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EXHIBIT 10.8
STOCK RESTRICTION AGREEMENT
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STOCK RESTRICTION AGREEMENT by and between SERVICESOFT TECHNOLOGIES, INC.
(the "Company") and ▇▇▇▇▇ ▇▇▇▇▇▇ (the "Executive"), dated as of October 25,
1999.
WHEREAS, simultaneous with the execution of this Agreement, the Executive
is purchasing 833,502 shares of the Company's Common Stock (the "Shares"); and
WHEREAS, the parties hereto believe that it is in the best interests of the
Company and the Executive to provide for certain rights and obligations of the
Company and the Executive with respect to the Shares under certain
circumstances.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained herein, the parties agree as follows:
Section 1. DEFINITIONS. For the purposes of this Agreement, the following
terms shall have the following respective meanings:
(a) "ACT" shall mean the Securities Act of 1933, as amended, and the
rules and regulations thereunder.
(b) "CAUSE" shall mean the determination by a majority of the Board
of Directors of the Company that any one or more of the following events
has occurred: (A) dishonesty, breach of fiduciary duty or breach of the
terms of this Agreement or any other agreements executed by the Executive
(including, without limitation, the Executive's Confidentiality and
Non-Competition Agreement with the Company); (B) commission by the
Executive of any act of embezzlement, fraud, larceny or theft on or from
the Company; (C) substantial and continuing neglect or inattention by the
Executive of duties of his employment which shall continue for 30 business
days following written notification by the Board of Directors; (D) willful
misconduct or gross negligence of the Executive in connection with the
performance of such duties; (E) commission by the Executive of any acts of
moral turpitude; or (F) the conviction of the Executive of a felony. A
determination by the Board of Directors, after notice to the Executive and
providing the Executive an opportunity to be heard, that the Executive has
committed an act of the sort mentioned in (A) through (F) above shall be
conclusive, whether or not there are proceedings by public authorities with
respect thereto and without regard to the outcome thereof.
(c) "COMMON STOCK" shall mean the Company's Common Stock, par value
$0.01 per share.
(d) "DISABILITY" shall mean the inability to perform the functions
ascribed to an Executive of the Company.
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(e) "EXECUTIVE" shall mean ▇▇▇▇▇ ▇▇▇▇▇▇.
(f) "QUALIFIED PUBLIC OFFERING" shall mean the consummation of the
first fully underwritten, firm commitment public offering pursuant to an
effective registration statement under the Securities Act, other than on
Forms ▇-▇, ▇-▇, ▇-▇▇ or S-15 or their then equivalents or any successor
form thereto, covering the offer and sale by the Company of its Common
Stock, with net proceeds to the Company equal to or in excess of
$15,000,000.
(g) "NON-VESTED SHARES" shall mean all the Shares that are not Vested
Shares.
(h) "PERMITTED TRANSFEREES" shall mean the Executive's spouse,
parents, brothers, sisters, children (natural or adopted), stepchildren or
grandchildren, a trust for their benefit or a partnership, limited
partnership, corporation or other entity of which all of the direct or
indirect beneficial owners are the Executive and/or any of the foregoing.
(i) "SALE EVENT" shall mean the occurrence of any of the following
events: (i) the Company is the subject of a merger or consolidation in
which the holders of voting securities of the Company immediately prior to
the closing of such merger or consolidation own less than fifty percent
(50%) of the voting securities of the combined entity following such merger
or consolidation; (ii) there is a sale or transfer of all of the voting
securities of the Company to a person or entity that was previously not a
shareholder of the Company; or (iii) there is a sale of substantially all
of the Company's assets.
(j) "SHARES" shall mean the 833,502 shares of Common Stock owned by
the Executive on the date hereof.
(k) "TERMINATION EVENT" shall mean the termination of Executive's
employment with the Company, whether by reason of death, Disability,
retirement, discharge or any other reason, voluntary or involuntary.
