Exhibit 10.31
SECURITY AGREEMENT
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THIS SECURITY AGREEMENT is made and entered into this __th day of
________, ____ by and between _____________ ("Purchaser") and BF Enterprises,
Inc. a Delaware corporation (the "Company").
RECITALS:
A. Purchaser has purchased from the Company _____________________
shares of the Company's Common Stock (the "Shares") pursuant to a Stock Option
Agreement dated October 9, 1991 (the "Stock Option Agreement").
B. The Company has accepted Purchaser's Promissory Note
Secured by Pledge of Stock of even date herewith (the "Note") in payment for
the Shares.
C. In consideration of the sale of the Shares and as security for the
payment of the Note, Purchaser has agreed to execute this Agreement.
NOW, THEREFORE, it is agreed as follows:
1. Pledge.
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(a) Purchaser hereby assigns, transfers and pledges the Shares to
the Company as security for payment of all amounts due under the Note.
(b) Purchaser agrees that he/she will deposit with the Company the
certificate representing the Shares together with fully executed stock
assignments (with date and number of shares blank), accompanied by such other
documents of transfer as may be necessary, as determined by the Company, to
authorize the Company or its transfer agent to transfer the Shares to the
Company if required to do so by the provisions of this Agreement.
(c) While Purchaser is not in default under this Agreement,
Purchaser shall have the right to execute all stock rights and rights to
subscribe, and to receive all liquidating dividends, cash dividends, shares,
new securities or other property which the Purchaser is or may hereafter become
entitled to receive on account of the Shares pledged hereunder; provided,
however, that in the event the Purchaser receives any such property, other than
cash dividends, he/she will immediately deliver such property to the Company to
be held as collateral in the same manner as the Shares originally pledged
hereunder. As used in this Agreement, the term "Shares" refers to all the Shares
assigned, transferred, and pledged hereunder, and all other property received in
respect thereof, other than cash dividends.
(d) In the event the Company is involved in a merger
reorganization, exchange reorganization, sale-of-assets reorganization or other
event requiring the transfer of a part or all of the Shares, Purchaser shall,
within ten days after demand by the Company, execute any documents necessary to
insure the continued secured status of the Note by the Shares and any securities
or property issued in respect thereto.
2. Rights of Purchaser with Respect to the Collateral.
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Unless and until the ownership of the Shares is transferred to the
Company pursuant to the provisions hereof, the Company shall collect and receive
all property, other than cash dividends, distributed in respect of the Shares.
The Company shall hold the same as collateral under this Agreement. As long as
the Purchaser is not in default of this Agreement, Purchaser shall retain all
incidents of ownership in the Shares not specifically limited herein and not in
derogation of the Company's security interest in the Shares, including the right
to vote the Shares held as collateral, subject to the terms of this Agreement,
and the right to receive all notices sent with respect to the Shares.
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3. Purchaser's Warranties and Indemnity.
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Purchaser represents, warrants and covenants (a) that he/she is and
will be the lawful owner of the Shares; (b) that the Shares are and will remain
free and clear of all liens, encumbrances and security interests, other than the
security interest granted by Purchaser under this Agreement; and (c) that
Purchaser has the sole right and lawful authority to pledge the Shares and
otherwise to comply with the provisions hereof. In the event that any adverse
claim is asserted in respect of the Collateral or any portion thereof, except
such as may result from an act of the Company not authorized by this Agreement,
Purchaser promises and agrees to indemnify the Company and hold the Company
harmless from and against any losses, liabilities, damages, expenses, costs and
counsel fees incurred by the Company in exercising any right, power or remedy of
the Company hereunder or defending, protecting or enforcing the security
interest created by this Agreement. Any such loss, liability or expense so
incurred shall be paid by Purchaser upon demand, become part of the indebtedness
secured hereunder and bear interest at the rate provided in the Note until
paid.
4. Taxes, Charges and Expenses.
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(a) Purchaser agrees to pay, prior to delinquency, all taxes,
charges, liens and assessments against the Shares. In the event Purchaser fails
to make any such payment, the Company may at its option pay any such payment.
