PLEDGE AND SECURITY AGREEMENT
Exhibit
10.7
1. Identification.
This
Pledge and Security Agreement (the "Agreement"), dated as of July 19__, 2007,
is
entered into by and between Global Realty Development Corporation, a Delaware
corporation (“Debtor”), and Xxxx Xxxxxxx, P.A., as collateral agent acting in
the manner and to the extent described in the Collateral Agent Agreement defined
below (the "Collateral Agent"), for the benefit of the parties identified on
Schedule A hereto (collectively, the "Lenders").
2. Recitals.
2.1 This
Agreement is being entered into in connection with up to a $6,000,000 loan
to
Debtor (the “Loan”).
2.2 The
Loan is evidenced by certain 12% senior promissory notes (each a “Note” and
collectively, the "Notes") issued by Debtor pursuant to a Note and Warrant
Purchase Agreement (“Purchase Agreement”) dated July __, 2007. The
Notes are further identified on Schedule A hereto and were and will be
executed by Debtor for the benefit of each Lender thereof.
2.3 In
consideration of the Loan made by Lenders to Debtor and for other good and
valuable consideration, and as security for the performance by Debtor of its
obligations under the Notes and as security for the repayment of the Loan and
all other sums due from Debtor to Lenders arising under the Notes (collectively,
the “Obligations”), Debtor, for good and valuable consideration, receipt of
which is acknowledged, has agreed to pledge and grant to the Collateral Agent,
for the benefit of the Lenders, a security interest in the Collateral (as such
term is hereinafter defined), on the terms and conditions hereinafter set
forth.
2.4 The
Lenders have appointed Xxxx Xxxxxxx, P.A. as Collateral Agent pursuant to that
certain Collateral Agent Agreement dated July 19__, 2007 (“Collateral Agent
Agreement”), among the Lenders and Collateral Agent.
2.5 Terms
used but not otherwise defined in this Agreement that are defined in Article
9
of the UCC shall have the respective meanings given such terms in Article 9
of
the UCC. “UCC” means the Uniform Commercial Code as in effect on the
date hereof in the State of Florida, provided that if by reason of
mandatory provisions of law, the perfection or the effect of perfection or
non-perfection of the Security Interest in the Collateral or the availability
of
any remedy hereunder is governed by the Uniform Commercial Code as in effect
on
or after the date hereof in any other jurisdiction, "UCC" means the Uniform
Commercial Code as in effect in such other jurisdiction for purposes of the
provisions hereof relating to such perfection or effect of perfection or
non-perfection or availability of such remedy.
3. Grant
of General Security Interest in Collateral.
3.1 As
security for the Obligations of Debtor, Debtor hereby grants, pledges and
assigns to the Collateral Agent, for the benefit of the Lenders, a continuing
security interest in the Collateral. Said security interest shall remain
inferior to Collateral Agent’s security interest in the Collateral until his
interest has been satisfied in full.
3.2 “Collateral”
shall mean the following property of Debtor:
1
(A)
All
now owned and hereafter acquired right, title and interest of Debtor in, to
and
in respect of on the Beach Boys memorabilia collection as described in the
appraisal dated July 5, 2007, by Xxxxxx Xxxx, attached as Exhibit I
herein, and the subject of the Beach Boys Memorabilia Purchase Agreement dated
February 21, 2007.
3.3 The
Collateral Agent is hereby specifically authorized, after an Event of Default
(as defined herein) and the expiration of any applicable cure period, to
transfer any Collateral into the name of the Collateral Agent and to take any
and all action deemed advisable to the Collateral Agent to remove any transfer
restrictions affecting the Collateral.
4. Perfection
of Security Interest.
Debtor
shall deliver to the Collateral Agent a UCC-1 Financing Statement acknowledging
Collateral Agent’s priority in the security. The Collateral Agent is
instructed to file the Financing Statement and other financing statements deemed
advisable to the Collateral Agent in such jurisdictions deemed advisable to
the
Collateral Agent, including but not limited to Florida. The Financing Statement
and such other financing statements are deemed to have been filed for the
benefit of the Collateral Agent and Lenders identified on Schedule A
hereto.
5. Further
Action By Debtor; Covenants and Warranties.
5.1 Collateral
Agent at all times shall have a priority perfected security interest in the
Collateral until indefeasible satisfaction in full of all of the Obligations
to
him. Subject to the security interests described herein, Debtor has
and will continue to have full title to the Collateral free from any liens,
leases, encumbrances, judgments or other claims, other than liens existing
on
the date hereof. Collateral Agent's security interest in the
Collateral constitutes a first and indefeasible security interest in favor
of
Collateral Agent. Debtor will do all acts and things, and will
execute and file all instruments (including, but not limited to, security
agreements, financing statements, continuation statements, etc.) reasonably
requested by Collateral Agent to establish, maintain and continue the perfected
security interest of Collateral Agent in the Collateral.
