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EXHIBIT 10.20
SECURITY AND PLEDGE AGREEMENT
THIS SECURITY AND PLEDGE AGREEMENT (the "Agreement") is made as of
October 11, 1999 by and between ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ (the "Borrower") and Hyperion
Solutions Corporation (the "Lender") in connection with the loan from Lender to
Borrower in the principal amount of One Million Dollars ($1,000,000.00)
evidenced by the Secured Promissory Note, dated as of the date hereof, issued by
Borrower to Lender (the "Note").
THE PARTIES AGREE AS FOLLOWS:
1. GRANT OF SECURITY INTEREST.
In consideration of the Lender's loan of $1,000,000.00
evidenced by the Note, the Borrower hereby grants and transfers to the Lender a
security interest in all Borrower's right, title, and interest in and to the
shares of Common Stock, including such distributions and adjustments to the
Common Stock as are set forth in Section 4.3 below, of the Lender acquired by
the Borrower under that certain Restricted Stock Award Agreement (the
"Restricted Stock Agreement") dated as of October 11, 1999, between the Borrower
and the Lender (the "Collateral").
2. NO PRIOR GRANTS OF SECURITY INTERESTS.
The Borrower represents and warrants to the Lender that the
Borrower has not previously granted a security interest in the Collateral to any
party and that no such security interest is now effective. The Borrower also
represents and warrants that he owns all right, title and interest in the
Collateral, subject only to the terms and conditions of the Restricted Stock
Agreement and this Agreement.
3. OBLIGATIONS SECURED.
The obligations secured by this Agreement are the payment and
performance of all obligations pursuant to the Note (collectively, the
"Obligations").
4. PLEDGE AS SECURITY.
4.1. Pledge. As security for the Obligations, Borrower
hereby pledges the Collateral to Lender.
4.2. Non-Stock Distributions. All cash distributions
received during the term of this Agreement in respect of the Collateral shall be
delivered to the Pledgeholder. Unless and until a "Failure of Payment" (as
defined in Section 8 below) occurs and is continuing, the Pledgeholder shall
deliver those cash distributions that are attributable to current profits to the
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Borrower. However, any cash distribution of current profits delivered to the
Pledgeholder after the occurrence of a Failure of Payment that is continuing
shall be held by the Pledgeholder and applied to reduce the Obligations. Any
cash distributions or portions thereof that do not represent the distribution of
current profits shall be held by the Pledgeholder and retained as additional
Collateral. All distributions other than in cash or stock so issued in respect
of the Collateral during the term of this Agreement in respect of the Collateral
shall be delivered by the Lender directly to and held by Pledgeholder as
additional Collateral.
4.3. Stock Distributions and Adjustments of Collateral. If
during the term of this Agreement, any stock or other non-cash distribution,
dividend, reclassification, readjustment, or other change is declared or made in
the capital structure of Lender, all securities, instruments and other property
so issued with respect to the Collateral by reason of any such change shall be
immediately delivered by the Lender to Pledgeholder as additional Collateral,
together with executed assignments separate from certificate, to be held by
Pledgeholder in the same manner as the Collateral originally pledged hereunder.
4.4. Default; Non-recourse Obligation. Subject to
compliance with applicable law, if a "Failure of Payment" (as defined in Section
8 below) has occurred under the Note and is continuing, Lender is authorized to
sell, assign and deliver at Lender's discretion, from time to time, all or any
part of the Collateral at any private or public sale upon such notice to the
Borrower as is required by law, at such price or prices and upon such terms as
Lender may deem advisable and Lender shall have all the rights and remedies of a
secured creditor under the provisions of the California Uniform Commercial Code.
At any such public sale, Lender may bid for, and become the purchase of, the
whole or any part of the Collateral offered for sale. In case of any private or
public sale, after deducting the costs, reasonable attorneys' fees and other
expenses of sale and delivery, the remaining proceeds of such sale shall be
applied to the satisfaction of the Obligations; provided, however, that after
the satisfaction in full of the Obligations, the balance of the proceeds of the
sale then remaining shall be paid to Borrower. Borrower acknowledges that (i)
the Collateral consists of securities, (ii) any sale of securities must be made
in compliance with applicable federal and state securities laws and regulations,
and (iii) such compliance may decrease the price at which the Collateral could
otherwise be sold. Borrower shall not be liable for any deficiency if the
proceeds of the sale of the Collateral are insufficient to discharge all of the
Obligations.
