EXHIBIT 10.35
LOAN AND SECURITY AGREEMENT
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This Loan and Security Agreement ("Agreement") dated as of December 29,
1997 is entered into by and between Xxxxxxxxx Xxxxxx Properties Operating
Partnership, L.P., a California limited partnership ("Lender") and Xxxx X.
Xxxxxxx, an individual ("Borrower").
W I T N E S S E T H:
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WHEREAS, Borrower has heretofore entered into a certain financing agreement
with Xxxxxxxxx Xxxxxx, Xx. dated as of July 1, 1996 (the "Haagen Loan");
WHEREAS, Borrower has requested that Lender enter into certain financing
arrangements with Borrower pursuant to which Lender may advance and otherwise
provide financial accommodations to Borrower (the "Loan" as hereinafter defined)
to repay Borrower's obligations with respect to the amounts outstanding under
the Haagen Loan; and
WHEREAS, Lender is willing to advance funds to Borrower in order to
discharge such obligations and provide such financial accommodations on the
terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the mutual conditions and agreements
set forth herein, and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto agree as
follows:
SECTION 1. DEFINITIONS
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All terms used herein which are defined in Division 1 or Division 9 of the
Uniform Commercial Code as enacted in the State of California shall have the
meanings given therein unless otherwise defined in this Agreement. All
references to the plural herein shall also mean the singular and to the singular
shall also mean the plural. All references to Borrower and Lender pursuant to
the definitions set forth in the recitals hereto, or to any other person herein,
shall include their respective successors and assigns. The words "hereof",
"herein", "hereunder", "this Agreement" and words of similar import when used in
this Agreement shall refer to this Agreement as a whole and not any particular
provision of this Agreement and as this Agreement now exists or may hereafter be
amended, modified, supplemented, extended, renewed, restated or replaced. Any
accounting term used herein unless otherwise defined in this Agreement shall
have the meanings customarily given to such term in accordance with GAAP. For
purposes of this Agreement, the following terms shall have the respective
meanings given to them below:
1.1 Reserved.
1.2 "Collateral" shall have the meaning set forth in Section 4 hereof.
1.3 "Employment Agreement" means that certain Employment Agreement dated
as of December 27, 1993, as amended by that certain Amendment to Employment
Agreement dated as of December 31, 1995, together with all further amendments,
supplements, replacements and extensions to either, or both, of such documents,
by and among Xxxxxxxxx Xxxxxx Properties, Inc. ("AHP"), Xxxxxxxxx Xxxxxx
Properties Operating Partnership, L.P. ("AHPOP"), or Haagen Property Management,
Inc. ("HPMI") and Borrower.
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1.4 "Financing Agreements" shall mean, collectively, this Agreement, the
Term Note, the Pledge Agreement and all notes, guarantees, security agreements
and other agreements, documents and instruments now or at any time hereafter
executed and/or delivered by Borrower pursuant hereto, as the same now exist or
may hereafter be amended, modified, supplemented, extended, renewed, restated or
replaced.
1.5 "Distributions" shall mean any and all distributions of property of
any kind or type, including, but not limited to, distributions made with respect
to interests in partnerships, general or limited; dividends with respect to
stock (including the Restricted Stock), whether cash or non-cash; proceeds from,
and other distributions with respect to, options, including, but not limited to,
the Options and all similar instruments, including, but not limited to,
warrants, rights and similar interests, whether realized through the exercise
thereof or not; distributions with respect to operating partnership units,
including, but not limited to, the Units, whether obtained as a direct
distribution, realized on account of or in connection with a sale or other
transfer thereof, or as the same may be otherwise received.
1.6 "Material Adverse Effect" shall mean any event, occurrence or
circumstance which shall have the effect of materially and adversely affecting:
(i) the ability of Borrower to conduct his business in the ordinary course; or
(ii) the ability of Borrower to repay the Obligations as and when due.
1.7 "Loan" shall mean the loan made pursuant to, agreed to be made
pursuant to and/or evidenced hereby and by the other Financing Agreements.
