SECURITY AGREEMENT -- PLEDGE OF CERTIFICATE OF DEPOSIT THIS SECURITY AGREEMENT -- PLEDGE OF CERTIFICATE OF DEPOSIT ( Agreement ) is made this day of, 2014, by and between LAKE COUNTY, FLORIDA, a political subdivision of the State of Florida, whose address for the purpose of this Agreement is 315 West Main Street, P.O. Box 7800, Tavares, Florida 32778 (the County ), and THE VILLAGES OF LAKE-SUMTER, INC., a Florida corporation, whose address is 1020 Lake Sumter Landing, The Villages, Florida 32162 ( The Villages ). RECITALS: A. On or about the 12th day of June, 2014, The Villages and the County entered into a Development Agreement Between Lake County, Florida, and The Villages of Lake-Sumter, Inc. Regarding A Portion of CR466A in Lake County, Florida (the Development Agreement ). B. Section 3.B of the Development Agreement requires The Villages to provide an unconditional performance and payment bond, or irrevocable letter of credit, as security for The Villages obligations to perform the Road Project (as defined in the Development Agreement, and used herein from time to time). C. The Villages has requested, and the County wishes to agree that, in lieu of an unconditional performance and payment bond or irrevocable letter of credit, The Villages instead be permitted to, and does pledge a certificate of deposit as security for The Villages obligations to perform the Road Project. NOW THEREFORE, in consideration of the mutual covenants and promises herein contained, the County and The Villages agree: 1. Recitals. The Recitals set forth above are true and correct and are hereby incorporated herein by reference. 2. Creation of Security Interest. The Villages hereby pledges, assigns, delivers and grants a security interest to the County in the certificate of deposit attached hereto as Exhibit A and made a part hereof (hereinafter referred to as the Certificate of Deposit ). 3. Obligation Secured. County shall hold the Certificate of Deposit to secure The Villages full obligations under the Development Agreement. 4. Transfer of Certificate of Deposit to the County. The Villages hereby appoints the County as its attorney in fact to arrange for the transfer of the Certificate of Deposit on the books of Citizens First Bank (the Bank ). 5. Substitution or Exchange of Certificate of Deposit. With the consent of the County, The Villages may substitute or exchange other certificates of deposit in place of those herein mentioned, and all of the rights and privileges of the County and all of the obligations of The Villages with respect to such Certificate of Deposit originally pledged or held as collateral hereunder shall be forthwith applied to such substituted or exchanged certificates of deposit.
6. Assignment. This Agreement is for the benefit of the County, its successors or assigns. The Bank shall execute this Agreement where indicated below acknowledging the assignment, pledge and security agreement in favor of the County. The Bank, by acknowledging such pledge, agrees to hold the Certificate of Deposit for the benefit of the County and to comply with all instructions of the County regarding the redemption and distribution of the funds represented by such Certificate of Deposit until such time as the County has executed the release of pledge below. The Villages agrees to hold the Bank harmless from any and all obligations it has in complying with the terms and provisions of this Agreement. 7. Demand for Payment. In the event The Villages shall become in breach of its obligations under the Development Agreement, then the County shall have the right to demand payment of the Certificate of Deposit and use such proceeds in accordance with its rights under the Development Agreement. Such demand shall be evidenced by a notarized statement from the County Attorney that The Villages has not completed its construction of the Road Project (as described in the Development Agreement) or has otherwise breached its obligations set forth in the Development Agreement. Such notarized statement shall be delivered to the Bank, or such other institution holding the pledged Certificate of Deposit, and said Bank shall immediately release, deliver and pay over to the County the funds represented by said Certificate of Deposit. Alternatively, in the event The Villages completes its construction of the Road Project and complies with its obligations under the Development Agreement, then, within sixty (60) days after completion of the Road Project (as defined in the Development Agreement) and acceptance of the Road Project by the County, the County shall execute and deliver to The Villages, The Release of Pledge indicated below. 8. Representations and Warranties with Respect to the Certificate of Deposit. The Villages represents and warrants to the County that: A. Ownership. The Villages is the lawful owner of the Certificate of Deposit. B. Right to Pledge. The Villages has the full right, power and authority to enter into this Agreement and to pledge the Certificate of Deposit. C. Authority; Binding Effect. The Villages has full right, power and authority to enter into this Agreement and to grant a security interest in the Certificate of Deposit. This Agreement is binding upon The Villages, its successors and assigns, and is legally enforceable in accordance with its terms. The foregoing representations and warranties, and all other representations warranties contained in this Agreement are and shall be continuing in nature and shall remain in full force and effect until such time as this Agreement has been released by the County. D. No Assignment. The Villages has not, and shall not, sell, assign, transfer, encumber or otherwise dispose of any of The Villages rights in the Certificate of Deposit. E. No Defaults. There are no defaults existing under this Certificate of Page 2 of 5
Deposit, and there are no offsets or counterclaims to the same. The Villages will strictly and promptly perform each of the terms, conditions, covenants and agreements, if any, contained in the Certificate of Deposit, which are to be performed by The Villages. F. No Violation. The execution and delivery of this Agreement will not violate any law or agreement governing The Villages or to which The Villages is a party. 9. Acknowledgment of Receipt. The County hereby acknowledges receipt of evidence that the Bank has received the Certificate of Deposit attached hereto as Exhibit A. IN WITNESS WHEREOF, The Villages and the County have duly executed this Agreement on the date and year first written above. WITNESSES: THE VILLAGES: THE VILLAGES OF LAKE-SUMTER, INC. a Florida corporation _ Print Name: Print Name: By: Print Name: Title: THE COUNTY: Approved as to form and legality: By: _ David C. Heath County Manager Sanford A. Minkoff, County Attorney Page 3 of 5
EXHIBIT A Certificate of Deposit (To be provided by Bank.) Page 4 of 5
ACKNOWLEDGMENT OF PLEDGE Certificate of Deposit # Principal Balance $ Citizens First Bank hereby acknowledges that the above referenced Certificate of Deposit, which has been pledged in favor of the County, and until such time as the County executes and delivers the Release set forth below, the Bank agrees to comply with all instructions of the County regarding the redemption and distribution of the funds represented by such Certificate of Deposit. CITIZENS FIRST BANK By: Print Name: Title: RELEASE OF PLEDGE County hereby acknowledges satisfaction of all of the obligations of The Villages pursuant to the Development Agreement and hereby instructs the Bank to remove from its records the Security Agreement-Pledge of Certificate of Deposit in favor of the Bank and henceforth to comply with all instructions of The Villages regarding the redemption and distribution of proceeds represented by such Certificate of Deposit. WITNESSES: Print Name: Print Name: COUNTY: By: Print Name: Title: Page 5 of 5