Exhibit 10.10
STOCK OPTION PLEDGE AND SECURITY AGREEMENT
THIS STOCK OPTION PLEDGE AND SECURITY AGREEMENT ("Agreement"), dated as
of October 13, 1999, is entered into by and between Xxxxx Xxxx-Xxxxxx, a natural
resident of Georgia ("Pledgor") and OPTIO SOFTWARE, INC., a Georgia corporation
(the "Holder"), in order to secure the payment of indebtedness to Holder.
R E C I T A L S
A. The Holder has requested that the Pledgor pledge to the Holder
as security for the payment of a certain Promissory Note of
even date herewith (the "Note") an option to acquire 100,000
shares of common stock of Holder evidenced by a Stock Option
Grant Certificate dated May 1, 1996 (the "Options");
B. The Holder has the right to convert the principal balance of
the Note into equity of The Unilink Group, LLC (an affiliate
of Pledgor) but such right or option has lapsed; and
C. In order to receive the Note, the Pledgor is the owner of the
Options and desires to pledge such Options.
A G R E E M E N T
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. DEFINITIONS. Capitalized terms used herein shall have the meaning
specified herein.
2. PLEDGE. The Pledgor hereby pledges, assigns, transfers and delivers
to the Holder and hereby grants a security interest (the "Security Interest")
in, the following (the "Collateral"): an option to acquire 100,000 shares of
common stock of Holder evidenced by a Stock Option Grant Certificate dated May
1, 1996.
3. SECURED OBLIGATIONS. The Security Interest shall secure, under the
circumstances set forth herein, the due and punctual payment and performance of
the Note, made by the Pledgor and payable to the order of the Holder (the
"Secured Obligations").
4. DELIVERY OF COLLATERAL. Upon the execution hereof, Pledgor shall
deliver to the Holder the certificate representing or evidencing the Collateral,
in suitable form for transfer by delivery, or accompanied by duly executed
instruments of transfer or assignment in blank, all in form and substance
reasonably satisfactory to the Holder.
5. REPRESENTATIONS AND WARRANTIES.
5.1 Pledgor represents and warrants as follows:
(a) No authorization, approval, or other action by, and
no notice to or filing with, any governmental authority is required
for the exercise by the Holder of the other rights provided for in this
Agreement or the remedies in respect of the Collateral pursuant to
this Agreement (except as may be required in connection with such
disposition by laws affecting the offering and sale of securities
generally).
(b) The Security Interest constitutes a valid and, upon
delivery of the certificate evidencing the Options, first perfected
security interest in all of the Collateral for payment and performance
of the Secured Obligations.
(c) The Collateral is owned by such Pledgor free and clear of
any lien, except for the Security Interest.
All representations and warranties of the Pledgor contained herein
shall survive the execution, delivery and performance of this Agreement until
termination of this Agreement under Section 16.
6. FURTHER ASSURANCES. Pledgor agrees that at any time and from time to
time, at the expense of Pledgor, Pledgor will promptly execute and deliver all
further instruments and documents, and take all further action that the Holder
may reasonably request, in order to perfect and protect the Security Interest
granted or purported to be granted hereby or to enable the Holder to exercise
and enforce the rights and remedies hereunder with respect to any Collateral,
including but not limited to UCC Financing Statements.
7. RELEASES OF COLLATERAL. Pledgor shall not sell or otherwise dispose
of the Collateral, or any part thereof or any interest therein. If the
Collateral, or any part thereof, is sold or otherwise disposed of in violation
of these provisions, the Security Interest of the Holder shall continue in such
Collateral or any part thereof notwithstanding such sale or other disposition,
and such Pledgor will deliver any proceeds thereof to the Holder to be held as
Collateral hereunder.
8. HOLDER APPOINTED ATTORNEY-IN-FACT. Pledgor hereby irrevocably
appoints the Holder as Pledgor's attorney-in-fact, with full authority in the
place and stead of the Pledgor and in its name or otherwise, from time to time
in the Holder's discretion, to take any action and to execute any instrument
which the Holder may deem reasonably necessary or advisable to accomplish the
purposes of this Agreement, including, without limitation, to receive, endorse
and collect all instruments made payable to Pledgor representing any dividend,
interest payment or other distribution in respect of the Collateral or any part
thereof and to give full discharge for the same, when and to the extent
permitted by this Agreement.