1.8 INTENTIONALLY DELETED.
1.9 "Obligations" shall mean the Loan, and all other obligations,
liabilities and indebtedness of every kind, nature and description arising under
any of the Financing Agreements owing by Borrower to Lender and/or its
affiliates, including principal, interest, charges, fees, costs and expenses,
however evidenced, whether as principal, surety, endorser, guarantor or
otherwise, whether now existing or hereafter arising, whether arising, during or
after the initial or any renewal term of this Agreement or after the
commencement of any case with respect to Borrower under the United States
Bankruptcy Code or any similar statute (including, without limitation, the
payment of interest and other amounts which would accrue and become due but for
the commencement of such case), whether direct or indirect, absolute or
contingent, joint or several, due or not due, primary or secondary, liquidated
or unliquidated, secured or unsecured.
1.10 "Options" shall mean any and all of the Options and related collateral
described on Exhibit A hereto.
1.11 "Person" or "person" shall mean any individual, sole proprietorship,
partnership, corporation, business trust, unincorporated association, joint
stock corporation, trust, joint venture or other entity or any government or any
agency or instrumentality or political subdivision thereof.
1.12 "Records" shall mean all of Borrower's present and future books of
account of every kind or nature, purchase and sale agreements, invoices, ledger
cards, bills of lading and other shipping evidence, statements, correspondence,
memoranda, credit files and other data, in each case, relating to the
Collateral, including but not limited to the Employment Agreement together with
the tapes, disks, diskettes and other data and software storage media and
devices, file cabinets or containers in or on which the foregoing are stored
(including any rights of Borrower with respect to the foregoing maintained with
or by any other person).
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1.13 "Rights to Payment" means accounts, accounts receivable and other
rights to payment including, but not limited to, rights to payment of every kind
or type inuring to the benefit of any person under the terms of the Units, the
Options or the Employment Agreement.
1.14 "Pledge Agreement" means that certain Borrower Pledge Agreement of
even date hereof between Borrower and Lender with respect to the Units,
Restricted Stock and the Options.
1.15 "Term Note" means that certain Term Promissory Note of even date
herewith evidencing the Loans.
1.16 "Unit" shall mean those certain Unit(s) described on Exhibit "B"
hereto.
1.17 "Restricted Stock" shall mean those certain shares of Restricted
Stock(s) described on Exhibit "B" hereto.
SECTION 2. CREDIT
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2.1 Term Loan. Subject to, and upon the terms and conditions contained
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herein, Lender agrees to extend the Loan to Borrower in the aggregate principal
amount of Three Million One Hundred and Thirty-Eight Thousand Five Hundred and
Eighty-Six and NO/100 Dollars ($3,138,586.00).
2.2 INTENTIONALLY DELETED.
2.3 Conditions Precedent to the Loan. As a condition precedent to the
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Loan hereunder, (a) Borrower shall execute and deliver to Lender the Financing
Agreements in such form as Lender may require, including, but not limited to,
the Term Note, the Pledge Agreement and such Uniform Commercial Code Financing
Statements as Lender may deem appropriate, (b) all representations and
warranties contained herein and in all the other Financing Agreements shall be
true and (c) no Event of Default, or event which, with the passage of time, the
giving of notice or both, would constitute an Event of Default has occurred and
is continuing.
2.4 Payments.
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(a) The Obligations may be voluntarily prepaid in whole or in part, at
any time and from time to time, without premium or penalty.
(b) There shall be mandatory payments with respect to the Obligations
payable hereunder and under the Term Note, (i) in an amount equal to the
proceeds of sale of or other disposition of any of the Units or Restricted
Stock; (ii) in an amount equal to the net proceeds from the sale or other
disposition of any of the Options; (iii) in an amount equal to all other
Distributions received by or payable to Borrower; and (iv) as otherwise set
forth in the Term Note.
(c) Each payment required to be made pursuant to Section 2.4(b) above
shall be due and payable when the proceeds of any sale or disposition of Units
or Options, or any other Disposition, as the case may be, would have otherwise
been received by Borrower. Each payment required to be made under clause (v) of
Section 2.4(b) above shall be due and payable as set forth in the Term Note. All
payments shall be applied first to accrued and outstanding interest owing
hereunder and under the Term Note and then to any installments of principal
owing under the Term Note in inverse order of maturity.
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SECTION 3. INTEREST AND FEES
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3.1 Interest.
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(a) Borrower shall pay to Lender interest on the outstanding principal
balance of the Loan at the per annum rate of 7.445%.
(b) Interest shall accrue and shall be compounded quarterly in arrears on
the first day of each calendar quarter commencing with the quarter commencing
January 1, 1998. Interest payable hereunder shall be calculated on the basis of
a three hundred sixty-five (365) day year and actual days elapsed. In no event
shall charges constituting interest payable by Borrower to Lender exceed the
maximum amount or the rate permitted under any applicable law or regulation, and
if any part or provision of this Agreement is in contravention of any such law
or regulation, such part or provision shall be deemed amended to conform
thereto.
