**Exhibit 10.14**

 

**LOAN AND PLEDGE AGREEMENT**

 

THIS LOAN AND PLEDGE AGREEMENT (this “Agreement”) is made as of September 21, 1998 (the“Effective Date”) between ValiCert, Inc., a Delaware corporation (“Lender”), and Srinivasan Krishnan (“Borrower”). 

 

**RECITALS**

 

A. Borrower desires to borrow $75,000 from Lender on the terms and subject to the conditions of this Agreement. 

 

B. To induce Lender to make the loan, Borrower desires (i) topledge and grant Lender a security interest in 180,000 shares (the “Shares”) of Series A-Junior Preferred Stock of Lender owned by Borrower, and (ii) to grant Lender an option (the “Option”) to purchase certain ofthe Shares pursuant to an Option to Purchase Stock Agreement of even date herewith between Borrower and Lender (the “Option Agreement”). 

 

**AGREEMENT**

 

1. Loan. 

 

1.1 Advance of Funds. Subject to the terms and conditions of this Agreement, Lender has advanced $75,000 toBorrower (the “Loan”). 

 

1.2 Promise to Pay. On or before the fifth anniversary of the Effective Date (the “Maturity Date”), Borrower promises to pay to Lender, at the address given pursuant to Section 5.6 for notice to Lender, inlawful money of the United States of America, the sum of $75,000, together with simple interest on the sum of the outstanding principal balance of the Loan at the rate of 6% per annum (the “Interest Rate”). Interest shall accrue andbe due and payable upon the Maturity Date. If payment of principal or accrued interest is not made in full when due, all unpaid amounts (including principal and interest) shall bear additional interest at the Interest Rate payable to Lender untilpaid in full. If any payment is due on a Saturday, Sunday, or a public holiday under the laws of the State of California, such payment shall be made on the next succeeding business day and such extension of time shall be included in computinginterest in connection with such payment. The dates specified for payment under this Section 1.2 may be accelerated as provided in Section 1.4. 

 

1.3 NON-RECOURSE. THE PRINCIPAL AND INTEREST PAYABLE BY BORROWER UNDER THIS AGREEMENT ARE NON-RECOURSE AND ARESECURED SOLELY AS PROVIDED IN SECTION 2.6 OF THIS AGREEMENT. 

 

1.4 Acceleration. Lender may, at its option and in its sole discretion, declare the then outstanding principal balance of the Loan, together with all accrued and unpaid interest thereon, to beimmediately due and payable if any of the following (each, an “Event of Default”) shall occur: 

 

(a) the failure of Borrower to pay any principal amount under this Agreement when due; 

 

(b) the commencement of any proceeding against Borrower in bankruptcy, or otherwise seeking any reorganization, arrangement or similar relief, or the appointment of a receiver, trustee, or liquidator to take possession of the assetsof Borrower, or the commencement of any other proceeding under any law for the relief of creditors; 

 

(c) any assignment by Borrower for the benefit of Borrower’s creditors; or 

 

(d) any other breach by Borrower of any ofBorrower’s representations, warranties or obligations under this Agreement which is not cured to the satisfaction of Lender within fifteen days after notice of such breach is deemed given pursuant to Section 5.6. 

 

1.5 Waivers by Borrower. Borrowerwaives presentment, demand for performance, notice of nonperformance, protest, notice of protest and notice of dishonor. 

 

2. Pledge as Security. 

 

2.1 Pledge. As security for all of borrower’s obligations and liabilities to Lender under this Agreement (the“Obligations”), Borrower hereby assigns as security and pledges to Lender the Shares and grants Lender a security interest in all of Borrower’s rights, title and interest in and to the Shares, the proceeds thereof and allproceeds of proceeds (collectively, the “Collateral”). Borrower has executed or will execute a financing statement to perfect Lender’s security interest in the Collateral, and agrees to execute continuation statements and totake such additional actions as may be necessary or advisable at the reasonable request of Lender to perfect and continue Lender’s security interest in the Collateral. 

 

2.2 Voting Rights. So long as Borrower is not in default of the performance of any ofthe terms of this Agreement or in the payment of an amount due pursuant to this Agreement, Borrower shall have the right to vote all of the Shares on all corporate questions in accordance with Lender’s Certificate of Incorporation and Bylaws.

 

2.3 Non-StockDistributions. All cash distributions received by Borrower during the term of this Agreement wit respect to the Shares shall be placed in an interest bearing savings account specified by Lender and shall be delivered to and held by Pledgeholder(as defined in Section 3.1) as additional Collateral, provided, however, Borrower may elect to deliver such cash to Lender in prepayment of the Loan by giving notice of such election to Lender and Pledgeholder. All distributions other than in cashor stock received by Borrower during the term of the Agreement wit respect to the Shares shall be delivered to and held by Pledgeholder as additional Collateral. 

