Exhibit 10.17
JATO COMMUNICATIONS CORP.
RESTRICTED STOCK PURCHASE AGREEMENT
THIS RESTRICTED STOCK PURCHASE AGREEMENT (the "Agreement") is entered
into as of August 31, 1999, by and between JATO COMMUNICATIONS CORP., a
Delaware corporation (the "Company"), and XXXXXX X. XXXXXXXX (the
"Purchaser").
RECITALS
WHEREAS, the Company has authorized the sale and issuance of five
hundred thousand (500,000) shares of its Common Stock to Purchaser (the
"Shares");
WHEREAS, the Purchaser desires to purchase the Shares on the terms and
conditions set forth herein; and
WHEREAS, the Company desires to issue and sell the Shares to Purchaser
on the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the foregoing recitals and the
mutual promises hereinafter set forth, the parties hereto agree as follows:
ARTICLE 1
AGREEMENT TO SELL AND PURCHASE
1.1 AUTHORIZATION OF SHARES. On or prior to the Closing (as
defined in Section 2 below), the Company shall have authorized the sale and
issuance to the Purchaser of the Shares. The Shares shall have the rights,
preferences, privileges and restrictions set forth in the Certificate of
Incorporation of the Company, as amended.
1.2 SALE AND PURCHASE. Subject to the terms and conditions hereof,
at the Closing (as hereinafter defined) the Company hereby agrees to issue
and sell to Purchaser the Shares at an aggregate purchase price of three
hundred seventy-five thousand dollars ($375,000). The aggregate par value
for the Shares, or five thousand dollars ($5,000) shall be paid in cash, with
the balance, three hundred seventy thousand dollars ($370,000), being
evidenced by a Promissory Note in the form attached hereto as EXHIBIT A-1.
The Shares shall be pledged to secure repayment of the Promissory Note
pursuant to the terms of a Pledge Agreement attached hereto as EXHIBIT A-2.
ARTICLE 2
CLOSING, DELIVERY AND PAYMENT
2.1 CLOSING. The closing of the sale and purchase of the Shares
under this Agreement (the "Closing") shall take place at 10:00 a.m. on the
date hereof, at the offices of the Company,
1.
or at such other time or place as the Company and the Purchaser may mutually
agree (such date is hereinafter referred to as the "Closing Date").
2.2 DELIVERY. At the Closing, subject to the terms and conditions
hereof, the Company will deliver to the Purchaser certificates representing
the number of Shares to be purchased at the Closing by the Purchaser, against
payment of the purchase price therefor by execution of the attached
assignment.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to the Purchaser as follows:
3.1 ORGANIZATION, GOOD STANDING AND QUALIFICATION. The Company is
a corporation duly organized, validly existing and in good standing under the
laws of the State of Colorado. The Company has all requisite corporate power
and authority to own and operate its properties and assets, to execute and
deliver this Agreement, to issue and sell the Shares and the Conversion
Shares and to carry out the provisions of this Agreement and the Certificate
of Incorporation and to carry on its business as presently conducted and as
presently proposed to be conducted. The Company is duly qualified and is
authorized to do business and is in good standing as a foreign corporation in
all jurisdictions in which the nature of its activities and of its properties
(both owned and leased) makes such qualification necessary, except for those
jurisdictions in which failure to do so would not have a material adverse
effect on the Company or its business. The Company owns no equity securities
of any other corporation, limited partnership or similar entity. The Company
is not a participant in any joint venture, partnership or similar arrangement.
3.2 AUTHORIZATION; BINDING OBLIGATIONS. All corporate action on
the part of the Company, its officers, directors and shareholders necessary
for the authorization of this Agreement, the performance of all obligations
of the Company hereunder and thereunder at the Closing and the authorization,
sale, issuance and delivery of the Shares pursuant hereto has been taken or
will be taken prior to the Closing. The Agreement, when executed and
delivered, will be valid and binding obligations of the Company enforceable
in accordance with their terms, except (i) as limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other laws of general
application affecting enforcement of creditors' rights and (ii) general
principles of equity that restrict the availability of equitable remedies.
