Exhibit 10.11
PLEDGE AGREEMENT
THIS PLEDGE AGREEMENT is entered into on August _30__, 2001, between Xxxxx
X. Xxxxxx (the "Pledgor"), and Eldorado Artesian Springs, Inc. (the "Secured
Party").
Section 1. Pledge of Security Interest. Pledgor hereby pledges to Secured
Party a security interest in, a minimum of 250,000 shares of Common Stock
("Pledged Collateral"), all of which are now owned by Pledgor in Secured Party,
and all proceeds of the foregoing. The formula used to calculate the Pledged
Collateral is two times the value of the loan divided by the closing price as
quoted by NASDAQ ($400,000 / $1.60 = 250,000 shares). The Pledged Collateral
shall be held by an outside director ("Escrow Agent") and shall have attached
thereto a stock power endorsed in blank by Pledgor, or at Pledgor's election, an
escrow may be established at a local bank. The cost of the escrow shall be paid
by the Pledgor if Pledgor elects to use a bank as the escrow agent. Unless and
until an Event of Default (as defined in Section 3 hereof) has occurred, the
Pledged Collateral shall be held by the Escrow Agent in accordance with the
terms of this Pledge Agreement.
Section 2. Indebtedness Secured. The security interest in the Pledged
Collateral granted under Section 1 hereof is granted as security for the
performance of, and the timely repayment of a loan in the amount of Two Hundred
Thousand and no/100 Dollars ($200,000.00) made by Secured Party to Pledgor for
the purchase of real property currently owned by Secured Party. Said loan is
evidenced by a promissory note dated August _30__, 2001, payable to the Secured
Party (the "Note").
Section 3. Events of Default. For purposes of this Pledge Agreement, an
"Event of Default" shall be deemed to have occurred if Pledgor shall fail to pay
any installment of principal or interest on the Note or any portion thereof when
due, or if there is a breach by Pledgor of any representation, warranty,
covenant or other agreement under this Pledge Agreement, and such event is not
cured within ten (10) business days of delivery of written notice by Secured
Party to Pledgor.
Section 4. Remedies Upon Default. At any time after an Event of Default
shall have occurred, Pledgor shall, upon written notice by Secured Party, (a)
register the Pledged Collateral in Secured Party's name and Secured Party shall
(to the extent permitted by law) have the right to vote the shares which are
part of the Pledged Collateral pending disposition thereof as required by
Section 4(c) hereof; (b) apply the cash (if any) then held as Pledged Collateral
hereunder to the payments due on the Note; and (c) if there shall be no such
cash or the cash so applied shall be insufficient to pay such Note in full, sell
the Pledged Collateral, or any part thereof, on an additional ten (10) business
days' written notice to Pledgor, at public or private sale for cash, upon
credit, or for future delivery, as Secured Party shall deem appropriate;
provided, however, that if such sale is a private sale, Pledgor shall receive
written notice thereof at least five (5) business days prior to the consummation
of such sale, which notice shall describe the material terms and conditions
thereof, and Pledgor may, within such five-day period, tender payment and
consummate such purchase on the same terms and conditions.
Section 5. Dividends. Unless there is an Event of Default under this
Agreement, all dividends paid or payable on the shares shall be the property of
the Pledgor.
Section 6. Further Documentation, etc. The Pledgor promises and agrees to
provide the Secured Party with any further, additional or corrected documents,
instruments or agreements reasonably required by the Secured Party to secure and
perfect the security interest granted hereby in the Pledged Collateral, or in
any proceeds thereof.
Section 7. Amendment to Agreements, Etc. Pledgor agrees and consents that
its obligations, and the rights of Secured Party under this Pledge Agreement,
shall not be impaired if, at any time and from time to time:
a. The time of repayment of the Note shall be extended in whole or in
part and/or shall be renewed in whole or in part;
b. The maturity of the Note shall be accelerated and any collateral
security therefore exchanged, surrendered or otherwise dealt with in
accordance with the terms of any present or future agreement relating
thereto, including this Pledge Agreement;
c. The time for the performance by Pledgor or of compliance with any
term, covenant or agreement on its part to be performed under the Note
and/or any present or future agreement between Pledgor and Secured
Party shall be extended or such performance or compliance waived;
d. The liability of Pledgor to pay the Note or to perform its obligations
under any present or future agreement between them and Secured Party
shall be settled or compromised.
Any of the foregoing may occur from time to time without affecting this
pledge or the obligations of Pledgor hereunder, which shall continue in full
force and effect until the Note secured hereby and all obligations of Pledgor
hereunder shall have been fully paid and performed.
Section 8. Relation to Other Documents. The provisions of this Pledge
Agreement shall be in addition to those of the Note or any other evidence of any
liability held by the Secured Party.
IN WITNESS WHEREOF, the parties hereto have caused this Pledge Agreement to
be executed as of the date first above written.
SECURED PARTY PLEDGOR
ELDORADO ARTESIAN SPRINGS, INC.
By: /s/ Xxxxxxx X. Xxxxxx /s/ Xxxxx X. Xxxxxx
Name: Xxxxxxx X. Xxxxxx Xxxxx X. Xxxxxx
Title: President
