EXHIBIT 10.48
COLLATERAL SECURITY AGREEMENT
(STOCK PLEDGE)
WHEREAS, CAPITOL COMMUNITIES CORPORATION, A NEVADA CORPORATION
(hereinafter referred to as the "Pledgor") has borrowed or has agreed to
borrow from BOCA FIRST CAPITAL, LLLC, A FLORIDA LIMITED LIABILITY LIMITED
PARTNERSHIP (hereinafter referred to as "Pledgee") the principal sum of
THREE-MILLION AND NO/100THS DOLLARS ($3,000,000.00); and
WHEREAS, Pledgor is the owner and holder of all of the issued and
outstanding capital stock of CAPITOL DEVELOPMENT OF ARKANSAS, INC., an
Arkansas corporation (hereinafter referred to as the "Corporation"); and
WHEREAS, the Pledgor has agreed to execute and to deliver to the
Pledgee a promissory note, hereinafter referred to as the "Note", for the
principal amount of THREE-MILLION and no/100ths DOLLARS ($3,000,000.00) to
evidence the indebtedness arising in connection with the aforesaid loan made
or to be made by Pledgee to Pledgor; and
WHEREAS, the Pledgor has agreed to pledge to Pledgee all of its
capital stock in Corporation as security for the Note;
NOW, THEREFORE, in consideration of the premises and as an inducement
to the Pledgee to lend the principal sum of THREE-MILLION and no/100ths
DOLLARS ($3,000,000.00) to Pledgor and in consideration thereof, the Pledgor
does hereby assign, transfer, set over and pledge to Pledgee One-thousand
(1000) shares of the capital stock of Corporation, being 100% percent of the
issued and outstanding capital stock of Corporation, and being 100% of the
issued and outstanding capital stock of Corporation owned by Pledgor, (which
together with all stock dividends or similar distributions thereon, and all
shares, obligations or securities into which said securities may change, or
which may be issued in lieu thereof, and together with any other securities
which hereafter may be pledged hereunder, are herein called the "Pledged
Securities"), and the Pledgee and the Pledgor hereby agree as follows:
1. Purpose of Pledge. This Pledge is made as collateral security
for the repayment, according to its terms, of the full amount of the Note
including interest thereon.
2. Possession and Use of Pledged Securities. The Pledged Securities
shall, immediately upon the execution of this Pledge, be delivered to Pledgee
together with good and sufficient duly executed stock powers. Pledgee shall
be entitled to receive, and have delivered to it, all stock dividends and all
amounts paid in cash, or other property, as liquidating dividends, or other
similar distributions on account of Pledged Securities, provided that Pledgee
shall also be entitled to receive capital gains distributions, regular cash
or extra dividends, or other distributions even though same do not decrease
the percentage of equity ownership in such investments. All distributions
received by Pledgee in accordance herewith shall become subject to all of the
provisions hereof. Prior to an event of default, as hereafter defined,
Pledgor shall be entitled to exercise all voting powers and privileges of a
stockholder.
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3. Event of Default and Remedies. If any one of the following events
(herein called "Event of Default") shall occur and be continuing:
(a) If the Pledgor defaults in the payment of any installment of
the Note when the same shall have become due, either by the terms thereof,
or otherwise, as herein provided and such default continues beyond any grace
period provided in the Note; or
(b) If the Pledgor becomes in default under the loan agreement
governing the loan represented by the Note; or
(c) If the Corporation or the Pledgor become in default under
any mortgage, security agreement or other document or instrument given to
provide or create collateral security for the Note;
then the Pledged Securities, other than cash, which shall at the
time of receipt thereof be applied to payment of the Note, may be sold,
transferred and delivered in whole or in part, together with any substitutes
therefor, or additions thereto, at any broker's board, or at public or
private sale, for cash, upon credit, for present or future delivery, all at
the option of Pledgee upon Pledgee's (i) declaring the Note due and payable
under the terms hereof, or declaring other liability mentioned or referred to
in this Pledge as being outstanding and overdue, and (ii) giving not less
than ten (10) days written notice of such sale to Pledgor by personal
delivery, or registered or certified mail, return receipt requested,
addressed to their last known address. All rights and remedies of Pledgee
upon an Event of Default, including any sale, transfer or delivery of the
Pledged Securities, shall occur in Palm Beach County, Florida.
