PLEDGE AGREEMENT AND LIMITED RECOURSE GUARANTY
THIS PLEDGE AGREEMENT (this "Agreement"), dated as of July 16,
1998, is made among ASSET INVESTORS CORPORATION, a Maryland corporation (the
"Non-Managing Member"), ASSET INVESTORS OPERATING PARTNERSHIP, L.P., A Deleware
limited partnership (the "Managing Member") and SALOMON BROTHERS REALTY CORP., a
New York corporation, as agent for the Lenders under the Loan Agreement referred
to below (the "Secured Party").
R E C I T A L S :
A. Pursuant to that certain Loan Agreement, dated as of the
date hereof (as amended, modified or supplemented and in effect from time to
time, the "Loan Agreement"), by and among AIOP Brentwood West, L.L.C., AIOP Lost
Dutchman Notes, L.L.C., and AIOP Mullica, L.L.C. (collectively, the "Non-Florida
Borrowers") and AIOP Gulfstream Harbor, L.L.C., AIOP Gulfstream Outlot I,
L.L.C., AIOP Gulfstream Outlot II, L.L.C., AIOP Gulfstream Outlot III, L.L.C.,
and AIOP Serendipity, L.L.C. (collectively, the "Florida Borrowers"), as
borrowers (the Florida Borrowers and the Non-Florida Borrowers, collectively,
the "Borrower"), LaSalle National Bank, as collateral agent, and Secured Party,
as agent and initial lender, Secured Party has agreed to make a loan (the
"Loan") to Borrower upon the terms and subject to the conditions set forth
therein. The Loan is to be evidenced by, and repayable with interest thereon in
accordance with, a promissory note dated the date hereof, executed and delivered
by Borrower to the order of Salomon Brothers Realty Corp. (as amended, modified,
supplemented or substituted and in effect from time to time, the "Note").
B. The Managing Member is the sole member of Non-Florida
Borrowers. The Managing Member and the Non-Managing Member (each a "Pledgor" and
collectively, the "Pledgors") are the sole members of the Florida Borrowers and
the Non-Managing Member is the sole general partner of the Managing Member. The
Managing Member and the Non-Managing Member each will therefore derive a benefit
from the making of the Loan. To induce Secured Party to enter into the Loan
Agreement and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Pledgors have agreed to (i)
provide a limited recourse guaranty of Borrower's obligations under the Loan and
(ii) pledge and grant a security interest in the Collateral (as defined herein)
as security for such guaranty.
C. The execution and delivery of this Agreement by the
Pledgors to Secured Party is a condition precedent to the obligation of Secured
Party to make the Loan.
NOW, THEREFORE, for good and valuable consideration, receipt
of which by the parties hereto is hereby acknowledged, the parties hereto hereby
agree as follows:
Section 1. Definitions. Capitalized terms used herein and not
otherwise defined herein have the meanings assigned to them in the Loan
Agreement. In addition, as used herein:
"Collateral" shall have the meaning assigned to such term in
Section 4 hereof.
"Obligations" shall mean (i) all indebtedness, obligations and
liabilities of Borrower to Secured Party arising under, or in connection with,
the Loan Documents, whether now existing or hereafter arising; (ii) any and all
sums paid by Lender in order to preserve the Mortgaged Property or its security
interest therein; (iii) in the event of any proceeding for the collection or
enforcement of any indebtedness, obligations or liabilities of Borrower referred
to in clause (i), the expenses of retaking, holding, collecting, preparing for
sale, selling or otherwise disposing of or realizing on the Mortgaged Property,
or of any exercise by Secured Party of its rights with respect to the Mortgaged
Property under the Loan Documents, together with attorneys' fees and expenses
and court costs; and (iv) all indemnity obligations of Borrower to Secured Party
pursuant to the Loan Documents.
"Organizational Agreement" means the Limited Liability Company
Agreement of each Borrower, each dated as of July 13, 1998, as amended and
restated from time to time.
"Records" shall have the meaning assigned to such term in
Section 2(a) hereof.
"Secured Obligations" shall mean the Obligations and the
rights of Secured Party pursuant to Section 6.
"UCC" means at any time the Uniform Commercial Code as in
effect in the State of New York; provided, that if, by reason of mandatory
provisions of law, the validity or perfection of Secured Party's security
interest in any item of Collateral is governed by the UCC as in effect in a
jurisdiction other than New York, "UCC" means the UCC as in effect in such other
jurisdiction for purposes of the provisions hereof relating to such validity or
perfection.
