STOCK PLEDGE AGREEMENT
THIS PLEDGE AGREEMENT (this "Agreement") is made this ___ day of July,
2001 between Viva Gaming & Resorts Inc., a Florida corporation ("Buyer") and
Phoenix Leisure, Inc., a Nevada corporation ("Secured Party") with reference to
the following facts:
A. Buyer is obligated to Secured Party in the amounts of One Million
Five Hundred Thousand Dollars ($1,500,000) and Five Hundred Thousand
Dollars ($500,000) under those certain Promissory Notes dated April 5,
2001 and the date hereof, respectively, copies of which are attached
hereto as Exhibit "A."
B. It is the desire and intent of the parties hereto that the
obligation of Buyer referred to above be secured in the manner
hereinafter set forth.
IT IS AGREED AS FOLLOWS:
1. Buyer hereby grants to Secured Party a security interest in One
Hundred percent (100%) of the stock of Viva Gaming & Resorts De Mexico, S.A. DE
C.V., a corporation organized under the laws of Mexico ("Collateral"). Said
security interest is granted to secure the performance of the obligation of
Buyer arising under the Promissory Notes referred to in Paragraph A above.
2. To perfect said security interest created hereby, Buyer hereby
pledges or, when received by Buyer, will pledge, said Collateral to Xxxxx Xxxxxx
Xxxxxx & Xxxxxxxx LLP, a Nevada limited liability partnership, who shall act as
pledgeholder hereunder ("Pledgeholder"), and who shall hold said Collateral as a
Pledgeholder and trustee, only subject to the terms of this Agreement and the
legal and equitable rights of the parties hereto.
3. Secured Party and Buyer shall have, respectively, the rights of a
secured party and debtor as provided under the provisions of the Nevada Uniform
Commercial Code, including any legislative amendments thereto which may be
hereinafter enacted. Secured Party shall retain and have all voting rights
represented by the Collateral until such time as Buyer has performed all of its
obligations under this Agreement and the Promissory Note referred to in
Paragraph 1 above.
4. Buyer shall be in default under this Agreement if Buyer is in
default under the terms of the Promissory Notes referred to in Paragraph A
hereof.
5. Upon default, and after ten (10) days written notice of their
intention to do so, Secured Party may direct Pledgeholder and Pledgeholder shall
comply therewith, to dispose of said Collateral in any manner provided by the
Nevada Uniform Commercial Code, applying the proceeds generated thereby, if any,
in the manner provided by the Nevada Uniform Commercial Code. Buyer shall be
liable for all costs incurred due to default, including reasonable attorney
fees, and the same shall be deducted from the proceeds, if any, generated by a
sale under default, all as provided by the Nevada Uniform Commercial Code.
1
6. Upon satisfactory proof in writing that the underlying obligations
of Buyer have been satisfied, Pledgeholder shall forthwith tender and deliver to
Buyer the Collateral. Buyer and Secured Party and their assigns expressly agree
to indemnify and hold Pledgeholder harmless including reasonable attorneys fees
from any dispute which may arise between them as to the rights in and to the
Collateral or the proceeds thereof.
7. Secured Party may assign this Agreement and the underlying
$1,500,000 Promissory Note (and with the written consent of the Buyer, the
$500,000 Promissory Note). If Secured Party does assign this Agreement and the
$1,500,000 Promissory Note, the assignee shall be entitled, on notifying Buyer
and the Pledgeholder, to the security interest in the Collateral under Paragraph
1 hereof, to secure performance or payment of Buyer's obligation as stated in
this Agreement, and to secure performance of all of Buyer's obligation and
agreements under Paragraphs 1 and 4 hereof, and as contained in said $1,500,000
Promissory Note attached hereto as Exhibit "A," and assignee shall be entitled
to all of Secured Party's rights and remedies under this Paragraph and
Paragraphs 3, 4, 5 and 8. Buyer will assert no claims or defenses they may have
against Secured Party against the assignee except those granted in this
Agreement. Secured Party and assignee shall accomplish an assignment hereunder
by giving written notice thereof to Buyer and Pledgeholder; said notice shall be
accomplished by use of the United States mail postage prepaid, first class, and
shall be effective upon posting.
8. Irrespective of default, Secured Party may delay or omit to exercise
any right or remedy, under this Agreement without waiving any right or remedy,
unless Secured Party gives Buyer a signed waiver in express terms.
9. Any approval, notice, request, waiver or other communication
required or permitted to be given by either party hereunder shall be
satisfactory if in writing and delivered in person or sent by registered or
certified mail, postage prepaid, return receipt requested (including telegrams
or mailgrams), as follows:
To Secured Party: Viva Gaming & Resorts Inc.
0000 X. Xxxxxxx Xxxx, Xxxxx 000
Xxx Xxxxx, Xxxxxx 00000
Attention: Xxxxxx Xxx
To Buyer: Phoenix Leisure, Inc.
0000 X. Xxxxxxx Xxxx, Xxxxx 000
Xxx Xxxxx, Xxxxxx 00000
Attention: Xxxxx XxXxxxxx
To Pledgeholder: Xxxxx Xxxxxx Xxxxxx & Xxxxxxxx LLP
000 Xxxxx Xxxxxxx Xxxxx, Xxxxx X
Xxx Xxxxx, Xxxxxx 00000
Attention: Xxxxx X. Xxxxxxxx, Esq.
2
10. Secured Party and Buyer agree that the laws of the State of Nevada
shall govern the construction of and the interests, rights and duties of the
parties to this Agreement and that if any of the provisions of this Agreement
shall contravene or be held invalid under the laws of any competent
jurisdiction, this Agreement shall be construed as if not containing those
provisions and the rights and obligations of the parties shall be construed and
enforced accordingly.
11. This Agreement contains the entire Agreement between the parties
and may not be changed, modified, terminated or discharged, except in writing
signed by all of the parties.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
"SECURED PARTY"
Phoenix Leisure, Inc., a Nevada corporation
By:
------------------------------------------
Its:
--------------------------------------
"BUYER"
Viva Gaming & Resorts Inc., a Florida corporation
By:
------------------------------------------
Its:
-------------------------------------
"PLEDGEHOLDER"
Xxxxx Xxxxxx Xxxxxx & Xxxxxxxx LLP, a Nevada
limited liability partnership
By:
-----------------------------------------
Its:
------------------------------------
3