5.2 Upon
sale of any or all of the Collateral, the net proceeds from such sale (the
“Net
Proceeds”) shall be applied against the Obligations pro rata among the Lenders
in proportion to their respective interests in the Obligations. Net
Proceeds shall be equal to the sale price less any transaction, commission
or
brokerage fees associated with the sale. Within three (3) business
days of any such sale, the Company shall give notice to the Collateral Agent
of
the amount of prepayment, accompanied by a listing of the items sold, their
individual sale prices, and any transaction, commission or brokerage fees netted
out of the sales proceeds. Such prepayments shall be made to the
Collateral Agent within the sooner of (i) thirty-five (35) days following the
date of any such sale or (ii) 5 (five) business days of the receipt of
payment. The Collateral Agent shall distribute the prepayments to the
Lenders pursuant to the terms of the Collateral Agent
Agreement. Accompanying such distributions of prepayments to the
Lenders shall be a report from the Collateral Agent indicating which items
were
sold, the individual sales prices, and any commissions or fees, as well as
an
updated list of the contents of the Collateral as well as the then current
storage locations. Any sale of the Collateral must be made on commercially
reasonable terms to an unrelated entity. The Collateral Agent and the
Lenders will promptly cooperate with removal of the UCC1 in connection with
any
items sold pursuant to this Section 5.2. Other than sales permitted by this
Section 5.2, Debtor will not transfer, assign or pledge items of Collateral
(or
allow any such items to transferred, assigned or pledged).
2
5.3 Debtor
will promptly notify Collateral Agent of any levy, distraint or other seizure
by
legal process or otherwise of any part of the Collateral, and of any threatened
or filed claims or proceedings that are reasonably likely to affect or impair
any of the rights of Collateral Agent under this Security Agreement in any
material respect.
5.4 The
Collateral will be insured for not less than 3.3 million dollars upon initial
disbursement from Lender to Global that has been funded to Debtor by Lenders
by
financially sound reputable insurers and stored in an appropriate storage
facility designed to accommodate such materials. If the total of
funds disbursed to Global exceeds 3 million dollars, then the insurance coverage
shall be increased by Debtor to 6.6 million
dollars. Collateral Agent shall be the named payee on said policy of
insurance and shall hold the proceeds after satisfaction of any outstanding
amounts due to Collateral Agent, as agreed to between Debtor and
Lender. The current storage location, and an inventory if more than
one storage location is used, is attached to the Notes as an
appendix. The Collateral Agent must approve in advance and in writing
any planned change in storage location. The Collateral currently located in
the
United States may not be moved to a storage facility outside of the United
States, except for Xxxxxx Xxxx in the UK.
5.5 In
the case of losses or damage to the Collateral, the proceeds of such insurance
shall first be used to satisfy any outstanding obligation remaining unpaid
to
Collateral Agent, then, next, against the Obligations, pro rata, among the
Lenders in proportion to their respective interests in the
Obligations. Collateral Agent is hereby irrevocably (until the
Obligations are satisfied in full) appointed Debtor’s attorney-in-fact to
endorse any check or draft that may be payable to Debtor so that Collateral
Agent may collect the proceeds payable for any loss under such
insurance.
5.6 Debtor
will, at its own expense, make, execute, endorse, acknowledge, file and/or
deliver to the Collateral Agent from time to time such vouchers, invoices,
schedules, confirmatory assignments, conveyances, financing statements, transfer
endorsements, powers of attorney, certificates, reports and other reasonable
assurances or instruments and take further steps relating to the Collateral
and
other property or rights covered by the security interest hereby granted, as
the
Collateral Agent may reasonably require to maintain the perfection of his
security interest hereunder.
5.7 Debtor
represents and warrants that it is the true and lawful exclusive owner of the
Collateral, free and clear of any material liens and encumbrances, other than
liens existing on the date hereof.
5.8 Debtor
hereby agrees not to divest itself of any right under the Collateral except
as
permitted herein absent prior written approval of the Collateral
Agent.
5.9 Debtor
hereby issues a general corporate guaranty in favor of the Lenders on the
Notes.
6. Power
of Attorney.
