Exhibit 10.16(b)
PROMISSORY NOTE
December 18, 1997
Borrower: Michael Touff Lender: M.D.C. Holdings, Inc.,
a Delaware corporation
Amount: $41,511.00 Maturity Date: December 30, 2002
For value received, Borrower promises to pay to the order of Lender at
Lender's corporate office in Denver, Colorado, the sum of $41,511.00 in lawful
money of the United States with simple interest thereon from the date hereof
until paid, both before and after judgment, computed on the basis of a 365 day
year, at a variable rate per annum, adjusted as of the first day of each
calendar month during the term of this Promissory Note, equal to (a) the average
one month London Inter-Bank Offered Rate as of the last business day immediately
preceding the date of such adjustment (or, in the case of the initial rate, the
date hereof) as reported in The Wall Street Journal, plus (b) 1%. Upon default
in payment of any principal or interest when due, whether due at stated
maturity, by acceleration, or otherwise, all outstanding principal shall bear
interest at a default rate of 18% per annum from the date when due until paid,
both before and after judgment.
Payments of principal and accrued interest shall be made on December 30
of each year during the term of this Promissory Note commencing December 30,
1998 based upon a ten year amortization. The remaining principal and accrued
interest shall be payable in full on the earlier of: (a) December 30, 2002; (b)
90 days after Borrower's employment with Lender has been terminated for cause;
or (c) one year after Borrower's employment with Lender has been terminated
other than for cause.
All payments shall be applied first to accrued interest and the
remainder, if any, to principal.
This Promissory Note is secured by shares of the Lender's common stock
pursuant to a Pledge Agreement.
If default occurs in the payment of any principal or interest when due
and remains uncured five days after Borrower's receipt of notice thereof, or if
any Event of Default (as defined in the Pledge Agreement) occurs under the
Pledge Agreement, time being the essence, then the entire unpaid balance, with
interest as aforesaid, shall, at the election of the holder hereof and without
notice of such election, become immediately due and payable in full and in any
such event, Borrower agrees to pay to the holder hereof all collection costs,
including reasonable attorney fees and legal expenses, in addition to all other
sums due hereunder.
Borrower:
-----------------------------
Michael Touff
PLEDGE AGREEMENT
THIS AGREEMENT is entered into as of the 18th day of December
1997, by and between M.D.C. Holdings, Inc., a Delaware corporation ("MDC") and
Michael Touff ("Pledgor").
WHEREAS, MDC has made a loan to Pledgor in connection with the
receipt by Pledgor of shares of MDC stock as part of Pledgor's compensation; and
WHEREAS, the loan to Pledgor is secured by certain shares of
MDC stock delivered to Pledgor;
NOW, THEREFORE, in consideration of the premises and the
mutual promises contained herein, MDC and Pledgor agree as follows:
1. PLEDGE.
1.1 Security Interest. As security for the promissory note of Pledgor
of even date herewith in the original principal amount of $41,511.00 (the
"Note"), including any renewals or extensions thereof, Pledgor hereby pledges
and assigns to MDC and creates in MDC a security interest in all of his right,
title and interest in and to the shares of common stock of MDC represented by
the stock certificates listed on Schedule 1 to this Agreement (the "Pledged
Shares") together with all rights and privileges of Pledgor with respect
thereto, all proceeds, income and profits thereof and all property received in
addition thereto, in exchange thereof or in substitution therefor (the
"Collateral"). The initial number of Pledged Shares shall be no less than the
principal amount of the Note plus 25%, divided by $11.38.
1.2 Stock Dividends, Options, or Other Adjustments. If the Pledged
Shares or any additional shares of capital stock, instruments, or other property
distributable on or by reason of the Collateral, shall come into the possession
or control of Pledgor, and such property is such that a security interest
therein can be perfected only by possession by MDC, Pledgor shall hold the same
in trust and forthwith transfer and deliver the same to MDC subject to the
provisions hereof. Notwithstanding the above, absent an Event of Default,
Pledgor shall retain the right to vote all shares of the Collateral and receive
all dividends declared on all shares of the Collateral.