(l) "VESTED SHARES" shall mean 208,375.50 outstanding shares of the
Shares owned by the Executive on August 9, 2000, PLUS an additional
52,093.875 of the Shares on the ninth day of each third month thereafter,
commencing with November 9, 2000 and continuing through August 9, 2003, so
long as the Executive remains in the employ of the Company on each such
date; PROVIDED, HOWEVER, that if on any one occasion there shall occur a
Sale Event, then (i) 416,751 of the Non-Vested Shares (or such lesser
number of Non-Vested Shares held by the Executive immediately prior to the
closing of such Sale Event) shall vest and become fully exercisable upon
such closing and (ii) any remaining Non-Vested Shares shall continue to
vest in accordance with the foregoing schedule; PROVIDED FURTHER, that in
the event that the Executive, within one year after a Sale Event, is
terminated without Cause or voluntarily terminates his employment following
a demotion or a material reduction in his responsibilities or reporting
position, then all of the Non-Vested Shares shall vest immediately.
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Section 2. PURCHASE AND SALE OF SHARES.
2.1 PURCHASE AND SALE. Simultaneous with the execution of this
Agreement, the Company hereby sells to the Executive and the Executive hereby
purchases 833,502 Shares at a purchase price of $1.00 per Share, payable in cash
or a promissory note reasonably acceptable to the Board of Directors.
Section 3. REPURCHASE RIGHT.
3.1 REPURCHASE RIGHT. In the event of a Termination Event, the
Company shall have the right and obligation (the "Repurchase Right") to
repurchase all of the Non-Vested Shares at a per share repurchase price equal to
the aggregate of (i) $1.00 plus (ii) the documented, per share amount of any
taxes paid by the Executive with respect to such Non-Vested Shares on account of
Section 83 of the Internal Revenue Code of 1986, as amended, minus (iii) the
amount of any tax reduction realized by the Executive during the tax year in
which the repurchase occurs as a result of the application of the capital loss
attributable to the repurchase to offset other capital gains. The Company shall
exercise its Repurchase Right pursuant to the provision of Section 3.2 below.
3.2 EXERCISE OF REPURCHASE RIGHT AND CLOSING. The Company shall
exercise the Repurchase Right by delivering or mailing to the Executive, in
accordance with Section 6.7, written notice within 45 days after the Termination
Event. The closing of any such repurchase of Non-Vested Shares shall be held at
the principal office of the Company, or at such other location as the parties to
such repurchase may mutually determine. At any such closing, the Company shall
pay to the Executive and/or any holder of the Non-Vested Shares the aggregate
repurchase price for the Non-Vested Shares to be purchased by certified or bank
check or by set off against any amounts owned under any promissory notes
delivered by the Executive in payment for the Shares pursuant to Section 2.1
hereof. At such time, the Executive and/or any holder of the Non-Vested Shares
shall deliver to the Company the certificate or certificates representing the
Non-Vested Shares so repurchased, duly endorsed for transfer, free and clear of
any lien or encumbrances.
Section 4. RESTRICTIONS ON TRANSFER OF SHARES.
4.1 NO TRANSFERS UNLESS AUTHORIZED AND IN COMPLIANCE WITH THIS
AGREEMENT.
(a) None of the Shares now owed or hereafter acquired by the
Executive shall be sold, assigned, transferred, pledged, hypothecated, given
away or in any other manner disposed of or encumbered, whether voluntarily or by
operation of law, unless such transfer is in compliance with all foreign,
federal and state securities laws (including, without limitation, the Act), and
such disposition is in accordance with the terms and conditions of this Section
4. In connection with any transfer of Shares, the Company may require an opinion
of counsel to the transferor, satisfactory to the Company, that such transfer is
in compliance with all foreign, federal and state securities laws (including
without limitation, the Act). The Executive agrees to give the Company prompt
notice of any transfer of Shares to a Permitted Transferee. Any attempted
disposition of Shares not in accordance with the terms and conditions of this
Agreement shall be null and void, and the Company shall not reflect on its
records any change in
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record ownership of any Shares pursuant to any such disposition, shall otherwise
refuse to recognize any such disposition and shall not in any way give effect to
any such disposition of any Shares.
