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EXHIBIT 10.22
PLEDGE AGREEMENT
THIS PLEDGE AGREEMENT ("Agreement") is made as of April 15, 1998, by and
between ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ ("Debtor"), and CyberSource Corporation (a/k/a
"▇▇▇▇▇▇▇▇.▇▇▇ Corporation"), a California corporation (the "Company"). Terms
used without other definition herein that are defined in Division 8 or Division
9 of the California Uniform Commercial Code shall have the respective meanings
assigned to such terms therein.
RECITALS
A. Debtor and the Company are parties to that certain Promissory Note
(the "Note") dated concurrently herewith pursuant to which Debtor borrowed
$270,000.00 from the Company subject to the terms and conditions set forth
therein, which terms and conditions are hereby incorporated by reference.
B. As security for the payment and performance of the obligations of
Debtor to the Company under the Note, as hereinafter defined, and in order to
induce the Company to extend credit pursuant to the Note, Debtor is entering
into this Agreement.
AGREEMENT
NOW, THEREFORE, for good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, Debtor and the Company hereby agree
as follows:
Section 1. Security Interest.
1.1. Grant of Interest. Debtor hereby grants the Company a first
priority, perfected security interest in the Collateral, as hereinafter defined,
to secure the Indebtedness, as hereinafter defined, owed to the Company. Prior
to, or contemporaneous with, the execution and delivery of this Agreement,
Debtor has delivered or shall deliver to the Company each of the items of
Collateral as set forth below.
1.2. Collateral. The term "Collateral" means, collectively 129,808 shares
of common stock of the Company owned by Debtor (the "Stock") and all
substitutions therefor and liquidating dividends, stock dividends, cash
dividends, new securities and other property to which Debtor is or may hereafter
become entitled to receive on account of the Stock.
1.3. Indebtedness. "Indebtedness" means all debts, obligations, and
liabilities of Debtor to the Company arising out of the Note or under this
Agreement.
1.4. Collateral Delivery.
a. Concurrent with the execution and delivery of this Agreement
or prior thereto, Debtor is delivering to the Company the Collateral, which
shall be duly endorsed in blank without restriction (or with a duly executed
Assignment Separate From Certificate (stock power) duly endorsed in blank
without restriction).
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b. Voting, etc. So long as no Event of Default (as defined
herein) has occurred and is continuing, Debtor shall have the right to vote the
Stock and exercise the consensual rights and powers relating to such Stock;
provided, however, that Debtor shall not be permitted to trade or sell the Stock
without the consent of the Company until all amounts owed to the Company under
the Note are paid in full.
Section 2. Covenants, Representations and Warranties.
2.1. Debtor's Covenants. Debtor hereby covenants and agrees that:
a. Debtor will at all times keep the Collateral free of all
liens, encumbrances and claims of any kind or nature other than the security
interest of the Company.
b. Debtor will not sell, transfer, lease or otherwise dispose of
any of the Collateral or any interest therein to any individual or entity until
all amounts owed to the Company under the Note are paid in full.
c. Debtor will pay when due and prior to delinquency all taxes,
levies, assessments or other claims which are or may become liens against the
Collateral.
d. Debtor will deliver to the Company promptly or ensure that the
Company promptly receives (i) all Collateral, (ii) all initial transaction
statements and all other writings necessary or desirable to evidence the
transfer and pledge of the Collateral to the Company as provided above, (iii)
such specific acknowledgments, assignments, stock or bond powers, or other
agreements or writings as the Company may request relating to the Collateral,
and (iv) copies of records and other reports relating to the Collateral in such
form and detail and at such times as the Company may from time to time require.
e. Debtor will from time to time as required by the Company: (i)
execute and deliver to the Company, and file or record at Debtor's expense, all
notices and other documents the Company deems necessary in order for it to
maintain a first perfected security interest in the Collateral; and (ii) perform
such other acts, and execute and deliver to the Company such additional
assignments, agreements and instruments, as the Company may request in
connection with the administration and enforcement of this Agreement and/or the
Company's rights, powers and remedies hereunder.
2.2. Debtor's Representations. Debtor hereby represents and warrants to
the Company that Debtor has full and complete marketable title to the Collateral
free and clear of all liens, encumbrances and security interests (except for
those in favor of the Company and those expressly permitted in writing by the
Company).
Section 3. Default.