5. Notice of Default. The Pledgee shall deliver to Pledgor promptly
upon the occurrence of any Event of Default, a written notice thereof,
specifying the nature thereof but failure to promptly deliver such notice
shall not constitute a waiver of any rights of Pledgee under this Agreement.
A written notice from Pledgee to any nominee that an Event of Default exists
shall be sufficient evidence of that fact to such nominee.
6. Sale of Pledged Securities by Pledgee. Any sale, as provided
herein, of Pledged Securities by Pledgee, or its nominee, may be adjourned
from time to time, if a public sale, by announcement at the time and place
appointed for any such sale, and without further notice, such sale may be
made at the time and place to which the same shall be so adjourned, unless
otherwise provided by law. At such sale, Pledgee, or its nominee, shall be
under no duty to sell all of the Pledged Securities on the date fixed in the
notice, but beginning on such date, Pledgee, or its nominee, may sell the
same from day to day until all, or a portion thereof, have been sold to pay
all amounts secured by this Pledge. At any such sale, Pledgee, or any of its
employees or assigns, as the case may be or its nominee, may become the
purchaser of the whole, or any part, of the Pledged Securities, free from any
trust, claim, right or equity of redemption of the Pledgor, which are
expressly waived and released. In case of any sale on credit, or for future
delivery, the Pledged Securities sold may be retained by the Pledgee, or its
nominee, until the selling price is paid by the purchaser, but neither the
Pledgee, nor its nominee, shall incur any liability in case of failure of the
purchaser to take up and pay for the Pledged Securities so sold. Upon the
sale of any Pledged Securities hereunder, after deducting all costs and
expenses of collection, Pledgee, or its nominee, shall apply the residue of
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the proceeds of the sale, or sales, so made first to the payment of any sums
Pledgee may pay, or incur, in enforcing its rights under the Note and/or this
Pledge, and second to the payment of any sums the Pledgor may be, or become
liable to pay under any of those instruments, and shall pay the excess, if
any, to the Pledgor. No purchaser at such sale, or sales, except the Pledgee,
or its nominee, shall be responsible for the application of the purchase
money.
7. Waiver. The Pledgor agrees that neither the Pledgee, nor its
nominee, shall be held liable for loss or damage resulting from acts or
events beyond the reasonable control of the Pledgee, or its nominee, and acts
of the Pledgee taken in good faith. In taking, or refraining from taking
action required, or permitted, hereunder, such nominee shall follow the
direction of Pledgee, if given, and Pledgor agrees that such nominee shall
not be liable for any action or omission taken hereunder in good faith
pursuant to instructions from Pledgee.
8. Release of Pledged Securities. The Pledgee shall release the
Pledged Securities to the Pledgor when the Note shall have been paid in full;
provided, however, that if at such time there shall be due from Pledgor under
this Pledge additional charges which theretofore arose as a result of the
default under any of the aforesaid instruments then Pledgee shall not release
the Pledged Securities to the Pledgor until such additional charges shall
have been paid in full; and the Pledgee shall deliver to the Pledgor all of
the securities pledged under this Pledge, together with all dividends and
interest upon the Pledged Securities then held by them, and together with all
property, shares of stock, or other securities into which the Pledged
Securities may have been changed or converted and Pledgee shall execute and
deliver, or cause to be executed and delivered, to the Pledgor such
instruments as may be necessary to cancel this Pledge, and revest the Pledged
Securities in the Pledgor free and clear of the lien hereof.