SECTION 4. GRANT OF SECURITY INTEREST
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To secure payment and performance of all Obligations, Borrower hereby
grants to Lender a continuing security interest in and a lien upon, and hereby
assigns to Lender as security, the following property and interests in property,
whether now owned or hereafter acquired or existing, and wherever located
(collectively, the "Collateral"):
4.1 Reserved;
4.2 all Units, Options, Restricted Stock and other "Pledged Collateral",
as defined in the Pledge Agreement;
4.3 Records; and
4.4 all products and proceeds of the foregoing, in any form.
SECTION 5. REPRESENTATIONS AND WARRANTIES
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Borrower hereby represents and warrants to Lender the following (which
shall survive the execution and delivery of this Agreement), the truth and
accuracy of which are a continuing condition of the making of the Loan by Lender
to Borrower:
5.1 Enforceability. This Agreement and the other Financing Agreements
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constitute legal, valid and binding obligations of Borrower enforceable in
accordance with their respective terms, subject to the following qualifications:
(i) the effects of bankruptcy, insolvency, reorganization, receivership,
moratorium and other similar laws affecting the rights and remedies of creditors
generally; (ii) the effects of general principles of equity, whether applied by
a court of law or equity, and (iii) any limitations under applicable law which
relate to the indemnification provisions of this Agreement.
5.2 INTENTIONALLY DELETED.
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5.3 Primary Domicile; Collateral Locations. The primary domicile of
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Borrower is located at the address set forth at the end of this Agreement.
Borrower's records concerning accounts are located only at such office. Subject
to the right of Borrower to establish new locations in accordance with Section
6.1 below, Borrower has no other places of business or locations of collateral.
5.4 Priority of Liens; Title to Collateral. The security interests and
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liens granted to Lender under this Agreement and the other Financing Agreements
constitute valid and perfected first priority liens and security interests in
and upon the Collateral. Borrower has good and marketable title to the
Collateral.
5.5 Tax Returns. Borrower has filed, or caused to be filed, in a timely
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manner all tax returns, reports and declarations which are required to be filed
by it (without requests for extension except as previously disclosed, in
writing, to Lender). All information in such tax returns, reports and
declarations is complete and accurate in all material respects and each year,
until the Loan has been paid in full, copies of each of such tax returns,
reports and declarations, in each case executed by Borrower and/or Borrower's
financial consultant, shall be delivered to Lender no later than such filings
are filed with the appropriate taxing authorities. There is no present
investigation by any governmental agency pending, or to the best of Borrower's
knowledge threatened, against or affecting Borrower, its assets or business and
there is no action, suit, proceeding or claim by any Person pending, or to the
best of Borrower's knowledge threatened, against Borrower or its assets or
goodwill, or against or affecting any transactions contemplated by this
Agreement.
5.6 Compliance with Other Agreements and Applicable Laws. Borrower is
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not in default in any material respect under, or in violation in any material
respect of any of the terms of, any material agreement, contract, instrument,
lease or other commitment to which it is a party or by which it or any of its
assets are bound and Borrower is in compliance in all material respects with all
applicable provisions of laws, rules, regulations, licenses, permits, approvals
and orders of any foreign, Federal, State or local governmental authority the
failure to comply with which in each case, would have a Material Adverse Effect.
5.7 Accuracy and Completeness of Information. All information furnished
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by or on behalf of Borrower in writing to Lender in connection with this
Agreement or any of the other Financing Agreements or any transaction
contemplated hereby or thereby, is true and correct in all material respects on
the date as of which such information is dated or certified and does not omit
any material fact necessary in order to make such information not misleading.
No event or circumstance has occurred which has had a Material Adverse Effect
which has not been fully and accurately disclosed to Lender in writing.
5.8 Survival of Warranties; Cumulative. All representations and
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warranties contained in this Agreement or any of the other Financing Agreements
shall survive the execution and delivery of this Agreement. The representations
and warranties set forth herein shall be cumulative and in addition to any other
representations or warranties which Borrower shall now or hereafter give, or
cause to be given, to Lender.