1.3 Delivery of Share Certificates; Stock Powers. The stock
certificates representing the Pledged Shares have been delivered to MDC. Pledgor
shall promptly deliver to MDC share certificates or other documents representing
Collateral acquired or received after the date of this Agreement with stock
powers duly executed by Pledgor. If at any time MDC notifies Pledgor that
additional stock powers endorsed in blank held by MDC with respect to the
Collateral are required, Pledgor shall promptly execute in blank and deliver
such stock powers as MDC may request.
1.4 Power of Attorney. Pledgor hereby constitutes and irrevocably
appoints MDC, with full power of substitution and revocation by MDC, as
Pledgor's true and lawful attorney-in-
fact, to the full extent permitted by law, at any time or times when an Event of
Default (as defined below) has occurred and is continuing, to affix to
certificates and documents representing the Collateral the stock powers
delivered with respect thereto, to transfer or cause the transfer of the
Collateral or any part thereof on the books of MDC to the name of MDC or MDC's
nominee and thereafter exercise as to such Collateral all the rights, powers and
remedies of an owner. The power of attorney granted pursuant to this Agreement
and all authority hereby conferred are granted and conferred solely to protect
MDC's interest in the Collateral and shall not impose any duty upon MDC to
exercise any power. This power of attorney shall be irrevocable as one coupled
with an interest.
2. REPRESENTATIONS OF PLEDGOR.
Pledgor represents and warrants to MDC that:
2.1 Ownership. Pledgor is the sole legal and beneficial owner of, and
has good and marketable title to, the Pledged Shares listed as being owned by
him on Schedule 1, free and clear of all pledges, liens, security interests and
other encumbrances other than the security interest created by this Agreement,
and Pledgor has the unqualified right and authority to execute this Agreement
and to pledge the Collateral to MDC as provided for herein.
2.2 Other Rights. There are no outstanding options, warrants or
other agreements with respect to the Pledged Shares, other than this Agreement.
2.3 Compliance. The execution and delivery of this Agreement by
Pledgor, and the performance by Pledgor of his obligations hereunder, will not
result in a violation of any contract, agreement or other obligation to which
Pledgor is a party or, to the best knowledge of Pledgor, any law or governmental
regulation to which Pledgor is subject.
3. COVENANTS.
Pledgor covenants to MDC that:
3.1 Sale or Transfer. Unless Pledgor and MDC have made arrangements for
the release of all or any part of the Collateral in accordance with Section 3.2
below, Pledgor will not sell, transfer or convey any interest in, or suffer or
permit any lien or encumbrance to be created upon or with respect to, any of the
Collateral (other than as created under this Agreement) during the term of this
Agreement.
3.2 Release of Collateral. At any time on or after Pledgor makes a
principal payment on the Note, the Pledgor may require MDC to release a pro-rata
portion of the Collateral, with the number of shares to be released determined
by multiplying the total number of shares of Collateral then held by MDC by a
fraction, the numerator of which being the amount of any such principal payment
and the denominator of which being the original principal amount of the Note;
provided, however, that releases of Collateral shall be permitted by this
Section 3.2 only if the
fair market value of the Collateral retained by MDC after giving effect to a
release equals or exceeds the unpaid principal amount of the Note after giving
effect to the principal payment. For this purpose, "fair market value" shall
mean the closing price of each share of the Collateral on the New York Stock
Exchange on the date of the principal payment (or, if no shares were traded on
that day, on the next preceding day on which shares were traded), multiplied by
the number of shares of Collateral retained by MDC.
3.3 Further Actions. Pledgor will, at his own expense, at any time and
from time to time at MDC's request, do, make, procure, execute and deliver all
acts, things, writings, assurances and other documents as may be reasonably
proposed by MDC further to enhance, preserve, establish, demonstrate or enforce
MDC's rights, interests and remedies created by, provided in or arising from
this Agreement.
4. REMEDIES.
4.1 Events of Default. "Event of Default" means any one of the
following events:
(A) the occurrence of any event of default under the Note
which has not been cured within the applicable cure period, or
(B) default in the performance, or breach, of any covenant,
representation or warranty of Pledgor in this Agreement, and continuance of such
default or breach for a period of 30 days after MDC has given such Pledgor
written notice specifying such default or breach and requiring it to be
remedied.