Section 2. Representations and Warranties. Each Pledgor
represents and warrants to Secured Party that:
(a) The chief place of business of Borrower and the Managing
Member is at c/o Asset Investors Corporation, 0000 Xxxxx Xxxxxx Xxxxxx, 00xx
Xxxxx, Xxxxxx, Xxxxxxxx 00000. The chief executive office of Borrower and the
Managing Member and the place where (i) the original copies of the
Organizational Agreement are located and (ii) Borrower and Managing Member keep
their records concerning the applicable Collateral, including the registration
books in which all membership interests in Borrower, partnership interests in
Managing Member and pledges and transfers thereof are recorded (collectively,
the "Records"), is at c/o Asset Investors Corporation, 0000 Xxxxx Xxxxxx Xxxxxx,
00xx Xxxxx, Xxxxxx, Xxxxxxxx 00000. Pledgors have heretofore furnished to
Secured Party a certified copy of the Organizational Agreement as in effect on
the date hereof.
(b) The Managing Member is a limited partnership, duly formed,
validly existing and in good standing under the laws of the State of Delaware
and is duly qualified to do business and is in good standing in all other places
where necessary in light of the business it conducts and the property that it
owns and intends to conduct and own and in light of the transactions
contemplated by this Agreement. No filing, recording, publishing or other act
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that has not been made or done is necessary or desirable in connection with the
existence or good standing of the Managing Member or the conduct of the business
of the Managing Member, except as would not have a Material Adverse Effect.
(c) The Non-Managing Member is a corporation, duly formed,
validly existing and in good standing under the laws of the State of Maryland
and is duly qualified to do business and is in good standing in all other places
where necessary in light of the business it conducts and the property it owns
and intends to conduct and own and in light of the transactions contemplated by
this Agreement. No filing, recording, publishing or other act that has not been
made or done is necessary or desirable in connection with the existence or good
standing of the Non-Managing Member, or the conduct of the business of the
Non-Managing Member, except as would not have a Material Adverse Effect.
(d) Each Pledgor has the full power, authority and legal right
to execute, deliver and perform its obligations under this Agreement and the
Organizational Agreement. The execution, delivery and performance by each
Pledgor of this Agreement and the Organizational Agreement and the consummation
of the transactions contemplated hereby and thereby have been duly authorized by
all necessary corporate action, partnership action or limited liability company
action, as applicable. Each of this Agreement and the Organizational Agreement
has been duly executed and delivered by each Pledgor, has not been amended or
otherwise modified except as otherwise disclosed in writing to Secured Party
prior to the date hereof, is in full force and effect and is the legal, valid
and binding obligation of each Pledgor, enforceable against each Pledgor in
accordance with its terms, except as may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to or affecting the
rights of creditors generally and to the application of general principles of
equity (regardless of whether considered in a proceeding in equity or at law).
None of the Pledgors is in default in the performance of any covenant or
obligation set forth in the Organizational Agreement.
(e) Each Pledgor is the sole beneficial owner of the
Collateral pledged by it under Section 4 hereof free and clear of all claims,
mortgages, pledges, liens, security interests and other encumbrances of any
nature whatsoever (and no right or option to acquire the same exists in favor of
any other person or entity), except for the assignment, pledge and security
interest in favor of Secured Party created or provided for herein, and each
Pledgor agrees that it will not encumber or grant any security interest in or
with respect to the Collateral or permit any of the foregoing.
(f) Upon the filing of UCC-l financing statements ("UCC-ls")
in the States where the principal office of each Pledgor is located and, to the
extent that the Collateral or any part thereof constitutes "securities" for
purposes of Article 8 of the UCC, registration of such pledge on the
registration book maintained by Borrower, the pledge and security interest
hereunder in favor of Secured Party constitutes a first priority pledge and
security interest in and to all of the Collateral pledged by each Pledgor
hereunder.
(g) None of the execution and delivery of this Agreement and
the Organizational Agreement or the consummation of the transactions
contemplated herein will conflict with or result in a breach of, or require any
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consent under, any applicable law or regulation, or any order, writ, injunction
or decree of any court or governmental authority or agency to which Pledgor or
its property is bound or subject, or any agreement or instrument to which the
Pledgors are a party or by which the Pledgors or any of the Pledgors' property
is bound or to which the Pledgors are subject, or constitute a default under any
such agreement or instrument, or (except for the liens created pursuant hereto)
result in the creation or imposition of any lien or encumbrance upon any of the
Pledgors' revenues or assets pursuant to the terms of any such agreement or
instrument.