3.1. Events of Default. The occurrence of any of the following shall
constitute an Event of Default under this Agreement at the option of the
Company:
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a. Debtor fails to perform any obligation under the Note.
b. Debtor breaches any provision of this Agreement and fails to
cure such breach within thirty (30) days after the receipt of written notice
from the Company specifying such breach.
3.2. Rights on Default. Upon the occurrence of an Event of Default:
a. All Indebtedness shall, at the option of the Company, without
demand or notice, become immediately due and payable.
b. The Company shall have all other rights and remedies available
under contract or applicable law, which include those of a secured party under
the California Uniform Commercial Code, at law or in equity, and the right to
take possession of the Collateral (if not then in the Company's possession), and
sell and dispose of the same, or any part thereof, at public or private sale or
at any broker's board or on any securities exchange, for cash, upon credit or
for future delivery, and at such price or prices as the Company may deem
satisfactory all in accordance with applicable law.
c. In taking action as is specified above, the Company shall be
permitted to use the services of a broker.
d. The Company, instead of exercising the power of sale herein
conferred upon it, may proceed by a suit or suits at law or in equity to
foreclose the security interests herein granted and sell the Collateral, or any
portion thereof, under a judgment or decree of a court or courts of competent
jurisdiction. Debtor hereby agrees that any disposition of Collateral by way of
a private placement or other method which, in the opinion of the Company, is
required or advisable under federal and state securities laws is commercially
reasonable.
3.3. Application of Proceeds. The proceeds of any sale foreclosure or
disposition shall be applied first to the reasonable expenses of retaking,
holding, preparing for sale, discharging all liens, selling and the like, then
to the reasonable attorneys' fees and legal expenses incurred by the Company,
and then to the Indebtedness pursuant to the terms of the Note. Should the net
proceeds resulting from any such sale or disposition exceed the amount owing to
the Company, the Company shall pay such surplus to the Debtor or other person(s)
legally entitled thereto.
3.4. Powers. Upon the occurrence and during the continuance of an Event
of Default, Debtor's right to exercise the voting or consensual rights and
powers with respect to the Collateral shall cease, and all such rights and
authority to exercise such voting or consensual rights and powers shall inure to
the Company.
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Section 4. Power of Attorney. Debtor hereby irrevocably appoints the Company, or
any officer thereof, as Debtor's true and lawful attorney-in-fact coupled with
an interest, with full power of substitution, after an Event of Default to sign
or endorse any instrument, document, or other writing necessary or desirable to
transfer title or other rights to or in any of the Collateral; and, after an
Event of Default, to do all acts necessary or incidental to assert, protect and
enforce the Company's rights in the Collateral and under this Agreement. Debtor
agrees to reimburse the Company promptly upon demand for any expenses the
Company may incur while acting as Debtor's attorney-in-fact, which expenses
shall constitute indebtedness under the Note.
Section 5. Waivers of Debtor.
5.1. Presentment. Debtor hereby waives presentment, demand, protest,
notice of protest, notice of dishonor, notice of payment and nonpayment, notice
of any default, or notice of nonpayment at maturity.
5.2. Enforcement. Debtor hereby waives any right to require the Company
(i) to proceed against any person, (ii) to pursue any remedy in the Company's
power in any order or whatsoever. The Company shall not be required to take any
action to preserve rights against prior parties with respect to any of the
Collateral.
5.3. Release of Third Parties. Debtor hereby waives any right or defense
it may now or hereafter have based upon (i) the Company's release of any party
who may be obligated to the Company; (ii) the Company's release or impairment of
any collateral for the Indebtedness; and (iii) the modification or extension of
the Indebtedness.
5.4. Suretyship Defenses. Debtor hereby waives any and all suretyship
defenses now or hereafter available to it under the California Civil Code or the
California Uniform Commercial Code.
5.5. General Waivers. Without limiting the generality of any other waiver
or other provision of this Agreement, Debtor hereby waives, to the maximum
extent such waiver is permitted by law, any and all benefits or defenses arising
directly or indirectly under any one or more of: (i) California Civil Code
Sections 2799, 2808, 2809, 2810, 2815, 2819, 2820, 2821, 2822, 2838, 2839, 2845,
2846, 2847, 2848, 2849, 2850, 2899, and 3433; (ii) Chapter 2 of Title 14 of the
California Civil Code; (iii) California Code of Civil Procedure Sections 580a,
580b, 580c, 580d, and 726; or (iv) California Uniform Commercial Code Section
3605.
Section 6. Non-Waiver. Subject to Section 8.3, the Company may, in the exercise
of its sole discretion, waive an Event of Default, or cure an Event of Default,
at Debtor's expense.
