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EXHIBIT 10.32
PLEDGE AGREEMENT
This Pledge Agreement is made and entered into as of August 14,
1998, between Xxxxx X. Xxxxx ("Borrower"), and Arden Realty, Inc., a Maryland
corporation (the "Company").
RECITALS
A. The Company has loaned to Borrower $1,000,000.00 as evidenced
by a promissory note dated as of August 14, 1998 (the "Note"), which was used by
Borrower to purchase an aggregate of 42,553 shares of the Company's common stock
(the "Pledged Shares") pursuant to the terms of The 1996 Stock Option and
Incentive Plan of Arden Realty, Inc. and Arden Realty Limited Partnership.
B. Borrower desires to grant a security interest in the Pledged
Shares to the Company to secure payment of the Note.
AGREEMENT
Now, therefore, in consideration of the above recitals and the
mutual covenants hereinafter set forth, the parties hereto agree as follows:
1. Creation of Security Interest. Borrower hereby grants to the
Company a security interest in all of Borrower's right, title and interest in
and to the collateral described in section 2 hereinbelow (the "Collateral") in
order to secure the payment and performance of the obligations described in
section 3 hereinbelow.
2. Collateral. The Collateral under this Pledge Agreement is:
(a) The Pledged Shares;
(b) All securities, certificates and instruments
representing or evidencing ownership of the Collateral hereunder, and all
proceeds and products of any
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Collateral hereunder, including without limitation, stock, cash, property
or other dividends, securities, rights and other property now or hereafter
at any time or from time to time received, receivable or otherwise
distributed or distributable in respect of or in exchange for any or all
of such Collateral; and
(c) Any substituted or additional Collateral required to be
supplied under the terms of this Pledge Agreement.
3. Secured Obligations of Borrower. The Collateral secures and
shall hereafter secure the payment to the Company of all indebtedness now or
hereafter owed to the Company by Borrower pursuant to the Note, this Agreement
and any extensions, modifications and renewals thereof.
4. Borrower's Representations and Warranties. Borrower represents
and warrants:
(a) Borrower is (or to the extent that this Pledge Agreement
states that the Collateral is to be acquired after the date hereof, will
be) the sole owner of the Collateral; that the security interest hereunder
in the Collateral is a first, prior and perfected security interest; that
there are no security interests, liens or encumbrances upon, or adverse
claims of title to, or any other interest whatsoever in, the Collateral or
any portion thereof except that created by this Pledge Agreement; and that
no financing statement covering the Collateral or any portion thereof
exists or is on file in any public office; and
(b) Borrower has full right, power and authority to enter
into this Pledge Agreement and no consent of, or registration or filing
with, any person or entity,
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including the California Corporations Commissioner or any other
governmental officer or entity, is required.
5. Covenants of Borrower. Borrower covenants that:
(a) Borrower will deliver to the Company each item of
Collateral hereunder immediately upon Borrower's acquisition thereof, and
will defend the Collateral against all claims and demands of all persons
at any time claiming the same or any interest therein; and
(b) If, while this Pledge Agreement is in effect, any stock
dividend, stock split, reclassification, readjustment, reorganization,
merger, consolidation or other change in the capital structure is declared
or made, or proposed to be declared or made, by the Company or any issuer
of the Collateral, all substituted and additional securities issued with
respect to the Collateral shall be endorsed in blank by Borrower promptly
upon receipt thereof or otherwise appropriately transferred to the Company
in negotiable form, and all certificates or instruments evidencing such
securities shall be delivered to the Company to be held under the terms of
this Pledge Agreement in the same manner as and as part of the Collateral.
Borrower shall have the right to exercise any subscription or other rights
with respect to any Collateral, with the prior written approval of such
exercise by the Company; provided, however, that any securities which may
be issued upon exercise of any such rights shall be delivered to the
Company, with any necessary stock power, endorsed in blank and with
signatures guaranteed, to be included in the Collateral.
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6. Defaults and Remedies.
(a) The occurrence of any one or more of the following
events or conditions affecting Borrower shall constitute a default under
this Pledge Agreement:
(i) Borrower fails to pay any indebtedness, perform
any obligation required to be performed by her, or discharge her
liability to the Company in accordance with the terms of the Note;
or
(ii) Borrower fails to perform any obligation under
this Agreement.