(h) No authorizations, approvals or consents of, and no
filings or registrations with, any governmental authority are necessary for the
execution, delivery or performance by the Pledgors of this Agreement or the
Organizational Agreement, except for the filings of the UCC-ls.
(i) There is no action, suit or proceeding at law or in equity
by or before any governmental authority, arbitral tribunal or other body now
pending, or to the best knowledge of the Pledgors, threatened against or
affecting the Pledgors or any of its property or the Collateral that could have
a material adverse effect on such party's condition, financial or otherwise.
(j) No Pledgor is (i) required to register as an "investment
company" within the meaning of the Investment Company Act of 1940, as amended,
or an "investment advisor" within the meaning of the Investment Company Act of
1940, as amended, (ii) an "electric utility company", a "holding company" or a
"subsidiary company" of a "holding company" or an "affiliate" of either a
"holding company" or a "subsidiary company" within the meaning of the Public
Utility Holding Company Act of 1935, as amended, or (iii) subject to any other
federal or state law or regulation which purports to restrict or regulate its
ability to borrow money.
(k) The Pledgors and Borrower do not, in connection with
incurring the Loan and pledging the Collateral, have any actual intent to
hinder, delay or defraud any entity to which any of the Pledgors or Borrower is
or is to become indebted.
(l) Each of the Pledgors and Borrower (or their respective
equity owners) is receiving reasonably equivalent value in exchange for the Loan
and pledge.
(m) Each of the Pledgors and Borrower is not insolvent on the
date hereof and will not become insolvent as a result of such Loan and pledge.
(n) The Loan and pledge do not result in any of the Pledgors
or Borrower having unreasonably small capital for its intended purposes.
(o) Each of the Pledgors and Borrower does not intend to
incur, or believe in respect of the Loan and pledge that it will incur, debts
that would be beyond such Pledgor's ability to pay as such debts matured.
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(p) The Pledgors are the sole members of the Florida Borrowers
and their percentage interests in the Florida Borrowers are as set forth on
Schedule A hereto. The Managing Member is the sole member of Non-Florida
Borrowers.
(q) The Managing Member is the sole managing member of
Borrower and has the full power, authority and legal right under the
Organizational Agreement to execute and deliver the Loan Documents on behalf of
Borrower and to direct the operations of Borrower, including the performance by
Borrower of its obligations under the Loan Documents. Each such Loan Document
has been duly executed and delivered by the Managing Member on behalf of
Borrower, and constitutes the legal, valid and binding obligation of Borrower,
enforceable against Borrower in accordance with its terms, except as may be
limited by bankruptcy, insolvency, reorganization, moratorium or other similar
laws relating to or affecting the rights of creditors generally and to the
application of general principles of equity (regardless of whether considered in
a proceeding in equity or at law).
(r) The Non-Managing Member is the sole general partner of the
Managing Member and has the full power, authority and legal right under the
Organizational Agreement to execute and deliver the Loan Documents on behalf of
the Managing Member on behalf of Borrower and to direct the operations of the
Managing Member on behalf of the Borrower, including the performance by the
Managing Member on behalf of the Borrower of Borrower's obligations under the
Loan Documents. Each such Loan Document has been duly executed and delivered by
the Non-Managing Member on behalf of the Managing Member on behalf of Borrower,
and constitutes the legal, valid and binding obligation of Borrower, enforceable
against Borrower in accordance with its terms, except as may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
relating to or affecting the rights of creditors generally and to the
application of general principles of equity (regardless of whether considered in
a proceeding in equity or at law).
(s) All instruments and stock or other certificates
representing the Collateral are being delivered by Pledgors to the Secured Party
simultaneously herewith duly endorsed in blank.
(t) There are no outstanding options, warrants or other
agreements with respect to any portion of the Collateral.
