Pledge Agreement - MathSoft Inc. and Charles J. Digate
PLEDGE AGREEMENT
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PLEDGE AGREEMENT, dated as of June 20, 2000 (the "Agreement"), made by the
undersigned Charles J. Digate ("Digate"), in favor of MathSoft, Inc.
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("MathSoft").
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RECITALS
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Digate, in order to secure his obligations to MathSoft under the promissory
note made by Digate to MathSoft in the principal amount of $550,000.00 of even
date herewith (the "Note"), has agreed to pledge to MathSoft the Pledged
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Securities (as hereinafter defined), of which Digate is the legal and beneficial
owner.
NOW, THEREFORE, in consideration of the premises, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, and to induce MathSoft to make its loan to Digate, Digate hereby
agrees with MathSoft as follows:
1. Defined Terms. Unless otherwise defined herein, all terms which are
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defined in the Uniform Commercial Code in effect in the Commonwealth of
Massachusetts on the date hereof are used herein as therein defined.
"Code" means the Uniform Commercial Code from time to time in effect in the
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Commonwealth of Massachusetts.
"Collateral" means the Pledged Securities and all Proceeds.
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"Event of Default" means (1) failure to pay any amount or perform any
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obligation as set forth in this Agreement or the Note, which default is not
cured within thirty (30) days after written notice of such default from MathSoft
(other than payment due five (5) days after the permissible demand therefor by
MathSoft; (2) insolvency (however evidenced) or the commission of any act of
insolvency; (3) the making of a general assignment for the benefit of creditors;
(4) the filing of any petition or the commencement of any proceeding by the
Obligor or any endorser of the Note for any relief under any bankruptcy or
insolvency laws; (5) the filing of any petition or the commencement of any
proceeding against the Obligor for any relief under any bankruptcy or insolvency
laws, which proceeding is not dismissed within sixty (60) days; or (6) the past
or future making of a false representation or warranty by the Obligor in
connection with any loan or loans by MathSoft, including as set forth in the
Note, or in this Agreement.
"Obligation" means the unpaid principal, accrued interest and other amounts
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payable under the Note.
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Pledge Agreement -- Page 2
"Pledged Securities" means the 275,000 shares of Common Stock of MathSoft
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acquired by Digate on the date hereof on the exercise of options pursuant to
that Non Qualified Stock Option Agreement dated September 9, 1994, together with
all stock certificates, instruments, options or rights of any nature whatsoever
which may be issued or granted to Digate in respect of the Pledged Securities
while this Agreement is in effect.
"Proceeds" includes, without limitation, all rights and privileges of
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Obligor with respect to the Pledged Securities, all shares, securities, moneys
or property representing a dividend on or proceeds of any of the Pledged
Securities, or representing a distribution or return of capital upon or in
respect of the Pledged Securities, or resulting from a split-up, revision,
reclassification or other like change of the Pledged Securities or otherwise
received in exchange therefor, and any warrants, rights or options issued to the
holders of, or otherwise in respect of, the Pledged Securities.
2. Pledge; Grant of Security Interest. Digate hereby delivers to
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MathSoft all the Pledged Securities and hereby grants to MathSoft a security
interest in the Collateral, as collateral security for the prompt and complete
payment and performance when due of up to fifty percent (50%) of the Obligation
at any time outstanding.
3. Stock Powers. Concurrently with the delivery to MathSoft of each
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certificate or instrument representing the Pledged Securities, Digate shall
deliver an undated stock power or other transfer document covering such
certificate or instrument, duly executed in blank.
4. Covenants. Digate covenants and agrees with MathSoft that, from and
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after the date of this Agreement until the Obligation is paid in full:
(a) Any cash, securities or other property paid or distributed
upon or in respect of the Pledged Securities shall be paid over to MathSoft to
be held by it hereunder as additional collateral security for the Obligation as
set forth in Sections 5 and 6 below.
(b) Without the prior written consent of MathSoft, Digate will not
(i) sell, assign, transfer, exchange or otherwise dispose of, or grant any
option with respect to, the Collateral, or (ii) create, incur or permit to exist
any lien or option in favor of, or any claim of any person or entity with
respect to, any of the Collateral, or any interest therein, except for
MathSoft's interest as pledgee hereunder. Digate will defend the right, title
and interest of MathSoft as pledgee hereunder in and to the Collateral against
the claims and demands of all persons or entities whomsoever.
(c) Digate agrees to pay, and to save MathSoft harmless from, any
and all liabilities with respect to, or resulting from any delay in paying any
and all stamp, excise, sales or other taxes (exclusive of taxes based on income,
gross receipts, franchise rights and related items) which may be payable or
determined to be payable with respect to the Collateral or in connection with
any of the transactions contemplated by this Agreement.
