Exhibit 10.4
INDEMNITY AND RESTRICTION AGREEMENT
This Indemnity Agreement and Restriction Agreement (the "Agreement") is
made and entered into this 8th day of July, 1998 by SOLAR SATELLITE
COMMUNICATION, INC., a Colorado corporation ("Primary Indemnitor") whose
principal business address is 000 X. 00xx Xxxxxx, Xxxxx 0000, Xxxxxx, Xxxxxxxx,
XXXXXX X. XXXXXXX ("Indemnitee") whose business address is 0000 Xxxxxxxxx Xxxxx
Xxxxxxxxx, Xxxxx 000, Xxxxxxxxx, 00000, SATELLITE INTEREST GROUP, LLC, a
Colorado limited liability company ("SIG") whose business address is 0000
Xxxxxxxxx Xxxxx Xxxxxxxxx, Xxxxx 000, Xxxxxxxxx, 00000 and ST. XXXXXXX
INVESTMENT COMPANY, a Colorado corporation ("St. Xxxxxxx") whose business
address is 0000 Xxxxxxxxx Xxxxx Xxxxxxxxx, Xxxxx 000, Xxxxxxxxx, 00000.
RECITALS
A. Primary Indemnitor owns 527,650 shares of stock (the "Accelr8 Stock") in
Accelr8 Technology Corporation, a Colorado corporation ("Accelr8") which
shares are represented by two stock certificates (the "Accelr8
Certificates"), to wit: Accelr8 Stock #1797 which originally represented
610,600 shares of Accelr8 Stock and now represents 152,650 shares of
Accelr8 Stock as a result of a 1 for 4 reverse stock split and Accelr8
Stock #1428 which originally represented 1,500,000 shares of Accelr8 Stock
and now represents 375,000 shares of Accelr8 Stock as a result of the 1 for
4 reverse stock split.
B. The Accelr8 Certificates have been lost, stolen, destroyed or misplaced;
C. Primary Indemnitor desires to obtain a lost instruments bond (the
"Indemnity Bond" ) to submit to Accelr8 and/or its transfer agent
(collectively, the "Issuer") in order to induce the Issuer to issue
replacement stock certificates (the "Replacement Certificates") for the
Accelr8 Stock;
D. Seaboard Surety Company (the "Seaboard") has agreed to issue its Indemnity
Bond to Primary Indemnitor on the condition that Xxxxxxx issue his
Agreement of Indemnity (the "Xxxxxxx Indemnity") to Seaboard;
E. SIG is the majority shareholder of the Primary Indemnitor and is entitled
to receive a fee (the "Asset Rehabilitation Fee") from the Primary
Indemnitor in the amount of $2,500,000 when and if the Replacement Shares
are issued;
F. St. Xxxxxxx owns a 25% membership interest in and to SIG and is entitled to
receive a fee (the "Credit Facilitation Fee") from SIG in the amount of
$1,600,000 when and if the Replacement Shares are issued;
X. Xxxxxxx has signed and delivered the Xxxxxxx Indemnity to Seaboard, and
will authorize Seaboard to issued its Indemnity Bond to the Issuer, subject
to the terms and conditions of this Agreement.
NOW, THEREFORE, in consideration of Xxxxxxx issuing the Xxxxxxx Indemnity
and authorizing Seaboard to issue its Indemnity Bond to Issuer, the parties
agree as follows:
1. INDEMNITY OF PRIMARY INDEMNITOR. The Primary Indemnitor hereby agrees at all
times to indemnify and save harmless Xxxxxxx from and against any and all
liabilities, losses, damages, judgments, costs, charges, counsel fees and
expenses of every nature and character which he may sustain or incur by reason
or on account of issuing the Xxxxxxx Indemnity to Seaboard.
2. COVENANTS OF PRIMARY INDEMNITOR. The Primary Indemnitor covenants and agrees
until the Termination Date (as defined and described in Section 3), without the
prior written consent of Xxxxxxx, which consent Xxxxxxx may withhold for any
reason whatsoever, the Primary Indemnitor will comply with and observe the
following negative covenants and provisions (collectively, the "Restrictions"),
and will not:
A. Make any loan or advance to any person or entity unless the loan is
fully secured.
B. Declare or pay any dividends, purchase, redeem, retire, or otherwise
acquire for value any of its authorized stock (or rights, options or
warrants to purchase shares of its authorized stock) now or hereafter
outstanding, return any capital to its shareholders as such, or permit
any subsidiary to do any of the foregoing; provided, however, that
nothing herein contained shall prevent the Primary Indemnitor from
effecting a stock split.
C. Make, or enter into any agreement under which Primary Indemnitor would
be bound to make, any purchase, redemption, retirement or other
acquisition for value of any of its outstanding shares, except for
distributions incident to the redemption of stock made pursuant to
existing redemption agreements.