4.5. Substitution of Collateral. Borrower may substitute
at any time, and from time to time, any Collateral subject in each case to
obtaining the prior written approval of Lender, such approval to be given or
withheld in the exercise of Lender's sole discretion, and upon such substitution
Borrower shall be entitled to the release and return of the Collateral for which
new Collateral approved by Lender has been substituted.
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4.6. Voting Rights. Unless and until a Failure of Payment
(as defined in Section 8) occurs and is continuing, the Borrower shall have the
sole and exclusive right to vote and give consents with respect to the
Collateral and to consent to, ratify or waive notice of any and all meetings of
stockholders, except that the Borrower will not have the right to vote and give
consents on matters related to liquidation of the Lender or a sale of all or
substantially all of its assets.
5. PLEDGE.
5.1. Appointment of Pledgeholder. Borrower and Lender
hereby authorize ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, a member of the Board of Directors of the
Lender (the "Board"), to act as pledgeholder ("Pledgeholder") for them in
accordance with this Agreement. Borrower and Lender acknowledge that
Pledgeholder, whomever shall act in such capacity from time to time, shall be
independent of, and shall not be under the control of, Borrower, shall maintain
possession of the Collateral and shall not permit either of Borrower or Lender
to take possession of the Collateral except in accordance with the provisions of
this Agreement.
5.2. Delivery of Collateral. Borrower has delivered to
Pledgeholder the stock certificate evidencing the Collateral, a copy of which is
attached hereto as Exhibit 4.2, and four (4) stock assignments separate from
certificate (each a "Stock Assignment") for such stock certificate, duly
executed in blank by Borrower.
5.3. Duties after a Failure of Payment. Upon receipt of a
written notice from the Lender that a Failure of Payment has occurred and is
continuing, Pledgeholder shall deliver to the Lender a Stock Assignment for such
number of shares evidenced by the Collateral as the Lender instructs
Pledgeholder are sufficient to foreclose upon to pay the Obligations then due
and any enforcement costs (including reasonable attorneys' fees) related
thereto.
5.4. Attorney-in-Fact; Additional Stock Assignments.
Borrower hereby irrevocably constitutes and appoints Pledgeholder as Borrower's
attorney-in-fact and agent for the term of this escrow to execute with respect
to the Collateral all documents necessary or appropriate to negotiate such
Collateral and complete any transaction herein contemplated. Borrower shall
deliver to Pledgeholder from time to time such number of additional Stock
Assignments or other documents duly executed by Borrower as may be requested by
Lender or Pledgeholder.
5.5. Duties; Modification of Duties. Subject to the
performance of its duties and obligations hereunder, Pledgeholder shall be
liable hereunder only for gross negligence or willful misconduct. Pledgeholder's
duties hereunder may be altered, amended, modified or revoked by a written
instrument signed by Lender, Borrower and Pledgeholder.
5.6. Obligations. Pledgeholder shall be liable only for
the performance of such duties as are specifically set forth herein and may rely
and shall be protected in relying or refraining from acting on any instrument
reasonably believed by Pledgeholder to be genuine and to have been signed or
presented by the proper party or parties. Pledgeholder shall not be personally
liable for any act Pledgeholder may do or omit to do hereunder as Pledgeholder
or as
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attorney-in-fact for Borrower while acting in good faith and any act done or
omitted by Pledgeholder pursuant to the advice of Pledgeholder's own attorneys
shall be conclusive evidence of such good faith.
5.7. Authorization to Act. Pledgeholder is hereby required
to act only in accordance with the terms of this Agreement, applicable law and
court orders and is hereby expressly authorized to comply with and obey orders,
judgments or decrees of any court. In case Pledgeholder obeys or complies with
any such order, judgment or decree of any court, he or she shall not be liable
to any of the parties hereto or to any other person, firm or corporation by
reason of such compliance, notwithstanding any such order, judgment or decree
being subsequently reversed, modified, annulled, set aside, vacated or found to
have been entered without jurisdiction.
5.8. Bankruptcy. Bankruptcy, insolvency or dissolution of
any party hereto shall not affect Pledgeholder's performance hereunder.
5.9. Statute of Limitations. Pledgeholder shall not be
liable for the lapse of any rights because of any statute of limitation
applicable with respect to this Agreement or any documents deposited with
Pledgeholder.
5.10. Legal Counsel. Pledgeholder shall be entitled to
employ such legal counsel and other experts as Pledgeholder may deem necessary
to advise Pledgeholder in connection with Pledgeholder's obligations under this
Agreement and may pay such counsel reasonable compensation therefor, for which
Pledgeholder shall be reimbursed by Lender.