4.2 Actions by MDC. If an Event of Default occurs and is continuing,
then and in every such case MDC may take any one or more of the following
actions:
(A) MDC may upon two business days' notice cause the
Collateral to be transferred to its name or to the name of its nominee or
nominees and thereafter exercise as to such Collateral all of the rights, powers
and remedies of an owner;
(B) MDC may upon two business days' notice collect by legal
proceedings or otherwise all dividends, interest, principal payments, capital
distributions and other sums now or hereafter payable on account of said
Collateral, and hold the same as part of the Collateral, or apply the same to
the Note in such manner as MDC may decide in its sole and absolute discretion;
(C) MDC may upon two business days' notice enter into any
extension, subordination, reorganization, deposit, merger, or consolidation
agreement, or any other agreement relating to or affecting the Collateral, and
in connection therewith deposit or surrender control of such Collateral
thereunder, and accept other property in exchange therefor and hold and apply
such property or money so received in accordance with the provisions hereof;
(D) At any time upon two business days' notice, after
Pledgor's failure to pay the same, MDC may discharge any taxes, liens, security
interests or other encumbrances levied or placed on the Collateral, pay for the
maintenance and preservation of the Collateral, or pay for insurance on the
Collateral; the amount of such payments, plus any and all fees, costs and
expenses of MDC (including reasonable attorneys' fees and disbursements) in
connection therewith, shall, at MDC's option, be reimbursed by Pledgor on
demand, with interest thereon to be calculated pursuant to the Note from the
date paid by MDC.
(E) MDC shall have all the rights and remedies of a secured
party under the Uniform Commercial Code of Colorado.
4.3 Remedies Cumulative and Nonexclusive. All of MDC's rights
and remedies, including, but not limited to the foregoing, shall be cumulative
and not exclusive and shall be enforceable alternatively, successively or
concurrently as MDC may deem expedient.
4.4 Consents and Approvals. If any consent, approval or authorization
of any state, municipal or other governmental department, agency or authority
should be necessary to effectuate any sale or other disposition of the
Collateral, or any partial disposition of the Collateral, Pledgor will execute
all such applications and other instruments as may be required in connection
with securing any such consent, approval or authorization and will otherwise use
his best efforts to secure the same. Pledgor further agrees to use his best
efforts to secure such sale or other disposition of the Collateral as MDC may
deem necessary pursuant to the terms of this Agreement.
4.5 Assignment and Transfer. Upon any sale or other disposition of the
Collateral, MDC shall have the right to deliver, assign and transfer to the
purchaser thereof the Collateral so sold or disposed of. Each purchaser at any
such sale or other disposition (including MDC) shall hold the Collateral free
from any claim or right of whatever kind, including any equity or right of
redemption of Pledgor. Pledgor specifically waives, to the extent permitted by
applicable law, all rights of redemption, stay or appraisal that he had or may
have under any rule of law or statute now existing or hereafter adopted.
4.6 No Obligation. MDC shall not be obligated to make any sale or
other disposition, unless the terms thereof shall be satisfactory to it. MDC
may, without notice or publication, adjourn any private or public sale, and,
upon five days' prior notice to Pledgor, hold such sale at any time or place to
which the same may be so adjourned. In case of any sale of all or any part of
the Collateral, on credit or for future delivery, the Collateral so sold may be
retained by MDC until the selling price is paid by the purchaser thereof, but
MDC shall incur no liability in case of the failure of such purchaser to take up
and pay for the property so sold and, in case of any such failure, such property
may again be sold as herein provided.
4.7 Disposition of Proceeds. The proceeds of any sale or
disposition of all or any part of the Collateral shall be applied by MDC in the
following order:
(A) to the payment in full of the costs and expenses of such
sale or sales, collections, and the protection, declaration and enforcement of
any security interest granted hereunder including the reasonable compensation of
MDC's agents and attorneys;
(B) to the payment of Note in such manner as MDC may
elect; and
(C) to the payment to Pledgor of any surplus.