(b) Purchaser will defend the Shares against any and all claims
and demands of all persons at any time claiming an interest therein other than
any claims originating from the Company's actions or omissions.
(c) All advances, charges, taxes, assessments, costs and
expenses, including reasonable attorneys' fees, incurred or paid by the Company
in exercising any right, power or remedy conferred by this Agreement, or any
enforcement thereof, or to preserve the value of the Shares shall be paid to the
Company by Purchaser immediately upon demand, shall become a part of the
indebtedness secured hereunder and shall bear interest at the rate
provided in the Note until paid.
5. Purchaser's Default.
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The occurrence of any of the following shall be a default under
this Agreement:
(a) Purchaser is in default of the Note;
(b) Purchaser fails to perform any of his/her obligations
hereunder or to comply with any of the terms under the Stock Purchase
Agreement; or
(c) Purchaser is in default under or fails to comply with the
provisions of any agreement, instrument, decree, judgment, order, obligation,
covenant, xxxx, xxxx, xxxxxxxxxxx, security interest, article of incorporation
or bylaw pertaining to the Shares or affecting Purchaser's or the Company's
rights in the Shares.
6. Remedies of the Company.
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Should any default, as provided in paragraph 5 above, exist,
(a) the Note shall become immediately due and payable at the option of the
Company, without notice or demand, (b) the Company shall have the right to take
possession and proceed against the Shares in accordance with this Agreement or
the Stock Purchase Agreement, and (c) the Company shall have all the rights and
remedies provided by law, particularly the provisions of the Uniform Commercial
Code of the State of Florida.
7. Application of Sale Proceeds.
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In the event of a sale of the Shares upon a default, the proceeds
shall first be applied to the payment of the reasonable expenses of the sale,
second, to satisfy all outstanding obligations of Purchaser to the Company, and
third, the surplus (if any) shall be paid promptly to Purchaser.
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8. Release of Collateral.
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The Company shall release the Shares from this pledge and within
5 days shall deliver certificates representing the Shares to the Purchaser upon
the payment in full of all sums due, including interest thereon, under the Note
and under this Agreement.
9. Non-Waiver.
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The rights, powers and remedies given to the Company by this
Agreement will be in addition to all rights, powers and remedies given the
Company by virtue of any statute, rule or law. The Company shall have the right
to enforce one or more of such remedies, successively or concurrently, and any
action to enforce the same shall not bar the Company from pursuing any further
remedy which it may have hereunder, under the Note, or otherwise as provided by
law, and the Company shall have the right to commence an action against
Purchaser or his/her spouse for a judgment in the amount of all sums due and
collectible under this Agreement and the Note.
10. Company's Forbearance.
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The failure or delay of the Company at any time to require
performance by Purchaser of any provision of this Agreement, even if known,
shall not affect the right of the Company to require performance of that
provision or to exercise any right, power or remedy hereunder. Any waiver by the
Company of any breach of any provision of this Agreement should not be construed
as a waiver of any continuing or succeeding breach of such provision, a waiver
of the provision itself, or a waiver of any right, power or remedy under this
Agreement. No notice to or demand on Purchaser in any case shall, of itself,
entitle Purchaser to any other or further notice or demand in similar or other
circumstances. No course of conduct shall be claimed by Purchaser to alter or
avoid any of their obligations under or in connection with this Agreement.
11. Miscellaneous.
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(a) 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. Confirmation of execution
by electronic transmission of a facsimile signature page shall be binding upon
any party so confirming.
(b) Further Assurances. The parties from time to time
shall execute and deliver such further and other transfers, assignments and
documents and do all matters and things which may be reasonably requested as
being convenient or necessary to more effectively and completely carry out the
intentions of this Agreement (including, without limitation, filing financing
and continuation statements and a termination statement of the security interest
granted hereby).
(c) Binding Effect. The rights and remedies of this Agreement
shall inure to the benefit of, and be binding upon, the heirs, executors,
successors and permitted assigns of the parties. The Company may assign its
security interest hereunder and all its rights, including its rights to receive
payment under the Note, to any person or entity.