(b) Prior to making any Transfer of Shares (other than to a Permitted
Transferee), the Executive shall deliver written notice (the "Transfer Notice")
to the Company. The Transfer Notice shall disclose in reasonable detail the
identity of the prospective transferees, the number of shares to be Transferred
(the "Offered Shares") and the terms and conditions of the proposed Transfer. By
giving the Transfer Notice, the Executive shall be deemed to have granted the
Company an option to purchase the Offered Shares. The Company may purchase all,
but not less than all, of the Offered Shares upon the same terms and conditions
as those set forth in the Transfer Notice by delivering written notice of such
election to the Executive within 20 days after the Transfer Notice has been
given to the Company (the "Election Period"). If the Company has not elected to
purchase or otherwise acquire all of the Offered Shares prior to the expiration
of the Election Period, the Executive may Transfer such Shares at a price and on
terms no more favorable to the transferees thereof than specified in the
Transfer Notice during the 30-day period immediately following the expiration of
the Election Period (the "Transfer Period"). Any Offered Shares not Transferred
within the Transfer Period shall be subject to the provisions of this Section
4.1 upon any subsequent Transfer. If the Company has elected to purchase any
Offered Shares hereunder, the Transfer of such Offered Shares shall be
consummated as soon as practical after the deliver of the election notice to the
Executive, but in any event within 15 days after the expiration of the Election
Period.
4.2 TRANSFERS TO PERMITTED TRANSFEREES. Subject to the next sentence
of this Section 4.2, the Executive may sell, assign, transfer or give away any
or all of the Shares without receipt of consideration or for such consideration
as such holder shall determine to Permitted Transferees. No transfer permitted
hereby shall be effective unless the Permitted Transferee to whom the Shares are
proposed to be transferred has delivered to the Company a written acknowledgment
that the Shares to be received by it are subject to the provisions of this
Agreement (including without limitation, the provisions of this Section 4) and
that the Permitted Transferee is bound hereby and thereby.
4.3 TRANSFERS UPON DEATH. Upon the death of the Executive, the Vested
Shares held by the Executive may be transferred and distributed by will or other
instrument taking effect at his death or by the laws of descent and distribution
to the Executive's estate, executors, administrators and personal
representatives, and then to such holder's heirs, legatees or distributees
whether or not such heirs, legatees or distributees are Permitted Transferees.
No transfer permitted hereby shall be effective unless the transferee to whom
the Shares are proposed to be transferred pursuant to this provision has
delivered to the Company a written acknowledgment that the Shares to be received
by it are subject to the provisions of this Agreement (including without
limitation, the provisions of this Section 4) and that such transferee is bound
hereby and thereby.
4.4 TRANSFERS AFTER QUALIFIED PUBLIC OFFERING. Upon the consummation
of a Qualified Public Offering, the Executive may transfer any Vested Shares,
with or without
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consideration to a Permitted Transferee or any other person or entity without
restriction other than compliance with applicable federal and state securities
laws and payment of any amounts due by cash or promissory notes issued in
consideration for the purchase of such Vested Shares.
Section 5. LEGEND. Any certificate representing the Shares shall carry the
following legends:
"The transferability of this Certificate and the shares of stock
represented hereby are subject to the restrictions, terms and
conditions (including forfeiture, repurchase and restrictions
against transfers contained in the Executive's Stock Restriction
Agreement dated October 25, 1999 between the Company and ▇▇▇▇▇
▇▇▇▇▇▇ (copies of which are available at the offices of the
Company for examination)."
and
"The shares represented by this Stock Certificate have not been
registered under the Securities Act of 1933 or the securities
laws of any State. The shares may not be sold or transferred in
the absence of such registration or an exemption from
registration."
Section 6. MISCELLANEOUS PROVISIONS.
6.1 INVESTMENT REPRESENTATION. The Executive represents that his
purchase hereunder is for investment and not for resale or with a view to the
distribution thereof. The Executive acknowledges that the Executive has been
informed by the Company that in the absence of an effective registration
statement under the Act and under any applicable state securities or "blue sky"
laws (or exemptions from the registration requirements thereof), the Shares may
not be sold or otherwise transferred or disposed of. The Company is not
obligated to register under the Act or under applicable state securities or
"blue sky" laws, any sale, transfer or other disposition of the Shares, and,
accordingly, the Shares must be held, and the Executive must bear the economic
risk of such investment, for an indefinite period of time unless such sale,
transfer or disposition is registered under the Act and under any applicable
state securities or "blue sky" laws or is exempt from the registration
requirements thereof.
