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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. _____________)*
Eagle River Interactive, Inc.
- --------------------------------------------------------------------------------
(Name of Issuer)
Common Stock, $0.001 par value
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(Title of Class of Securities)
269837 10 0
----------------
(CUSIP Number)
Thomas R. Graunke, 11000 N. Scottsdale Road, Suite 260, Scottsdale, AZ 85254
(602) 998-7500
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(Name, Address and Telephone Number of Person Authorized to Receive Notices and
Communications)
July 31, 1996
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(Date of Event Which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box / /.
Check the following box if a fee is being paid with the statement /X/. (A fee
is not required only if the filing person: (1) has a previous statement on file
reporting beneficial ownership of more than five percent of the class of
securities described in Item 1; and (2) has filed no amendment subsequent
thereto reporting beneficial ownership of five percent or less of such class.)
(See Rule 13d-7).
NOTE: Six copies of this statement, including all exhibits, should be filed
with the Commission. See Rule 13d-1(a) for other parties to whom copies are to
be sent.
(Continued on following pages)
(Page 1 of 4 Pages)
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities,
and for any subsequent amendment containing information which would alter the
disclosures provided in a prior cover page.
The information required in the remainder of this cover page shall not be
deemed to be "filed" for the purpose of Section 18 of the Securities Exchange
Act of 1934 ("Act") or otherwise subject to the liabilities of that section of
the Act but shall be subject to all other provisions of the Act (however, see
the Notes).
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SCHEDULE 13D
CUSIP NO. 269837 10 0 PAGE 2 of 4 PAGES
- --------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Thomas R. Graunke -- ###-##-####
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [ ]
(b) [ ]
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3 SEC USE ONLY
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4 SOURCE OF FUNDS*
00
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) or 2(e) [ ]
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States
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7 SOLE VOTING POWER
1,185,000
NUMBER OF
SHARES -------------------------------------------------
8 SHARED VOTING POWER
BENEFICIALLY
OWNED BY
------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER
1,185,000
REPORTING
PERSON ------------------------------------------------
10 SHARED DISPOSITIVE POWER
WITH
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,185,000
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
[ ]
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
8.98%
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14 TYPE OF REPORTING PERSON*
IN
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*SEE INSTRUCTION BEFORE FILLING OUT!
INCLUDED BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
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ITEM 1. SECURITY AND ISSUER
This statement relates to Common Stock, $0.001 par value. The name of the
issuer is Eagle River Interactive, Inc. and the address of its principal
executive offices is 1060 West Beaver Creek Boulevard, Avon, Colorado 81620.
ITEM 2. IDENTITY AND BACKGROUND
(a) The name of the person filing this statement is Thomas R. Graunke.
(b) Mr. Graunke's business address is 11000 N. Scottsdale Road, Suite 260,
Scottsdale, Arizona 85254.
(c) Mr. Graunke's principal occupation or employment is as the Executive
Vice President of the issuer and the President of Mastering Computers,
Inc. The address from which Mr. Graunke conducts such occupation is
11000 N. Scottsdale Road, Suite 260, Scottsdale, Arizona 85254.
(d) During the last five years, Mr. Graunke has not been convicted in a
criminal proceeding (excluding traffic violations or similar
misdemeanors).
(e) During the last five years, Mr. Graunke has not been a party to a civil
proceeding of a judicial or administrative body of competent
jurisdiction resulting in any judgment, decree or final order enjoining
future violations of, or prohibiting or mandating activities subject to,
federal or state securities laws or finding any violation with respect
to such laws.
(f) Mr. Graunke is a United States citizen.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION
Mr. Graunke's 100 shares of the Common Stock of Mastering Computers, Inc. were
converted into 1,175,000 shares of the Common Stock of the issuer in connection
with the merger of Ute Creek Acquisition Corp., a wholly-owned subsidiary of
the issuer, with and into Mastering Computers, Inc. (the "Merger"). Mr. Graunke
did not borrow funds or other consideration in connection with the Merger.
Prior to the Merger, Mr. Graunke purchased 10,000 shares of the issuer's Common
Stock in its March 1996 initial public stock offering.