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9. HOLDER MAY PERFORM. Upon the occurrence and during the continuance
of an Event of Default under the Note (including an Event of Default resulting
from a failure to perform any agreement contained herein), if Pledgor fails to
perform any agreement contained herein, the Holder may itself perform, or cause
performance of, such agreement, and the expenses of the Holder incurred in
connection therewith shall be payable by Pledgor under Section 12.
10. REASONABLE CARE. The Holder shall have an obligation to exercise
reasonable care with respect to Collateral in its possession; provided, however,
that the Holder shall be deemed to have exercised reasonable care if the
Collateral is accorded treatment substantially comparable to that which the
Holder accords its own property or treatment substantially in accordance with
actions requested by any Pledgor in writing (although the Holder shall not be
obligated to comply with any such requests and no failure to do so shall be
deemed to be a failure to exercise reasonable care).
11. EVENTS OF DEFAULT: REMEDIES UPON DEFAULT. An "Event of Default" hereunder
occurs if the Pledgor fails to pay any amount when due under the Note or any
other Event of Default under the terms of the Note occurs (herein called an
"Event of Default"). If upon or after the occurrence of any Event of Default,
the Holder elects to exercise remedies under this Agreement, then upon five (5)
days' advance notice to the Pledgor, the Holder may exercise (in compliance with
all applicable securities laws) in respect of the Collateral, in addition to
other rights and remedies provided for herein or otherwise available to it, all
the rights and remedies of a secured party after default under the Uniform
Commercial Code in effect in the State of Georgia at that time. The Holder may
also act as follows:
(a) Without notice except as specified below, Holder may sell
the Collateral or any part thereof in one or more parcels at public or private
sale, at any exchange, over the counter or at the Holder's offices or elsewhere,
for cash, on credit or for future delivery, and at such price or prices and upon
such other terms as the Holder may deem commercially reasonable or otherwise in
such manner as necessary to comply with applicable federal and state securities
laws. Upon consummation of any such sale, the Holder shall have the right to
assign, transfer and deliver to the purchaser or purchasers at any such sale and
such purchasers shall hold the property sold absolutely, free from any claim or
right on the part of the Pledgor, and Pledgor hereby waives (to the extent
permitted by law) all rights of redemption, stay or appraisal which it now has
or may at any time in the future have under any rule of law or statute now
existing or hereafter enacted.
The Pledgor agrees that the Holder shall not be required to register or
qualify any of the Collateral under applicable state or federal securities laws
in connection with any such sale if the sale is effected in a manner that
complies with all applicable federal and state securities laws or exemptions
therefrom. The Holder shall be authorized at any such sale (if it deems it
advisable to do so) 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 sale
thereof. In the event that any such Collateral is
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sold at private sale, each Pledgor agrees that if such Collateral is sold for a
price which the Holder in good faith believes to be reasonable under the
circumstances then existing, then (a) the sale shall be deemed to be
commercially reasonable in all respects, (b) such Pledgor shall not be entitled
to a credit against the Secured Obligations in an amount in excess of the
purchase price, and (c) the Holder shall not incur any liability or
responsibility to such Pledgor in connection therewith, notwithstanding the
possibility that a substantially higher price might have been realized at a
public sale. Each Pledgor hereby waives any claims against the Trustee arising
by reason of the fact that the price at that the Collateral may have been sold
at such private sale was less than the price which might have been obtained at a
public sale or was less than the Secured Obligations, even if the Holder accepts
the first offer received and does not offer the Collateral to more than one
offeree (other than the Holder), unless such sale was not commercially
reasonable under the circumstances.