The sale of the Shares are not and will not be subject to any preemptive
rights or rights of first refusal that have not been properly waived or
complied with.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
Each Purchaser hereby represents and warrants to the Company as
follows (such representations and warranties do not lessen or obviate the
representations and warranties of the Company set forth in this Agreement):
2.
4.1 REQUISITE POWER AND AUTHORITY. The Purchaser has all necessary
power and authority under all applicable provisions of law to execute and
deliver this Agreement and to carry out its provisions. All action on the
Purchaser's part required for the lawful execution and delivery of this
Agreement has been or will be effectively taken prior to the Closing. The
Agreement, when executed and delivered, will be valid and binding obligations
of the Purchaser enforceable in accordance with their terms, except (i) as
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
other laws of general application affecting enforcement of creditors' rights
and (ii) general principles of equity that restrict the availability of
equitable remedies.
4.2 INVESTMENT REPRESENTATIONS. The Purchaser understands that
neither the Shares nor the Conversion Shares have been registered under the
Securities Act of 1933, as amended (the "Act"). The Purchaser also
understands that the Shares are being offered and sold pursuant to an
exemption from registration contained in the Act based in part upon the
Purchaser's representations contained in the Agreement. The Purchaser hereby
represents and warrants as follows:
(a) PURCHASER BEARS ECONOMIC RISK. The Purchaser has
substantial experience in evaluating and investing in private placement
transactions of securities in companies similar to the Company so that it is
capable of evaluating the merits and risks of its investment in the Company
and has the capacity to protect its own interests. The Purchaser must bear
the economic risk of this investment indefinitely unless the Shares are
registered pursuant to the Act or an exemption from registration is
available. The Purchaser understands that the Company has no present
intention of registering the Shares, the Conversion Shares or any shares of
its Common Stock. The Purchaser also understands that there is no assurance
that any exemption from registration under the Act will be available and
that, even if available, such exemption may not allow the Purchaser to
transfer all or any portion of the Shares or the Conversion Shares under the
circumstances, in the amounts or at the times the Purchaser might propose.
(b) ACQUISITION FOR OWN ACCOUNT. The Purchaser is acquiring
the Shares and the Conversion Shares for the Purchaser's own account for
investment only, and not with a view toward their distribution.
(c) PURCHASER CAN PROTECT ITS INTEREST. The Purchaser
represents that by reason of its, or of its management's, business or
financial experience, the Purchaser has the capacity to protect its own
interests in connection with the transactions contemplated in this Agreement.
Further, the Purchaser is aware of no publication of any advertisement in
connection with the transactions contemplated in the Agreement.
(d) RULE 144; RULE 701. The Shares are being issued
pursuant to the Company's 1998 Equity Incentive Plan. The issuance of the
Shares are pursuant to Rule 701 under the Securities Act of 1933, as amended.
The Purchaser acknowledges and agrees that the Shares must be held
indefinitely unless they are subsequently registered under the Act or an
exemption from such registration is available. The Purchaser has been
advised or is aware of the provisions of Rule 144 promulgated under the Act,
which permits limited resale of shares purchased in a private placement
subject to the satisfaction of certain conditions, including,
3.
among other things: the availability of certain current public information
about the Company, the resale occurring not less than two years after a party
has purchased and paid for the security to be sold, the sale being through an
unsolicited "broker's transaction" or in transactions directly with a market
maker (as said term is defined under the Securities Exchange Act of 1934, as
amended) and the number of shares being sold during any three-month period
not exceeding specified limitations.
ARTICLE 5
CONDITIONS TO CLOSING
5.1 CONDITIONS TO PURCHASER'S OBLIGATIONS AT THE CLOSING. The
Purchaser's obligations to purchase the Shares at the Closing are subject to
the satisfaction, at or prior to the Closing, of the following conditions:
(a) REPRESENTATIONS AND WARRANTIES TRUE; PERFORMANCE OF
OBLIGATIONS. The representations and warranties made by the Company in
Section 3 hereof shall be true and correct in all material respects as of the
Closing Date with the same force and effect as if they had been made as of
the Closing Date, and the Company shall have performed all obligations and
conditions herein required to be performed or observed by it on or prior to
the Closing.