After
the
occurrence and during the uncured continuation of an Event of Default
thereunder, Debtor hereby irrevocably constitutes and appoints the Collateral
Agent as the true and lawful attorney of Debtor, with full power of
substitution, in the place and stead of Debtor and in the name of Debtor or
otherwise, at any time or times, in the discretion of the Collateral Agent,
to
take any action and to execute any instrument or document which the Collateral
Agent may deem necessary or advisable to accomplish the purposes of this
Agreement. This power of attorney is coupled with an interest and is
irrevocable until the Obligations are satisfied. Collateral Agent
retains the absolute right to resign from his position, without any further
duty
or obligation to the parties upon providing five (5) days written notice
pursuant to the notice provisions set forth in paragraph 10.2.
3
7. Performance
By The Collateral Agent.
If
Debtor
fails to perform any material covenant, agreement, duty or obligation of Debtor
under this Agreement, which failure is not cured within thirty (30) calendar
days after receipt of written notice from Collateral Agent of such failure
to
perform, the Collateral Agent may, after any applicable cure period, at any
time
or times in its discretion, take action to effect performance of such
obligation.
8. Event
of Default.
An
event
of default ("Event of Default") shall be deemed to have occurred hereunder
upon
the occurrence of any event of default as defined in the Notes, Purchase
Agreement, and any other agreement to which Debtor and a Lender are
parties. Upon and after any Event of Default, after the
applicable cure period, if any, any or all of the Obligations shall become
immediately due and payable at the option of the Collateral Agent, for the
benefit of the Lenders, and the Collateral Agent may dispose of Collateral
as
provided below.
9. Disposition
of Collateral.
9.1 Upon
and after any Event of Default which is then continuing,
(A) The
Collateral Agent may exercise its rights with respect to each and every
component of the Collateral, without regard to the existence of any other
security or source of payment for the Obligations. In addition to
other rights and remedies provided for herein or otherwise available to it,
the
Collateral Agent shall have all of the rights and remedies of a lender on
default under the UCC then in effect.
(B) If
any notice to Debtor of the sale or other disposition of Collateral is required
by then applicable law, five (5) business days prior written notice (which
Debtor agrees is reasonable notice within the meaning of Section 9-611(a) of
the
Uniform Commercial Code) to Debtor of the time and place of any sale of
Collateral which Debtor hereby agrees may be by private sale. The
rights granted in this Section are in addition to any and all rights available
to Collateral Agent under the UCC or any applicable Florida law. A Lender that
purchases all or some of the Collateral may apply in payment therefore, the
Lender's portion of the Obligations up to the net proceeds payable to such
Lender from the proceeds of the sale of the Collateral.
(C) All
proceeds received by the Collateral Agent for the benefit of the Lenders in
respect of any sale, collection or other enforcement or disposition of
Collateral, shall be applied against the Obligations pro rata among the Lenders
in proportion to their interests in the Obligations. Upon
satisfaction in full of all Obligations, Debtor shall be entitled to the prompt
return of all Collateral, including cash, which has not been used or applied
toward the payment of Obligations. To the extent allowed by law, each
Lender may purchase the Collateral and pay for such purchase by offsetting
any
sums owed to such Lender by Debtor arising under the Obligations.
9.2 Upon
satisfaction in full of all Obligations, Debtor shall be entitled to the prompt
return of all Collateral. The Lenders and Collateral Agent shall
cooperate with Debtor and execute any instruments or agreements reasonably
requested by Debtor to terminate and extinguish any and all security interests
granted to the Lenders pursuant to this Agreement.
4
10. Miscellaneous.
10.1 Waiver. No
course of dealing by the Collateral Agent and no failure by the Collateral
Agent
to exercise, or delay by the Collateral Agent in exercising any right, remedy
or
power hereunder shall operate as a waiver thereof, and no single or partial
exercise thereof shall preclude any other or further exercise thereof or the
exercise of any other right, remedy or power of the Collateral
Agent.
10.2 Notices. Any
notice required or permitted hereunder shall be given in writing (unless
otherwise specified herein) and shall be deemed effectively given upon (i)
personal delivery, against written receipt thereof, (ii) delivery via facsimile
or e-mail as set forth below (iii) two (2) business days after deposit with
Federal Express or another nationally recognized overnight courier service,
or
(iv) five (5) business days after being forwarded, postage paid, via certified
or registered mail, return receipt requested, addressed to each of the other
parties thereunto entitled at the following addresses, or at such other
addresses as a party may designate by ten (10) business days advance written
notice. The addresses for such communications shall be:
| If To Debtor: | Global
Realty Development Corp.