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SECTION 6. AFFIRMATIVE AND NEGATIVE COVENANTS
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6.1 New Domicile. Borrower may change his principle domicile or place of
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residence within the continental United States provided Borrower (c) gives
Lender sixty (60) days prior written notice of the intended change and (d)
executes and delivers, or causes to be executed and delivered, to Lender such
agreements, documents, and instruments as Lender may deem reasonably necessary
or desirable to protect its interests in the Collateral at such location,
including, without limitation, Uniform Commercial Code financing statements.
6.2 Compliance with Laws, Regulations, Etc. Borrower shall, at all times,
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comply in all material respects with all laws, rules, regulations, licenses,
permits, approvals and orders of any Federal, State or local governmental
authority applicable to it for which the failure to so comply would have a
Material Adverse Effect.
6.3 Financial Statements and Other Information. Borrower shall furnish
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or cause to be furnished to Lender such information respecting the Collateral
and the business of Borrower as Lender may, from time to time reasonably request
until the Loans are paid in full, including but not limited to, copies of all of
Borrower's income tax returns required to be filed by Borrower under Federal or
state laws. Such tax returns shall be executed by Borrower and Borrower's tax
advisor, if any, and shall be submitted by Borrower to Lender prior to their
becoming delinquent, together with evidence, reasonably required by Lender,
showing that Borrower has actually paid the liabilities reflected in such
returns.
6.4 Restrictions on Dividends and Redemptions. Except as otherwise set
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forth herein, Borrower shall not, directly or indirectly, receive or retain any
Distributions on account of any Collateral, including, but not limited to, the
Pledged Collateral, now or hereafter outstanding.
6.5 Costs and Expenses. Borrower shall pay to Lender on demand all costs,
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expenses, filing fees and taxes paid or payable in connection with the
preparation, negotiation, closing, collection, liquidation, enforcement and
defense of the Obligations or Lender's rights in (i) the Collateral, (ii) this
Agreement or (iii) the other Financing Agreements, including any amendments,
supplements or consents which may hereafter be entered into in respect hereof
and thereof, including, but not limited to: (a) costs and expenses of preserving
and protecting the Collateral; and (b) costs and expenses paid or incurred in
connection with obtaining payment of the Obligations, enforcing the security
interests and liens of Lender, selling or otherwise realizing upon the
Collateral, and otherwise enforcing the provisions of this Agreement and the
other Financing Agreements; and (c) the fees and disbursements of counsel
(including legal assistants) to Lender in connection with any of the foregoing.
6.6 Further Assurances. At the reasonable request of Lender at any time
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and from time to time, Borrower shall, at its expense, duly execute and deliver,
or cause to be duly executed and delivered, such further agreements, documents
and instruments, and do or cause to be done such further acts as may be
necessary or proper to evidence, perfect, maintain and enforce the security
interests and the priority thereof in the Collateral and to otherwise effectuate
the provisions or purposes of this Agreement or any of the other Financing
Agreements. Where permitted by law, Borrower hereby authorizes Lender to
execute and file one or more UCC financing statements signed only by Lender.
6.7 Negative Pledge. Borrower shall, at all times while the Loan is
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outstanding, keep all of the Collateral free and clear of all liens, claims and
encumbrances other than those in favor of Lender granted pursuant to the
Financing Agreements. Borrower shall also protect and defend Lender's interest
in the Collateral granted pursuant to the Financing Agreements or otherwise.
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6.8 Certain Board of Directors' Matters. Borrower currently sits on the
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Board of Directors of AHP and serves as an executive officer thereof and of
AHPOP. Borrower covenants to abstain from any and all Board discussions and
votes concerning the stock dividend associated with AHP's stock.