ITEM 4. PURPOSE OF TRANSACTION
Mr. Graunke acquired the shares for investment. Mr. Graunke has no plans or
proposals which relate to or would result in any of the actions listed in
Items 4(a) through 4(j) of Schedule 13D.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER
(a) Mr. Graunke beneficially owns 1,185,000 shares, or 8.98%, of the
issuer's Common Stock, based on 13,201,447 shares outstanding at
July 31, 1996.
(b) Except as specified otherwise by the Pledge Agreement (as defined in
Item 6 below) and except to the extent that such power may be shared by
Mr. Graunke's spouse under applicable law, Mr. Graunke has the sole
power to vote or to direct the vote of 1,185,000 shares, shares the
power to vote or to direct the vote of none of the shares, has the sole
power to dispose or to direct the disposition of 1,185,000 shares, and
shares the power to dispose of or to direct the disposition of none of
the shares.
(c) Other than his acquisition of the 1,175,000 shares in the Merger on
July 31, 1996, there were no transactions in the Common Stock effected
by Mr. Graunke during the past 60 days.
(d) Except as specified otherwise by the Pledge Agreement (as defined in
Item 6 below) and except to the extent that such right and power may be
shared by Mr. Graunke's
Page 3 of 4
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spouse under applicable law, Mr. Graunke has the sole right to receive
and the power to direct the receipt of dividends from, or the proceeds
from the sale of, the Common Stock.
(e) Not applicable.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO SECURITIES OF THE ISSUER
Mr. Graunke has entered into a Stock Pledge Agreement with the issuer dated
July 31, 1996 (the "Pledge Agreement"). Pursuant to the Pledge Agreement, Mr.
Graunke has secured a portion of certain indemnification obligations to the
issuer and Mastering Computers, Inc. in the form of a pledge to the issuer of
117,500 shares of the issuer's Common Stock (the "Pledged Stock") owned by Mr.
Graunke. For so long as the issuer shall not have notified Mr. Graunke of a
claim for indemnification, Mr. Graunke shall be entitled to exercise any and
all voting and consensual rights and powers relating to the Pledged Stock. For
so long as the issuer shall not have notified Mr. Graunke of a claim for
indemnification, Mr. Graunke shall be entitled to receive and retain any and
all ordinary cash dividends, but any and all stock and liquidating dividends
shall become part of the Pledged Stock. Upon the expiration of the
indemnification period, the issuer shall cause to be transferred to Mr. Graunke
all of the remaining shares of Pledged Stock to the extent the issuer has not
taken, sold or realized on the same pursuant to its rights under the Pledge
Agreement. The issuer also must release shares of the Pledged Stock when such
shares are no longer necessary to satisfy potential claims for indemnification.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS
1. Stock Pledge Agreement between the issuer and Thomas R. Graunke dated
July 31, 1996.
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
July 31, 1996
---------------------
Date
/s/ Thomas R. Graunke
---------------------
Signature
Thomas R. Graunke
---------------------
Name/Title
Page 4 of 4
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EXHIBIT INDEX
Exhibit
No. Description Page
- ------- ----------- ----
1 Stock Pledge Agreement between the issuer and
Thomas R. Graunke dated July 31, 1996.
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EXHIBIT 1
STOCK PLEDGE AGREEMENT
This Stock Pledge Agreement ("Pledge Agreement") is made as of July 31,
1996 between Eagle River Interactive, Inc., a Delaware corporation ("Parent"),
and Thomas R. Graunke ("Pledgor").
W I T N E S S E T H :
WHEREAS, pursuant to the Agreement and Plan of Merger of even date
herewith (the "Merger Agreement") by and among Parent, Ute Creek Acquisition
Corp., an Arizona corporation and wholly-owned subsidiary of Parent ("Sub"),
and Mastering Computers, Inc., an Arizona corporation (the "Company"), Sub will
merge (the "Merger") with and into the Company, and Pledgor, as the sole
stockholder of the Company, will exchange all of the outstanding shares of
Common Stock, no par value, of the Company ("Company Common Stock") for shares
of Common Stock, $.001 par value, of Parent ("Parent Common Stock");
WHEREAS, pursuant to the Supplemental Agreement of even date herewith
(the "Supplemental Agreement") by and among Parent, Sub, the Company and
Pledgor, Pledgor has agreed to indemnify, and hold harmless Parent and the
Company, as the surviving corporation in the Merger, from and against certain
Losses and Expenses (each as defined in the Supplemental Agreement);
WHEREAS, Pledgor has agreed to secure a portion of the foregoing
indemnification obligations to Parent and the Company in the form of a pledge
to Parent of an aggregate of 117,500 shares of Parent Common Stock (the
"Pledged Stock"), according to the terms and conditions of this Pledge
Agreement; and
WHEREAS, execution and delivery of this Pledge Agreement is a condition
precedent to the consummation by Parent of the transactions contemplated by the
Merger Agreement and the Supplemental Agreement.
