Security and Pledge Agreement - Plumtree Software Inc. and Eric Borrmann
SECURITY AND PLEDGE AGREEMENT
SECURITY AND PLEDGE AGREEMENT, dated as of August 14, 2000 (the
"Agreement"), by and between Eric Borrmann (the "Pledgor"), and Plumtree
Software, Inc., a California corporation (the "Pledgee").
WHEREAS, in consideration for the Pledgee's loan of $520,000 to the
Pledgor, the Pledgor is delivering to the Pledgee a duly executed promissory
note, dated the date hereof (such note as it may be amended, modified or
supplemented from time to time together with any replacement thereof, the
"Note"), in the principal amount of $520,000 in favor of the Pledgee; and
WHEREAS, the Pledgor has agreed to pledge the Pledged Shares (as
defined below) and the Proceeds (as defined below) to the Pledgee to secure the
Pledgor's obligations under the Note.
NOW, THEREFORE, in consideration of the foregoing and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. Grant of Security Interest in Collateral. The Pledgor hereby
grants to the Pledgee, as security for all present and future obligations and
liabilities of all kinds of the Pledgor to the Pledgee under the Note and this
Agreement (collectively referred to as the "Obligations"), a first priority
security interest in the following described property (collectively referred to
as the "Collateral"):
(a) Two Hundred Thousand (200,000) shares of Plumtree Software,
Inc. voting common stock, par value $.01 per share (the "Pledged Shares"), as
more fully described in Schedule 1 hereto, and the certificates representing the
Pledged Shares and all of the Pledgor's rights and privileges with respect
thereto, together with stock powers executed in blank, each of which has been
delivered to the Pledgee concurrently with the execution hereof; and
(b) the proceeds and accessions of the Pledged Shares (the
"Proceeds").
2. Pledgor's Covenants.
(a) The Pledgor agrees hereafter not to encumber or grant a
security interest in or a lien or other encumbrance on the Collateral.
(b) The Pledgor agrees not to dispose of any of the Collateral
except in accordance with the terms of this Agreement.
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(c) The Pledgor agrees: (i) at any time and from time to time,
upon request of the Pledgee, to give, execute, file and/or record any notice,
financing statement, continuation statement, instrument, document or agreement
that the Pledgee shall consider reasonably necessary or desirable to create,
preserve, continue, perfect or validate any security interest granted hereunder
or which the Pledgee may consider reasonably necessary or desirable to exercise
or enforce its rights hereunder with respect to such security interest; (ii] to
give the Pledgee notice of any litigation filed or claim asserted against the
Pledgor relating to or potentially affecting the Collateral; (iii) if requested
by the Pledgee (and without affecting the validity or enforcecability of any
other provisions hereof, including Section 3 herein), to receive and collect the
Proceeds, in trust and as the property of the Pledgee, and to immediately
endorse as appropriate and deliver such Proceeds to the Pledgee when requested
by the Pledgee in the exact form in which they are received; (iv) not to
commingle the Proceeds or collections thereunder with other property; (v} to
keep complete and accurate records regarding all of the Proceeds; (vi) to
provide any service and do other acts or things necessary to keep the Collateral
and the Proceeds free and clear of all defenses, rights of offset and
counterclaim; and (vii) to use any net, after-tax Proceeds to pay principal and
interest on the Note, with payments to be credited first to interest on past due
interest, then to past due interest, then to accrued interest and then to
principal.
(d) The Pledgor agrees to: (i) pay promptly the Obligations
secured hereby when due; (ii) indemnify the Pledgee against all loss, claims,
demands and liabilities of every kind arising from the Collateral and the
transactions and other agreements and undertakings contemplated hereby; and
(iii) Pay all expenses, including reasonable attorneys' fees, incurred by the
Pledgee in the preservation, realization, enforcement and exercise of its
rights, powers and remedies hereunder.
3. Payment of Taxes, Charges, Liens and Assessments. The Pledgor
agrees to pay, prior to delinquency, all taxes, charges, liens and assessments
against the Collateral and the Proceeds, and upon the failure of the Pledgor to
do so, the Pledgee, at its option, may pay any of them. Any such payments made
by the Pledgee shall be obligations of the Pledgor to the Pledgee, due and
payable immediately without demand and shall be secured by the Collateral and
the Proceeds, subject to all of the terms and conditions of this Agreement.