SECTION 7. EVENTS OF DEFAULT AND REMEDIES
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7.1 Events of Default. The occurrence or existence of any one or more of
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the following events are referred to herein individually as an "Event of
Default", and collectively as "Events of Default":
(a) Borrower fails to pay when due any of the Obligations;
(b) Borrower fails to perform any of the terms, covenants, conditions
or provisions contained in this Agreement or any of the other Financing
Agreements;
(c) any representation, warranty or statement of fact made by
Borrower to Lender in this Agreement, the other Financing Agreements or any
other agreement, schedule, confirmatory assignment or other document delivered
to Lender by or on behalf of Borrower pursuant hereto shall, when delivered by
or on behalf of Borrower or, if applicable, as of the date as of which document
speaks, be false or misleading in a manner reasonably likely to have a Material
Adverse Effect;
(d) Borrower becomes insolvent (however defined or evidenced), makes
an assignment for the benefit of creditors, makes or sends notice of a bulk
transfer or calls a meeting of its creditors or principal creditors;
(e) a case or proceeding under the bankruptcy laws of the United
States of America now or hereafter in effect or under any insolvency,
reorganization, receivership, readjustment of debt, dissolution or liquidation
law or statute of any jurisdiction now or hereafter in effect (whether at law or
in equity) is filed against Borrower or all or any part of its properties and
such petition or application is not dismissed within ninety (90) days after the
date of its filing or Borrower shall file any answer admitting or not contesting
such petition or application or indicates its consent to, acquiescence in or
approval of, any such action or proceeding or the relief requested is granted
sooner;
(f) a case or proceeding under the bankruptcy laws of the United
States of America now or hereafter in effect or under any insolvency,
reorganization, receivership, readjustment of debt, dissolution or liquidation
law or statute of any jurisdiction now or hereafter in effect (whether at a law
or equity) is filed by Borrower or for all or any part of its property; or
(g) there shall be an Event of Default, withdrawal, cancellation or
other termination under any of the other Financing Agreements.
7.2 Remedies.
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(a) At any time an Event of Default exists or has occurred and is
continuing, Lender shall have all rights and remedies provided in this
Agreement, the other Financing Agreements, the Uniform Commercial Code as
enacted in the State of California and other applicable law, all of which rights
and remedies may be exercised without notice to or consent by Borrower, except
as such notice or consent is expressly provided for hereunder or required by
applicable law. All rights, remedies and powers granted to Lender hereunder,
under any of the other Financing Agreements, the Uniform
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Commercial Code as enacted in the State of California or other applicable law,
are cumulative, not exclusive and enforceable, in Lender's discretion,
alternatively, successively, or concurrently on any one or more occasions, and
shall include, without limitation, the right to apply to a court of equity for
an injunction to restrain a breach or threatened breach by Borrower of this
Agreement or any of the other Financing Agreements. Lender may, at any time or
times, proceed directly against Borrower or any Obligor to collect the
Obligations without prior recourse to the Collateral.
(b) Without limiting the foregoing, at any time an Event of Default
exists or has occurred and is continuing, Lender may, in its discretion and
without limitation, (i) accelerate the payment of all Obligations and demand
immediate payment thereof to Lender (provided, that, upon the occurrence of any
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Event of Default described in Sections 7.1(e) and 7.1(f), all Obligations shall
automatically become immediately due and payable), (ii) collect, foreclose,
receive, appropriate, setoff and realize upon any and all Collateral, and/or
(iii) terminate this Agreement. If notice of disposition of Collateral is
required by law, then Lender shall provide Borrower with such notice. In the
event Lender institutes an action to recover any Collateral or seeks recovery of
any Collateral by way of prejudgment remedy, Borrower waives the posting of any
bond which might otherwise be required.
(c) Lender may apply the cash proceeds of Collateral actually
received by Lender from any sale, lease, foreclosure or other disposition of the
Collateral to payment of the Obligations, in whole or in part and in such order
as Lender may elect, when due. Borrower shall remain liable to Lender for the
payment of any deficiency with interest at the highest rate provided for herein
and all costs and expenses of collection or enforcement, including attorneys'
fees and legal expenses.
SECTION 8. JURY TRIAL WAIVER; OTHER WAIVERS AND CONSENTS; GOVERNING LAW
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8.1 Governing Law; Choice of Forum; Service of Process; Jury Trial Waiver.
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(a) The validity, interpretation and enforcement of this Agreement
and the other Financing Agreements and any dispute arising out of the
relationship between the parties hereto, whether in contract, tort, equity or
otherwise, shall be governed by the internal laws of the State of California
(without giving effect to principles of conflicts of law).
(b) Borrower and Lender irrevocably consent and submit to the non-
exclusive jurisdiction of the Superior Court of the State of California for the
County of Los Angeles and the United States District Court for the Central
District of California and waive any objection based on venue or forum non
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conveniens with respect to any action instituted therein arising under this
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Agreement or any of the other Financing Agreements or in any way connected with
or related or incidental to the dealings of the parties hereto in respect of
this Agreement or any of the other Financing Agreements or the transactions
related hereto or thereto, in each case whether now existing or hereafter
arising, and whether in contract, tort, equity or otherwise, and agree that any
dispute with respect to any such matters shall be heard only in the courts
described above (except that Lender shall have the right to bring any action or
proceeding against Borrower or its property in the courts of any other
jurisdiction which Lender deems necessary or appropriate in order to realize on
the Collateral or to otherwise enforce its rights against Borrower or its
property).