 

2.4 Stock Distributions and Adjustments of Collateral. If during the term of thisAgreement any stock or other non-cash distribution, dividend, reclassification, readjustment, or other change is declared or made in the capital structure of Lender, all new, substituted and additional shares of stock or other securities issued byreason of any such change shall be immediately delivered by Borrower to Pledgeholder, together with executed assignments separate from certificate, to be held by Pledgeholder in the same manner as the Shares originally pledged hereunder, andhereafter the term “Shares” shall include such securities. 

 

2.5 Warrants and Rights; Option. If, during the term of this Agreement, subscription warrants or any other rights or options shall be issued in connection with any of the Shares, and Borrower shall elect to exercise suchwarrants, rights or options, all new shares or other securities so acquired by the Borrower shall be immediately delivered to Pledgeholder to be held under the terms of this Agreement in the same manner as the Shares originally pledged hereunder,and thereafter the term “Shares” shall include such securities. If the Option expires or is terminated prior to the termination of this Agreement, any remaining securities or other property then subject to the Option, together withassignments separate from certificate or any certificates representing such securities, shall be immediately delivered to Pledgeholder to be held under the terms of this Agreement in the same manner as the Shares, and thereafter the term“Shares” shall include such securities and other property. 

 

2.6 Default; Non-Recourse Obligation. If an Event of Default has occurred, Lender is authorized to sell, assign and deliver at Lender’s discretion, form time to time, all or any part of theCollateral at any private or public sale, on not less than ten days’ written notice to Borrower and Pledgeholder, at such price or prices and upon such terms as Lender may deem advisable and Lender shall have all the rights and remedies of asecured creditor under the provisions of the California Uniform Commercial Code. At any such public sale, Lender may bid for, and become the purchaser of, the whole or any part of the Collateral offered for sale. In case of any private or publicsale, after deducting the costs, counsel 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 satisfaction in full of theObligations, the balance of the proceeds of sale then remaining shall be paid to Borrower. Borrower shall not be liable for any deficiency if the proceeds of the sale of the Collateral are insufficient to discharge the amount of principal andinterest due under this Agreement. 

 

2.7 Return of Collateral. Upon Borrower’s satisfaction of the Obligations, Lender shall instruct Pledgeholder to return to Borrower all Collateral then in Pledgeholder’s possession. 

 

2.8 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. 

 

3. Escrow. 

 

3.1 Appointment of Pledgeholder.Borrower and Lender hereby appoint Venture Law Group, A Professional Corporation (“Pledgeholder”) to act as pledgeholder for them in accordance with this Agreement. 

 

3.2 Delivery of Documents. Borrower has delivered to Pledgeholder the stockcertificates listed on Schedule 3.2, together with a stock assignment separate from certificate for each stock certificate, duly executed by Borrower. 

 

3.3 Duties After an Event of Default. Pledgeholder shall have no duty to determine the existence of an Event ofDefault, but may, without any liability whatsoever, rely upon the written notice of Lender that an Event of Default has occurred. If, following an Event 

of Default, Lender shall elect to exercise its right to realize on the Shares, Pledgeholder shall, upon the receipt of written notice fromLender of the number of Shares sold and sale price, (a) date the stock assignments necessary for each transfer in question, (b) fill in the number of Shares being transferred and (c) deliver the same, together with the certificate(s) evidencing theShares to be transferred to the purchaser against the simultaneous delivery to Pledgeholder of the purchase price for the number of the Shares then being purchased. In connection with each such sale, Pledgeholder shall deliver from the Escrow thespecific Shares which are designated by Lender. Following an Event of Default, Pledgeholder shall dispose of the Collateral other than the Shares in accordance with written instructions of Lender. After deducting the costs, counsel fees and otherexpenses of such sale and delivery as provided in Section 2.6 of this Agreement, Pledgeholder shall pay the remaining proceeds of such sale to Lender to the extent of the obligations of Borrower under this Agreement as specified by Lender. Anyremaining proceeds of such sale shall be paid to Borrower. 

 

3.4 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 toexecute, with respect to such securities or other Collateral as are deposited with Pledgeholder hereunder, all documents necessary or appropriate to make such securities or other Collateral negotiable and complete any transaction hereincontemplated. Borrower shall deliver to Pledgeholder from time to time such number of stock assignments separate from certificate or other documents duly executed by Borrower as may be reasonably requested by Lender or Pledgeholder. 