5.11. Termination of Duties; Successor. Pledgeholder's
responsibilities as Pledgeholder hereunder shall terminate (i) if Pledgeholder
shall resign by thirty days' written notice to Borrower and Lender, (ii) if
Pledgeholder dies or is disabled or (iii) immediately upon Pledgeholder ceasing
to serve as a member of the Board. In the event of any such termination, the
Board shall appoint one of its members to act as Pledgeholder, which successor
Pledgeholder shall execute a consent to serve as Pledgeholder and be bound by
the terms of this Agreement. Upon the appointment of a successor Pledgeholder,
all documents, shares and other property then in Pledgeholder's possession
pursuant to this Agreement shall be directly delivered to such successor.
5.12. Further Instruments. If Pledgeholder reasonably
requires other or further instruments in connection this Agreement or
obligations in respect hereto, the necessary parties hereto shall join in
furnishing such instruments.
5.13. Conflicting Notices; Disputes. If Pledgeholder
receives a notice from Lender that Lender is exercising any of Lender's rights
hereunder, Pledgeholder shall first complete all action required with respect to
the notice before taking any action with respect to any subsequently received
notice from Lender which in any way conflicts with the prior notice.
5.14. Return of Property. If at the time of termination of
this Agreement, Pledgeholder has in Pledgeholder's possession any documents or
other property belonging to
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Borrower, Pledgeholder shall deliver all of the same to Borrower and shall be
discharged of all further obligations hereunder.
6. FURTHER ASSURANCES.
The Borrower shall execute and deliver to the Lender
concurrently with the execution of this Agreement, and at any time or times
hereafter at the request of the Lender, all financing statements, continuations
statements, security agreements, assignments, affidavits, reports, notices, and
any other documents, including any notice deemed by the Lender to be required to
be filed with the Securities and Exchange Commission in respect of any proposed
sale of the Collateral under Rule 144 of the Securities Act of 1933, as amended,
that the Lender may reasonably request in a form satisfactory to the Lender, to
maintain the Lender's security interest in the Collateral and to consummate
fully all of the transactions contemplated under this Agreement.
In the event that the Lender determines that it is necessary
or advisable, in connection with any sale of the Collateral permitted by this
Agreement, to register the Collateral for sale under the Securities Act of 1933,
as amended, or applicable state securities laws, Borrower shall reasonably
cooperate with Lender and shall provide such information concerning the Borrower
as may be necessary in connection with such registration. Notwithstanding
anything to the contrary in this Agreement, all expenses incurred in connection
with any such sale and registration, including, without limitation, any
underwriters or brokers discounts or commissions, filing fees, printing costs
and fees and disbursements of attorneys and accountants will be added to the
Obligations secured by this Agreement to which the proceeds of any disposition
of the Collateral shall be applied pursuant to section 9 of this Agreement, to
the extent that such expenses are commercially reasonable.
7. POWERS OF THE LENDER.
The Borrower appoints the Lender its true attorney-in-fact to
perform any of the following powers following a Failure of Payment, which powers
are coupled with an interest, are irrevocable until termination of this
Agreement, and may be exercised from time to time by the Lender (following a
Failure of Payment), (a) to perform obligations of the Borrower under this
Agreement in the name of the Borrower or otherwise; (b) to give notice of the
Lender's rights to the Collateral to enforce the same and to make extension
agreements with respect thereto; (c) to prepare, execute, file, record or
deliver schedules, designation statements, financing statements, continuation
statements, termination statements, or like papers to perfect, preserve or
release the Lender's interest in the Collateral; (d) to endorse, collect,
deliver, deposit and receive payment under instruments for the payment of money
and other property to which the Lender is entitled under this Agreement; and (e)
to do all acts and things and execute all documents in the name of the Borrower
or otherwise, deemed by the Lender necessary, proper and convenient in
connection with the preservation, perfection or enforcement of its rights under
this Agreement.
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8. FAILURE OF PAYMENT.
If the Borrower fails to pay any principal, interest or other
amounts due under the Note within ten (10) business days after the "Maturity
Date" (as defined in the Note) (a "Failure of Payment"), then, and in any such
event, the Lender, by notice to the Borrower may exercise any and all rights and
remedies vested in the Lender pursuant to this Agreement and/or applicable law
including, but not limited to, those of a secured creditor under the Uniform
Commercial Code.