Section 7. The Company's Duties.
a. The Company's sole duty with respect to the Collateral in its
possession shall be to use reasonable care in the custody and preservation
thereof. The Company shall be deemed to have exercised reasonable care in the
custody and preservation of such Collateral if such Collateral is accorded
treatment substantially equal to that which the Company accords its
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own property, it being understood that the Company shall not have any
responsibility for (i) ascertaining or taking action with respect to calls,
conversions, exchanges, maturities, declining value, tender or other matters
relative to any Collateral, regardless of whether the Company have or are deemed
to have knowledge of such matters or (ii) taking any steps to preserve any
rights against any person with respect to any Collateral. Under no circumstances
shall the Company be responsible for an injury or loss to the Collateral, or any
part thereof, arising from any cause beyond the reasonable control of the
Company. b. The Company may at any time deliver the Collateral or any part
thereof to Debtor or arrange for the delivery thereof and Debtor's receipt shall
be a complete and full acquittance for the Collateral so delivered, and the
Company shall thereafter be discharged from any liability or responsibility
therefor.
Section 8. General Provisions.
8.1. Notices. Any notice given by any party under this Agreement or the
Note shall be in writing and personally delivered, deposited in the United
States mail, postage prepaid, or sent by telex or other authenticated message,
charges prepaid, and addressed as follows:
To Debtor: To the Company:
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ CyberSource Corporation
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ a/k/a "▇▇▇▇▇▇▇▇.▇▇▇ Corporation"
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: President
with a copy to:
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ & Black, LLP
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, Esq.
Each party may change the address to which notices, requests and other
communications are to be sent by giving written notice of such change to each
other party.
8.2. Binding Effect. This Agreement shall be binding upon Debtor, its
permitted successors, representatives and assigns, and shall inure to the
benefit of the Company and its successors, representatives and assigns;
provided, however, that neither Debtor nor the Company may assign or transfer
Debtor's obligations under this Agreement without each other's prior written
consent.
8.3. No Waiver. Any waiver, consent or approval by the Company of any
Event of Default or breach of any provision, condition or covenant of this
Agreement or the Note must be in writing and shall be effective only to the
extent set forth in writing. No waiver of any breach
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or default shall be deemed a waiver of any later breach or default of this
Agreement or the Note. No failure or delay on the part of the Company in
exercising any power, right or privilege under this Agreement or the Note shall
operate as a waiver thereof, and no single or partial exercise of any such
power, right or privilege shall preclude any further power, right or privilege.
8.4. Rights Cumulative. All rights and remedies existing under this
Agreement are cumulative to, and not exclusive of, any other rights or remedies
available under contract or applicable law. The obligations of Debtor under this
Agreement shall continue to be effective or be reinstated, as the case may be,
if at any time any payment of any Indebtedness is rescinded or must otherwise be
returned by the Company upon, on account of, or in connection with, the
insolvency, bankruptcy or reorganization of Debtor or otherwise, all as though
such payment had not been made.
8.5. Unenforceable Provisions. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall be so only as to such
jurisdiction and only to the extent of such prohibition or unenforceability, but
all the remaining provisions of this Agreement shall remain valid and
enforceable.
8.6. Governing Law. Except as may be otherwise provided by the California
Uniform Commercial Code or in any addendum hereto, this Agreement shall be
governed by and construed in accordance with the laws of the State of
California.
8.7. Entire Agreement. This Agreement and the Note are intended by Debtor
and the Company as the final expression of Debtor's obligations to the Company
in connection with the Collateral and supersedes all prior understandings or
agreements concerning the subject matter hereof. This Agreement may be amended
only by a writing signed by Debtor and accepted by the Company in writing.
8.8. Legal Matters.
a. Choice of Law. The validity, terms, performance and
enforcement of this Agreement shall be governed by those laws of the State of
California which are applicable to agreements which are negotiated,
executed/delivered and performed solely in the State of California.
b. Jurisdiction; Venue. The state and federal District Courts
located in San Jose, California shall have exclusive jurisdiction and venue over
any action or proceeding arising out of or related to the negotiation,
execution, delivery, performance, breach or enforcement of this Agreement.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date set forth above.
COMPANY DEBTOR
CyberSource Corporation (a/k/a
"▇▇▇▇▇▇▇▇.▇▇▇ Corporation"), a
California corporation
By: _________________________________ _____________________________________
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: President and Chief Executive
Officer
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