NOW THEREFORE, in consideration of the mutual covenants contained herein,
Pledgor and Parent, intending to be legally bound, agree as follows:
1. Definitions. Unless the context otherwise requires, all capitalized
terms used but not expressly defined herein shall have the meanings, if any,
given to them in the Supplemental Agreement or, if they are not defined in the
Supplemental Agreement but are defined in the Uniform Commercial Code, as
presently in effect in the State of Arizona (the "UCC"), they shall have the
same meaning herein as in the UCC.
2. Pledge of the Pledged Stock; Power of Attorney.
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(a) To induce Parent to consummate the transactions
contemplated by the Merger Agreement and the Supplemental Agreement, and
as security for the indemnification obligations of Pledgor pursuant to
the Supplemental Agreement (hereinafter, the "Obligations"), Pledgor
hereby pledges, hypothecates, assigns, transfers and sets over unto
Parent, and grants a lien and security interest to Parent, in the
Pledged Stock. Pledgor has delivered to Parent, in its capacity as
pledgee, original stock certificates accompanied by guaranteed stock
powers duly signed by Pledgor (the "Stock Certificates") representing
all of the Pledged Stock.
(b) Parent shall not have any obligation with respect to
the Stock Certificates (and the Pledged Stock represented thereby) or
any other property held or received by it hereunder except to use
reasonable care in the custody and preservation thereof to the extent
required by law. If Parent for any reason cannot produce the Pledged
Stock Certificates representing Pledged Stock that it is obligated to
return to Pledgor, Parent shall be obligated to have such certificates
reissued and to execute any indemnity or bond that may be required in
connection therewith.
(c) Parent, or its agents, shall hold the Stock
Certificates until the earlier of the return of the Pledged Stock
pursuant to Section 6 or the occurrence of a Liquidated Claim for
Indemnification (as defined below), upon which latter event Pledgor
hereby constitutes and irrevocably appoints Parent (and any officer or
agent of Parent, with full power of substitution and revocation) as
Pledgor's true and lawful attorneys-in-fact, which appointment is
coupled with an interest, in Pledgor's stead and in his or in Parent's
name, to (i) transfer the Required Shares (as defined below) on the
books of Parent, in whole or in part, to the name of Parent or such
other Person as Parent may designate; and (ii) take possession of and
endorse any one or more checks, drafts, bills of exchange, money orders
or any other documents received on account of such Pledged Stock.
(d) The powers of attorney granted pursuant to this Pledge
Agreement and all authority hereby conferred are granted and conferred
solely to protect Parent's interest in the Pledged Stock and shall not
impose any duty upon the attorney-in-fact to exercise such powers. Such
powers of attorney shall be irrevocable prior to the payment in full and
satisfaction of the Obligations relating to the Claims for
Indemnification and shall not be terminated prior thereto or affected by
any act of Pledgor, or by operation of law, and if Pledgor should die or
become legally incapacitated, such attorney-in-fact shall nevertheless
be fully authorized to act under such powers of attorney as if such
event had not occurred and regardless of notice thereof.
(e) Each transferee of the beneficial ownership of the
Pledged Stock by the acceptance of such a transfer shall be
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deemed to have irrevocably appointed Parent with full power of substitution and
revocation, such transferee's true and lawful attorney-in-fact in such
transferee's name and otherwise to do any and all acts permitted to, and to
exercise any and all powers herein conferred upon, such attorney-in-fact.
3. Voting Rights, Dividends, Etc.
(a)(i) So long as Parent shall not have notified Pledgor of a
Claim for Indemnification, Pledgor shall be entitled to exercise any and
all voting and consensual rights and powers relating or pertaining to
the Pledged Stock or any part thereof for any purpose not inconsistent
with the terms of this Pledge Agreement.
