Exhibit 10.6
EXHIBIT 3 to RESTRICTED STOCK AGREEMENT
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STOCK PLEDGE AGREEMENT
This Stock Pledge Agreement is entered into as of June 1, 2001 (the
"Effective Date"), by and among DAOU Systems, Inc., a Delaware corporation (the
"Company"), and James Roberto (the "Pledgor"), with reference to the following
facts:
Background Statement
The Company has agreed to sell to Pledgor 1.5 million shares of the
Company's common stock, par value $.001 per share (the "Shares"), pursuant to
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that certain Stock Purchase Agreement, by and between the Company and Pledgor,
dated June 1, 2001 (the "Purchase Agreement").
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In addition the Company has agreed to loan to Pledgor $435,000 as evidenced
by that certain Secured Promissory Note (the "Note") dated June 1, 2001.
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As a material inducement for the Company to make the loan to Pledgor and to
enter into the Purchase Agreement, Pledgor has agreed to secure his obligations
under the Note by granting the Company a first priority security interest in the
Shares.
Agreement
NOW, THEREFORE, in consideration of the mutual terms, covenants and
conditions contained herein, the parties hereby agree as follows:
1. Security. The term "Pledged Stock" shall mean the 1.5 million
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Shares registered in the name of Pledgor, together with all certificates,
options, rights or other distributions issued as an addition to, in substitution
or in exchange for, or on account of, any such Shares, and all proceeds of the
foregoing, as further described in and subject to the provisions of Section 4
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below, now or hereafter owned or acquired by Pledgor.
2. Grant of Security Interest. As security for full and timely
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payment, performance and satisfaction of the Obligations (as defined in Section
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3), Pledgor hereby grant to the Company a first priority security interest in
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the Pledged Stock. Upon the execution hereof, the Pledged Stock and any related
stock powers will be deposited in escrow with the Company pursuant to Section
1.9 of the Purchase Agreement.
3. Obligations of Pledgor. As used herein, the term "Obligations"
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shall mean all of Pledgor's obligations, covenants and agreements under the
Note.
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4. Pledged Stock. In the event Pledgor will become entitled to
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receive or will receive, in connection with any of the Pledged Stock, (a) any
stock certificate, including any certificate representing a stock dividend or
any certificate in connection with any increase or reduction of capital,
reclassification, merger, consolidation, sale of assets, combination of shares,
stock split or spin-off, (b) any option, warrant or right, whether as an
addition to or in substitution of any of the Pledged Stock, or otherwise, (c)
any dividend or distribution payable in property, including securities issued as
a dividend on the Pledged Stock, or (d) any other distributions of any kind
whatsoever, Pledgor will accept the same as encumbered by the security interest
created hereby, and will deliver the same forthwith to the Company as the escrow
agent (the "Escrow Agent"), in the exact form received, including as
appropriate, Pledgor's endorsement or appropriate stock power duly executed in
blank, as appropriate, to be held by the Escrow Agent, as a part of the Pledged
Stock, subject to the terms hereof; provided, however, that as long as no
Default (as defined in Section 7) is in existence, Pledgor will have sole voting
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rights with respect to the Pledged Stock.
5. Representations and Warranties of Pledgor. Pledgor warrants
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and represents to the Company that: (a) he has the power and authority to enter
into this Agreement and has the power and authority to pledge the Pledged Stock
for the purposes described herein, (b) Pledgor is the legal and beneficial owner
of all of the Pledged Stock, (c) all of the shares of the Pledged Stock are
owned by Pledgor free of any pledge, mortgage, lien or security interest of any
kind, except as created hereby, (d) the execution and delivery by Pledgor of
this Agreement, and the performance of its terms, will not result in any
violation or default under the terms of any agreement or instrument, or any law
or governmental rule or regulation applicable to Pledgor or the Pledged Stock,
and (e) upon execution and delivery by Pledgor of this Agreement and upon
delivery of the Pledged Stock to Escrow Agent, this Agreement will create a
valid and perfected first priority security interest in the Pledged Stock, and
the proceeds thereof, subject to no prior security interest.