(c) Each party hereby waives personal service of any and all process
upon it and consents that all such service of process may be made by certified
mail (return receipt requested) directed to its address set forth on the
signature pages hereof and service so made shall be deemed to be
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completed five (5) days after the same shall have been so deposited in the U.S.
mails, or, at the option of the party sending the notice, by service upon the
recipient in any other manner provided under the rules of any such courts.
Within thirty (30) days after such service, Borrower shall appear in answer to
such process, failing which Borrower shall be deemed in default and judgment may
be entered by Lender against Borrower for the amount of the claim and other
relief requested.
(d) BORROWER AND LENDER EACH HEREBY WAIVES ANY RIGHT TO TRIAL BY JURY
OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION (i) ARISING UNDER THIS AGREEMENT
OR ANY OF THE OTHER FINANCING AGREEMENTS OR (ii) IN ANY WAY CONNECTED WITH OR
RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO IN RESPECT OF THIS
AGREEMENT OR ANY OF THE OTHER FINANCING AGREEMENTS OR THE TRANSACTIONS RELATED
HERETO OR THERETO IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND
WHETHER IN CONTRACT, TORT, EQUITY OR OTHERWISE. BORROWER AND LENDER EACH HEREBY
AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL
BE DECIDED BY COURT TRIAL WITHOUT A JURY AND THAT BORROWER OR LENDER MAY FILE AN
ORIGINAL COUNTERPART OF A COPY OF THIS AGREEMENT WITH ANY COURT AS WRITTEN
EVIDENCE OF THE CONSENT OF THE PARTIES HERETO TO THE WAIVER OF THEIR RIGHT TO
TRIAL BY JURY.
(e) Lender shall not have any liability to Borrower (whether in tort,
contract, equity or otherwise) for losses suffered by Borrower in connection
with, arising out of, or in any way related to the transactions or relationships
contemplated by this Agreement, or any act, omission or event occurring in
connection herewith, unless such losses were the result of acts or omissions
constituting negligence or willful misconduct by Lender.
8.2 Waiver of Notices. Borrower hereby expressly waives demand,
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presentment, protest and notice of protest and notice of dishonor with respect
to any and all instruments and commercial paper, included in or evidencing any
of the Obligations or the Collateral, and any and all other demands and notices
of any kind or nature whatsoever with respect to the Obligations, the Collateral
and this Agreement, except such as are expressly provided for herein. No notice
to or demand on Borrower which Lender may elect to give shall entitle Borrower
to any other or further notice or demand in the same, similar or other
circumstances.
8.3 Amendments and Waivers. Neither this Agreement nor any provision hereof
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shall be amended, modified, waived or discharged orally or by course of conduct,
but only by a written agreement signed by Lender and Borrower. Lender shall not,
by any act, delay, omission or otherwise be deemed to have expressly or
impliedly waived any of its rights, powers and/or remedies unless such waiver
shall be in writing and signed by Lender. Any such waiver shall be enforceable
only to the extent specifically set forth therein. A waiver by Lender of any
right, power and/or remedy on any one occasion shall not be construed as a bar
to or waiver of any such right, power and/or remedy which Lender would otherwise
have on any future occasion, whether similar in kind or otherwise.
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8.4 Indemnification.
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(a) Borrower shall indemnify, defend and hold Lender, and its
successors, assigns and employees (collectively the "Lender Parties"), harmless
from and against any and all losses, claims, damages, liabilities, costs or
expenses (collectively, "Losses") imposed upon, incurred by or asserted against
any of the Lender Parties by any creditor of Borrower in connection with any
litigation, investigation, claim or proceeding commenced or threatened related
to the enforcement, performance or administration of this Agreement, any other
Financing Agreement, any undertaking or proceeding relating to any of the
transactions contemplated hereby or any act, omission, event or transaction
related or attendant thereto, including, without limitation, amounts paid in
settlement, court costs, and the fees and expenses of counsel.