To the extent notice of sale shall be required by law, the Holder shall
give Pledgor at least five (5) days' (or such longer period as shall be
specified by applicable laws) notice of the time and place of any public sale or
the time after which any private sale is to be made, which each Pledgor or
agrees shall constitute commercially reasonable notification. At any such sale,
the Holder, to the extent permitted by law, may bid (which bid may be, in whole
or in part, in the form of cancellation of Secured Obligations) for and purchase
for the account of the Holder the whole or any part of the Collateral. The
Holder shall not be obligated to make any sale of Collateral regardless of
notice of sale having been given. The Holder may adjourn any public or private
sale from time to time by announcement at the time and place fixed therefor, and
such sale may, without further notice, be made at the time and place to which it
was so adjourned. If sale of all or any part of the Collateral is made on credit
or for future delivery, the Collateral so sold may be retained by the Holder
until the sale price is paid by the purchaser or purchasers thereof, but the
Holder shall not incur any liability in case any such purchaser or purchasers
shall fail to take up and pay for the Collateral so sold and, in case of any
such failure, such Collateral may be sold again upon like notice. Each Pledgor
agrees that any sale of the Collateral conducted by the Holder in accordance
with the foregoing provisions of this Section 11(a) shall be deemed to be a
commercially reasonable sale under the Georgia Uniform Commercial Code as in
effect from time to time.
(b) As an alternative to exercising the power of sale herein
conferred upon it, the Holder may proceed by a suit or suits at law or in equity
to foreclose the security interest granted under this Agreement and to sell the
Collateral, or any portion thereof, pursuant to a judgment or decree of a court
or courts of competent jurisdiction.
(c) Holder may cancel and rescind all rights conferred upon
the Pledgor evidenced by the Stock Option Grant Certificate take such further
action as necessary to effectuate the cancellation of such Options.
(d) Any cash held by the Holder as Collateral and all cash
proceeds received by the Holder in respect of any sale of, collection from, or
other realization upon all or any part of the Collateral prior to an Event of
Default shall be held by the Holder as collateral for
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the Note, and following an Event of Default may be held by the Holder as
Collateral and/or then or at any time thereafter applied as follows: (x) first,
to the payment of the costs and expenses of retaking, holding and preparing for
sale of the Collateral and any other fees, expenses, claims, demands, losses,
judgments, damages and liabilities arising out of or related to any loan
document payable to the Holder pursuant to Section 12, and (y) second, to the
Holder for application against or on account of all or any part of the Note.
(e) Any surplus of such cash or cash proceeds held by the
Holder and remaining after payment in full of all the Note shall be reassigned
and redelivered as provided in Section 16 hereof.
12. EXPENSES. The Holder shall be entitled to receive from any proceeds
of the Collateral and not from the Pledgor individually, the amount of any and
all reasonable expenses, including the fees and expenses of its counsel and of
any experts and agents which the Holder may incur in connection with (i) the
administration of this Agreement, (ii) the custody or preservation of, or the
sale of, collection from, or other realization upon, any of the Collateral,
(iii) the exercise or enforcement of any of the rights of the Holder hereunder,
or (iv) the failure by Pledgor to perform or observe any of the provisions
hereof.
13. SECURITY INTEREST ABSOLUTE. All rights of the Holder hereunder, the
interest, and all obligations of the Pledgor hereunder, shall be absolute and
unconditional irrespective of:
(a) any lack of validity or enforceability of any loan
document, any agreement with respect to the Notes or any other
agreement or instrument relating to any of the foregoing;
(b) any change in the time, manner or place of payment
of, or in any other term of, the Note, or any renewal or extension of
the Note or any other amendment or waiver of or any consent to any
departure from this Agreement or any other agreement or instrument;
(c) any sale, exchange, release or nonperfection of any
other collateral, or any release of any guarantor or any person liable
in any manner for the collection of the Note, or any amendment or
waiver of or consent to or departure from any guaranty, for the Note;
or
(d) any other circumstance that might otherwise
constitute a defense available to, or a discharge of, the Pledgor in
respect of the Note or in respect of this Agreement.