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Pledge Agreement -- Page 2
5. Cash Dividends; Voting Rights. Notwithstanding the provisions of
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Section 4(a) hereof, unless an Event of Default shall have occurred, Digate
shall be permitted to receive all cash dividends and other cash distributions
paid by the issuer of any of the Pledged Securities in respect of the Pledged
Securities and to exercise all voting and corporate rights with respect to the
Pledged Securities to the extent permitted by law. In addition to any other
rights and remedies available to MathSoft, upon the occurrence of any Event of
Default, the Pledged Securities shall immediately become vested in MathSoft with
or without record transfer and it shall have exclusive authority to exercise
voting and all other rights relative to the Pledged Securities. Digate shall
take notice of the foregoing and make record transfer of the Pledged Securities
upon written notice from MathSoft. Any transfer of the Pledged Securities or
exercise of rights in the Pledged Securities pursuant to this Section shall not
be deemed a sale or disposition under applicable law of the Code or an
acceptance of the Pledged Securities in satisfaction of the Obligation.
6. Rights and Remedies of MathSoft.
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(a) If an Event of Default shall occur and be continuing, then (a)
MathSoft shall have the right to receive and hold as additional collateral
security for the payment and performance of the Obligations any and all cash
dividends paid in respect of the Pledged Securities and (b) MathSoft may
thereafter exercise, in addition to all other rights and remedies granted in
this Agreement and in the Term Note, all rights and remedies of a secured party
under applicable law.
(b) The rights and remedies of MathSoft hereunder shall not be
conditioned or contingent upon the pursuit by MathSoft of any right or remedy
against Digate or against any other collateral security therefor.
7. Limitation on Duties Regarding Collateral. MathSoft's sole duty
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with respect to the custody, safekeeping and physical preservation of the
Collateral in its possession, under applicable law or otherwise, shall be to
deal with the Collateral in the same manner as MathSoft deals with similar
securities, instruments and property for its own account. MathSoft shall not be
liable for failure to demand, collect or realize upon any of the Collateral or
for any delay in doing so nor shall it be under any obligation to sell or
otherwise dispose of any Collateral upon the request of Digate or otherwise.
8. Powers Coupled with an Interest. All authorizations and agencies
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herein contained with respect to the Collateral are irrevocable and powers
coupled with an interest.
9. Severability. Any provision of this Agreement which is prohibited
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or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
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Pledge Agreement -- Page 4
10. Section Headings. The section headings used in this Agreement are
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for convenience of reference only and are not to affect the construction hereof
or to be taken into consideration in the interpretation hereof.
11. No Waiver; Cumulative Remedies. MathSoft shall not by any act
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(except by a written instrument pursuant to Section 12 hereof) of delay,
indulgence, omission or otherwise be deemed to have waived any right or remedy
hereunder or to have acquiesced in any default or Event of Default or in any
breach of any of the terms and conditions hereof. No failure to exercise, nor
any delay in exercising, on the part of MathSoft, any right, power or privilege
hereunder shall operate as a waiver thereof. No single or partial exercise of
any right, power or privilege hereunder shall preclude any other or further
exercise thereof or the exercise of any other right, power or privilege. A
waiver by MathSoft of any right or remedy hereunder on any one occasion shall
not be construed as a bar to any right or remedy which MathSoft would otherwise
have on any future occasion. The rights and remedies herein provided are
cumulative, may be exercised singly or concurrently and are not exclusive of any
rights or remedies provided by applicable law.
12. Waivers and Amendments; Successors and Assigns; Governing Law.
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None of the terms or provisions of this Agreement may be waived, amended,
supplemented or otherwise modified except by a written instrument executed by
Digate and MathSoft, provided that any provision of this Agreement may be waived
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in writing by MathSoft in a letter or agreement executed by MathSoft or by telex
or facsimile transmission from MathSoft. This Agreement shall be binding upon
the successors and assigns of Digate and shall inure to the benefit of MathSoft
and its successors and assigns. This Agreement shall be governed by, and
construed and interpreted in accordance with, the laws of the Commonwealth of
Massachusetts.
13. Notices. Notices by either party hereto to the other shall be
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given as provided in the Term Note.
14. Counterparts. This Agreement may be executed in several
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counterparts, each of which shall constitute an original, but all of which, when
taken together, shall constitute but one agreement.
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IN WITNESS WHEREOF, the undersigned has caused this Pledge Agreement to be
duly executed and delivered as of the date first above.
DIGATE:
/s/ Charles J. Digate
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Charles J. Digate
MATHSOFT:
MATHSOFT, INC.
By: /s/ Dermot P. O'Grady
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Name: Dermot P. O'Grady
Title: Chief Financial Officer