6.2 EQUITABLE RELIEF. The parties hereto agree and declare that
legal remedies may be inadequate to enforce the provisions of this Agreement and
that equitable relief, including specific performance and injunctive relief, may
be used to enforce the provisions of this Agreement.
6.3 CHANGE AND MODIFICATIONS. This Agreement may not be orally
changed, modified or terminated, nor shall any oral waiver of any of its terms
be effective. This Agreement may be changed, modified or terminated only by an
agreement in writing signed by the Company and the Executive.
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6.4 GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the Commonwealth of Massachusetts.
6.5 HEADINGS. The headings are intended only for convenience in
finding the subject matter and do not constitute part of the text of this
Agreement and shall not be considered in the interpretation of this Agreement.
6.6 SAVING CLAUSE. If any provision(s) of this Agreement shall be
determined to be illegal or unenforceable, such determination shall in no manner
affect the legality or enforceability of any other provision hereof.
6.7 NOTICES. All notices, requests, consents and other
communications shall be in writing and be deemed given when delivered
personally, by telex or facsimile transmission or when received if mailed by
first class registered or certified mail, postage prepaid. Notices to the
Company or the Executive shall be addressed as set forth underneath their
signatures below, or to such other address or addresses as may have been
furnished by such party in writing to the other. Notices to any holder of the
Shares other than the Executive shall be addressed to the address furnished by
such holder to the Company.
6.8 BENEFIT AND BINDING EFFECT. This Agreement shall be binding
upon and shall inure to the benefit of the parties hereto, their respective
successors, assigns, and legal representatives. The Company has the right to
assign this Agreement, and such assignee shall become entitled to all the rights
of the Company hereunder to the extent of such assignment.
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IN WITNESS WHEREOF, the Company and the Executive have executed this
Agreement as of the date first above written.
SERVICESOFT TECHNOLOGIES, INC.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
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▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Chairman of the Board
EXECUTIVE:
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
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▇▇▇▇▇ ▇▇▇▇▇▇
▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
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THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, AND MAY NOT BE SOLD, ASSIGNED OR OTHERWISE TRANSFERRED IN THE ABSENCE
OF SUCH REGISTRATION OR AN EXEMPTION FROM SUCH REGISTRATION.
PROMISSORY NOTE
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Natick, Massachusetts
October 25, 1999
US$832,502
FOR VALUE RECEIVED, the undersigned ("Debtor") hereby promises to pay to
Servicesoft Technologies, Inc., a Delaware corporation, or its successor
("Payee"), at such place or places as may be specified by Payee or any holder
hereof, in legal tender of the United States of America, the principal amount of
$832,502.00 (the "Principal"), with interest at the fixed rate of 7.00% per
annum, compounded annually, on the unpaid balance. Interest shall be payable on
each anniversary of the date hereof commencing on October 25, 2000. The
Principal, with accrued interest thereon, shall become due and payable in whole
or in part upon any sale by the Debtor of shares of Common Stock, $.01 par
value, of the Payee ("Common Stock") pursuant to the terms set forth below. In
any event, any Principal then unpaid shall be due and payable, with accrued
interest thereon, on the tenth anniversary of the date hereof (the "Repayment
Date"). The Debtor shall pay to Payee, within ten (10) days after receipt
thereof, the net after-tax proceeds from any sales by the Debtor of shares of
the Common Stock of the Payee held or being acquired on the date hereof, or any
successor securities, in reduction of the Principal until such time as the
Principal has been paid in full, and in connection with each such payment shall
pay accrued but unpaid interest on the amount so paid. For purposes hereof, net
after-tax proceeds refers to the amount received upon any sale of such shares,
less brokerage commissions or underwriting discounts, other expenses of every
kind, including documentary, excise and other taxes, if any, directly relating
to the sale and an amount equal to the federal, state and local taxes on any
gain from such sale (as determined by multiplying the amount of such gain by the
combined maximum federal, state and local tax rate applicable to the sale of
such shares by the Debtor, taking into account the holding period for such
shares and any federal income tax deduction for state and local income taxes).