4.8 Insufficiency. In the event that the proceeds of any sale or other
disposition are insufficient to cover the principal of, and interest on, the
Note plus the costs and expenses of the sale or other disposition, Pledgor shall
be liable for such deficiency.
5. TERMINATION.
This Agreement shall continue in full force and effect as long as any
amount remains outstanding under the Note. Subject to any sale or other
disposition by MDC of the Collateral or any part thereof pursuant to this
Agreement, the Collateral shall be returned to Pledgor upon full indefeasible
payment, satisfaction and termination of the Note. A portion of the Collateral
shall also be returned to Pledgor as provided in Section 3.2.
6. EXPENSES OF MDC.
All expenses (including reasonable fees and disbursements of counsel)
incurred by MDC in connection with any actual or attempted sale or exchange of,
or any enforcement, collection, compromise or settlement respecting, the
Collateral, or any other proceeding or action taken by MDC hereunder whether
directly or as attorney-in-fact pursuant to a power of attorney or other
authorization herein conferred, and regardless of whether any litigation or
proceeding is commenced for the purpose of satisfaction of the liability of
Pledgor for failure to pay his or her obligations or as additional amounts owing
by Pledgor to cover MDC's costs of acting against the Collateral, shall be
deemed an obligation of Pledgor for all purposes of this Agreement, and MDC may
apply the Collateral to payment of or reimbursement of itself for such
liability.
7. MISCELLANEOUS.
7.1 Assignability of Rights. Pledgor may not assign any of his rights
under this Agreement, and any attempted assignment shall be void and considered
a default under this Agreement. The provisions of this Agreement which are for
MDC's benefit as a holder of the Collateral are also for the benefit of, and
enforceable by any subsequent holder of the Note or the Collateral.
7.2 Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be given (and shall be
deemed to have been duly given upon receipt) by delivery in person, by telecopy
or by registered or certified mail (postage
prepaid, return receipt requested) to the respective parties at the following
addresses (or at such other address for a party as shall be specified by like
notice):
(A) if to MDC:
MDC Holdings, Inc.
3600 South Yosemite, Suite 900
Denver, Colorado 80237
Attention: Chief Financial Officer
(B) if to Pledgor:
Mr. Michael Touff
3600 South Yosemite, Suite 900
Denver, CO 80237
7.3 Entire Agreement. Except as expressly set forth herein, this
Agreement constitutes the entire agreement between the parties with respect to
the subject matter hereof and supersedes all prior agreements and undertakings,
both written and oral, between the parties with respect to the subject matter
hereof.
7.4 Governing Law. This Agreement shall be governed by, and construed
in accordance with, the laws of the State of Colorado regardless of the laws
that might otherwise govern under applicable principles of conflicts of laws
thereof. No provision of this Agreement shall be construed against any party by
reason of that party having drafted the same.
7.5 Headings. The descriptive headings contained in this Agreement are
included for convenience of reference only and shall not affect in any way the
meaning or interpretation of this Agreement.
7.6 Severability; Enforceability. If any term or provision of this
Agreement or any application thereof shall be invalid or enforceable, the
remainder of this Agreement and any other application of such term or provision
shall not be affected thereby.
7.7 Attorneys' Fees. In the event of any dispute among the parties
hereto relating to the subject matter of this Agreement, the out-of-pocket costs
and reasonable attorneys' fees of the prevailing party shall be paid by the
other party in addition to any other relief.
7.8 Amendment. This Agreement may not be supplemented, modified
or amended except by an instrument in writing signed by the parties hereto.
7.9 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
7.10 No Obligation. MDC and its assigns shall use reasonable care
in holding the Collateral and shall hold and dispose of the same in accordance
with the terms of this Agreement.
IN WITNESS WHEREOF, MDC has caused this Agreement to be
executed, and Pledgor has executed this Agreement, as of the date first written
above.
M.D.C. HOLDINGS, INC.