(b) Upon the occurrence of a default hereunder, the Company
may, at its option, without notice to or demand upon Borrower, do any one
or more of the following:
(i) Exercise any or all of the rights and remedies
provided for by the applicable Uniform Commercial Code, specifically
including, without limitation, the right to recover the attorneys'
fees incurred by the Company in the enforcement of this Pledge
Agreement or in connection with Borrower's redemption of the
Collateral;
(ii) Sell the Collateral, or any portion thereof, at
any public or private sale or on any securities exchange or other
recognized market, for cash, upon credit or for future delivery, as
the Company shall deem appropriate;
(iii) Enforce one or more remedies hereunder,
successively or concurrently, and such action shall not operate to
estop or prevent the Company from pursuing any other or further
remedy it may have, and any repossession or retaking or sale of the
Collateral pursuant to the terms hereof shall not operate to
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release Borrower until full payment of any deficiency has been made
in cash. Borrower shall reimburse the Company upon demand for, or
the Company may apply any proceeds of Collateral to, the costs and
expenses (including attorneys' fees, transfer taxes and other
charges) incurred by the Company in connection with any sale,
disposition or retention of any Collateral hereunder.
7. Miscellaneous Provisions.
(a) Notices. Notices, requests and other communications
hereunder shall be in writing and may be delivered personally or sent by
telegram, telex or first class mail to the parties addressed as follows:
To Borrower: Xxxxx X. Xxxxx
c/o Arden Realty, Inc.
00000 Xxxxxxxx Xxxxxxxxx
Xxxxxx Xxxxx
Xxx Xxxxxxx, XX 00000-0000
Facsimile:(000) 000-0000
To the Company: Arden Realty, Inc.
00000 Xxxxxxxx Xxxxxxxxx
Xxxxxx Xxxxx
Xxx Xxxxxxx, XX 00000-0000
Attn: President
Facsimile:(000) 000-0000
Such notices, requests and other communications sent as provided
hereinabove shall be effective when received by the addressee thereof, but
if sent by registered or certified mail, postage prepaid, shall be
effective exactly three (3) business days after being deposited in the
United States mail. The parties hereto may change their addresses by
giving notice thereof to the other parties hereto in conformity with this
section.
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(b) Headings. The various headings in this Pledge Agreement
are inserted for convenience only and shall not affect the meaning or
interpretation of this Pledge Agreement or any provision hereof.
(c) Choice of Law. This Pledge Agreement shall be construed
in accordance with and all disputes hereunder shall be governed by the
laws of the State of California, without giving effect to the conflicts of
law principals thereof.
(d) Amendments. This Pledge Agreement or any provision
hereof may be changed, waived, or terminated only by a statement in
writing signed by the party against which such change, waiver or
termination is sought to be enforced.
(e) No Waiver. No delay in enforcing or failure to enforce
any right under this Pledge Agreement by the Company shall constitute a
waiver by the Company of such right. No waiver by the Company of any
default hereunder shall be effective unless in writing, nor shall any
waiver operate as a waiver of any other default or of the same default on
a future occasion.
(f) Time of the Essence. Time is of the essence of each
provision of this Pledge Agreement of which time is an element.
(g) Binding Agreement. All rights of the Company hereunder
shall inure to the benefit of its successors and assigns. Borrower shall
not assign any of its interest under this Pledge Agreement without the
prior written consent of the Company. Any purported assignment
inconsistent with this provision shall, at the option of the Company, be
null and void.
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(h) Definitions. All terms not defined herein shall have the
meaning set forth in the applicable Uniform Commercial Code, except where
the context otherwise requires.
(i) Entire Agreement. This Pledge Agreement, together with
any other agreement executed in connection herewith, is intended by the
parties as a final expression of their agreement and is intended as a
complete and exclusive statement of the terms and conditions thereof.
Acceptance of or acquiescence in a course of performance rendered under
this Pledge Agreement shall not be relevant to determine the meaning of
this Pledge Agreement even though the accepting or acquiescing party had
knowledge of the nature of the performance and opportunity for objection.