Section 3. Non-Recourse Guaranty. The Pledgors hereby
guarantee to Secured Party, on a non-recourse basis, prompt payment (whether at
stated maturity, by acceleration or otherwise) and performance of the Secured
Obligations, it being understood that Secured Party's sole recourse against any
of the Pledgors shall be limited to the Collateral. Notwithstanding anything to
the contrary herein, Secured Party agrees not to xxx or seek payment from any of
the Pledgors (except to the extent of their respective interests in the
Collateral) or any direct or indirect partners, members, shareholders, officers,
employees, controlling person or affiliates of any of the Pledgors and none of
such Persons shall have any liability for the Secured Obligations or any other
obligation or liability hereunder whether based in law, in equity or otherwise.
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Section 4. Xxxxxxxxxx.Xx collateral security for the prompt
payment in full when due (whether at stated maturity, by acceleration or
otherwise) of the Secured Obligations, each Pledgor hereby pledges, collaterally
assigns and hypothecates to Secured Party, and hereby grants to Secured Party, a
Lien on and security interest in, all of such Pledgor's right, title and
interest in, to and under the following, whether now owned by such Pledgor or
hereafter acquired and whether now existing or hereafter coming into existence
and wherever located (all being collectively referred to herein as
"Collateral"):
(i) its membership interest in Borrower (including, without
limitation, all of its right, title and interest in, to and under the
Organizational Agreement), including, without limitation, (a) all
rights of such Pledgor to receive moneys due but unpaid and to become
due under or pursuant to the Organizational Agreement, (b) all rights
of such Pledgor to participate in the operation or management of
Borrower and to take actions or consent to actions in accordance with
the provisions of the Organizational Agreement, (c) all rights of such
Pledgor to any property of Borrower, (d) all rights of such Pledgor to
receive proceeds of any insurance, bond, indemnity, warranty or
guaranty with respect to the Organizational Agreement, (e) all claims
of such Pledgor for damages arising out of or for breach of or default
under the Organizational Agreement and (f) all rights of such Pledgor
to terminate, amend, supplement, modify or waive performance under the
Organizational Agreement, to perform thereunder and to compel
performance and otherwise to exercise all remedies thereunder;
(ii) all certificates representing its membership interest or
a distribution or return of capital upon or with respect to its
membership interest or resulting from a split-up, revision,
reclassification or other like change of the Collateral or otherwise
received in exchange therefor, and any subscription warrants, rights or
options issued to the holders of, or otherwise in respect of, the
Collateral; and
(iii) to the extent not included in the foregoing, all
proceeds, products, offspring, rents, revenues, dividends, redemptions,
distributions, issues, profits, royalties, income, benefits,
accessions, additions, substitutions and replacements of and to any and
all of the foregoing.
Section 5. Covenants.
5.01. Each Pledgor covenants and agrees as to itself that:
(i) Such Pledgor shall not (1) cancel or terminate the
Organizational Agreement or consent to or accept any cancellation or
termination thereof, (2) amend, supplement or otherwise modify the
Organizational Agreement (as in effect on the date hereof and as
thereafter amended, modified or supplemented with the consent of
Secured Party) or (3) petition, request or take any other legal or
administrative action that seeks, or may reasonably be expected, to
rescind, terminate, amend, modify or suspend the Organizational
Agreement.
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(ii) Such Pledgor shall preserve and maintain its existence as
a limited partnership or corporation, as applicable, and all of its
licenses, rights, privileges and franchises that are necessary or
desirable for the fulfillment of its obligations under this Agreement,
the Organizational Agreement and each other Loan Document to which it
is or is intended to be a party.
(iii) Subject to Pledgor's right to contest taxes in good
faith, such Pledgor shall pay and discharge all material taxes now or
hereafter imposed on it, on its income or profits, on any of its
property or upon the Liens provided for herein prior to the date on
which penalties attach thereto; such Pledgor shall promptly pay any
valid, final judgment enforcing any such tax and cause the same to be
satisfied of record and shall also pay, or cause to be paid, when due
all claims for labor, material, supplies or services that, if unpaid,
could by law result in a mechanic's lien.
(iv) Such Pledgor shall not (a) create, incur, assume or
suffer to exist any Lien upon any of the Collateral, (b) directly or
indirectly create, incur or suffer to exist any Indebtedness payable by
Borrower, except as permitted by the Loan Agreement, (c) merge into or
consolidate with any Person without the prior consent of Secured Party
or (d) convey, sell, lease, transfer or otherwise dispose of, in one
transaction or a series of transactions, all or substantially all of
its assets.