(ii) So long as Parent shall not have notified Pledgor of a
Claim for Indemnification, Pledgor shall be entitled to receive and
retain any and all ordinary cash dividends and interest payable on the
Pledged Stock, but any and all stock and liquidating dividends,
distributions in property, returns of capital or other distributions
made on or in respect of the Pledged Stock, whether resulting from a
subdivision, combination or reclassification of the outstanding capital
stock of any issuer thereof or received in exchange for Pledged Stock or
any part thereof or as a result of any merger, consolidation,
acquisition or other exchange of assets to which any such issuer may be
a party or otherwise, and any and all cash and other property received
in payment of the principal of or in redemption of or in exchange for
any Pledged Stock (either at maturity, upon call for redemption or
otherwise) shall be and become part of the Pledged Stock and, if
received by Pledgor, shall be held in trust for the benefit of Parent
and shall immediately be delivered to parent or its designated agent
(accompanied by proper instruments of assignment and/or stock powers
executed by Pledgor in accordance with Parent's instructions) to be
subject to the terms of this Pledge Agreement.
(iii) Parent shall execute and deliver (or cause to be executed
and delivered) to Pledgor all such proxies, powers of attorney, dividend
orders, interest coupons and other instruments as Pledgor may reasonably
request and at Pledgor's expense for the purpose of enabling Pledgor to
exercise the voting and consensual rights and powers which he is
entitled to exercise pursuant to subsection (i) above and to receive the
dividends and interest payments which he is authorized to receive and
retain pursuant to subsection (ii) above.
(b) Upon the giving by Parent of the notice referred to in
Section 3(a)(i), all rights of Pledgor to exercise the voting and
consensual rights and powers which he is entitled to exercise pursuant
to Section 3(a)(i) shall cease, and upon the
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giving by Parent of the notice referred to in Section 3(a)(ii), all rights of
Pledgor to receive the dividends and interest payments which he is authorized
to receive and retain pursuant to Section 3(a)(ii) shall cease; but, in each
case, only as to the Required Shares.
4. Covenants of Pledgor. Pledgor agrees that until the earlier of
the expiration of the Indemnification Period (as defined in Section 7) or the
return of the Pledged Stock pursuant to Section 6, he will defend the Pledged
Stock against the claims and demands of all Persons other than Parent claiming
by or through the Pledgor and promptly pay all taxes, assessments, and charges
upon the Pledged Stock, and not sign (or permit to be signed) any documents
creating or perfecting a lien upon or security interest in any of the Pledged
Stock except in favor of Parent, or otherwise create, suffer, or permit to
exist any liens or security interests upon any Pledged Stock other than in
favor of Parent.
5. Adjustments of Capital Stock; Application of Dividends. In the
event that during the term of this Pledge Agreement any stock dividend,
reclassification, readjustment or other change is declared or made in the
capital structure of Parent or if any shares of the Pledged Stock are exchanged
or converted, or if stock or liquidating dividends or other distributions of
cash or other assets or properties are made, in respect of, in redemption of,
in exchange for or in payment of principal of the Pledged Stock (whether
resulting from a subdivision, combination or reclassification of the
outstanding capital stock, any merger, consolidation, acquisition or other
exchange of assets or securities, any conversion, call or redemption, or
otherwise), all new, substituted and additional shares or other securities
issued by reason of any such change or acquisition shall immediately be
delivered by Pledgor to Parent and shall be deemed to be part of the Pledged
Stock under the terms of this Pledge Agreement in the same manner as the
shares of the Pledged Stock originally pledged hereunder. If a Claim for
Indemnification has occurred, all cash dividends or other property received by
or payable to Pledgor by reason of Pledgor's ownership of the Required Shares
shall immediately be delivered by Pledgor to Parent, to be held by Parent as
additional collateral.