(b) LEGAL INVESTMENT. On the Closing Date, the sale and
issuance of the Shares shall be legally permitted by all laws and regulations
to which the Purchaser and the Company are subject.
(c) STOCKHOLDERS' AGREEMENT. Purchaser shall have executed
the Stockholders' Agreement.
5.2 CONDITIONS TO OBLIGATIONS OF THE COMPANY. The Company's
obligation to issue and sell the Shares at the Closing is subject to the
satisfaction, on or prior to the Closing, of the following conditions:
(a) REPRESENTATIONS AND WARRANTIES TRUE. The
representations and warranties made by the Purchaser in Section 4 hereof
shall be true and correct in all material respects at the date of the
Closing, with the same force and effect as if they had been made on and as of
said date.
(b) PERFORMANCE OF OBLIGATIONS. The Purchaser shall have
performed and complied with all agreements and conditions herein required to
be performed or complied with by the Purchaser on or before the Closing.
(c) STOCKHOLDERS' AGREEMENT. Purchaser shall have executed
the Stockholders' Agreement.
4.
ARTICLE 6
REPURCHASE OPTION
6.1 REPURCHASE OPTION.
(a) Subject to Section 6.3 below, in the event of any
voluntary or involuntary termination of the Purchaser's employment by or
services to the Company for any or no reason before all of the Shares are
released from the Company's repurchase option as set forth in Section 6.2
below (the "Repurchase Option"), the Company shall, upon the date of such
termination (as reasonably fixed and determined by the Company) have an
irrevocable, exclusive option for a period of 90 days (or such longer period
of time either mutually agreed to by Purchaser and the Company or determined
by the Company in good faith to be necessary to avoid the loss of "qualified
small business stock" treatment under Section 1202 of the Internal Revenue
Code for any stockholder other than the Purchaser) from such date to
repurchase some or all of the Unreleased Shares (as defined in Section 5) at
the then current fair market value of the shares, determined in the sole
discretion of the Compensation Committee of the Board unless the employee
finds a bonified offer for the stock, principles of which would be agreeable
to the Compensation Committee (the "Repurchase Price").
(b) The Repurchase Option shall be exercised by the Company
by written notice to the Purchaser or the Purchaser's executor and by
delivery to the Purchaser or the Purchaser's executor with such notice of a
check in the amount of the Repurchase Price for the Shares being repurchased.
(c) Upon delivery of such notice and the payment of the
Repurchase Price, the Company shall become the legal and beneficial owner of
the Shares being repurchased and all rights and interests therein or relating
thereto, and the Company shall have the right to retain and transfer to its
own name the number of Shares being repurchased by the Company.
6.2 RELEASE OF SHARES FROM REPURCHASE OPTION.
(a) Subject to Section 6.3 below, the number of Shares to be
released from the Company's Repurchase Option is set forth in a schedule
attached hereto as EXHIBIT A, provided as to each incremental period
resulting in the release of Shares from such Repurchase Option that the
Purchaser's employment or services have not been terminated prior to the date
of any such release.
(b) Any of the Shares that have not yet been released from
the Company's Repurchase Option are referred to herein as "Unreleased Shares."
6.3 EVENTS OF ACCELERATED RELEASE FROM COMPANY'S REPURCHASE OPTION.
All of the Purchaser's Shares shall be released from the Company's Repurchase
Option upon the occurrence of (i) a sale of all or substantially all of the
assets of the Company, (ii) a transaction that results in a change of control
in which greater than 50% of the voting power is transferred, (iii)
termination of Executive's employment by the Company without Cause, or either
(iv) a material reduction in Executive's responsibilities, or (v) a material
downgrading of job title,
5.
either of which is not cured within 30 days of being notified by Executive
(each an "Acceleration Event").
ARTICLE 7
MISCELLANEOUS
7.1 GOVERNING LAW. This Agreement shall be governed in all
respects by the laws of the State of Colorado as such laws are applied to
agreements between Colorado residents entered into and performed entirely in
Colorado.
7.2 SURVIVAL. The representations, warranties, covenants and
agreements made herein shall survive any investigation made by the Purchaser
and the closing of the transactions contemplated hereby. All statements as
to factual matters contained in any certificate or other instrument delivered
by or on behalf of the Company pursuant hereto in connection with the
transactions contemplated hereby shall be deemed to be representations and
warranties by the Company hereunder solely as of the date of such certificate
or instrument.