9. DISPOSITION OF PROCEEDS.
Except as otherwise provided herein, any proceeds of any
disposition of the Collateral, or any part thereof, may be applied by the Lender
to the payment of expenses in connection with the Collateral, including, but not
limited to, reasonable fees of attorneys, and the balance of such proceeds may
be applied by the Lender toward the payment of the Obligations, with any excess
proceeds payable to the Borrower.
10. GOVERNING LAW. The interpretation, performance and enforcement
of this Agreement shall be governed by the laws of the State of California
without resort to that State's conflict-of-laws rules.
11. SUCCESSORS AND ASSIGNS. Except as otherwise provided herein,
the provisions hereof shall inure to the benefit of and be binding upon the
successors, assigns, heirs, executors and administrators of the parties hereto.
12. ENTIRE AGREEMENT; WAIVER.
12.1. Entire Agreement. This Agreement and the exhibit
hereto constitute the full and entire understanding and agreement between the
parties with regard to the subjects hereof and thereof, and supersede any and
all prior and contemporaneous agreements, understandings, discussions and
correspondence between Borrower and Lender with respect thereto.
12.2. Waiver. The Lender's failure, at any time or times
hereafter, to require strict performance by the Borrower of any provision of
this Agreement shall not waive, affect or diminish any right of the Lender
thereafter to demand strict compliance and performance therewith. Any suspension
or waiver by the Lender of a default under this Agreement shall not suspend,
waive or affect any other default under this Agreement, whether the same is
prior or subsequent thereto and whether of the same or of a different kind or
character. None of the undertakings or agreements of the Borrower contained in
this Agreement and no default under this Agreement shall be deemed to have been
suspended or waived by the Lender unless such suspension or waiver is in writing
specifying such suspension or waiver, signed by an officer of the Lender, and
directed to the Borrower.
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13. TERM OF AGREEMENT/PARTIAL RELEASE
13.1. Term. This Agreement and the security interest and
lien arising hereunder shall become effective as of the date of this Agreement
and shall continue in force until the payment in full of the Obligations to the
Lender, whereupon the Lender and the Pledgeholder shall promptly execute and
deliver such documents and instruments as Borrower may reasonably request to
evidence the termination of this Agreement and of such security interests and
liens and shall promptly deliver to the Borrower all certificates representing
the Collateral and all other instruments or documents delivered by Borrower or
received by Lender pursuant to this Agreement.
13.2. Partial Release. If Borrower desires to sell any of
the Collateral, any such Collateral shall be released from this pledge provided
that (i) prior to such release Borrower has repaid a portion of the Obligations
equal to the portion that the Collateral being sold bears to the total shares of
Common Stock initially pledged hereunder and (ii) the fair market value of the
Collateral that remains subject to the pledge following such release shall equal
no less than One Hundred Ninety percent (190%) of the monetary value of the
Obligations remaining following such partial repayment.
14. NOTICES. Any notice required or permitted to be given or
delivered under this Agreement shall be validly given, made, or served if in
writing and delivered personally, via overnight courier or sent by registered
mail, to the Borrower or the Pledgeholder at the address set forth below his
name on the signature line of this Agreement, or to such other address as
Borrower may specify by notice delivered to the Lender.
Any notice required or permitted to be given or delivered to Lender
under the terms of this Agreement shall be in writing and addressed to Lender at
the following address:
Hyperion Solutions Corporation
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, General Counsel
All notices shall be deemed effective upon personal delivery or upon deposit in
the U.S. mail, postage prepaid and properly addressed to the party to be
notified.
15. COUNTERPARTS. This Agreement may be executed in two
counterparts, each of which shall be deemed an original, and all of which
together shall constitute one and the same instrument.
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IN WITNESS WHEREOF the parties have executed this Agreement as
of the date first above written.
THE BORROWER: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Address:
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CONSENT OF BORROWER'S SPOUSE. Borrower's spouse consents to be bound by the
terms of this Agreement as to her interests, whether as community property or
otherwise, in the Collateral.
/s/ ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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Borrower's spouse
THE LENDER: HYPERION SOLUTIONS CORPORATION
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
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Title: President
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CONSENT OF PLEDGEHOLDER. The undersigned consents to act as Pledgeholder under
this Agreement pursuant to Section 5 and agrees to be bound only under Sections
5 and Section 13.
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
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Pledgeholder
Address:
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EXHIBIT 4.2 TO SECURITY AGREEMENT BETWEEN
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ AND HYPERION SOLUTIONS CORPORATION
COPY OF STOCK CERTIFICATE