6. Return of Pledged Stock. Upon the expiration of the
Indemnification Period, Parent shall cause to be transferred and delivered to
Pledgor all of the remaining shares of Pledged Stock and any money, property
and rights received by Pledgor pursuant hereto, to the extent Parent has not
taken, sold or otherwise realized upon the same pursuant to its rights
hereunder. In addition, Parent shall, after the Audit Report Date (as defined
in the Supplemental Agreement), so transfer and deliver such number of shares
of Pledged Stock and any such money, property and rights to Pledgor as Parent
and Stockholder reasonably determine shall not be necessary to satisfy any
claims
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for Indemnification that may thereafter be asserted by Parent during the
remainder of the Indemnification Period. Thereafter, Parent shall release such
additional number of shares of Pledged Stock and any such money, property and
rights to Pledgor as Parent and Stockholder reasonably determine shall not be
necessary to satisfy any claims for Indemnification that may thereafter be
asserted by Parent during the remainder of the Indemnification Period.
7. Claim for Indemnification. A "Claim for Indemnification" for
purposes of this Pledge Agreement shall mean a claim by Parent or the Company
against Pledgor under the indemnification provisions of Section 8.1 of the
Supplemental Agreement as to which Parent or the Company has given notice to
Pledgor on or prior to the termination of the indemnification obligations in
Section 8.1 of the Supplemental Agreement (the "Indemnification Period").
Promptly upon the discovery by Parent or the Company of a Claim for
Indemnification, Parent shall deliver written notice to Pledgor specifying the
known facts relating to each claim and the amount or estimated amount thereof.
Upon final resolution of a Claim for Indemnification, either by way of
agreement among the parties or a final adjudication of a court, such claim will
become a Liquidated Claim for Indemnification. Until a Claim for
Indemnification has become a Liquidated Claim for Indemnification as set forth
above, Parent shall be entitled to retain so much of the Pledged Stock as may
be necessary to pay the full amount of the estimated amount of the indemnity
claims specified in the notice of the claim (based on the Current Market Price
of Parent Common Stock (as defined in the Supplemental Agreement) on the date
hereof), and Parent shall refrain from exercising or in any way acting on the
authority of the stock powers signed by Pledgor and delivered with the Pledged
Stock.
8. Remedies on Default.
(a) Upon the occurrence of a Liquidated Claim for Indemnification,
Pledgor shall, in the aggregate, at the option of Parent, automatically and
without further action by Pledgor, Parent or any third party, forfeit in favor
of Parent all of its rights, title and interest in and to the number of shares
of Pledged Stock having a fair market value (based on the Current Market Price
of Parent Common Stock on the date hereof), together with any dividends paid
thereon (the "Required Shares"). Should all of the Pledged Stock have been sold
and the proceeds of such sale substituted therefor, as contemplated by Section
12, Pledgor shall, upon the occurrence of a Liquidated Claim for
Indemnification, forfeit to Parent the proceeds of sale of such shares.
(b) In addition, Parent may exercise any and all rights and remedies
afforded to Parent, as a secured party in possession of collateral or
otherwise, under any and all provisions of applicable law, including, but not
limited to, the
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UCC.
(c) Pledgor expressly waives protest, notice, presentment, dishonor
and demand of any kind.
(d) Parent shall collect the cash proceeds received from any sale
or other disposition and shall apply the full proceeds in accordance with the
provisions of this Pledge Agreement.
(e) Notwithstanding the foregoing, none of the provisions of this
Section 8 shall confer on Parent any rights or privileges that are not
permissible under applicable law.
(f) In connection with the provisions of this Pledge Agreement,
Pledgor from time to time promptly shall execute and deliver, or cause to be
executed and delivered, to Parent such reasonable documents and instruments,
shall join in such notices and shall take, or cause to be taken, such other
reasonable and lawful action as Parent shall deem necessary or desirable to
enable it to exercise any of the rights with respect to the Pledged Stock
granted to it pursuant to this Pledge Agreement.
9. Expenses. All expenses (including fees and disbursements of
counsel) incurred by the prevailing party in connection with any litigation
arising out of this Pledge Agreement shall be borne by the non-prevailing party
or parties.
10. Further Assurances. Pledgor agrees to do such further acts and
things and to execute and deliver such additional documents as Parent from time
to time may reasonably request in connection with the administration or
enforcement of this Pledge Agreement, whether related to the Pledged Stock or
any part thereof, to evidence, confirm, perfect or protect any security
interest granted or required to have been granted hereunder or in order to
better assure and confirm unto Parent its rights, powers and remedies
hereunder. Pledgor hereby consents and agrees that the issuers of the Pledged
Stock or any registrar or transfer agent for any of the Pledged Stock shall be
entitled to accept the provisions hereof and determination of any Claim for
Indemnification as provided herein as conclusive evidence of the right of
Parent to effect any transfer pursuant hereto, notwithstanding any notice or
direction to the contrary heretofore or hereafter given by Pledgor or any other
Person to any of such issuers or to any such registrar or transfer agent.
