Exhibit 10.18
PLEDGE AND SECURITY AGREEMENT
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Dated as of December , 2005
This PLEDGE AND SECURITY AGREEMENT (this "Agreement"), is made by TIERRA
DEL SOL RESORT, INC., a Florida corporation with an address at 0000 Xxxx Xxxx
Xxxx, Xxxxxxx, Xxxxxxx 00000 (the "Pledgor"), to PCL CONSTRUCTION ENTERPRISES,
INC., a Colorado corporation (the "Lender").
RECITALS
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A. The Lender has made a loan in the amount of $4,000,000.00 (the "Loan")
to TDS DEVELOPMENT, LLC, a Florida limited liability company (the "Borrower").
B. The Pledgor owns all of the outstanding equity interests in the
Borrower.
C. The Loan is evidenced by a Promissory Note of even date in the original
principal amount of $4,000,000 made by the Borrower in favor of the Lender (the
"Note").
AGREEMENT
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In consideration of the premises and other good and valuable consideration
(receipt of which is hereby acknowledged), the Pledgor hereby agrees as follows:
Section 1. Pledge. The Pledgor hereby pledges to the Lender, and grants to
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the Lender a security interest in, the following, whether now owned by the
Pledgor or hereafter acquired by it, and whether now or hereafter existing (the
"Pledged Collateral"):
(a) all of the membership interests in the Borrower (the "Pledged
Interests");
(b) all instruments evidencing the Pledged Interests (if any);
(c) all interest, cash, instruments and other property from time to
time received, receivable or otherwise distributed in respect of or in
exchange for any or all of the Pledged Interests; and
(d) all proceeds of any of the foregoing.
Section 2. Security for Obligations. This Agreement secures the payment of
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any and all present or future obligations and liabilities of the Borrower to the
Lender evidenced by or arising under the Note and any other obligations of the
Borrower and the Pledgor to the Lender (whether absolute or contingent, whether
joint or several, and whether now existing or hereafter arising) (all such
obligations and liabilities referred to in this Section 2 being the
"Obligations").
Section 3. Delivery of Pledged Collateral. In the event that the Pledged
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Collateral should be evidenced by certificates or other instruments, then the
Pledgor will immediately deliver such certificates and instruments to the Lender
and the Lender shall hold them pursuant to the terms of this Agreement. In such
event, the Pledgor shall also deliver to the Lender duly executed instruments of
transfer or assignment in blank, all in form and substance satisfactory to the
Lender.
Section 4. Increase, Profits or Distributions; Changes in Capital
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Structure; Income.
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(a) The Pledgor authorizes the Lender: (i) to receive any
distributions on the Pledged Collateral and to hold the same as part of the
Pledged Collateral; (ii) to surrender such Pledged Collateral or any part
thereof in exchange therefor; and (iii) to hold the net cash receipts from
any such distribution as part of the Pledged Collateral. If the Pledgor
receives any such distribution, the Pledgor will, promptly and without the
Lender's request, deliver the same promptly to the Lender to be held by the
Lender in the same manner as, and as part of, the Pledged Collateral.
(b) If, during the term of this Agreement, any reclassification,
readjustment, or other change is declared or made in the capital structure
of the Company, all new, substituted, and additional interests, or other
securities, issued by reason of any such change with respect to the Pledged
Collateral shall be held by the Lender under the terms of this Agreement in
the same manner as, and as part of, the Pledged Collateral.
(c) If, during the term of this Agreement, subscription rights or any
other rights are issued with respect to the Pledged Collateral, such rights
shall be immediately assigned by the Pledgor to the Lender, and, if
exercised by the Pledgor, all new interests or other securities so acquired
by the Pledgor shall be immediately assigned to the Lender to be held under
the terms of this Agreement in the same manner as, and as part of, the
Pledged Collateral.
(d) The Pledgor shall not demand or receive any income from the
Pledged Collateral, and, if the Pledgor receives any such income (with or
without demand), the Pledgor will pay the same promptly to the Lender.