14. AMENDMENTS AND WAIVERS. No amendment or waiver of any provision of
this Agreement nor consent to any departure by any Pledgor herefrom shall in any
event be effective unless the same shall be in writing and signed by the Holder
and the Pledgor, and then such waiver or consent shall be effective only for the
specific purpose for which given.
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15. TIME IS OF THE ESSENCE; NO WAIVER: CUMULATIVE REMEDIES. Time and
exactitude of each of the terms, obligations, covenants and conditions of this
Agreement are hereby declared to be of the essence. No failure on the part of
the Holder to exercise, and no delay in exercising, any right, power or remedy
hereunder shall operate as a waiver thereof, nor shall any single or partial
exercise of any such right, power or remedy by the Holder preclude any other or
further exercise thereof or the exercise of any other right, power or remedy.
All remedies hereunder are cumulative and are not exclusive of any other
remedies provided by law.
16. TERMINATION. This Agreement shall terminate upon the occurrence of
the payment in full of the Note. Upon such termination, the Holder shall
reassign and redeliver (or cause to be reassigned and redelivered) to the
Pledgor, or to such person or persons as the Pledgor shall designate or to
whomever may be lawfully entitled to receive such surplus, against receipt, such
of the Collateral (if any) as shall not have been sold or otherwise applied by
the Holder pursuant to the terms hereof and shall still be held by it hereunder,
together with appropriate instruments of reassignment and release. Any such
reassignment shall be without recourse upon or warranty by the Holder and at the
expense of the Pledgor.
17. NOTICES All notices, requests, demands, and other communications
hereunder shall be in writing and shall be deemed given as of the date of
delivery if delivered personally or two (2) business days after being mailed in
the U.S. mail by certified or registered mail, postage prepaid, return receipt
requested, to the parties, their successors in interest or their assignees at
the following addresses, or at such other addresses as the parties may designate
by written notice in the manner aforesaid:
If to Pledgor:
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If to Holder: Optio Software, Inc.
0000 Xxxxx Xxxxx Xxxxxxx
Xxxxxx, Xxxxxxx 00000
Attn: C. Wayne Cape
18. CONTINUING SECURITY INTEREST; ASSIGNMENTS. This Agreement shall
create a continuing security interest in the Collateral and shall (i) remain in
full force and effect until termination as provided in Section 16, (ii) be
binding upon the Pledgor, the Holder and their respective successors and
assigns, and (iii) inure, together with the rights, powers and remedies of the
Pledgor and the Holder hereunder, to the benefit of the Pledgor, the Holder and
their respective successors, transferees and assigns, as the case may be.
19. GOVERNING LAW. This Agreement and the rights and obligations of the
parties hereto shall be governed by and construed and enforced in accordance
with the laws of the State of Georgia.
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20. ARBITRATION. In the event of any dispute or controversy over the
interpretation, enforceability, breach or effect of this Agreement, the parties
hereto consent and agree that any and all such disputes shall be submitted for
final and binding arbitration in accordance with the American Arbitration
Association's Rules for Commercial Arbitration in effect at the time the dispute
is submitted, including the selection of an arbitrator. The arbitration shall be
conducted by a single arbitrator. The arbitrator shall be chosen from a panel of
persons knowledgeable in business and in the health care businesses similar to
the Business. The decision and award of the arbitrator shall be final and
binding, and the award so rendered may be entered in any court having
jurisdiction thereof. The parties shall be entitled to conduct discovery in such
arbitration. Any such arbitration shall be conducted in the County of Xxxxxx,
Georgia, and the substantive laws of the State of Georgia shall be applied in
such arbitration.
21. SEVERABILITY. Wherever possible, each provision of this Agreement
shall be interpreted in such manner as to be effective. If any provisions of
this Agreement or any lien, security interest or other right of the Holder
hereunder shall be held to be invalid, illegal or unenforceable under applicable
law, such invalidity, illegality or unenforceability shall not affect any other
provision herein or any lien, security interest or other right granted hereby.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement, as
of the date first above written.
HOLDER:
OPTIO SOFTWARE, INC.
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By:
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Title:
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PLEDGOR:
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Xxxxx Xxxx-Xxxxxx
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