11. Representations and Warranties. To induce Parent to enter into
this Pledge Agreement, Pledgor represents and warrants to Parent that:
(a) Neither the execution or delivery of this Pledge Agreement, nor
the consummation of the transactions contemplated hereby, nor the compliance
with or performance of the terms and conditions of this Pledge Agreement by
Pledgor is prevented by,
<PAGE> 7
limited by, conflicts with or will result in the breach or violation of or a
default under the terms, conditions or provisions of (i) any mortgage, security
agreement, indenture, evidence of indebtedness, loan or financing agreement,
partnership agreement, or other material agreement or instrument to which he is
a party or by which he is bound or (ii) any provision of law, any order of any
court or administrative agency or any rule or regulation applicable to him or
his business; and
(b) This Pledge Agreement and all documents and instruments executed or
to be executed in connection herewith constitute the valid and binding
obligations of Pledgor, enforceable in accordance with their respective terms.
12. Sale of Pledged Stock, Etc. Pledgor covenants and agrees, that,
from the date hereof and until the expiration of the Indemnification Period, he
(a) shall not sell, transfer, exchange or otherwise dispose or agree to dispose
of all or any portion of the Pledged Stock without duly pledging to Parent
substitute collateral acceptable to Parent in its sole discretion and, without
first obtaining the written consent of Parent to such transfer and
substitution, provided that Pledgor may at any time, without such prior written
consent, direct Parent to sell the Pledged Stock for cash, and substitute for
any Pledged Stock the gross cash proceeds (before any sales commissions) of the
sale thereof; (b) shall not further pledge, assign or deliver a security
interest in the Pledged Stock, or amend, modify, supplement or waive any
provisions of any portion of the Pledged Stock; and (c) shall not suffer or
permit any lien or encumbrance to be created upon or with respect to any of the
Pledged Stock.
13. Litigation Respecting Pledged Stock. In the event any action, suit
or other proceeding at law, in equity, in arbitration or before any other
authority involving or affecting the Pledged Stock is contemplated by Pledgor,
Pledgor shall give Parent prior notice thereof.
14. Miscellaneous.
(a) Entire Agreement. Except for the Supplemental Agreement, this
Pledge Agreement supersedes all other representations, agreements and
understandings, oral or otherwise, between the parties with respect to the
matters contained herein.
(b) Severability. Wherever possible, each provision hereof shall be
interpreted in such manner as to be effective and valid under applicable law,
but in case any one or more of the provisions contained herein shall, for any
reason, be held to be invalid, illegal or unenforceable in any respect, such
provision shall be ineffective in the jurisdiction involved to the extent, but
only to the extent, of such invalidity, illegality or unenforceability without
invalidating the remainder of such invalid, illegal or unenforceable provision
or provisions or any
<PAGE> 8
other provisions hereof, unless such a construction would be unreasonable.
(c) Survival of Representations, Etc. All representations,
warranties, covenants and other agreements made herein shall survive the
execution and delivery of this Pledge Agreement and shall continue in full
force and effect until the earlier of the return to Pledgor of all Pledged
Stock in accordance with Section 6 or the full payment and satisfaction of all
Losses and Expenses pursuant to Section 8.1 of the Supplemental Agreement.
Neither the exercise nor the failure to exercise any of Parent's rights
hereunder will constitute an election of remedies or limit Parent in any
manner in the enforcement of any other remedies that may be available to it,
under the Supplemental Agreement or otherwise.