Section 5. Pledgor's Covenants. As long as any of the Obligations remain
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unpaid Note, the Pledgor:
(a) Shall defend the Pledged Collateral against the claims and demands
of all other parties; shall keep the Pledged Collateral free of all
security interests or other encumbrances, except the security interest
created hereby; and shall not sell, transfer, assign, deliver or otherwise
dispose of any of the Pledged Collateral or any interest therein without
the prior written consent of the Lender;
(b) Shall notify the Lender promptly in writing of any change in the
Pledgor's address specified above;
(c) Shall pay all taxes, assessments and other charges of every nature
which may be levied or assessed against the Pledged Collateral; and
(d) Shall promptly secure from the Managers of the Borrower whatever
waivers or consents the Lender considers would be necessary in connection
with any future disposition of the Pledged Collateral pursuant to Section
12 hereof.
Section 6. Representations and Warranties. The Pledgor represents and
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warrants (and, as long as any of the Obligations shall not have been paid in
full, shall be deemed continuously to warrant) to the Lender that:
(a) The Pledgor is the sole legal and beneficial owner of all the
Pledged Collateral, free and clear of any lien, security interest, option
or other charge or encumbrance except for the security interest created by
this Agreement. The Pledged Interests constitute, and shall continue to
constitute, all of the outstanding equity interests in the Borrower.
(b) No authorization, approval, or other action by, and no notice to
or filing with, any governmental authority or regulatory body is required
either (i) for the perfected pledge by the Pledgor of the Pledged
Collateral pursuant to this Agreement or for the execution, delivery or
performance of this Agreement by the Pledgor or (ii) for the exercise by
the Lender of the rights provided for in this Agreement or the remedies in
respect of the Pledged Collateral pursuant to this Agreement, other than
the filing of a UCC-1 Financing Statement with the State of Florida (which
the Lender is hereby authorized to file).
Section 7. Further Assurances. The Pledgor agrees that at any time and from
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time to time, at the expense of the Pledgor, the Pledgor will promptly execute
and deliver all further instruments and documents, and take all further action,
that may be necessary or desirable, or that the Lender may reasonably request,
in order to perfect or protect any security interest granted or purported to be
granted hereby or to enable the Lender to exercise and enforce its rights and
remedies hereunder with respect to any of the Pledged Collateral.
Section 8. Transfers and Other Liens. The Pledgor agrees that it will not
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(i) sell or otherwise dispose of, or grant any option with respect to, any of
the Pledged Collateral, or (ii) create or permit to exist any lien, security
interest, or other charge or encumbrance upon or with respect to any of the
Pledged Collateral, except for the security interest created under this
Agreement or created by actions of the Lender.
Section 9. Lender Appointed Attorney-in-Fact. The Pledgor hereby appoints
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the Lender the Pledgor's attorney-in-fact, with full authority in the place and
stead of the Pledgor and in the name of the Pledgor or otherwise, from time to
time in the Lender's discretion to take any action and to execute any instrument
which the Lender may deem necessary or advisable to accomplish the purposes of
this Agreement, including, without limitation, to receive, indorse and collect
all instruments made payable to the Pledgor representing any dividend, interest
payment or other distribution in respect of the Pledged Collateral or any part
thereof and to give full discharge for the same.
Section 10. Lender May Perform. If the Pledgor fails to perform any
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agreement contained herein and the applicable grace period, if any, expires, the
Lender may itself perform, or cause performance of, such agreement, and the
reasonable expenses of the Lender incurred in connection therewith shall be
payable by the Pledgor under Section 13.
Section 11. Reasonable Care. The Lender shall be deemed to have exercised
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reasonable care in the custody and preservation of the Pledged Collateral in its
possession if the Pledged Collateral is accorded treatment substantially equal
to that which the Lender accords its own property, it being understood that the
Lender shall not have any responsibility for (i) ascertaining or taking action
with respect to calls, conversions, exchanges, maturities, tenders or other
matters relative to any of the Pledged Collateral, whether or not the Lender has
or is deemed to have knowledge of such matters, or (ii) taking any necessary
steps to preserve rights against any parties with respect to any of the Pledged
Collateral.