 

3.5 Return of Property. If at the timeof termination of this Agreement, Pledgeholder, has in Pledgeholder’s possession any documents, securities, or other property belonging to Borrower, Pledgeholder shall deliver all of same to Borrower and shall be discharged of all furtherobligations hereunder. 

 

3.6Special Instructions to Pledgeholder. Borrower hereby instructs Pledgeholder, as Escrowholder pursuant to the Option, to retain in pledge under this Agreement as additional Collateral (i) any proceeds from the exercise of the Option, and (ii)any Shares or other property which remain in Pledgeholder’s possession (as Escrowholder under the Option) at the expiration or earlier termination of the Option. 

 

3.7 Duties; Modification of Duties. Pledgeholder shall carry out Pledgeholder’sduties hereunder to the best of Pledgeholder’s ability and shall be liable only for gross negligence or willful misconduct. Pledgeholder’s duties hereunder may be altered, amended, modified or revoked only by a written instrument signed byLender, Borrower and Pledgeholder. 

 

3.8 Obligations. Pledgeholder shall be obligated 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 instrumentreasonably 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 asattorney-in-fact for Borrower while acting in good faith and in the exercise of Pledgeholder’s 

own good judgment, and any act done or omitted by Pledgeholder pursuant to the advice of Pledgeholder’s own attorneys shall beconclusive evidence of such good faith. 

 

3.9 Authorization to Act. Pledgeholder is hereby expressly authorized to disregard any and all warnings given by any of the parties hereto or by any other person or corporation, excepting only orders or process of courts oflaw, 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 shall not be liable to any of the partieshereto 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 withoutjurisdiction. 

 

3.10Bankruptcy. Bankruptcy, insolvency, or dissolution of any party hereto shall not affect Pledgeholder’s performance hereunder. 

 

3.11 Statute of Limitations. Pledgeholder shall not be liable for the lapse of any rights because of any Statute ofLimitation applicable with respect to this Agreement or any documents deposited with Pledgeholder. 

 

3.12 Legal Counsel. Pledgeholder shall be entitled to employ such legal counsel and other experts as Pledgeholdermay deem necessary properly to advise Pledgeholder in connection with Pledgeholder’s obligations and may pay such counsel reasonable compensation therefore, for which Pledgeholder shall be reimbursed by Lender. 

 

3.13 Termination of Duties; Successor.Pledgeholder’s responsibilities as Pledgeholder hereunder shall terminate if (a) Pledgeholder shall resign by thirty days written notice to Borrower and Lender or (b) Borrower and Lender jointly agree as to Pledgeholder’s termination andappoint Pledgeholder’s successor. Upon Pledgeholder’s receipt of notice of any such appointment of Pledgeholder’s successor, all documents, shares and other property then in Pledgeholder’s possession pursuant to this Agreementshall be delivered to such successor. 

 

3.14 Further Instruments. If Pledgeholder reasonably requires other or further instruments in connection with this Agreement or obligations in respect hereto, the necessary parties hereto shall join in furnishing suchinstruments. 

 

3.15Conflicting 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 takingaction with respect to any subsequently received notice which in any way conflicts with the prior notice. If any dispute arises with respect to the delivery and/or ownership or right of possession of the Collateral, Pledgeholder may, atPledgeholder’s option, be relieved from all liability to Borrower and Lender by depositing all documents held hereunder with the Clerk of the California Superior Court for the City and County of Los Angeles for the purpose of permitting theBorrower and Lender to litigate their respective rights in said court. The receipt of the Clerk of said court of such documents shall discharge Pledgeholder from all liability to the Borrower and Lender, and the same may be pleaded as a bar to anyaction against Pledgeholder by Borrower or Lender. 

 

3.16 Acknowledgment. Lender and Borrower hereby acknowledge that Pledgeholder represents Lender and agree that Pledgeholder may continue to represent Lender and/or Pledgeholder in all respects including, without limitation,with respect to any dispute between Borrower and Lender arising out of this Agreement or otherwise. 

 

4. Representation, Warranties and Covenants of Borrower. 

 

4.1 Ownership of Collateral; No Conflicts. Borrower represents and warrants as of thisdate, and covenants for the period beginning on this date and ending the termination of this Agreement, that (a) Borrower has and will have the right to enter into this Agreement, to transfer to Lender all or any part of the Collateral, free andclear of any lien, claim, encumbrance or restriction of any type or nature whatsoever (other than restrictions on resale that may arise under applicable federal and state securities laws); and (b) there is no provision of any existing agreement, andBorrower will not enter into an agreement, by which Borrower is or would be bound (or to which Borrower is or would become subject) that conflicts or would conflict with this Agreement or the performance of Borrower’s obligations under thisAgreement. 