(b) Promptly after receipt by Borrower under this Section 8.4 of
notice of the commencement of any action, proceeding or investigation or the
assertion of any claim, if a claim in respect thereof is to be made against a
Lender Party, Borrower shall immediately notify all other persons potentially
liable under this Section 8.4 of the commencement thereof. In case such action
is brought against any party hereto and such party shall be entitled to
participate in, and to the extent that it may wish, to assume, the defense
thereof subject to the provisions herein stated, with counsel reasonably
satisfactory to such party, and after notice each other party with potential
liability under this Section 8.4 to such party of its election so to assume the
defense thereof, notwithstanding anything to the contrary contained herein, no
one shall not be liable under this Section 8.4 for any legal or other expenses
subsequently incurred by anyone else in connection with the defense thereof,
other than reasonable costs assuming such defense of investigation. All other
persons entitled to the benefit hereof shall have the same rights as each other
such person set forth in the immediately preceding sentence. The person
referred to immediately above shall have the right to employ separate counsel in
any such action and to participate in the defense thereof, but the fees and
expenses of such counsel shall not be at the expense of the person initially
undertaking the defense of such action if such person has assumed the defense of
the action with counsel reasonably satisfactory to the other person also subject
to the benefit of this Section 8.4.
(c) No settlement of any action against any party subject to the
benefit of this Section 8.4 shall be made without the consent of the person who
received the notice of claim referred to above and the party providing the
indemnity, which consent shall not be unreasonably withheld or delayed by any
person in light of all factors of importance to all parties shall not be liable
to indemnify any person for any settlement of any such claim accepted without
such person's consent.
(d) No one shall be liable for any Losses pursuant to this Section
8.4 to the extent such Losses resulted from the negligence or misconduct of such
person or its affiliates, successors or assigns or to the extent that such
Losses resulted from the material breach by a person entitled to the benefit
hereof or its affiliates, successors or assigns of any representation, warranty,
covenant or other agreement of such person contained in this Agreement.
(e) Each person entitled to the benefits of this Section 8.4 agrees
that if and to the extent that the undertaking to indemnify, pay and hold
harmless set forth in this Section 8.4 may be unenforceable because it violates
any law or public policy, the relevant person shall pay the maximum portion
which it is permitted to pay under applicable law to the appropriate person in
satisfaction of indemnified matters hereunder. If the relevant person is the
Borrower, the foregoing indemnity shall survive the payment of the Obligations
and the termination or non-renewal of this Agreement.
10
8.5 Representation as to Counsel Generally. Borrower acknowledges,
---------------------------------------
represents and warrants that he has: (a) been represented by and relied on
counsel of his own choosing with respect to this Agreement, the Term Note,
Pledge Agreement and the rest of the Financing Agreements and the transactions
evidenced and/or contemplated thereby; (b) he has read this Agreement and the
rest of the Financing Agreements and is fully aware of and understands all of
their respective terms and the consequences thereof; and (c) that, through his
counsel, he participated in the preparation of this Agreement and the other
Financing Agreements.
------------------------------------
F.W.B.
SECTION 9. TERM OF AGREEMENT; MISCELLANEOUS
--------------------------------
9.1 Term.
----
(a) This Agreement and the other Financing Agreements shall become
effective as of the date set forth on the first page hereof and shall continue
in full force and effect for a term ending on the earlier of (i) the maturity
date of the Term Note, whether through acceleration or otherwise, or (ii) the
date which is six months after Borrower is no longer employed by Lender,
Xxxxxxxxx Xxxxxx Properties Operating Partnership, L.P. ("AHPOP"), or Haagen
Property Management, Inc. ("HPMI") or any of their successors and assigns).
(b) No termination of this Agreement or the other Financing
Agreements shall relieve or discharge Borrower or any Obligor of its respective
duties, obligations and covenants under this Agreement or the other Financing
Agreements until all Obligations have been fully and finally discharged and
paid, and Lender's continuing security interest in the Collateral and the rights
and remedies of Lender hereunder, under the other Financing Agreements and
applicable law, shall remain in effect until all such Obligations have been
fully and finally discharged and paid. In the event of such a termination,
interest shall continue to accrue and be payable on all outstanding Obligations
as set forth in Section 3 of this Agreement.
9.2 Notices. All notices, requests and demands hereunder shall be in
-------
writing and (a) made to Lender at its address set forth below and to Borrower at
its domicile set forth below, or to such other address as either party may
designate by written notice to the other in accordance with this provision, and
(b) be deemed to have been given or made: if delivered in person, immediately
upon delivery if such delivery is made on a business day, or, otherwise, on the
next following business day; if by telex, telegram or facsimile transmission,
immediately upon sending and upon confirmation of receipt if such transmission
is made on a business day or, otherwise, on the next following business day and
if by a nationally recognized overnight courier service with instructions to
deliver the next business day, one (1) business day after sending; and if by
certified mail, return receipt requested, five (5) days after mailing.