(d) Cumulative Remedies, Waivers and Amendment. The rights and
remedies herein provided to Parent are cumulative and not exclusive of any
rights or remedies provided by law. Any term or provision of this Pledge
Agreement may be waived, or the time for its performance may be extended, by
the party or parties entitled to the benefit thereof. Any such waiver shall be
validly and sufficiently authorized for the purposes of this Pledge Agreement
if, as to any party, it is authorized in writing by an authorized
representative of such party. The failure of any party hereto to enforce at any
time any provision of this Pledge Agreement shall not be construed to be a
waiver of such provision, nor in any way to affect the validity of this Pledge
Agreement or any part hereof or the right of any party thereafter to enforce
each and every such provision. No waiver of any breach of this Pledge Agreement
shall be held to constitute a waiver of any other or subsequent breach. No
notice to or demand on a party in any case shall entitle such party to any
other or further notice or demand in the same, similar or other circumstances.
Any right or power of Parent hereunder respecting the Pledged Stock and any
other property or money held hereunder may at the option of Parent be exercised
as to all or any part of the same and the term the "Pledged Stock" wherever
used herein, unless the context clearly requires otherwise, shall be deemed to
mean (and shall be read as) the "Pledged Stock and any other property or money
held hereunder or any part thereof." This Pledge Agreement shall not be amended
nor shall any right hereunder be deemed waived except by a written agreement
expressly setting forth the amendment or waiver and signed by the party against
whom or which such amendment or waiver is sought to be charged.
(e) Notices. Any notices or other communications required under
this Pledge Agreement shall be in writing, shall be deemed to have been given
when delivered in person, by telex or telecopier, when delivered to a
recognized next business day courier, or, if mailed, when deposited in the
United States mail, first class, registered or certified, return receipt
requested, with proper postage prepaid, addressed as follows or to such
<PAGE> 9
other address as notice shall have been given pursuant hereto:
If to Pledgor:
Thomas R. Graunke
10568 Laurel Lane
Scottsdale, Arizona 85259
Telecopy: (602) 451-9167
With a copy to:
Fennemore Craig, P.C.
Two North Central Avenue
Suite 2200
Phoenix, Arizona 85004
Attention: Janet W. Lord
Telecopy: (602) 257-8527
If to Parent:
Eagle River Interactive, Inc.
1060 West Beaver Creek Boulevard
Avon, Colorado 81620
Attention: Marc Pinto
Telecopy: (970) 845-3016
with copies to:
Eagle River Interactive, Inc.
1701 N. Market Street
Suite 400
Dallas, Texas 75202
Attention: Fred McCallister
Telecopy: (214) 571-4011
and:
Sidley & Austin
One First National Plaza
Chicago, Illinois 60603
Attention: Larry A. Barden
Telecopy: (312) 853-7036
(f) Successors. This Pledge Agreement shall, upon execution and
delivery by Pledgor, become effective and shall be binding upon and inure to
the benefit of Pledgor, Parent and their respective successors, and assigns,
except that Pledgor may not transfer or assign any of its rights or interests
hereunder without the consent of Parent.
(g) Interpretation. The section headings contained in this Pledge
Agreement are for reference purposes only and shall not in any way affect the
meaning or interpretation of this Supplemental Agreement. Whenever the context
may require, any
<PAGE> 10
pronoun used herein shall include the corresponding masculine, feminine or
neuter forms.
(h) Counterparts. This Pledge Agreement may be executed in two or
more counterparts, each of which shall be deemed to be an original, but all of
which together shall constitute one and the same instrument; and shall become
binding when two or more counterparts have been signed by each of the parties
hereto and delivered to each of Parent and Pledgor.
(i) Construction. This Pledge Agreement and any document or
instrument executed in connection herewith shall be governed by and construed
in accordance with the internal laws (as opposed to the conflicts of laws
provisions) of the State of Arizona, and shall be deemed to have been executed
in the State of Arizona.
<PAGE> 11
IN WITNESS WHEREOF, Pledgor and Parent have caused this Pledge
Agreement to be executed as of the day and year first above written.
PLEDGOR
/s/ THOMAS R. GRAUNKE
-----------------------------------
Thomas R. Graunke
EAGLE RIVER INTERACTIVE, INC.
By: /s/ MARC PINTO
--------------------------------
Marc Pinto
Executive Vice President,
Chief Financial Officer
THE UNDERSIGNED, being the spouse of Pledgor, does hereby represent and
warrant that any and all interest of the undersigned, including any community
property interest, in the Parent Common Stock subject to this Pledge Agreement
shall be bound hereby.
/s/ KIMBERLY A. GRAUNKE
------------------------------------
Kimberly A. Graunke