6. Transfer of Interests. Pledgor hereby covenants that, until
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such time as the Obligations have been fully paid, performed and satisfied,
except as set forth in Section 1.2 of the Purchase Agreement, Pledgor will not
sell, convey or otherwise dispose of any of the Pledged Stock or any interest
therein, or create, incur or permit to exist any pledge, mortgage, lien, charge,
encumbrance or any security interest whatsoever in or with respect to any of the
Pledged Stock, or the proceeds thereof, other than the security interest created
hereby. No transfer shall be valid unless and until the transferee agrees that
such transfer is subject to the preexisting security interest created hereby and
such transferee executes a pledge agreement reasonably satisfactory to the
Company.
7. Default. As used herein, the term "Default" will mean the
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failure of full and timely payment or performance and satisfaction of any of the
Obligations.
8. Rights of the Company. Upon the occurrence of a Default, the
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Company may, at its option, do any one or more of the following: (a) declare all
indebtedness of Pledgor to Company to be immediately due and payable, whereupon
all unpaid principal and interest under the Note will become and be immediately
due and payable; (b) exercise any and all of the rights and remedies of a
secured party as provided for by law; (c) proceed by an action or actions at law
or in equity to recover the obligations secured hereby or to foreclose under the
terms of this
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Agreement and the Note and sell the collateral, or any portion thereof, pursuant
to a judgment or decree of a court or courts of competent jurisdiction; (d)
proceed immediately to have any or all of the Pledged Stock registered in the
Company's name or in the name of a nominee; (e) enforce one or more remedies
hereunder, successively or concurrently; and (f) proceed immediately to dispose
of and realize upon the Pledged Stock, or any part thereof, and in connection
therewith, sell or otherwise dispose of and deliver the Pledged Stock, or any
part thereof, in one or more parcels at public or private sale or sales, at any
exchange, broker's board or at any of the Company's offices or elsewhere, at
such prices and on such terms as the Company may deem best, for cash or on
credit, or for future delivery without assumption of any credit risk, with the
right of the Company or any purchaser to purchase at any such sale either the
whole or any part of the Pledged Stock (in connection with any such sale or
disposition, the Company need not give more than thirty (30) calendar days
notice of the time and place of any public sale or of the time after which a
private sale may take place, which notice to Pledgor hereby acknowledges to be
reasonable).
9. Proceeds. The proceeds of any disposition of all or any part
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of the Pledged Stock, as provided in Section 8, will be applied as follows: (a)
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first, to the costs and expenses incurred in connection therewith or incidental
thereto, including the Company's attorneys' fees and legal expenses; (b) second,
to the satisfaction of the Obligations; (c) third, to the payment of any other
amounts required by applicable law; and (d) fourth, to Pledgor to the extent of
any surplus remaining. In the event that there is any deficiency due to the fact
that the proceeds from the aforesaid disposition of the Pledged Stock were
inadequate to satisfy the Obligations, Pledgor will not be liable to the Company
for such deficiency.
10. Private Sale. Pledgor recognize and acknowledge that the
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company may be unable to effect a public sale of all or a part of the Pledged
Stock and may elect to resort to one or more private sales to purchasers who
will be obligated to agree, among other things, to acquire the Pledged Stock for
their own account, for investment, and not with a view to the distribution or
resale thereof. Pledgor acknowledges that any such private sales may be at
prices and on terms less favorable than those of public sales, and agrees that
such private sales will be deemed to have been made in a commercially reasonable
manner and that the Company has no obligation to delay sale of any Pledged Stock
to permit Pledgor to register it for public sale under the Securities Act of
1933, as amended.
11. Release of Pledged Stock. Upon the execution hereof, Pledgor
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will deliver to Escrow Agent the stock certificates representing the Pledged
Stock, including Pledgor's endorsement thereon or appropriate stock powers duly
executed in blank, as appropriate, to be held by the Escrow Agent in accordance
with the terms of this Agreement and Section 1.9 of the Purchase Agreement.