Section 12. Remedies upon Default. If at any time the Pledgor fails to pay
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when due any amounts owing under the Note or otherwise defaults in its
obligations thereunder or hereunder (any such failure or default being an "Event
of Default"):
(a) The Lender may exercise in respect of the Pledged Collateral, in
addition to other rights and remedies provided for herein or otherwise
available to it, all the rights and remedies of a secured party on default
under the Uniform Commercial Code (the "Code") in effect in the State of
Florida at that time, and the Lender may also, without notice except as
specified below, sell the Pledged Collateral or any part thereof in one or
more parcels at public or private sale, at any exchange, broker's board or
at any of the Lender's offices or elsewhere, for cash, on credit or for
future delivery, and upon such other terms as the Lender may deem
commercially reasonable. The Pledgor agrees that, to the extent notice of
sale shall be required by law, at least seven (7) calendar days' notice to
the Pledgor of the time and place of any public sale or the time after
which any private sale is to be made shall constitute reasonable
notification. The Lender shall not be obligated to make any sale of Pledged
Collateral regardless of notice of sale having been given. The Lender may
adjourn any public or private sale from time to time by announcement at the
time and place fixed therefor, and such sale may, without further notice,
be made at the time and place to which it was so adjourned.
(b) Any cash held by the Lender as Pledged Collateral and all cash
proceeds received by the Lender in respect of any sale of, collection from,
or other realization upon all or any part of the Pledged Collateral may, in
the discretion of the Lender, be held by the Lender as collateral for,
and/or then or at any time thereafter applied (after payment of any amounts
payable to the Lender pursuant to Section 13) in whole or in part by the
Lender against all or any part of the Obligations in such order as the
Lender shall elect.
Section 13. Expenses. The Pledgor shall, upon demand, pay to the Lender the
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amount of any and all reasonable expenses, including the reasonable fees and
expenses of its counsel and of any experts and agents, which the Lender may
incur in connection with (i) the custody or preservation of, or the sale of,
collection from, or other realization upon, any of the Pledged Collateral, (ii)
the exercise or enforcement of any of the rights of the Lender hereunder or
(iii) the failure by the Pledgor to perform or observe any of the provisions
hereof.
Section 14. Amendments, Etc. No amendment or waiver of any provision of
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this Agreement nor consent to any departure by the Pledgor herefrom, shall in
any event be effective unless the same shall be in writing and signed by the
Lender, and then such waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given.
Section 15. Addresses for Notices. All notices, demands or other
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communications to the Pledgor in connection herewith shall be sufficiently given
if mailed, or hand-delivered to the Pledgor at the address specified at the head
of this Agreement or such other place of which the Pledgor may from time to time
notify the Lender in writing. Any such notice shall be deemed to have been given
when placed in the United States mails or when hand-delivered.
Section 16. Continuing Security Interest; Transfer of Note. This Agreement
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shall create a continuing security interest in the Pledged Collateral and shall
(i) remain in full force and effect until payment in full of the Obligations and
termination of the Note, (ii) be binding upon the Pledgor, its successors and
assigns, and (iii) inure to the benefit of the Lender and its successors,
transferees and assigns.
Section 17. Governing Law; Terms. This Agreement shall be governed by and
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construed in accordance with the laws of the State of Florida.
Section 18. No Waiver; Remedies Cumulative. No failure on the part of the
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Lender to exercise, and no delay in exercising, any right under this Agreement
shall operate as a waiver thereof; nor shall any single or partial exercise of
any right under this Agreement preclude any other or further exercise thereof or
the exercise of any other right. The remedies provided in this Agreement are
cumulative and not exclusive of any remedies provided by law or by other
contract.
Section 19. Survival. All covenants, agreements, representations and
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warranties made by the Pledgor in this Agreement shall, notwithstanding any
investigation by the Lender, be deemed material and be deemed to have been
relied upon by the Lender and shall survive the execution and delivery to the
Lender of this Agreement.
Section 20. JURY TRIAL WAIVER. THE PLEDGOR HEREBY KNOWINGLY, VOLUNTARILY
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AND INTENTIONALLY WAIVES ANY AND ALL RIGHT IT MAY HAVE TO A TRIAL BY JURY IN
RESPECT OF ANY LITIGATION (INCLUDING BUT NOT LIMITED TO ANY CLAIMS, CROSS CLAIMS
OR THIRD PARTY CLAIMS) ARISING OUT OF, UNDER, OR IN CONNECTION WITH THIS
AGREEMENT OR ANY OTHER DOCUMENTS TO WHICH IT IS A PARTY.
IN WITNESS WHEREOF, the Pledgor has duly executed and delivered this
Agreement as of the date first above written.
Witnessed by: TIERRA DEL SOL RESORT, INC.
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By:/s/Xxxxxxx X. Xxxxxx
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Xxxxxxx X. Xxxxxx, President
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