(d) Severability. If any provision of this Agreement or any
other agreement entered into pursuant hereto is contrary to, prohibited by or
deemed invalid under applicable law or regulation, such provision shall be
inapplicable and deemed omitted to the extent so contrary, prohibited or
invalid, but the remainder hereof shall not be invalidated thereby and shall be
given full force and effect so far as possible. If any provision of this
Agreement may be construed in two or more ways, one of which would render the
provision invalid or otherwise voidable or unenforceable and another of which
would render the provision valid and enforceable, such provision shall have the
meaning which renders it valid and enforceable.
(e) Governing Law. This Agreement shall be governed by and
construed and enforced in accordance with the laws of the State of Florida
without regard to any principles governing conflicts of laws.
(f) Amendments. The provisions of this Agreement may not be
amended, supplemented, waived or changed orally, but only by a writing signed by
Purchaser and the Company making specific reference to this Agreement.
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(g) Jury Waiver. IN ANY CIVIL ACTION, COUNTERCLAIM, OR
PROCEEDING, WHETHER AT LAW OR IN EQUITY, WHICH ARISES OUT OF, CONCERNS, OR
RELATES TO THIS AGREEMENT, ANY AND ALL TRANSACTIONS CONTEMPLATED HEREUNDER, THE
PERFORMANCE OF THIS AGREEMENT, OR THE RELATIONSHIP CREATED HEREBY, WHETHER
SOUNDING IN CONTRACT, TORT, STRICT LIABILITY, OR OTHERWISE, TRIAL SHALL BE TO A
COURT OF COMPETENT JURISDICTION AND NOT TO A JURY. EACH PARTY HEREBY IRREVOCABLY
WAIVES ANY RIGHT HE MAY HAVE TO A TRIAL BY JURY. ANY PARTY MAY FILE AN ORIGINAL
COUNTERPART OR A COPY OF THIS AGREEMENT WITH ANY COURT, AS WRITTEN EVIDENCE OF
THE CONSENT OF THE PARTIES HERETO OF THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.
NEITHER PARTY HAS MADE OR RELIED UPON ANY ORAL REPRESENTATIONS TO OR BY ANY
OTHER PARTY REGARDING THE ENFORCEABILITY OF THIS PROVISION. EACH PARTY HAS READ
AND UNDERSTANDS THE EFFECT OF THIS JURY WAIVER PROVISION.
(h) Advice of Counsel. EACH PARTY ACKNOWLEDGES THAT HE HAS
BEEN ADVISED BY HIS OWN COUNSEL WITH RESPECT TO THIS AGREEMENT, AND SPECIFICALLY
WITH RESPECT TO THE TERMS OF SECTION 13(g) ABOVE, WHICH CONCERNS THE WAIVER OF
EACH PARTY'S RIGHT TO TRIAL BY JURY.
(i) Entire Agreement. This Agreement, the Stock Purchase
Agreement, and the Note contain the entire agreement and understanding between
the parties hereto with respect to matters covered hereby and supersede all
prior agreements and understandings, written or oral, among the parties with
respect to the subject matter hereof,
IN WITNESS WHEREOF, this Agreement has been executed effective as of
the date first above written.
BF ENTERPRISES, INC. PURCHASER
(Secured Party) (Debtor)
By: By:
Title: Name:
APPENDIX I
CONSENT OF SPOUSE
I, ______________________________, spouse of the Purchaser who executed
the foregoing Agreement, hereby agree that my spouse's interest in the Shares of
BF ENTERPRISES, INC. Stock subject to said Agreement shall be irrevocably bound
by the Agreement's terms. I further agree that my community property interest in
such Shares, if any, shall similarly be bound by said Agreement and that such
consent is binding upon my executors, administrators, heirs and assigns. I agree
to execute and deliver such documents as may be necessary to carry out the
intent of said Agreement and this consent.
Dated:_________________, 2001
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Spouse's Signature
