EXHIBIT 10.72
SECURITY AGREEMENT AND STOCK PLEDGE AGREEMENT
Dated: As of November 4 , 1998
1. Borrower(s): Xxxxx X. Xxxxxxx, and his successors and assigns.
---------- Address: 0000 Xxxxxxxx Xxxxxx Xxxx
Xxxxxxx Xxxxxx, Xxxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Tax I.D.: ###-##-####
2. Pledgor(s): Xxxxx X. Xxxxxxx
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3. Secured Party: Capital Associates, Inc., a Delaware corporation, and
------------- its successors and assigns
Address: 0000 Xxxx Xxxxxxxxx Xxxxxx - Xxxxx 0000
Xxxxxxxx, Xxxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
4. Collateral: The following property and all accessions thereto:
----------
4.1. Eighty Six Thousand Two Hundred Fifty ( 86,250 ) shares of $.008
par value common stock of Capital Associates, Inc., a Delaware
corporation, represented by stock certificate numbered D 0298, and
any substitutions and replacements thereof, held in the name of the
Pledgor(s), together with executed blank stock power assignment(s),
have been delivered to Secured Party by Pledgor(s) and Secured Party
hereby acknowledges receipt of said items.
5. Obligations:
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5.1. Any and all obligations of Borrower(s) to Secured Party under
that certain promissory note, dated as of November 4, 1998, in the
original principal amount of $ $131,069.25 ("Loan Note") and all
other agreements and instruments executed by Borrower(s) and
delivered to Secured Party in consummating the loan represented by
the Loan Note and any other transactions contemplated in said loan.
5.2. Future advances, if any, made and/or credit granted by Secured
Party to Borrower(s) under the Loan Note, plus interest thereon;
5.3. All expenditures of any kind or nature made by Secured Party to
preserve the Collateral, including, but not limited to, all amounts
paid to discharge taxes, liens, security interests and any other
encumbrances against the Collateral, and to repair any damage to the
Collateral or otherwise preserve or maintain the Collateral and all
insurance thereon.
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6. SECURITY INTEREST: To secure payment and performance of the Obligations,
Pledgor(s) hereby pledge(s) and grant(s) to Secured Party a security
interest in the Collateral and in all attachments, replacements and
accessions thereto and the proceeds therefrom. Pledgor(s) hereby warrant(s)
and represent(s) that Pledgor(s) has/have, or forthwith will acquire, title
to the Collateral free and clear of all liens, security interests and
encumbrances. Contemporaneously with the execution and delivery hereof,
Pledgor(s) is/are delivering the certificates representing the Collateral
to the Secured Party. The Secured Party's security interest in the
Collateral is being granted as security only and shall not affect or modify
any obligation or liability of Borrower(s) and/or Pledgor.
7. WARRANTIES AND REPRESENTATIONS: Pledgor(s) warrant(s) and represent(s) to
Secured Party the following:
7.1. Except for the security interests created by this Agreement,
Pledgor(s) is/are the owner(s) of all of the Collateral, or will
be at the time such Collateral is created or acquired, free and
clear of all liens, security interest and encumbrances and any
rights to subscribe for or rights or options to purchase or
acquire the same (including without limitation, through any
securities convertible into or exchangeable for any such pledged
securities).
7.2. The Collateral has been duly authorized and validly issued and is
fully paid and non-assessable, and is subject to no option to
purchase for similar rights of any person. Pledgor(s) is/are not
and shall not become a party to or otherwise bound by any
agreement, document or other instrument (other than this
Agreement) that restricts in any manner the rights of any present
or future holder of any part of the Collateral with respect
thereto.
7.3. The Assignment and granting of the security interest hereunder
represents a legally binding obligation of Pledgor(s), and, upon
delivery of the stock certificates representing the Collateral,
shall constitute a valid, effective, enforceable and perfected
security interest in the Collateral in favor of Secured Party.
Furthermore, upon delivery of the stock certificates no
registration, recordation or filing with any governmental
authority is required in connection with the execution, delivery
or performance of this Agreement or necessary to establish the
validity, effectiveness or enforceability hereof or of the
security interest or for the perfection of the security interest.
Pledgor(s) has/have not performed and shall not perform any act
that might prevent the secured party from enforcing any of the
terms and conditions of this Agreement or that would limit the
secured party in any such enforcement.
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7.4. Pledgor(s) agree(s) to warrant and defend Secured Party's right,
title, security interest in and assignment of Collateral and/or
any cash or property distributed thereunder.
7.5. Pledgor(s) has/have no undisclosed knowledge of any circumstances
or conditions with respect to the Collateral that could reasonably
be expected to adversely affect the value or marketability of such
Collateral.