This Note is subject to the terms of and the payment hereof is secured by a
certain Pledge Agreement dated as of the date hereof by and between Debtor and
Payee (the "Pledge Agreement").
In case an Event of Default, as defined in the Pledge Agreement, shall
occur, the aggregate unpaid balance of Principal and accrued interest thereon
may be declared to be due and payable in the manner and with the effect provided
in the Pledge Agreement. The Payee shall have (i) full recourse against the
Collateral under the Pledge Agreement in connection with the repayment of the
Principal and accrued interest thereon, and (ii) recourse up to the Recourse
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Amount (as hereinafter defined) against any other assets of the Debtor. The
Recourse Amount as of any time shall mean (i) 30% of the Principal amount hereof
reduced by 30% of each payment of Principal made by or on behalf of the Debtor
from any source and (ii) the full amount of accrued interest under this Note (it
being understood that the Debtor shall be personally obligated for the payments
of interest hereunder). Unless otherwise directed by the Debtor, all sums paid
by the Debtor or otherwise received by Payee on account of sums owing hereunder
shall be deemed to reduce the Recourse Amount on a proportionate basis.
Debtor may not prepay any of the principal balance hereof or accrued
interest thereon.
Debtor expressly waives presentment for payment, protest and demand, notice
of protest, demand and dishonor and expressly agrees that this Note may be
extended from time to time without in any way affecting the liability of Debtor.
No delay or omission on the part of Payee in exercising any right hereunder
shall operate as a waiver of such right or of any other right under this Note.
This Note may from time to time be extended by Payee, with or without
notice to Debtor, and any related right may be waived, exchanged, surrendered or
otherwise dealt with, all without affecting the liability of Debtor, in each
case in the sole discretion of Payee.
This Note may not be changed, modified or terminated orally, but only by an
agreement in writing and signed by the Debtor and Payee. This Note shall be
governed by and construed in accordance with the laws The Commonwealth of
Massachusetts, and shall be binding upon the successors and assigns of Debtor
and inure to the benefit of Payee and its successors, endorsees and assigns.
DEBTOR:
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇
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▇▇▇▇▇ ▇▇▇▇▇▇
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PLEDGE AGREEMENT
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In consideration of Servicesoft Technologies, Inc., a Delaware corporation
(together with any successor thereto, the "Company"), having made a loan to
▇▇▇▇▇ ▇▇▇▇▇▇ ("Borrower"), under the Promissory Note of even date herewith, and
any renewals or extensions thereof made in the sole discretion of the Company
(the "Note"), Borrower agrees as follows:
Section 1. PLEDGE. Borrower hereby pledges, assigns and transfers to the
Company, and grants to the Company a security interest in, the
following property ("Collateral"), to be held by the Company:
(a) The shares of Common Stock, par value $0.01 per share, of the
Company (each, together with any successor securities, a "Share")
obtained pursuant to a certain Restricted Stock Agreement dated
as of the date hereof between Borrower and the Company (the
"Restricted Stock Agreement") and held by Borrower or any
Permitted Transferee (as that term is defined in the Restricted
Stock Agreement), and any securities owned in respect thereof or
in exchange therefor.
(b) All other securities, instruments and other property issued or
accepted in substitution for or in addition to any of the
foregoing.
(c) All proceeds of any and all of the Collateral.
Section 2. OBLIGATIONS. This Agreement and the security interest granted
hereby secure the payment of all obligations of Borrower to the
Company under the Note ("Obligations"), and the Obligations of
Borrower under this Agreement, and any and all renewals or extensions
thereof. So long as any of the Obligations are outstanding, unless and
until Borrower shall be in default hereunder or there shall be any
default of any of the Obligations, Borrower shall retain all rights to
dividends and distributions and voting rights, if any, with respect to
the Collateral. In the event the Obligations shall be in default or in
the event that Borrower shall be in default under the terms hereof,
the Company may, in its discretion, vote and exercise all of the
powers of an owner with respect to any of the relevant Collateral.