7.3 SUCCESSORS AND ASSIGNS. Except as otherwise expressly provided
herein, the provisions hereof shall inure to the benefit of, and be binding
upon, the successors, assigns, heirs, executors and administrators of the
parties hereto and shall inure to the benefit of, and be enforceable by, each
person who shall be a holder of the Shares from time to time.
7.4 ENTIRE AGREEMENT. This Agreement and the other documents
delivered pursuant hereto constitute the full and entire understanding and
agreement between the parties with regard to the subjects hereof and no party
shall be liable or bound to any other in any manner by any representations,
warranties, covenants and agreements except as specifically set forth herein
and therein.
7.5 SEVERABILITY. In case any provision of the Agreement shall be
invalid, illegal or unenforceable, the validity, legality and enforceability
of the remaining provisions shall not in any way be affected or impaired
thereby.
7.6 AMENDMENT AND WAIVER.
(a) This Agreement may be amended or modified only upon the
written consent of the Company and Purchaser.
(b) The obligations of the Company and the rights of the
holders of the Shares under the Agreement may be waived only with the written
consent of the Purchaser.
7.7 DELAYS OR OMISSIONS. It is agreed that no delay or omission to
exercise any right, power or remedy accruing to any party, upon any breach,
default or noncompliance by another party under this Agreement or the
Certificate of Incorporation shall impair any such right, power or remedy,
nor shall it be construed to be a waiver of any such breach, default or
noncompliance, or any acquiescence therein, or of or in any similar breach,
default or noncompliance thereafter occurring. It is further agreed that any
waiver, permit, consent or approval of any kind or character on the
Purchaser's part of any breach, default or noncompliance under this Agreement
6.
or under the Certificate of Incorporation or any waiver on such party's part
of any provisions or conditions of the Agreement or the Certificate of
Incorporation must be in writing and shall be effective only to the extent
specifically set forth in such writing. All remedies, whether under this
Agreement, the Certificate of Incorporation, by law or otherwise afforded to
any party, shall be cumulative and not alternative.
7.8 NOTICES. All notices required or permitted hereunder shall be
in writing and shall be deemed effectively given: (i) upon personal delivery
to the party to be notified; (ii) when sent by confirmed telex or facsimile
if sent during normal business hours of the recipient, if not, then on the
next business day; (iii) five (5) days after having been sent by registered
or certified mail, return receipt requested, postage prepaid; or (iv) one (1)
day after deposit with a nationally recognized overnight courier, specifying
next day delivery, with written verification of receipt. All communications
shall be sent to the Company and the Purchaser at the addresses as set forth
on the signature page hereof or at such other address as the Company or the
Purchaser may designate by ten (10) days' advance written notice to the other
parties hereto.
7.9 TITLES AND SUBTITLES. The titles of the sections and
subsections of the Agreement are for convenience of reference only and are
not to be considered in construing this Agreement.
7.10 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.
7.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date set forth in the first paragraph hereof.
COMPANY:
JATO COMMUNICATIONS CORP.
By: /s/ Xxxxx X. Xxxx
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Address:
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PURCHASER:
/s/ Xxxxxx X. Xxxxxxxx
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Xxxxxx X. Xxxxxxxx
Address:
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8.
EXHIBIT A
RELEASE SCHEDULE
So long as Purchaser continues to provide services to the Company:
Shares Released
On the first anniversary of employment 125,000
Each whole month thereafter 15,625
X-0
XXXXXXX X-0
PROMISSORY NOTE
$370,000 Denver, Colorado
August 31, 1999
FOR VALUE RECEIVED, the undersigned hereby unconditionally promises to
pay to the order of Jato Communications Corp., a Delaware corporation (the
"Company"), at 0000 00xx Xxxxxx, Xxxxx 0000, Xxxxxx, XX 00000, or at such
other place as the holder hereof may designate in writing, in lawful money of
the United States of America and in immediately available funds, the
principal sum of Three Hundred Seventy Thousand ($370,000) together with
interest accrued from the date hereof on the unpaid principal at the rate of
7% per annum, or the maximum rate permissible by law (which under the laws of
the State of Colorado shall be deemed to be the laws relating to permissible
rates of interest on commercial loans), whichever is less, as follows:
Principal Repayment. The outstanding principal amount hereunder shall
be due and payable in full on August 30, 2001.