By:
------------------------------
Name:
----------------------------
Title:
---------------------------
PLEDGOR
---------------------------------
Name: Michael Touff
Schedule 1 to Pledge Agreement
PLEDGED SHARES
Stock Cert. Number of
Number Shares
__ 4,560
------------
-- ------------
PROMISSORY NOTE
December 18, 1997
Borrower: Paris G. Reece III Lender: M.D.C. Holdings, Inc.,
a Delaware corporation
Amount: $52,581.00 Maturity Date: December 30, 2002
For value received, Borrower promises to pay to the order of Lender at
Lender's corporate office in Denver, Colorado, the sum of $52,581.00 in lawful
money of the United States with simple interest thereon from the date hereof
until paid, both before and after judgment, computed on the basis of a 365 day
year, at a variable rate per annum, adjusted as of the first day of each
calendar month during the term of this Promissory Note, equal to (a) the average
one month London Inter-Bank Offered Rate as of the last business day immediately
preceding the date of such adjustment (or, in the case of the initial rate, the
date hereof) as reported in The Wall Street Journal, plus (b) 1%. Upon default
in payment of any principal or interest when due, whether due at stated
maturity, by acceleration, or otherwise, all outstanding principal shall bear
interest at a default rate of 18% per annum from the date when due until paid,
both before and after judgment.
Payments of principal and accrued interest shall be made on December 30
of each year during the term of this Promissory Note commencing December 30,
1998 based upon a ten year amortization. The remaining principal and accrued
interest shall be payable in full on the earlier of: (a) December 30, 2002; (b)
90 days after Borrower's employment with Lender has been terminated for cause;
or (c) one year after Borrower's employment with Lender has been terminated
other than for cause.
All payments shall be applied first to accrued interest and the
remainder, if any, to principal.
This Promissory Note is secured by shares of the Lender's common stock
pursuant to a Pledge Agreement.
If default occurs in the payment of any principal or interest when due
and remains uncured five days after Borrower's receipt of notice thereof, or if
any Event of Default (as defined in the Pledge Agreement) occurs under the
Pledge Agreement, time being the essence, then the entire unpaid balance, with
interest as aforesaid, shall, at the election of the holder hereof and without
notice of such election, become immediately due and payable in full and in any
such event, Borrower agrees to pay to the holder hereof all collection costs,
including reasonable attorney fees and legal expenses, in addition to all other
sums due hereunder.
Borrower:
-----------------------------
Paris G. Reece III
PLEDGE AGREEMENT
THIS AGREEMENT is entered into as of the 18th day of December
1997, by and between M.D.C. Holdings, Inc., a Delaware corporation ("MDC") and
Paris G. Reece III ("Pledgor").
WHEREAS, MDC has made a loan to Pledgor in connection with the
receipt by Pledgor of shares of MDC stock as part of Pledgor's compensation; and
WHEREAS, the loan to Pledgor is secured by certain shares of
MDC stock delivered to Pledgor;
NOW, THEREFORE, in consideration of the premises and the
mutual promises contained herein, MDC and Pledgor agree as follows:
8. PLEDGE.
1.1 Security Interest. As security for the promissory note of Pledgor
of even date herewith in the original principal amount of $52,581.00 (the
"Note"), including any renewals or extensions thereof, Pledgor hereby pledges
and assigns to MDC and creates in MDC a security interest in all of his right,
title and interest in and to the shares of common stock of MDC represented by
the stock certificates listed on Schedule 1 to this Agreement (the "Pledged
Shares") together with all rights and privileges of Pledgor with respect
thereto, all proceeds, income and profits thereof and all property received in
addition thereto, in exchange thereof or in substitution therefor (the
"Collateral"). The initial number of Pledged Shares shall be no less than the
principal amount of the Note plus 25%, divided by $11.38.
1.2 Stock Dividends, Options, or Other Adjustments. If the Pledged
Shares or any additional shares of capital stock, instruments, or other property
distributable on or by reason of the Collateral, shall come into the possession
or control of Pledgor, and such property is such that a security interest
therein can be perfected only by possession by MDC, Pledgor shall hold the same
in trust and forthwith transfer and deliver the same to MDC subject to the
provisions hereof. Notwithstanding the above, absent an Event of Default,
Pledgor shall retain the right to vote all shares of the Collateral and receive
all dividends declared on all shares of the Collateral.