D. Merge or consolidate with, or sell, assign, lease or otherwise dispose
of or voluntarily part with the control of (whether in one transaction
or in a series of transactions) a material portion of the assets of the
Primary Indemnitor or any assets of any subsidiary (except for a sale of
all assets to, or merger of any subsidiary into, the Primary Indemnitor)
(whether now owned or hereafter acquired) to any Person or entity.
E. Enter, or permit any subsidiary to enter, into any transaction,
including, without limitation, any loans or extensions of credit, with
any officer or director of the Primary Indemnitor or holder of more than
10% of any class of authorized stock of the Primary Indemnitor, or any
member of their respective immediate families or any corporation or
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other entity directly or indirectly controlled by one or more of such
officers, directors or shareholders or members of their immediate
families.
F. Make, or permit any subsidiary to make, any material change in the
nature of its business as carried on at the date hereof.
G. Make any amendment to its Articles of Incorporation or Bylaws which
limits its legal capacity or ability to perform its obligations under
this Agreement.
H. Pay salaries, bonuses or other compensation to its officers and
directors in an aggregate amount exceeding Thirty Thousand Dollars
($30,000.00) in any fiscal year.
3. TERMINATION OF RESTRICTIONS. The Restrictions set forth in Section 2 above
shall terminate on the earlier of (the "Termination Date"): (a) the date that
Xxxxxxx is released from the Xxxxxxx Indemnity; (b) the date that the Xxxxxxx
Indemnity becomes legally unenforceable; (c) the seventh (7th) anniversary of
Seaboard's issuance of the Indemnity Bond; or (d) the date that this Agreement
automatically terminates because St. Xxxxxxx can "cover" for Xxxxxxx pursuant to
Section 6.
4. SUBORDINATION OF DISTRIBUTIONS. SIG shall not receive or accept from the
Primary Indemnitor any dividends, distributions of cash or assets, or return of
capital (collectively, the "Distributions") until the Termination Date. If SIG
should receive a Distribution prior to the Termination Date it shall hold any
amount so received in trust for the Indemnitee to be applied or held by it to
make any indemnity payments that the Primary Indemnitor may be required to make
to Indemnitee pursuant to Section 1.
5. SECONDARY INDEMNITY. SIG and St. Xxxxxxx hereby agree at all times to
indemnify and save harmless Xxxxxxx from and against any and all liabilities,
losses, damages, judgments, costs, charges, counsel fees and expenses of every
nature and character which he may sustain or incur by reason or on account of
issuing the Xxxxxxx Indemnity to Seaboard, in the event that the indemnity of
the Primary Indemnitor is uncollectible. The indemnity set forth in this Section
5 is intended to be a secondary indemnity to be exercised by Xxxxxxx only after
exhausting his rights and remedies against the Primary Indemnitor. The Primary
Indemnitor shall have no rights of contribution against SIG or St. Xxxxxxx.
6. TERMINATION IF ST. XXXXXXX CAN COVER. In the event that the price per share
of Accelr8 stock drops to the extent that St. Xxxxxxx can "cover" Xxxxxxx by
purchasing 527,650 shares of Accelr8 Stock with its $1,600,000 Credit
Facilitation Fee, then this Agreement shall automatically terminate. St. Xxxxxxx
shall be deemed to be able to "cover" if the Closing Price for Accelr8 stock in
the National Association of Securities Dealers Automatic Quotation System
remains at or below $3.00 per share for thirty (30) consecutive calendar days.
If this Agreement automatically terminates pursuant to this Section 6, at the
request of any party, all parties shall sign a written statement acknowledging
that this Agreement is terminated.
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7. SUCCESSORS AND ASSIGNS. The provisions of this Agreement shall be binding
upon and shall inure to the benefit of the heirs, administrators, successors and
assigns of Xxxxxxx and Indemnitor. In the event of the death or incompetence of
Xxxxxxx, the trustee of the Xxxxxx X. Xxxxxxx Trust is hereby empowered to
consent to the waiver of the Restriction set forth in Paragraph 2.
DONE AND SIGNED this 8th day of July, 1998.
INDEMNITEE: /s/ Xxxxxx x. Xxxxxxx
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XXXXXX X. XXXXXXX
INDEMNITOR: SOLAR SATELLITE COMMUNICATION,
INC., a Colorado corporation
By: /s/ Xxxxxx X. Xxxxxx
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Name: Xxxxxx X. Xxxxxx
Title: President
ST. XXXXXXX INVESTMENT COMPANY,
a Colorado corporation
By: /s/ Xxxxxx x. Xxxxxxx
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Name: Xxxxxx X. Xxxxxxx
Title: President
SATELLITE INVESTMENT GROUP, LLC
a Colorado limited liability company
By: /s/ Xxxxxx X. Xxxxxx
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Name: Xxxxxx X. Xxxxxx
Title: Manager
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