7.6. The execution and delivery of this Agreement will not violate any
agreement to which Pledgor(s) is/are a party or, to the best of
Pledgor's(s') knowledge, will not violate any law governing
Pledgor(s).
7.7. All information and statements with respect to Pledgor(s) on the
front of this Agreement are true and correct.
8. EVENTS OF DEFAULT: The occurrence of any of the following events shall
constitute an event of default under this Agreement:
8.1. Default in the payment or performance of any of the Obligations
when due, after written notice of such default is provided to
Borrower(s) by Secured Party and the applicable grace period had
expired;
8.2. Failure of Borrower(s) to perform or observe other covenants
contained in this Agreement, any other agreements or any other
documents or instruments evidencing an obligation of Borrower(s)
to Secured Party, whether now or hereafter in existence, and
Borrower(s) fail(s) to cure such default(s) within the allotted
time period after receipt of written notice of such default(s) by
Secured Party;
8.3. Any warranty, representation or statement of Pledgor(s) in this
Agreement, or by the Borrower(s) in any other agreement, document
or instrument, or otherwise made or furnished to Secured Party by
or on behalf of Borrower(s), proves to have been false in any
material respect when made or furnished; and
8.4. The sale or transfer of Pledgor's interest in the Collateral or
any part thereof, or interest therein, without the prior written
consent of Secured Party.
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9. REMEDIES:
9.1. Upon the occurrence of any Event of Default and at any time
thereafter, Secured Party shall have, in addition to all other
rights and remedies, the remedies of a secured party under the
Uniform Commercial Code as then in effect in the State of Colorado
("UCC"), regardless of whether the UCC applies to the security
transactions covered by this Agreement.
9.2. Upon the occurrence of any Event of Default and at any time
thereafter, the Secured Party, in its sole discretion, may assign
or transfer the whole or any part of the Obligations and may
transfer and deliver the whole or any part of the Collateral into
the name of any transferee and the transferee shall be vested with
all the rights and powers of Secured Party hereunder with respect
to the Collateral so transferred.
9.3. Upon the occurrence of any Event of Default and at any time
thereafter, the Secured Party shall have the right to receive and
retain as Collateral hereunder all dividends and other payments
and distributions made upon or with respect to the Collateral and
the Pledgor(s) shall take all such actions and execute and deliver
all such instruments as the Secured Party may deem necessary or
desirable to give effect to such right.
9.4. Upon the occurrence of an Event of Default and at any time
thereafter, the proceeds of any sale of, or other realization upon
all or any part of the Collateral and any cash held by the
Borrower(s) shall be applied by the Secured Party in the following
order of priorities: (i) to the payment of the reasonable expenses
of such sale or other realization including reasonable
compensation to the Secured Party and Counsel, and all expenses,
liabilities and advances incurred or made by the Secured Party in
connection therewith, and any other unreimbursed expenses or other
amounts for which the Secured Party is to be reimbursed hereunder,
(ii) to the ratable payment in respect of accrued but unpaid
interest, if any, on the Obligations; (iii) to the ratable payment
in respect of due but unpaid principal of the Loan Note and any
and all other unpaid Obligations; and (iv) to payment to the
Pledgor(s) or to his/her/its respective heirs, successors, or
assigns, as a court of competent jurisdiction may direct.
9.5. It is further agreed and understood that no delay on the part of
Secured Party in exercising any of the rights hereunder shall
operate as a waiver of said rights, nor shall Secured Party be
liable to the undersigned for any delay in collecting or realizing
upon the Collateral or substitutes therefor or additions thereto.
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9.6. Secured Party may delay exercising or may omit to exercise any
right or remedy under this Security Agreement without waiving that
or any other part, present or future right or remedy.
9.7. Upon payment in full of all Obligations of the Borrower(s) to the
Secured Party, the Secured Party shall deliver the Collateral to
the Pledgor(s) and this Agreement shall terminate.
9.8. Upon the occurrence of an Event of Default and at any time
thereafter (whether or not any or all of the pledged securities
have been transferred of record into the secured parties names),
the Secured Party shall have the right to the extent permitted by
law and the Pledgor(s) shall take all such action as may be
necessary or appropriate to give effect to such right, to vote and
to give consent, ratifications and waivers, and take any other
actions, with respect to any or all of the pledged securities with
the same force and effect as if the Secured Party were the
absolute and sole owner.