4. Powers of Pledgee. The Pledgor appoints the Pledgee his true
attorney in fact to perform any of the following powers, which are coupled with
an interest, are irrevocable until termination of this Agreement and may be
exercised from time to time by the Pledgee's officers and employees, or any of
them, whether or not the Pledgor is in default: (a) to perform any obligations
of the Pledgor hereunder in the Pledgor's name or otherwise; (b) to give notice
of Pledgee's right
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under the Collateral to enforce the same; (c) to release security; (d) to resort
to security; (e) to prepare, execute, file, record or deliver notes,
assignments, schedules, designation statements, financing statements,
continuation statements, termination statements, statements of assignment,
applications for registration or like papers to perfect, preserve or release the
Pledgee's interest in the Collateral; (f) to verify facts concerning the
Collateral by inquiry of obligors thereon, or otherwise, in its own name or
fictitious name; (g) after an Event of Default, to endorse, collect, deliver and
receive payment under instruments for the payment of money constituting or
relating to the Collateral; (h) after an Event of Default, to preserve or
release the interest evidenced by chattel paper to which the Pledgee is entitled
hereunder and to endorse and deliver evidences of title incidental thereto; (i)
after an Event of Default, to exercise all rights, powers and remedies which the
Pledgor would have, but for this Agreement, under all Collateral subject to this
Agreement; and (j) to do all acts and things and execute all documents in the
name of the Pledgor otherwise, deemed by the Pledgee as necessary, proper and
convenient in connection with the preservation, perfection or enforcement of its
rights hereunder.
5. Events of Default: Remedies.
(a) Each of the following shall constitute an event of default
("Event of Default") hereunder: (i) the Pledgor's failure to pay, within fifteen
(15) days after the date when such payment is due, any payment of principal or
interest on the Note; or (ii) the Pledgor's failure to observe or perform any
covenant or agreement contained in the Note; and (iii) the Pledgor's violation
of any of the transfer restrictions contained in the Certificate of
Incorporation of Plum Creek Manufacturing Holding Company, Inc.
(b) In case an Event of Default shall have occurred and be
continuing, the Pledgee shall be entitled to exercise all of the rights, powers
and remedies (whether vested in it by this Agreement, the Note or by law and
including without limitation, all rights and remedies of a secured party of a
debtor in default under the Uniform Commercial Code as in force in the State of
California) for the protection and enforcement of its rights in respect of the
Collateral. In addition to recourse against the Collateral as provided in this
Agreement, the Pledgee shall be entitled to recourse against the Pledgor for the
payment of any principal of or interest on the Note or for any claim based
thereon (including costs of collection).
6. No Waiver. The failure of the Pledgee to exercise any right or
remedy under this Agreement or the Note, or delay by the Pledgee in exercising
same, will not operate as a waiver thereof. No waiver by the Pledgee will be
effective unless and until it is in writing and signed by the Pledgee. No waiver
of any condition or performance will operate as a waiver of any subsequent
condition or
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obligation. The Pledgee shall have no obligation to resort to the Collateral or
any other security which is or may become available to it.
7. Miscellaneous.
(a) This Agreement, any amendments or replacement hereof, and the
legality, validity and performance of the terms hereof, shall be governed by and
enforced and construed in accordance with the laws of the State of California
without regard to conflicts of laws and principles thereof.
(b) This Agreement and the rights, powers and duties set forth
herein shall be binding upon the Pledgor, its agents, representatives and
successors and shall inure to the benefit of the Pledgee and its successors and
assigns and, in the event of any transfer or assignment of rights by the
Pledgee, the rights and privileges herein conferred upon the Pledgee shall
automatically extend to and be vested in such transferee or assignee, all
subject to the terms and conditions hereof. This Agreement and the rights and
privileges herein conferred upon the Pledgee may be assigned by the Pledgee
without the consent of the Pledgor. This Agreement may not be transferred or
assigned by the Pledgor without the written consent of the Pledgee.
(c) In the event that any provision of this Agreement is invalid
or unenforceable under any applicable statute or rule of law, then such
provision shall be deemed inoperative to the extent that it may conflict
therewith and shall be modified to conform with such statute or rule of law. Any
provision hereof which may prove invalid or unenforceable under any applicable
law shall not effect the validity or enforceability of any other provisions
hereof.
(d) Notices required or permitted to be given under this
Agreement shall be in writing and may be delivered personally or sent to a party
by airmail or first class mail, postage prepaid and addressed to such party, as
follows, or to such other address furnished by notice given in accordance with
this paragraph;
If to the Pledgor:
John Kunze
c/o Plumtree Software, Inc.
500 Sansome Street
San Francisco, CA 94111
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If to the Pledgee:
Plumtree Software, Inc.
500 Sansome Street
San Francisco, CA 94111
Attention: Chief Financial Officer
Any such notice shall be deemed to have been given, (i) if sent by mail, five
(5) days after the date mailed, and (ii) if delivered personally, on the date of
delivery.
(e) This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which shall
together constitute one and the same document.
(f) This Agreement and the security interest and pledge
hereunder shall terminate upon the full and final performance of all Obligations
of the Pledgor and payment of all indebtedness secured hereby. At such time, the
Pledgee shall promptly reassign to the Pledgor all of the Collateral hereunder
which has not been sold, disposed of, retained or applied by the Pledgee in
accordance with the terms hereof.
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IN WITNESS WHEREOF, the undersigned have caused this Agreement
to be executed as of the date first written above.
PLEDGOR:
/s/ Eric Borrmann
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Eric Borrmann
PLEDGEE:
PLUMTREE SOFTWARE, INC.
By: /s/ John Kunze
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Name: John Kunze
Title: CEO
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SCHEDULE 1
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Description of Pledged Shares
Certificate Number Number of Shares
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C-139 200,000
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