Attn:
Xxxxxx X. Xxxx, CEO and President
00000
Xxxxx Xxx Xxxxxxxxx, Xxxxx 000
Xxxxx
Xxxxxxx, Xxxxxxx 00000
Telephone: (000)
000-0000
Fax: (000)
000-0000
|
|
| With a copy to: | Xxxxxxxxxx
& Xxxxx LLP
Attn:
Addison X. Xxxxx, Esq.
00000
Xxxxxxxx Xxxx., Xxxxx 000
Xxx
Xxxxxxx, Xxxxxxxxxx 00000
Telephone: (000)
000-0000
Fax: (000)
000-0000
|
|
| To Lenders: | To the addresses and telecopier numbers set forth on the signature page to the Purchase Agreement | |
| To the Collateral Agent | Xxxx
X. Xxxxxxx, P.A.
Attn:
Xxxx X. Xxxxxxx, Esq.
1260
SunTrust International Center
Xxx
Xxxxxxxxx Xxxxx Xxxxxx
Xxxxx,
Xxxxxxx 00000
Telephone: (000)
000-0000
Fax: (000)
000-0000
|
10.3 Term;
Satisfaction of Obligations. This Agreement shall (a) remain in
full force and effect until satisfaction in full of all of the Obligations;
(b)
be binding upon Debtor, and its successors and permitted assigns; and (c) inure
to the benefit of the Collateral Agent, for the benefit of the Lenders and
their
respective successors and assigns. Upon the satisfaction in full of
the Obligations, (i) this Agreement and the security interests created hereby
shall terminate and all rights to the Collateral shall revert to the Debtor
and
(ii) Collateral Agent will, upon Debtor's request and at the Debtor's expense,
(A) return to Debtor such of the Collateral as shall not have been sold or
otherwise disposed of or applied pursuant to the terms hereof and (B) execute
and deliver to Debtor such documents as Debtor shall reasonably request to
evidence such termination. For all purposes of this Agreement, the satisfaction
in full of the Obligations shall be conclusively deemed to have occurred when
the Obligations have been paid in full pursuant to the terms of the Notes,
Purchase Agreement and related transaction documents or as otherwise agreed
by
the parties
5
10.4 Captions. The
captions of sections and paragraphs in this Agreement have been included for
convenience of reference only, and shall not define or limit the provisions
hereof and have no legal or other significance whatsoever.
10.5 Governing
Law; Venue; Severability. This Agreement shall be governed by and
construed in accordance with the laws of the State of Florida without regard
to
principles of conflicts or choice of law, except to the extent that the
perfection of the security interest granted hereby in respect of any item of
Collateral may be governed by the law of another jurisdiction. Any
legal action or proceeding against Debtor with respect to this Agreement may
be
brought in the courts of the State of Florida, and, by execution and delivery
of
this Agreement, Debtor hereby irrevocably accepts for itself and in respect
of
the Collateral, generally and unconditionally, the jurisdiction of the aforesaid
courts. If any provision of this Agreement, or the application
thereof to any person or circumstance, is held invalid, such invalidity shall
not affect any other provisions which can be given effect without the invalid
provision or application, and to this end the provisions hereof shall be
severable and the remaining, valid provisions shall remain of full force and
effect.
10.6 Counterparts/Execution. This
Agreement may be executed in any number of counterparts and by the different
signatories hereto on separate counterparts, each of which, when so executed,
shall be deemed an original, but all such counterparts shall constitute but
one
and the same instrument. This Agreement may be executed by facsimile
signature and delivered by facsimile transmission.
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IN
WITNESS WHEREOF, the undersigned have executed and delivered this
Security Agreement, as of the date first written above.
| DEBTOR: | COLLATERAL AGENT: | |||
| GLOBAL REALTY DEVELOPMENT CORP. | XXXX X. XXXXXXX, P.A. | |||
| a Delaware corporation | a Florida professional association | |||
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/s/
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| Xxxxxx X. Xxxx, Chief Executive Officer |
Xxxx
X. Xxxxxxx,
Principal
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APPROVED
BY “LENDERS”:
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This
Pledge and Security Agreement may be signed by facsimile signature
and
delivered
by confirmed facsimile transmission.
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SCHEDULE
A
TO
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LENDER
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PRINCIPAL
AMOUNT OF NOTE
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Xxxxxxx
Capital, Inc.
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SCHEDULE
B
TO
| COLLATERAL AGENT’S PERFECTED SECURITY INTEREST | SEE FEBRUARY 22, 2007 |
| BEACH BOYS MEMORABILIA | |
| PURCHASE AGREEMENT |
8
EXHIBIT
I
TO
Beach
Boys Memorabilia Appraisal dated July, 5 2007, by Xxxxxx
Xxxx
9