10. GENERAL:
10.1. The terms "Borrower(s)", "Pledgor(s)", "Secured Party",
"Collateral" and "Obligations" are defined in paragraphs 1,2,3,4
and 5;
10.2. No defaults shall be waived by Secured Party except in writing and
no waiver by Secured Party or other right under this Agreement
shall operate as a waiver of any other payment or right;
10.3. Secured Party may assign or transfer its rights under this
Agreement to any transferee. Pledgor(s) hereby agree(s) that on
such assignment or other transfer, all rights, powers and remedies
of Secured Party hereunder shall belong to and be exercisable by
the transferee.
10.4. If there is more than one Pledgor(s), all of the terms and
conditions of this Agreement shall apply to each and any of them
jointly and severally;
10.5. Without affecting any obligations of Pledgor(s) under this
Agreement, Secured Party without notice or demand may renew or
extend the terms and conditions of any of the Obligations; take or
release any other Collateral as security for any of the
Obligations, and add or release any guarantor, endorser, surety or
other party to any of the Obligations;
10.6. Beyond the exercise of reasonable care in the custody thereof, the
Secured Party shall have no duty as to any Collateral in its
possession or control or in the possession or control of any agent
or bailee or as to the preservation of rights against prior
parties or any other rights pertaining thereto. The Secured Party
shall be deemed to have exercised reasonable care in the custody
and preservation of the Collateral in their possession if the
Collateral is accorded treatment substantially equal to that
accorded by the Secured Party to their own property. The Secured
Parties shall not be liable or
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responsible for any loss or damage to any Collateral, or for any
diminution in the value thereof, by reason of the act or omission
of any agent or bailee selected by the Secured Party in good
faith.
10.7. Any consent, notice or other communication required or
contemplated by this Agreement shall be in writing. It shall be
deemed given when hand delivered or three (3) days after deposit
in U.S. mail, if mailed, certified or registered U.S. mail, return
receipt requested, postage prepaid, to the other party at the
address given on the first page hereof or at such other address
given by notice as herein provided; or one (1) business day after
being sent via air express carrier, fare prepaid; or on the
business day if received during business hours or the next
following business day such item is transmitted by facsimile;
provided such consent, notice or other communication is made to
the respective addressee at the address or facsimile number such
party set forth herein, or at such other address or facsimile
number given by notice as herein.
10.8. All of the rights of Secured Party under this Agreement shall be
cumulative and shall inure to the benefit of its successors and
assigns. All obligations of Pledgor(s) hereunder shall be binding
upon the heirs, legal representatives, successors or assigns of
Pledgor(s)
10.9. Any provision hereof contrary to, prohibited by, or invalid under
applicable laws or regulations shall be inapplicable and deemed
omitted herefrom, but shall not invalidate the remaining
provisions hereof. Pledgor(s) acknowledge(s) receipt of a true
copy of this Agreement and waive(s) acceptance hereof.
10.10. This Agreement may be signed in one or more counterparts, each of
which shall have the effect of an original, but all such
counterparts shall be deemed one and the same agreement;
10.11. The Pledgor(s) shall defend, indemnify and hold the Secured Party
harmless for any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind and nature whatsoever that may be
imposed on, incurred by or asserted against the Secured Party in
any way relating to or arising out of this Agreement any other
related document or any other document contemplated by or referred
to herein or therein or the transactions contemplated by or
referred to herein or therein or the encroachment of any of the
terms hereof or thereof or otherwise arising or relating in any
manner to the pledges contemplated hereunder.
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10.12. This Agreement shall be construed under, governed by and enforced
under the laws of the State of Colorado.
10.13. This Agreement represents the entire agreement and understanding
between Secured Party and Pledgor(s) with regard to the subject
matter hereof and supersedes all prior agreements. Any
modification or amendments to this Agreement shall be in writing
and signed by the party to be charged.
10.14. Except as otherwise provided in this Agreement, the Pledgor(s)
hereby waive(s), to the extent permitted by applicable law, notice
of Judicial Hearing in connection with the Secured Party taking
possession or disposing of any of the Collateral including,
without limitation, any and all prior notices and hearings for any
prejudgment remedy or remedies and any such right that Pledgor(s)
otherwise would have under the Constitution or any statute of the
United States or any State, and, to the full extent permitted by
applicable law, Pledgor(s) hereby further waive(s) all the
requirements as to the time, place and terms of sale or other
requirements with respect to the enforcement of the Pledgor's(s')
rights and powers. Any sale or realization upon any Collateral
shall operate to divest all right, title and interest, at law or
in equity against the Pledgor(s) thereon and thereto, and shall be
a perpetual bar both at law and in equity against Pledgor(s) and
against any and all persons claiming or attempting to claim the
Collateral.
PLEDGOR(S):
/s/Xxxxx. X. Xxxxxxx
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Name: Xxxxx X. Xxxxxxx
Date: November 18, 199
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