Interest Payments. Interest shall be payable at maturity and shall be
calculated on the basis of a 360-day year for the actual number of days
elapsed;
PROVIDED, HOWEVER, that in the event that the undersigned voluntarily
terminates his employment prior to payment in full of this Note, this Note
shall be accelerated and all remaining unpaid principal and interest shall
become due and payable within 90 days after such termination.
The Company may forgive the repayment of all or part of the principal
and interest due under this Note.
If the undersigned fails to pay any of the principal and accrued
interest when due, the Company, at its sole option, shall have the right to
accelerate this Note, in which event the entire principal balance and all
accrued interest shall become immediately due and payable, and immediately
collectible by the Company pursuant to applicable law.
This Note may be prepaid at any time without penalty. All money paid
toward the satisfaction of this Note shall be applied first to the payment of
interest as required hereunder and then to the retirement of the principal.
The full amount of this Note is secured by a pledge of shares of
Common Stock of the Company, and is subject to all of the terms and
provisions of the Restricted Stock Purchase Agreement and the Pledge
Agreement, each of even date herewith between the undersigned and the Company.
1.
The undersigned hereby represents and agrees that the amounts due
under this Note are not consumer debt, and are not incurred primarily for
personal, family or household purposes, but are for business and commercial
purposes only.
The undersigned hereby waives presentment, protest and notice of
protest, demand for payment, notice of dishonor and all other notices or
demands in connection with the delivery, acceptance, performance, default or
endorsement of this Note.
The holder hereof shall be entitled to recover, and the undersigned
agrees to pay when incurred, all costs and expenses of collection of this
Note, including without limitation, reasonable attorneys' fees.
This Note shall be governed by, and construed, enforced and
interpreted in accordance with, the laws of the State of Colorado, excluding
conflict of laws principles that would cause the application of laws of any
other jurisdiction.
__________________________________
Xxxxxx X. Xxxxxxxx
2.
EXHIBIT A-2
STOCK PLEDGE AGREEMENT
THIS STOCK PLEDGE AGREEMENT ("Pledge Agreement") is made by XXXXXX X.
XXXXXXXX, an individual, ("Pledgor"), in favor of JATO COMMUNICATIONS CORP.,
a Delaware corporation with its principal place of business at 0000 00xx
Xxxxxx, Xxxxx 0000, Xxxxxx, XX 00000 ("Pledgee").
WHEREAS, Pledgor has concurrently herewith executed that certain
Promissory Note (the "Note") in favor of Pledgee in the amount of three
hundred seventy thousand dollars ($370,000) in partial payment of the
purchase price of five hundred thousand (500,000) shares of the Common Stock
of Pledgee; and
WHEREAS, Pledgee is willing to accept the Note from Pledgor, but only
upon the condition, among others, that Pledgor shall have executed and
delivered to Pledgee this Pledge Agreement and the Collateral (as defined
below):
NOW, THEREFORE, in consideration of the foregoing recitals and for
other good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, and intending to be legally bound, Pledgor hereby agrees
as follows:
1. As security for the full, prompt and complete payment and
performance when due (whether by stated maturity, by acceleration or
otherwise) of all indebtedness of Pledgor to Pledgee created under the Note
(all such indebtedness being the "Liabilities"), together with, without
limitation, the prompt payment of all expenses, including, without
limitation, reasonable attorneys' fees and legal expenses, incidental to the
collection of the Liabilities and the enforcement or protection of Pledgee's
lien in and to the collateral pledged hereunder, Pledgor hereby pledges to
Pledgee, and grants to Pledgee, a first priority security interest in all of
the following (collectively, the "Pledged Collateral"):
(a) Five hundred thousand (500,000) shares of Common Stock
of Pledgee represented by Certificates numbered [CERTIFICATE NUMBER] (the
"Pledged Shares"), and all dividends, cash, instruments, and other property
or proceeds from time to time received, receivable, or otherwise distributed
in respect of or in exchange for any or all of the Pledged Shares;
(b) all voting trust certificates held by Pledgor evidencing
the right to vote any Pledged Shares subject to any voting trust; and
(c) all additional shares and voting trust certificates from
time to time acquired by Pledgor in any manner (which additional shares shall
be deemed to be part of the Pledged Shares), and the certificates
representing such additional shares, and all dividends, cash, instruments,
and other property or proceeds from time to time received, receivable, or
otherwise distributed in respect of or in exchange for any or all of such
shares.