12. Performance by Pledgor. Upon full payment and performance of
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all of the Obligations by Pledgor and upon payment of all additional costs and
expenses provided herein, this Agreement will terminate, and the Company will
deliver or caused to be delivered to Pledgor, such of the Pledged Stock that has
not been sold or otherwise disposed of pursuant to this Agreement.
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13. Remedies. The rights and remedies provided herein are
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cumulative and are in addition to, and not exclusive of, any rights or remedies
provided in other instruments and agreements between the Company and Pledgor, or
as provided by law.
14. Legend. As long as the shares are subject to this Agreement,
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such shares shall bear the following legend:
THE SHARES REPRESENTED HEREBY ARE SUBJECT TO THAT CERTAIN STOCK PLEDGE
AGREEMENT, DATED JUNE 1, 2001 BY AND BETWEEN DAOU SYSTEMS, INC. AND
JAMES ROBERTO AND MAY NOT BE ASSIGNED, SOLD OR TRANSFERRED EXCEPT AS
PROVIDED THEREIN.
15. Successors and Assigns. This Agreement is binding upon and
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will inure to the benefit of the parties hereto, and their successors and
assigns.
16. Governing Law. This Agreement will be governed by and
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construed in accordance with California law, without regards to the principles
of the conflict of laws.
17. Notices. All notices, consents, waivers, and other
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communications under this Agreement must be in writing and will be deemed to
have been duly given when (a) delivered by hand (with written confirmation of
receipt), (b) sent by facsimile (with written confirmation of receipt), provided
that a copy is mailed by registered mail, return receipt requested or (c) when
received by the addressee, if sent by a nationally recognized overnight delivery
service (receipt requested), in each case to the appropriate addresses and
facsimile numbers set forth below (or to such other addresses and facsimile
numbers as a party may designate by notice to the other parties):
If to Company: DAOU Systems, Inc.
5120 Shoreham Place
San Diego, California 92122
Attention:
Facsimile No.: (858) 452-1338
With a copy to: Baker & McKenzie
101 W. Broadway, 12th Floor
San Diego, California 92121-3890
Attention: Abby B. Silverman
Facsimile No.: (619) 236-0429
If to Pledgor: James Roberto
Address on file with the Company
18. Entire Agreement. This Agreement and any other agreement
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expressly referred to herein supersedes any and all other agreements, either
oral or in writing, among the parties hereto, with respect to the subject matter
hereof and contains all of the covenants and agreements among the parties with
respect to the subject matter hereof.
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19. Waiver; Modification. No term or condition of this Agreement
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will be deemed to have been waived nor will there by any estoppel to enforce any
provision of this Agreement except by written instrument of the party charged
with such waiver or estoppel. No amendment or modification of this Agreement
will be deemed effective unless and until executed in writing by all of the
parties hereto.
20. Severability. All agreements and covenants contained herein
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are severable and in the event that any of them will be held to be invalid by
any court of competent jurisdiction, this Agreement will be interpreted as if
such invalid agreements or covenants were not contained herein.
21. Delay; Time of Essence. No failure or delay by a party in
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exercising any right, power, or privilege hereunder will operate as a waiver
thereof, and no single or partial exercise thereof will preclude any other or
further exercise or the exercise of any other right, power, or privilege. Time
is of the essence of each and every provision of this Agreement of which time is
an element.
22. Attorneys' Fees. In any action or proceeding brought to
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enforce or interpret any provision of this Agreement, the prevailing party will
be entitled to recover reasonable attorneys' fees in addition to any other
available remedy.
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IN WITNESS WHEREOF, the parties have executed this Stock Pledge
Agreement effective as of the date first written above.
Pledgor:
By: /s/ JAMES T. ROBERTO
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James T. Roberto
The Company
DAOU Systems, Inc.
By: /s/ NEIL R. CASSIDY
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Name: Neil R. Cassidy
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Its: EVP and CFO
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Signature Page to Stock Pledge Agreement,
Executed August 28, 2001,
to be Effective as of the Date First Written Above