1.3 Delivery of Share Certificates; Stock Powers. The stock
certificates representing the Pledged Shares have been delivered to MDC. Pledgor
shall promptly deliver to MDC share certificates or other documents representing
Collateral acquired or received after the date of this Agreement with stock
powers duly executed by Pledgor. If at any time MDC notifies Pledgor that
additional stock powers endorsed in blank held by MDC with respect to the
Collateral are required, Pledgor shall promptly execute in blank and deliver
such stock powers as MDC may request.
1.4 Power of Attorney. Pledgor hereby constitutes and irrevocably
appoints MDC, with full power of substitution and revocation by MDC, as
Pledgor's true and lawful attorney-in-
fact, to the full extent permitted by law, at any time or times when an Event of
Default (as defined below) has occurred and is continuing, to affix to
certificates and documents representing the Collateral the stock powers
delivered with respect thereto, to transfer or cause the transfer of the
Collateral or any part thereof on the books of MDC to the name of MDC or MDC's
nominee and thereafter exercise as to such Collateral all the rights, powers and
remedies of an owner. The power of attorney granted pursuant to this Agreement
and all authority hereby conferred are granted and conferred solely to protect
MDC's interest in the Collateral and shall not impose any duty upon MDC to
exercise any power. This power of attorney shall be irrevocable as one coupled
with an interest.
9. REPRESENTATIONS OF PLEDGOR.
Pledgor represents and warrants to MDC that:
2.1 Ownership. Pledgor is the sole legal and beneficial owner of, and
has good and marketable title to, the Pledged Shares listed as being owned by
him on Schedule 1, free and clear of all pledges, liens, security interests and
other encumbrances other than the security interest created by this Agreement,
and Pledgor has the unqualified right and authority to execute this Agreement
and to pledge the Collateral to MDC as provided for herein.
2.2 Other Rights. There are no outstanding options, warrants or
other agreements with respect to the Pledged Shares, other than this Agreement.
2.3 Compliance. The execution and delivery of this Agreement by
Pledgor, and the performance by Pledgor of his obligations hereunder, will not
result in a violation of any contract, agreement or other obligation to which
Pledgor is a party or, to the best knowledge of Pledgor, any law or governmental
regulation to which Pledgor is subject.
10. COVENANTS.
Pledgor covenants to MDC that:
3.1 Sale or Transfer. Unless Pledgor and MDC have made arrangements
for the release of all or any part of the Collateral in accordance with Section
3.2 below, Pledgor will not sell, transfer or convey any interest in, or suffer
or permit any lien or encumbrance to be created upon or with respect to, any of
the Collateral (other than as created under this Agreement) during the term of
this Agreement.
3.2 Release of Collateral. At any time on or after Pledgor makes a
principal payment on the Note, the Pledgor may require MDC to release a pro-rata
portion of the Collateral, with the number of shares to be released determined
by multiplying the total number of shares of Collateral then held by MDC by a
fraction, the numerator of which being the amount of any such principal payment
and the denominator of which being the original principal amount of the Note;
provided, however, that releases of Collateral shall be permitted by this
Section 3.2 only if the fair market value of the Collateral retained by MDC
after giving effect to a release equals or
exceeds the unpaid principal amount of the Note after giving effect to the
principal payment. For this purpose, "fair market value" shall mean the closing
price of each share of the Collateral on the New York Stock Exchange on the date
of the principal payment (or, if no shares were traded on that day, on the next
preceding day on which shares were traded), multiplied by the number of shares
of Collateral retained by MDC.
3.3 Further Actions. Pledgor will, at his own expense, at any time and
from time to time at MDC's request, do, make, procure, execute and deliver all
acts, things, writings, assurances and other documents as may be reasonably
proposed by MDC further to enhance, preserve, establish, demonstrate or enforce
MDC's rights, interests and remedies created by, provided in or arising from
this Agreement.
11. REMEDIES.
4.1 Events of Default. "Event of Default" means any one of the
following events:
(A) the occurrence of any event of default under the
Note which has not been cured within the applicable cure period, or
(B) default in the performance, or breach, of any covenant,
representation or warranty of Pledgor in this Agreement, and continuance of such
default or breach for a period of 30 days after MDC has given such Pledgor
written notice specifying such default or breach and requiring it to be
remedied.