The term "indebtedness" is used herein in its most comprehensive sense
and includes any and all advances, debts, obligations and Liabilities
heretofore, now or hereafter made, incurred or
1.
created, whether voluntary or involuntary and whether due or not due,
absolute or contingent, liquidated or unliquidated, determined or
undetermined, and whether recovery upon such indebtedness may be or hereafter
becomes unenforceable.
2. At any time, without notice, and at the expense of Pledgor,
Pledgee in its name or in the name of its nominee or of Pledgor may, but
shall not be obligated to: (1) collect by legal proceedings or otherwise all
dividends (except cash dividends other than liquidating dividends), interest,
principal payments and other sums now or hereafter payable upon or on account
of said Pledged Collateral; (2) enter into any extension, reorganization,
deposit, merger or consolidation agreement, or any agreement in any wise
relating to or affecting the Pledged Collateral, and in connection therewith
may deposit or surrender control of such Pledged Collateral thereunder,
accept other property in exchange for such Pledged Collateral and do and
perform such acts and things as it may deem proper, and any money or property
received in exchange for such Pledged Collateral shall be applied to the
indebtedness or thereafter held by it pursuant to the provisions hereof; (3)
insure, process and preserve the Pledged Collateral; (4) cause the Pledged
Collateral to be transferred to its name or to the name of its nominee; (5)
exercise as to such Pledged Collateral all the rights, powers and remedies of
an owner, except that so long as no default exists under the Note or
hereunder Pledgor shall retain all voting rights as to the Pledged Shares.
3. Pledgor agrees to pay prior to delinquency all taxes, charges,
liens and assessments against the Pledged Collateral, and upon the failure of
Pledgor to do so, Pledgee at its option may pay any of them and shall be the
sole judge of the legality or validity thereof and the amount necessary to
discharge the same.
4. At the option of Pledgee and without necessity of demand or
notice, all or any part of the indebtedness of Pledgor shall immediately
become due and payable irrespective of any agreed maturity, upon the
happening of any of the following events: (1) failure to keep or perform any
of the terms or provisions of this Pledge Agreement; (2) failure to pay any
installment of principal or interest on the Note when due; (3) the levy of
any attachment, execution or other process against the Pledged Collateral; or
(4) the insolvency, commission of an act of bankruptcy, general assignment
for the benefit of creditors, filing of any petition in bankruptcy or for
relief under the provisions of Title 11 of the United States Code of, by, or
against Pledgor.
5. In the event of the nonpayment of any indebtedness when due,
whether by acceleration or otherwise, or upon the happening of any of the
events specified in the last preceding paragraph, Pledgee may then, or at any
time thereafter, at its election, apply, set off, collect or sell in one or
more sales, or take such steps as may be necessary to liquidate and reduce to
cash in the hands of Pledgee in whole or in part, with or without any
previous demands or demand of performance or notice or advertisement, the
whole or any part of the Pledged Collateral in such order as Pledgee may
elect, and any such sale may be made either at public or private sale at its
place of business or elsewhere, or at any broker's board or securities
exchange, either for cash or upon credit or for future delivery; provided,
however, that if such disposition is at private sale, then the purchase price
of the Pledged Collateral shall be equal to the public market price then in
effect, or, if at the time of sale no public market for the Pledged
Collateral exists, then, in recognition of the fact that the sale of the
Pledged Collateral would have to be registered under the Securities Act of
1933 and that the expenses of such registration are
2.