 

4.2 FurtherAssurances. Upon the reasonable request of Pledgeholder or Lender, Borrower will prepare, execute and deliver any further instruments and do any further acts that may be necessary to carry out more effectively the purpose of this Agreement.

 

5. Miscellaneous. 

 

5.1 Amendment. Except as provided inSection 3.7, this Agreement may only be amended by a writing signed by Borrower and Lender. 

 

5.2 Assignment. Borrower may not assign or otherwise transfer any of his rights or obligations under thisAgreement. Lender may assign all or any portion of his rights and obligations under this Agreement at any time, and from time to time, with notice to Borrower. Subject to the foregoing, this Agreement shall be binding upon the heirs, executors andpersonal representative of Borrower and shall be binding upon and inure to the benefit of the successors and assigns of Lender. 

 

5.3 Entire Agreement; Controlling Document. This Agreement and the Option Agreement constitute the entire agreementof the parties with respect to the subject matter hereof and supersedes any and all prior negotiations, correspondence and understandings between the parties with respect to the subject matter hereof, whether oral or in writing. 

 

5.4 Costs of Enforcement. If any partyto this Agreement seeks to enforce its rights under this Agreement by legal proceedings or otherwise, the non-prevailing party shall pay all costs and expenses incurred by the prevailing party, including, without limitation, all reasonableattorneys’ fees. 

 

5.5Governing Law, Consent to Jurisdiction. This Agreement shall be governed by and construed in accordance with the laws of the State of California applicable to contracts entered into by California residents and to be performed wholly in theState of California. Each party hereto hereby agrees that any action which, in whole or in part, in any way arises under this Agreement shall be brought in the Superior Court of the State of California 

for the County of Santa Clara or the United States District Court for the Northern District of California. Each party hereby submits to theexclusive jurisdiction and venue of such Courts for purposes of any such action and agrees that any notice, document or complaint in any such action may be served on it by delivery in the manner provided for the delivery of notices under thisAgreement. 

 

5.6 Notices.All notices and other communications under this Agreement (other than payments hereunder, which shall be deemed made as of the date of receipt by Lender) shall be in writing, and shall be deemed to have been duly given on the date of delivery ifdelivered personally, or on the third day after mailing if mailed to the party to whom notice is to be given by first class mail, registered or certified, postage prepaid, and addressed as set forth on the signature page (until any such address ischanged by notice duly given). 

 

5.7 Severability. If any provision of this Agreement shall be determined to be invalid or unenforceable, the remainder shall be valid and enforceable to the maximum extent possible. 

 

5.8 Headings. The section headingsused in this Agreement are intended principally for convenience and shall not, by themselves, determine the rights and obligations of the parties to this Agreement. 

 

5.9 Delay and Waiver. No delay on the part of Lender in exercising any right underthis Agreement shall operate as a waiver of such right. The waiver by Lender of any term or condition of this Agreement shall not be construed as a waiver of a subsequent breach or failure of the same term or condition or a waiver of any other termor condition contained in this Agreement. 

 

5.10 Term. This Agreement shall terminate upon delivery by Lender, to Borrow and Pledgeholder, of notice that all obligations of Borrower under this Agreement have been fulfilled. 

 

IN WITNESSWHEREOF, the undersigned have executed this Agreement the day and year first above written. 

 

BORROWER:        
     
/s/    SRINIVASANKRISHNAN        
      
**Srinivasan Krishnan**

 

LENDER:
     
                                VALICERT, INC.
      
/s/    YOSIAMRAM        
      
**Joseph (Yosi) Amram, President and CEO**

 

Consent of Borrower’s Spouse. Borrower’s spouse consents to be bound by the terms of this Loan and Pledge Agreement as to her interests, whether as community property or otherwise, if any, in the Collateral.

 
      
Borrower’s Spouse:    
            
**(signature)**

 

Consent of Pledgeholder. The undersigned agrees to act as pledgeholder under this Agreement pursuant to Section 3 and agrees to be bound only by such Section 3 and Section 5. 

 
      
Venture Law Group, A ProfessionalCorporation    
    
By:
 
/S/    JAMES L.BROCK        
      
**James L. Brock, Director**

 

**Schedule 3.2**

 

**Company**
  
**Record Holder**
  
**Type of Stock**
    
**Certificate**