4.2 Actions by MDC. If an Event of Default occurs and is continuing,
then and in every such case MDC may take any one or more of the following
actions:
(A) MDC may upon two business days' notice cause the
Collateral to be transferred to its name or to the name of its nominee or
nominees and thereafter exercise as to such Collateral all of the rights, powers
and remedies of an owner;
(B) MDC may upon two business days' notice collect by legal
proceedings or otherwise all dividends, interest, principal payments, capital
distributions and other sums now or hereafter payable on account of said
Collateral, and hold the same as part of the Collateral, or apply the same to
the Note in such manner as MDC may decide in its sole and absolute discretion;
(C) MDC may upon two business days' notice enter into any
extension, subordination, reorganization, deposit, merger, or consolidation
agreement, or any other agreement relating to or affecting the Collateral, and
in connection therewith deposit or surrender control of such Collateral
thereunder, and accept other property in exchange therefor and hold and apply
such property or money so received in accordance with the provisions hereof;
(D) At any time upon two business days' notice, after
Pledgor's failure to pay the same, MDC may discharge any taxes, liens, security
interests or other encumbrances levied or placed on the Collateral, pay for the
maintenance and preservation of the Collateral, or pay for
insurance on the Collateral; the amount of such payments, plus any and all fees,
costs and expenses of MDC (including reasonable attorneys' fees and
disbursements) in connection therewith, shall, at MDC's option, be reimbursed by
Pledgor on demand, with interest thereon to be calculated pursuant to the Note
from the date paid by MDC.
(E) MDC shall have all the rights and remedies of a secured
party under the Uniform Commercial Code of Colorado.
4.3 Remedies Cumulative and Nonexclusive. All of MDC's rights
and remedies, including, but not limited to the foregoing, shall be cumulative
and not exclusive and shall be enforceable alternatively, successively or
concurrently as MDC may deem expedient.
4.4 Consents and Approvals. If any consent, approval or authorization
of any state, municipal or other governmental department, agency or authority
should be necessary to effectuate any sale or other disposition of the
Collateral, or any partial disposition of the Collateral, Pledgor will execute
all such applications and other instruments as may be required in connection
with securing any such consent, approval or authorization and will otherwise use
his best efforts to secure the same. Pledgor further agrees to use his best
efforts to secure such sale or other disposition of the Collateral as MDC may
deem necessary pursuant to the terms of this Agreement.
4.5 Assignment and Transfer. Upon any sale or other disposition of the
Collateral, MDC shall have the right to deliver, assign and transfer to the
purchaser thereof the Collateral so sold or disposed of. Each purchaser at any
such sale or other disposition (including MDC) shall hold the Collateral free
from any claim or right of whatever kind, including any equity or right of
redemption of Pledgor. Pledgor specifically waives, to the extent permitted by
applicable law, all rights of redemption, stay or appraisal that he had or may
have under any rule of law or statute now existing or hereafter adopted.
4.6 No Obligation. MDC shall not be obligated to make any sale or
other disposition, unless the terms thereof shall be satisfactory to it. MDC
may, without notice or publication, adjourn any private or public sale, and,
upon five days' prior notice to Pledgor, hold such sale at any time or place to
which the same may be so adjourned. In case of any sale of all or any part of
the Collateral, on credit or for future delivery, the Collateral so sold may be
retained by MDC until the selling price is paid by the purchaser thereof, but
MDC shall incur no liability in case of the failure of such purchaser to take up
and pay for the property so sold and, in case of any such failure, such property
may again be sold as herein provided.
4.7 Disposition of Proceeds. The proceeds of any sale or
disposition of all or any part of the Collateral shall be applied by MDC in the
following order:
(A) to the payment in full of the costs and expenses of such
sale or sales, collections, and the protection, declaration and enforcement of
any security interest granted hereunder including the reasonable compensation of
MDC's agents and attorneys;
(B) to the payment of Note in such manner as MDC may
elect; and
(C) to the payment to Pledgor of any surplus.