Without limiting the generality of the other remedies provided herein
and in addition thereto, in the event any of the Obligations shall be
in default or upon any default by Borrower hereunder, the Company
after the occurrence of an Event of Default (as defined in Section 7
hereof) may take all steps necessary to cause the Collateral to be
transferred into the name of the Company, including but not limited to
taking steps necessary to comply with restrictions on sale or transfer
of the shares constituting such Collateral, and in connection
therewith Borrower appoints the Company such Borrower's
attorney-in-fact to execute and deliver such offers, tender offers,
certificates, documents or instruments of every nature
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or description required for the purpose of the transfer of such shares
into the name of the Company, or any other person.
If Borrower receives any cash distribution or dividend in respect of any
Collateral, Borrower may retain such cash distribution or dividend as his own
property unless prior to such receipt an Event of Default has occurred, in which
event Borrower shall accept same in trust for the Company, and shall upon
request deliver same immediately to the Company in the form received, with
Borrower's endorsement and/or assignment when necessary, to be held by the
Company as Collateral.
If Borrower receives any stock certificate or option or deferred
compensation right, whether as an addition to, in substitution of, or in
exchange for, any Collateral, or otherwise, Borrower shall accept same in trust
for the Company, and shall upon request deliver same immediately to the Company
in the form received, with Borrower's endorsement and/or assignment when
necessary, to be held by the Company as Collateral.
Borrower is herewith delivering to the Company all certificates or
instruments representing or evidencing Collateral in suitable form for transfer
or delivery, or accompanied by duly executed instruments of transfer or
assignment to be held subject to the preceding paragraph.
Section 3. RELEASE OF COLLATERAL. Upon the written request of
Borrower, the Company shall promptly release Collateral to Borrower or
to any designee of Borrower at any time and from time to time;
PROVIDED, HOWEVER, that the Company shall retain an amount of
Collateral with an Agreed Value (as defined below) at least equal to
the amount of the Obligations then outstanding.
(a) The "Agreed Value" of any Collateral consisting of Shares shall
be the original cost of such Shares as set forth in the
Restricted Stock Agreement ($1.00 per Share), equitably adjusted
for stock splits, stock dividends and like transactions. The
Agreed Value of any Collateral not consisting of Shares shall be
determined reasonably and in good faith by the mutual agreement
of Borrower and the Company.
(b) Borrower acknowledges that transfer of the Shares is subject to
certain restrictions under the Restricted Stock Agreement. The
obligation of the Company to release certificates representing
Shares to Borrower or his designee hereunder shall in any event
be subject to the requirements of the Restricted Stock Agreement.
Subject to such requirements and the terms hereof, the Company
shall release from this pledge Vested Shares or Restricted Shares
(as those terms are defined in the Restricted Stock Agreement) as
designated by Borrower, provided that such Shares shall remain
subject to the Restricted Stock Agreement to the extent
applicable.
Section 4. REPRESENTATIONS AND WARRANTIES. Borrower represents and
warrants to the Company as follows:
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(a) Borrower is, and (as to any substitute or additional Collateral)
shall be, the sole owner of the Collateral pledged by Borrower,
free and clear of any lien, security interest, option or other
charge or encumbrance, except for (i) the security interest
created by this Agreement, (ii) certain restrictions under the
Restricted Stock Agreement and (iii) restrictions imposed by
applicable laws, and, subject to the same exceptions, Borrower
has and shall have the right to transfer such Collateral and to
grant a security interest therein to the Company as provided in
this Agreement.
(b) No effective financing statement or similar notice covering any
Collateral pledged by Borrower is or shall be on file in any
recording office, and no other pledge or assignment thereof has
been made, or shall have been made, other than in favor of the
Company, except as the Company may approve.
Section 5. FURTHER ACTION BY BORROWER. Borrower shall, at the expense
of Borrower, promptly execute and deliver all further notices,
instruments and documents, including, without limitation, financing
statements, and take all such further action as may be reasonably
necessary or reasonably advisable or as the Company at any time may
reasonably request, in order to perfect, preserve and protect the
security interest granted or purported to be granted hereby or to
enable the Company to exercise and enforce such rights, powers and
remedies with respect to Collateral.
