
any stock rights, dividends, powers or other distributions or proceeds
received by the Pledgor shall be held in trust for and delivered to the
Pledgee to be held in accordance with the terms of this Agreement, and
shall be included in the Shares described above.
2. Delivery of the Shares. The Shares have been delivered to the
Pledgee on the date hereof, together with undated stock powers executed in
blank. Upon delivery to the Pledgee by the Pledgor of a notice of
Pledgor's intent to sell all or a portion of the Shares (the "Proposed
Shares") and an irrevocable undertaking by the Pledgor and the Pledgor's
broker to remit to the Pledgee the net proceeds to be received by the
Pledgor from the sale of such shares (or such lessor amount as is then
outstanding under the Note), in payment or partial payment of the Note,
within three business days of such sale, the Pledgee shall return to the
Pledgor the Proposed Shares. Upon payment in full of the Note, the Pledgee
shall return to the Pledgor the Shares, undated stock powers as well as
such other instruments, documents, stock certificates, money and goods as
may come into Pledgee's possession from time to time, whether through
delivery by Pledgor or otherwise.
3. Pledgee's Rights and Duties with Respect to the Collateral.
Pledgee's only duty with respect to the Shares shall be to exercise
reasonable care to secure the safe custody thereof all other duties being
hereby expressly disclaimed. Pledgee shall have the right, but not the
obligation, to (a) demand, xxx for, receive and collect all money or money
damages payable on account of any Shares, (b) protect, preserve or assert
any other rights of Pledgor or take any other action with respect to the
Shares, and (c) pay any taxes, liens, assessments, insurance premiums or
other charges pertaining to Shares. Any expenses incurred by Pledgee under
the preceding sentence shall be paid by Pledgor upon demand, become part of
the Obligations secured by the Shares and bear interest at the per annum
rate equal to the Default Rate set forth in the Note until paid. Pledgee
shall be relieved of all responsibility for the Shares upon surrendering
them to Pledgor.
4. Pledgor's Warranties and Indemnity.
4.1 Pledgor represents, warrants and covenants (a) that Pledgor
is the lawful owner of the Shares, (b) that the Shares are fully paid and
nonassessable, (c) that as of the date hereof, the Shares are free and
clear of all liens, encumbrances, and security interests, other than the
security interest granted by the Pledgor hereunder, and this pledge
constitutes a valid and perfected security interest in the Shares
enforceable against the Pledgor, (d) that the Shares are not subject to any
outstanding rights of redemption or options to purchase or sell, (e) that
the Pledgor has the sole right and lawful authority to pledge the Shares
and otherwise to comply with the provisions hereof, (f) no litigation is
pending or threatened against the Pledgor, which if adversely determined,
would have a material adverse effect against the Pledgor or the Pledgee's
rights in respect of the Shares, (g) that the Pledgor agrees to defend the
Pledgee's title in the Shares and the security interest therein against any
and all claims and demands, and (h) this Pledge Agreement constitutes the
legal, valid and binding obligation of the Pledgor, enforceable against the
Pledgor in accordance with its terms.
4.2 If any adverse claim is asserted in respect of the Shares or
any portion thereof, except as such may arise from the wanton or reckless
acts of the Pledgee, the Pledgor agrees to indemnify the Pledgee and hold
the Pledgee harmless from and against any reasonable liabilities or
damages, and reasonable attorney's fees incurred by the Pledgee in
exercising any right, power or remedy of the Pledgee hereunder. Any such
loss, liability or expense so incurred shall be paid by the Pledgor upon
demand, become part of the Obligations secured by the Shares and bear
interest at the per annum rate equal to the Default Rate (as defined in the
Note).
5. Voting of Collateral. While Pledgor is not in default hereunder,
Pledgor may vote the Shares, provided that said voting shall be in
conformity with the Pledgor's performance under this Agreement and the
Note.
6. Dividends and Other Distributions. While Pledgor is not in
default hereunder, Pledgor may receive all cash dividends, payments of
principal and interest, and other distributions payable with respect to
Shares, provided, however, that Pledgor shall immediately inform Pledgee of
the receipt of any such dividend, payment or other distribution and shall
hold the amount thereof in trust for Pledgee unless and until Pledgee shall
in writing release Pledgor from such trust. Pledgor shall cause all
non-cash dividends and distributions with respect to Shares to be
distributed directly to Pledgee, to be held by Pledgee as additional
Shares, and if any such distribution is made to Pledgor he shall receive
such distribution in trust for Pledgee and shall immediately transfer it to
Pledgee.
7. Pledgor's Default. Pledgor shall be in default hereunder upon the
occurrence of any of the following events:
7.1 Any event of default shall occur under the Note;
7.2 If any lien, encumbrance or adverse claim of any nature
whatsoever is asserted with respect to any Shares;