9.3 Partial Invalidity. If any provision of this Agreement is held to be
------------------
invalid or unenforceable, such invalidity or unenforceability shall not
invalidate this Agreement as a whole, but this Agreement shall be construed as
though it did not contain the particular provision held to be invalid or
unenforceable and the rights and obligations of the parties shall be construed
and enforced only to such extent as shall be permitted by applicable law.
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9.4 Successors. Neither party may assign its rights under this
----------
Agreement, except that Lender may, after written notice to Borrower, assign its
rights and delegate its obligations under this Agreement to any affiliate of, or
other successor to, Lender, in which event, such affiliate or other successor
shall have, to the extent of such assignment or delegation, the same rights and
benefits as it would have if it were the Lender hereunder, except as otherwise
provided by the terms of such assignment or delegation.
9.5 Entire Agreement. This Agreement, the other Financing Agreements,
----------------
any supplements hereto or thereto, and any instruments or documents delivered or
to be delivered pursuant hereto or therewith represents the entire agreement and
understanding concerning the subject matter hereof and thereof between the
parties hereto, and supersede all other prior agreements, understandings,
negotiations and discussions, representations, warranties, commitments,
proposals, offers and contracts concerning the subject matter hereof, whether
oral or written.
IN WITNESS WHEREOF, Lender and Borrower have caused these presents to be
duly executed as of the day and year first above written.
--------------------------------------------------------------------------------
LENDER BORROWER
------ --------
XXXXXXXXX XXXXXX PROPERTIES XXXX X. XXXXXXX
OPERATING PARTNERSHIP, L.P.,
a California limited partnership /s/ Xxxx X. Xxxxxxx
-------------------
By: Xxxxxxxxx Xxxxxx Properties, Inc., Xxxx X. Xxxxxxx
A Maryland corporation Domicile:
2825 Via Sola
Palos Verdes,
By: /s/ Xxxxxx Xxxxx Xxxxxxxxxx 00000
----------------------------------
Its: Senior VP
-----------------------------
Domicile or Principal Attention: Xxxx X. Xxxxxxx
Place of Business:
0000 Xxxxxxxxx Xxxxxxxxx Telephone:
Xxxxxxxxx Xxxxx,
Xxxxxxxxxx 00000 Facsimile:
Attention: President
Telephone: 310/000-0000
Facsimile: 310/546-8249
--------------------------------------------------------------------------------
12
EXHIBIT A
TO LOAN AND SECURITY AGREEMENT
OPTIONS
A. Those certain incentive stock options and non-qualified stock options to
buy 55,000 shares of Common Stock of Xxxxxxxxx Xxxxxx Properties, Inc.,
pursuant to the Amended and Restated 1993 Stock Option and Incentive Plan
("Plan") for Officers, Directors and Key Employees of Xxxxxxxxx Xxxxxx
Properties, Inc., Xxxxxxxxx Xxxxxx Properties Operating Partnership, L.P.,
and Haagen Property Management, Inc. Such options are exercisable in
annual increments of 13,750 shares commencing on December 28, 1994, at an
exercise price of $18.00 per share.
B. Those certain incentive stock options and non-qualified stock options to
buy 27,500 shares of Common Stock of Xxxxxxxxx Xxxxxx Properties, Inc.,
granted in August, 1995. Such options are exercisable in annual increments
of 6,875 shares commencing in August, 1996, at an exercise price of
$11.625.
C. Those certain incentive stock options to buy 100,000 shares of Common Stock
of Xxxxxxxxx Xxxxxx Properties, Inc., granted in May, 1997. Such options
are exercisable subject to certain vesting requirements at an exercise
price of $15.00.
13
EXHIBIT B
TO LOAN AND SECURITY AGREEMENT
UNITS
A. Those certain 255,666 Operating Partnership Units issued as of February 1,
1997, evidenced by Certificate No. 31.
B. Those certain 6,667 Operating Partnership Units issued on December 27, 1993
evidenced by Certificate No. 1007.
Restricted Stock
A. Those certain 5,000 shares of Restricted Stock issued on February 27, 1997
evidenced by Stock Certificate No. 8204.
14