Section 6. PRESERVATION OF COLLATERAL.
(a) The Company shall give to the Collateral the same degree of care
and protection which it gives to its own property, PROVIDED,
HOWEVER, that the Company shall have no liability to Borrower for
any losses, costs, expenses or damages due to any acts or
omissions of third parties, or due to any acts of God or other
causes beyond its control. The Company shall have no duty to
preserve any rights with respect to any Collateral, including,
without limitation, rights against prior parties, or to take, or
to notify Borrower of the need to take, any action respecting any
rights, privileges or options relating to any Collateral. To
replace any certificates, however, Borrower shall not be required
to supply any bond or other indemnity.
(b) Borrower shall furnish to the Company, promptly upon receipt
thereof, copies of all material notices, requests and other
documents received by Borrower relating to Collateral unless the
same were sent by the Company.
(c) Borrower shall not (i) sell, assign, transfer or otherwise
dispose of any Collateral, or create or suffer to exist any lien,
security interest,
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assignment by operation of law or other charge or encumbrance on,
or with respect to, any Collateral, except for the security
interest created by this Agreement and the rights, remedies and
restrictions imposed by the Restricted Stock Agreement; or (ii)
attempt any action prohibited by paragraph (c)(i) of this SECTION
6. Notwithstanding the foregoing, Borrower may transfer Shares to
Permitted Transferees pursuant to the Restricted Stock Agreement
or following the vesting of such Shares provided such transfer is
in accordance with the Restricted Stock Agreement; PROVIDED,
HOWEVER, that the Shares so transferred shall remain subject to
the security interest created by this Agreement and any such
Permitted Transferee(s) shall, as a condition to any transfer,
agree to be subject to the provisions of this Agreement.
Section 7. DEFAULTS. A default (an "Event of Default") shall be deemed to
have occurred hereunder if (a) Borrower fails in any material respect
to perform any material obligation hereunder, if any material
representation or warranty hereunder was untrue in any material
respect when made, or if any default or Event of Default by Borrower
occurs under the Note or any agreement evidencing, or constituting or
granting security for, the Obligations, provided the Company is
current in its obligation to pay certain bonuses on each day interest
is due on the Note, and (b) the Company gives to Borrower written
notice thereof and such default shall not have been cured within
fourteen (14) days or such additional time as may be required to
effect such cure if diligently pursued.
Section 8. REMEDIES. Upon and after the occurrence of any Event of Default
which is then continuing or which has not been cured within the time
period given for such cure:
(a) The Company may exercise its rights with respect to the
Collateral, without regard to the existence of any other security
or source of payment for Obligations, including without
limitation the rights set forth in SECTION 2, and may demand, ▇▇▇
for collection or make any other compromise or settlement with
respect to other rights and remedies provided for herein or
otherwise available to it, and the Company shall have all of the
rights and remedies of a secured party in Massachusetts under the
Uniform Commercial Code.
(b) Except as specifically reserved herein, Borrower waives all
suretyship defenses at law and in equity, including waste and
impairment of Collateral, and further waives the requirement of
any demand and presentment. Twenty-one (21) days' prior notice to
Borrower at the address provided below or at such other address
as Borrower shall provide to the Company in writing for such
purpose, of the time and place of any public sale of Collateral,
or of the time after which any private sale or any other intended
disposition is to be made, shall constitute reasonable
notification.
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(c) The Company is authorized at any such sale (including without
limitation any sale to itself or any affiliate of the Company,
the same being expressly authorized and contemplated herein), if
the Company deems it advisable to do so, in order to comply with
any applicable securities laws, to restrict the prospective
bidders or purchasers to persons who will represent and agree
that they are purchasing the Collateral for their own account for
investment, and not with a view to the distribution or resale
thereof. Sales made subject to such restriction shall not, solely
by reason thereof, be deemed not to have been made in a
commercially reasonable manner.