4.8 Insufficiency. In the event that the proceeds of any sale or other
disposition are insufficient to cover the principal of, and interest on, the
Note plus the costs and expenses of the sale or other disposition, Pledgor shall
be liable for such deficiency.
12. TERMINATION.
This Agreement shall continue in full force and effect as long as any
amount remains outstanding under the Note. Subject to any sale or other
disposition by MDC of the Collateral or any part thereof pursuant to this
Agreement, the Collateral shall be returned to Pledgor upon full indefeasible
payment, satisfaction and termination of the Note. A portion of the Collateral
shall also be returned to Pledgor as provided in Section 3.2.
13. EXPENSES OF MDC.
All expenses (including reasonable fees and disbursements of counsel)
incurred by MDC in connection with any actual or attempted sale or exchange of,
or any enforcement, collection, compromise or settlement respecting, the
Collateral, or any other proceeding or action taken by MDC hereunder whether
directly or as attorney-in-fact pursuant to a power of attorney or other
authorization herein conferred, and regardless of whether any litigation or
proceeding is commenced for the purpose of satisfaction of the liability of
Pledgor for failure to pay his or her obligations or as additional amounts owing
by Pledgor to cover MDC's costs of acting against the Collateral, shall be
deemed an obligation of Pledgor for all purposes of this Agreement, and MDC may
apply the Collateral to payment of or reimbursement of itself for such
liability.
14. MISCELLANEOUS.
7.1 Assignability of Rights. Pledgor may not assign any of his rights
under this Agreement, and any attempted assignment shall be void and considered
a default under this Agreement. The provisions of this Agreement which are for
MDC's benefit as a holder of the Collateral are also for the benefit of, and
enforceable by any subsequent holder of the Note or the Collateral.
7.2 Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be given (and shall be
deemed to have been duly given upon receipt) by delivery in person, by telecopy
or by registered or certified mail (postage prepaid, return receipt requested)
to the respective parties at the following addresses (or at such other address
for a party as shall be specified by like notice):
(A) if to MDC:
MDC Holdings, Inc.
3600 South Yosemite, Suite 900
Denver, Colorado 80237
Attention: General Counsel
(B) if to Pledgor:
Mr. Paris G. Reece III
3600 South Yosemite, Suite 900
Denver, CO 80237
7.3 Entire Agreement. Except as expressly set forth herein, this
Agreement constitutes the entire agreement between the parties with respect to
the subject matter hereof and supersedes all prior agreements and undertakings,
both written and oral, between the parties with respect to the subject matter
hereof.
7.4 Governing Law. This Agreement shall be governed by, and construed
in accordance with, the laws of the State of Colorado regardless of the laws
that might otherwise govern under applicable principles of conflicts of laws
thereof. No provision of this Agreement shall be construed against any party by
reason of that party having drafted the same.
7.5 Headings. The descriptive headings contained in this Agreement are
included for convenience of reference only and shall not affect in any way the
meaning or interpretation of this Agreement.
7.6 Severability; Enforceability. If any term or provision of this
Agreement or any application thereof shall be invalid or enforceable, the
remainder of this Agreement and any other application of such term or provision
shall not be affected thereby.
7.7 Attorneys' Fees. In the event of any dispute among the parties
hereto relating to the subject matter of this Agreement, the out-of-pocket costs
and reasonable attorneys' fees of the prevailing party shall be paid by the
other party in addition to any other relief.
7.8 Amendment. This Agreement may not be supplemented, modified
or amended except by an instrument in writing signed by the parties hereto.
7.9 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
7.10 No Obligation. MDC and its assigns shall use reasonable care
in holding the Collateral and shall hold and dispose of the same in accordance
with the terms of this Agreement.
IN WITNESS WHEREOF, MDC has caused this Agreement to be
executed, and Pledgor has executed this Agreement, as of the date first written
above.
M.D.C. HOLDINGS, INC.
By:
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Name:
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Title:
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PLEDGOR
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Name: Paris G. Reece III
Schedule 1 to Pledge Agreement
PLEDGED SHARES
Stock Cert. Number of
Number Shares
__ 5,776
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