9. Notices. All communications provided for hereunder shall be
addressed to the Pledgor at 00000 Xxxxxxxxx Xxxx., Xxxxx 000, Xxxxxxxx, XX
00000 and to the Pledgee at 000 Xxxxx Xxxxxxx Xxxxxxx, Xxxxx 000, Xxxx Xxxxx,
XX 00000 or to such other address with respect to any of the parties as such
party shall notify the other in writing.
10. Applicable Law. This Agreement shall be construed and enforced
in accordance with the laws of the State of Florida.
11. Successors and Assigns, etc. All of the covenants and provisions
in this Pledge by, or for the benefit of, the Pledgee and the Pledgor shall
bind and inure to the benefit of their respective successors, heirs,
executors, administrators and assigns.
12. Additional Security. This Pledge is without prejudice to the
right of Pledgee to enforce collection of the Note due and payable, by suit,
or in any lawful manner, or resort to any other security for the payment of
the said Note, this Pledge being additional, cumulative, and concurrent
security for the payment of the said Note. The enumeration of certain rights,
privileges and options in this Pledge as vested in Pledgee and its successors
and assigns, is not and shall not be construed as a waiver of, nor to impair
in any way other rights of Pledgee and its successors or assigns, either at
law or in equity, independent of this instrument, concerning this, or any of
the liabilities, obligations, indebtedness, or collateral security involved
in the said Note.
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13. Business Loan Agreement. This Pledge is subject to the provisions
of section 3 "Default; Forbearance; Termination of Forbearance" of Exhibit
"A" to that certain Business Loan Agreement dated the date hereof and entered
into by and between Pledgor and Pledgee.
14. Representation and Warranty of Pledgor. Pledgor represent and
warrant that Pledgor own and hold not less than one-hundred percent (100%) of
the issued and outstanding capital stock of Corporation, and that such stock
is being pledged hereunder.
IN WITNESS WHEREOF, the Pledgor has executed and delivered this
Pledge, this 26th day of April, 2002.
In the presence of: PLEDGOR:
CAPITOL COMMUNITIES CORPORATION
/s/ Xxx Xxxxxxxx By: /s/ Xxxxxxx X. Xxxx
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Xxx Xxxxxxxx Xxxxxxx X. Xxxx, President
PLEDGEE:
BOCA FIRST CAPITAL, LLLP
By: Addison Capital Group, LLC,
general partner
/s/ X.X. Xxxxxxx-Xxxxx By: /s/ Xxxxxx Xxxxx
---------------------- --------------------------
X.X. Xxxxxxx-Xxxxx Xxxxxx Xxxxx, Manager
State of Florida
County of Palm Beach
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The foregoing instrument was acknowledged before me this 26th day of
April, 2002, by XXXXXXX X. XXXX, AS PRESIDENT OF CAPITOL COMMUNITIES
CORPORATION, A NEVADA CORPORATION, who is personally known to me, or who
has produced _________________ as identification.
/s/ Xxxxxx XxXxxxxx
------------------
Signature of Person Taking Acknowledgment)
Xxxxxx Xx Xxxxxx
-----------------------------
(Name of Acknowledger Typed, Printed or
Stamped)
(Title or Rank)
(Serial Number, if any)
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State of Florida
County of Palm Beach
-----------
The foregoing instrument was acknowledged before me this ____ day of
April, 2002, by XXXXXX XXXXX, AS MANAGER OF ADDISON CAPITAL GROUP, LLC, A
NEVADA LIMITED LIABILITY COMPANY, AS GENERAL PARTNER OF BOCA FIRST CAPITAL,
LLLP, A FLORIDA LIMITED LIABILITY LIMITED PARTNERSHIP, who is personally
known to me, or who has produced _______________ as identification.
/s/Xxxx Xxxxxxx
(Signature of Person Taking Acknowledgment)
Xxxx Xxxxxxx
----------------------------
(Name of Acknowledger Typed, Printed or
Stamped)
(Title or Rank)
(Serial Number, if any)
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