(d) The Company is specifically authorized, with respect to any
Collateral that consists of Shares, to acquire such Collateral
itself or to transfer such Collateral to any affiliate of the
Company at a price equal to the Agreed Value of such Shares, as
defined in SECTION 3(A). Borrower expressly waives any
requirement that the Company conduct a public or private sale
with respect to such Shares and agrees that such a disposition is
commercially reasonable.
(e) In case of any sale of all or part of the Collateral on credit
for future delivery, the Collateral so sold shall be retained by
the Company until the purchase price is paid. The Company shall
incur no liability in case of the failure of the purchaser to pay
for the Collateral as so sold if the Collateral is recovered, or
of the failure of the Company to make any sale of Collateral
after giving notice thereof, and in case of any such failure,
such Collateral may again be sold.
(f) All cash proceeds received by the Company in respect of any sale,
collection or other enforcement or disposition of Collateral
shall be applied (after deduction of any amounts payable to the
Company for reasonable expenses of the sale, collection or
disposition of Collateral) against Obligations in such order as
the Company shall elect. Upon payment in full of all Obligations,
Borrower shall be entitled to the return of all Collateral
pledged by him and all proceeds thereof, which have not been used
or applied toward the payment of Obligations as herein
authorized.
Section 9. WAIVERS AND REMEDIES. Except as otherwise provided herein or by
law, Borrower waives presentment, demand, notice and protest, notice
of acceptance of this Agreement, and except as provided in SECTION
8(B) notice of all action by the Company in reliance hereon. No
failure by the Company to exercise, no delay by the Company in
exercising, and no single or partial exercise of, any right, remedy or
power hereunder or under any other agreement relating to the
Obligations or to Collateral shall operate as a waiver thereof, or of
any other right, remedy or power at any time. No amendment,
modification or waiver of any provision of this Agreement shall be
effective unless contained in a writing signed
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by the Company. Any such waiver or consent shall be effective only in
the specific instance and for the specific purpose for which given.
The rights, remedies and powers of the Company and Borrower, not only
hereunder, but also under any promissory note or notes of Borrower
held by the Company, any other agreements of Borrower with the Company
and applicable law, are cumulative and may be exercised successively,
concurrently or alternatively.
Section 10. TERM: BINDING EFFECT. This Agreement shall remain in full force
and effect until payment and satisfaction in full of all Obligations,
shall be binding upon Borrower and the heirs, legatees, legal
representatives and assigns of Borrower, including Permitted
Transferees, and shall inure to the benefit of the Company and its
successors and assigns. Notwithstanding the foregoing, the Company may
terminate this Agreement and release the Collateral, or may accept
substitute Collateral, at any time in its sole discretion without in
any way affecting the nonrecourse nature of a portion of the
Obligations as provided in the Note.
Section 11. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of The Commonwealth of
Massachusetts, without regard to conflict of law principles, except to
the extent that the perfection of the security interest granted hereby
in respect of any item of Collateral may be governed by the law of
another jurisdiction. Unless otherwise defined herein, all words and
terms used in this Agreement shall have the meanings provided in the
Uniform Commercial Code of the state of the jurisdiction of
incorporation of the Company (including its successor as issuer of the
Shares). If any provision of this Agreement, or the application
thereof to any person or circumstance, is held invalid, such provision
shall be deemed to be modified to comply with applicable law or if not
able to be so modified, shall be deemed to be severed from the
Agreement, the remaining provisions of which to be valid and
enforceable.
Section 12. SIGNATURES. This Agreement may be executed in counterparts.
Section 13. HEADINGS. The captions in this Agreement have been included for
reference only and shall not define or limit the provisions hereof.
[END OF TEXT]
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EXECUTED as of the date set forth above.
BORROWER:
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/s/ ▇▇▇▇▇ ▇▇▇▇▇▇
--------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇
COMPANY:
--------
SERVICESOFT TECHNOLOGIES, INC.
/s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
--------------------------------
By: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Its: ASO
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SCHEDULE OF COLLATERAL
TO
PLEDGE AGREEMENT
----------------
QUANTITY DESCRIPTION OF SECURITY
-------- -----------------------
833,502 shares Common Stock, par value $.01 per share, of
Servicesoft Technologies, Inc.
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