(j) Attorneys' Fees. If any legal action, arbitration or
other proceeding, is brought for the enforcement of this Pledge Agreement,
or because of an alleged dispute, breach or default in connection with any
of the provisions of this Pledge Agreement, each of the parties hereto
shall be responsible for payment of any attorneys' fees and other costs
incurred by them in that action or proceeding, without regard to whomever
is the prevailing party in such action or proceeding.
(k) Severability. If any provision of this Pledge Agreement
should be found to be invalid or unenforceable, all of the other
provisions shall nonetheless remain in full force and effect to the
maximum extent permitted by law.
(l) Power of Attorney. Borrower hereby appoints and
constitutes the Company as Borrower's attorney-in-fact for purposes of (i)
collecting any Collateral, and (ii) conveying any item of Collateral to
any purchaser thereof. This power of attorney is coupled with an interest
and is irrevocable by Borrower. Notwithstanding the foregoing,
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the Company agrees that it shall not exercise its power of attorney
granted under this Section 7(l) unless and until there is a default under
this Pledge Agreement.
(m) Counterparts. This Pledge Agreement may be executed in
one or more counterparts, each of which shall be deemed an original but
all of which shall together constitute one and the same agreement.
(n) Termination of Pledge. This Pledge Agreement and the
security interest and pledge hereunder shall not terminate until the full
and final payment and performance of all indebtedness and obligations
secured hereunder. At such time, the Company shall reassign and deliver to
Borrower all of the Collateral hereunder which has not been sold, disposed
of, retained or applied by the Company in accordance with the terms
hereof. Such reassignment and redelivery shall be without warranty by or
recourse to the Company, and shall be at the expense of Borrower. Without
limiting the generality of the foregoing, the security interest and pledge
hereunder shall not be terminated by the transfer of any of the Collateral
hereunder from the Company to Borrower, or any person designated by
Borrower, for the purpose of ultimate sale, exchange, presentation,
collection, renewal or registration of transfer or for any other purpose.
(o) Release of Collateral. Borrower shall be permitted to
sell any of the shares of Collateral and the Company shall release such
shares from Borrower's pledge hereunder provided, however, that (i) so
long as Borrower has not sold more than the aggregate shares of common
stock of the Company beneficially owned by Borrower on or after the
employment anniversary dates as specified below, (or the Company has
consented in writing to such a sale prior to such sale):
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PERCENTAGE OF SHARES THAT MAY BE PERCENTAGE OF REMAINING SHARES THAT
ANNIVERSARY SOLD ON OR AFTER ANNIVERSARY MAY BE SOLD ON OR AFTER ANNIVERSARY
Prior to Third Anniversary None None
Three 15% 15%
Four 25% 40%
Five 30% 70%
Six 30% 100%
Borrower shall pay to the Company that percentage of the net (after-tax)
proceeds from the sale of such shares equal to the percentage of shares of
common stock of the Company pledged by the Borrower to the Company as
security under this or any other agreement for obligations owing by
Borrower to the Company so sold and provided further, that if as a result
of any such sale the value of the remaining Collateral would be less than
the aggregate amount owing under the Note after such repayment plus any
other obligations of Borrower secured by the Collateral, Borrower shall
pay to the Company the lesser of (x) all of the net (after-tax) proceeds
from such sale and (y) as much of the net (after-tax) proceeds of such
sale as would be required to result in the value of the remaining
collateral being equal to or greater than the aggregate amount owing under
the Note after such repayment plus any other obligations of Borrower
secured by the Collateral and (ii) if Borrower has sold more than the
aggregate shares of common stock of the Company beneficially owned by
Borrower permitted to be sold in accordance with the table set forth above
during any fiscal quarter of the Company, Borrower shall pay to the
Company all of the net (after-tax) proceeds of the sale of such shares.
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IN WITNESS WHEREOF, the parties hereto have caused this Pledge
Agreement to be duly executed the day and year first above written. ARDEN
REALTY, INC. BORROWER
By_________________________ _____________________________
Xxxxxx X. Xxxxxxx Xxxxx X. Xxxxx
President
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