7.3 If any representation or warranty of Pledgor hereunder is or
shall become false; or
7.4 If Pledgor fails to fulfill any obligation hereunder.
8. Pledgee's Rights upon Default. Upon the occurrence of any
default as defined in Section 7 hereof, Pledgee may, if Pledgee so elects
in its sole discretion, take any one or more of the following:
8.1 At any time and from time to time sell, assign and deliver
all or any part of the Shares, or any interest therein, at any public or
private sale, for cash, on credit or for other property, for immediate or
future delivery without any assumption of credit risk, and for such price
or prices and on such terms as Pledgee in its absolute discretion may
determine; provided that (i) at least ten (10) days' notice of the time and
place of any such sale shall be given to Pledgor, and (ii) in the case of
any private sale, such notice shall also contain the terms of the proposed
sale and Pledgee shall sell the Shares proposed to be sold to any purchaser
procured by Pledgor who is ready, willing and able to purchase, and who
prior to the time of such sale tenders the purchase price of, such Shares
on terms more favorable to Pledgee than the terms contained in such notice;
provided, further, the Pledgor acknowledges that the Pledgee may be unable
to
effect a public sale of all or part of the Shares by reason of certain
prohibitions contained in the Securities Act of 1933, as amended, and may
be compelled to resort to one or more private sales to a restricted group
of purchasers who will be obligated to agree, among other things, to
acquire such securities for their own account, for investment, and not with
a view to the distribution or resale thereof. The Pledgor acknowledges
that any such private sale may be at prices and on terms less favorable to
the seller than if sold at public sales and that private sales shall be
deemed to be made in a commercially reasonable manner notwithstanding that
such a private sale may result in a lower sale price.
8.2 Exercise the right to vote, the right to receive cash
dividends and other distributions, and all other rights with respect to the
Shares as though Pledgee were the absolute owner thereof, whether or not
such rights were retained by Pledgor as against Pledgee before default; and
8.3 Exercise all other rights available to a secured party under
the Uniform Commercial Code and other applicable law.
8.4 The rights and remedies available pursuant to this Agreement
are cumulative, and not exclusive of any other rights or remedies otherwise
available to the Pledgee.
9. Application of Sale Proceeds. In the event of a sale of Shares
by the Pledgee in accordance herewith, the proceeds shall first be applied
to the payment of the expenses of the sale, including brokers' commissions,
counsel fees, any taxes or other charges imposed by law upon the Shares or
the transfer thereof and all other charges paid or incurred by Pledgee
pertaining to the sale; and, second, to satisfy outstanding Obligations, in
the order in which Pledgee elects in its sole discretion; and, third, the
surplus (if any) shall be paid to Pledgor.
10. 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 Pledgee or to Pledgor at the
addresses first above written. Notice by mail shall be deemed to have been
made on the date when the notice is deposited in the mail.
11. Heirs, Successors, Etc. This Agreement and all of its terms and
provisions shall benefit and bind the heirs, successors, assigns,
transferees, executors and administrators of each of the parties hereto.
12. Pledgee's Forbearance. Any forbearance, failure or delay by
Pledgee in exercising any right, power or remedy hereunder shall not be
deemed a waiver of such right, power or remedy. Any single or partial
exercise of any right, power or remedy of Pledgee shall continue in full
force and effect until such right, power or remedy is specifically waived
in writing by Pledgee.
13. Further Assurances. The Pledgor covenants and agrees to execute
and deliver, or cause to be executed or delivered, all such other stock
powers, proxies, instruments, and documents, and will take such other
action or actions as the Pledgee may reasonably request from time to time
in order to carry out the provisions and purposes hereof.
14. Termination. This Agreement and the pledge and security interest
represented hereby shall terminate upon the indefeasible payment in full of
the Obligations.
15. Miscellaneous.
(a) This Agreement or any part thereof cannot be changed, waived,
or amended except by an instrument in writing signed by Pledgee; and waiver
on one occasion shall not operate as a waiver on any other occasion.
(b) The Uniform Commercial Code and other laws of the
Commonwealth of Massachusetts shall govern the construction and enforcement
of this Agreement.
(c) If any part of this Agreement or any agreement, document, or
instrument executed in connection herewith shall be deemed invalid or
unenforceable by a court of competent jurisdiction, the remaining
provisions shall remain in full force and effect, and shall continue to be
binding upon the parties.
(d) This Agreement may be executed in one or more counterparts,
each of which shall constitute an original, but all of which, when taken
together, shall constitute one and the same instrument.
16. Jurisdiction. The Pledgor irrevocably submits to the
jurisdiction of the courts of the Commonwealth of Massachusetts and the
United States District Court for the District of Massachusetts for the
purpose of any suit, action or other proceeding brought by the Lender
arising out of or relating to this Agreement, and the Pledgor waives and
agrees not to assert by way of motion, as a defense or otherwise in any
such suit, action or proceeding, any claim that the Pledgor is not
personally subject to the jurisdiction of the courts of the Commonwealth of
Massachusetts or the United States District Court for the District of
Massachusetts or that the Pledgor's property is exempt or immune from
execution or attachment, either prior to judgment or in aid of execution,
that the suit, action or proceeding is brought in an inconvenient forum or
that the venue of the suit, action or proceeding is improper, or that this
Pledge Agreement or the subject matter hereof may not be enforced in or by
such court. THE PLEDGOR HEREBY WAIVES ANY AND ALL RIGHTS TO A TRIAL BY JURY
IN ANY ACTION OR PROCEEDING IN CONNECTION WITH ALL MATTERS
CONTEMPLATED HEREBY AND DOCUMENTS EXECUTED IN CONNECTION HEREWITH.
EXECUTED under seal as of the date first above written.
PLEDGOR:
/s/ Xxxxxx X. Xxxx-Xxxxxx
_________________________________________
PLEDGEE:
INSO CORPORATION
/s/ Xxxxx X. Xxxx
________________________________________
Its: Vice President and General Counsel
EXHIBIT A
TO PLEDGE AGREEMENT DATED DECEMBER 16, 1997
Description Number of Shares
--------------------- ----------------
Common Stock of INSO 46,829
CORPORATION, a Delaware
Corporation