commercially unreasonable for the type and amount of collateral pledged
hereunder, Pledgee and Pledgor hereby agree that such private sale shall be
at a purchase price mutually agreed to by Pledgee and Pledgor or, if the
parties cannot agree upon a purchase price, then at a purchase price
established by a majority of three independent appraisers knowledgeable of
the value of such collateral, one named by Pledgor within 10 days after
written request by the Pledgee to do so, one named by Pledgee within such 10
day period, and the third named by the two appraisers so selected, with the
appraisal to be rendered by such body within 30 days of the appointment of
the third appraiser. The cost of such appraisal, including all appraiser's
fees, shall be charged against the proceeds of sale as an expense of such
sale. Pledgee may be the purchaser of any or all Pledged Collateral so sold
and hold the same thereafter in its own right free from any claim of Pledgor
or right of redemption. Demands of performance, notices of sale,
advertisements and presence of property at sale are hereby waived, and
Pledgee is hereby authorized to sell hereunder any evidence of debt pledged
to it. Any sale hereunder may be conducted by any officer or agent of
Pledgee.
6. The proceeds of the sale of any of the Pledged Collateral and
all sums received or collected by Pledgee from or on account of such Pledged
Collateral shall be applied by Pledgee to the payment of expenses incurred or
paid by Pledgee in connection with any sale, transfer or delivery of the
Pledged Collateral, to the payment of any other costs, charges, attorneys'
fees or expenses mentioned herein, and to the payment of the indebtedness or
any part hereof, all in such order and manner as Pledgee in its discretion
may determine. Pledgee shall then pay any balance to Pledgor.
7. Upon the transfer of all or any part of the indebtedness
Pledgee may transfer all or any part of the Pledged Collateral and shall be
fully discharged thereafter from all liability and responsibility with
respect to such Pledged Collateral so transferred, and the transferee shall
be vested with all the rights and powers of Pledgee hereunder with respect to
such Pledged Collateral so transferred; but with respect to any Pledged
Collateral not so transferred Pledgee shall retain all rights and powers
hereby given.
8. Until all indebtedness shall have been paid in full the power
of sale and all other rights, powers and remedies granted to Pledgee
hereunder shall continue to exist and may be exercised by Pledgee at any time
and from time to time irrespective of the fact that the indebtedness or any
part thereof may have become barred by any statute of limitations, or that
the personal liability of Pledgor may have ceased.
9. Pledgee agrees that so long as no default exists under the Note
or hereunder, the Pledged Shares shall, upon the request of Pledgor, be
released from pledge as the indebtedness is paid. Such releases shall be at
the rate of one share for each seventy five cents ($0.75) of principal amount
of indebtedness paid. Release from pledge, however, shall not result in
release from the provisions of those certain Joint Escrow Instructions, if
any, of even date herewith among the parties to this Pledge Agreement and the
Escrow Agent named therein.
10. Pledgee may at any time deliver the Pledged Collateral or any
part thereof to Pledgor and the receipt of Pledgor shall be a complete and
full acquittance for the Pledged Collateral so delivered, and Pledgee shall
thereafter be discharged from any liability or responsibility therefor.
3.
11. The rights, powers and remedies given to Pledgee by this Pledge
Agreement shall be in addition to all rights, powers and remedies given to
Pledgee by virtue of any statute or rule of law. Any forbearance or failure
or delay by Pledgee in exercising any right, power or remedy hereunder shall
not be deemed to be a waiver of such right, power or remedy, and any single
or partial exercise of any right, power or remedy hereunder shall not
preclude the further exercise thereof; and every right, power and remedy of
Pledgee shall continue in full force and effect until such right, power or
remedy is specifically waived by an instrument in writing executed by Pledgee.
12. If any provision of this Pledge Agreement is held to be
unenforceable for any reason, it shall be adjusted, if possible, rather than
voided in order to achieve the intent of the parties to the extent possible.
In any event, all other provisions of this Pledge Agreement shall be deemed
valid and enforceable to the full extent possible.
13. This Pledge Agreement shall be governed by, and construed in
accordance with, the laws of the State of Colorado as applied to contracts
made and performed entirely within the State of Colorado by residents of such
State.
Dated: August 31, 1999
PLEDGOR:
________________________________________
Printed Name: Xxxxxx X. Xxxxxxxx
4.