(v) Such Pledgor shall notify Secured Party promptly upon
obtaining knowledge of any action, suit or proceeding at law or in
equity by or before any government authority, arbitral tribunal or
other body pending or threatened in writing against Borrower which
could result in a Material Adverse Effect.
(vi) Such Pledgor shall not sell, assign, transfer or
otherwise dispose of all or any part of its membership interest in
Borrower, or consent to the creation of any additional membership
interest in Borrower, unless Secured Party retains, or is given, a
first priority lien in such additional membership interest.
(vii) Such Pledgor shall not, without the prior written
consent of Secured Party, voluntarily withdraw as a member of Borrower.
(viii) Such Pledgor shall not take or consent to any action to
terminate, dissolve or liquidate Borrower or commence or consent to the
commencement of any proceeding seeking the termination, dissolution or
liquidation of Borrower.
(ix) Such Pledgor shall not cause or permit any membership
interest in Borrower to be (i) traded on an established securities
market, or (ii) readily tradable on a secondary market or the
substantial equivalent thereof, in either case within the meaning of
section 7704(b) of the Internal Revenue Code of 1986 and/or proposed,
temporary or final Treasury Regulations in effect at any time that the
Loan is outstanding.
5.02. The Non-Managing member covenants and agrees that:
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(i) It shall not consent to the creation of any additional
general partner in Managing Member.
(ii) It shall not, without the prior written consent of
Secured Party, voluntarily withdraw as a general partner of the
Managing Member.
(iii) It shall not take or consent to any action to terminate,
dissolve or liquidate Managing Member or commence or consent to the
commencement of any proceeding seeking the termination, dissolution or
liquidation of Managing Member.
Section 6. Further Assurances; Remedies. In furtherance of the
grant of the pledge and security interest pursuant to Section 4 hereof, each
Pledgor hereby agrees with Secured Party as follows:
6.01. Delivery and Other Perfection. Each Pledgor shall:
(i) if any of the above-described membership interests,
shares, securities, moneys, property or other interests constituting
"Collateral" required to be pledged by such Pledgor under Section 4
hereof are received by such Pledgor, forthwith either (x) transfer and
deliver to Secured Party such shares or securities so received by such
Pledgor (together with the certificates for any such shares and
securities duly endorsed in blank or accompanied by undated stock
powers duly executed in blank), all of which thereafter shall be held
by Secured Party, pursuant to the terms of this Agreement, as part of
the Collateral or (y) take such other action as Secured Party shall
deem necessary or appropriate to duly record the Lien created hereunder
in such ownership interests, shares, securities, moneys, property or
other interests in said clauses;
(ii) give, execute, deliver, file and/or record any financing
statement, continuation statement, notice, instrument, document,
agreement or other papers that may be necessary or desirable (in the
judgment of Secured Party) to create, preserve, perfect or validate the
security interest granted pursuant hereto or to enable Secured Party to
exercise and enforce its rights hereunder with respect to such pledge
and security interest (including, without limitation, causing any or
all of the Collateral to be transferred of record into the name of
Secured Party or its nominee (and Secured Party agrees that if any
Collateral is transferred into its name or the name of its nominee, it
will thereafter promptly give to the Non-Managing Member copies of any
notices and communications received by it with respect to the
applicable Collateral); without limiting the generality of the
foregoing, each Pledgor shall, if any Collateral shall be evidenced by
a promissory note or other instrument, deliver and pledge to Secured
Party such note or instrument duly endorsed or accompanied by duly
executed instruments of transfer or assignment, all in form and
substance satisfactory to Secured Party);
(iii) maintain, hold and preserve full and accurate Records
and stamp or otherwise xxxx, or cause to be stamped or otherwise
marked, the Records in such manner as Secured Party may reasonably
8
require in order to reflect the security interests granted by this
Agreement; and
(iv) permit representatives of Secured Party, upon reasonable
notice, at any time during normal business hours to inspect and make
abstracts from the Records and permit representatives of Secured Party
to be present at such Pledgor's place of business to make copies of all
communications and remittances relating to the Collateral.
6.02. Other Financing Statements and Liens. Without the prior
consent of Secured Party, no Pledgor shall file or suffer to be on file, or
authorize or permit to be filed or to be on file, in any jurisdiction, any
financing statement or like instrument with respect to the Collateral in which
Secured Party is not named as the sole secured party.
6.03. Preservation of Rights. Secured Party shall not be
required to take any steps necessary to preserve any rights against prior
parties to any of the Collateral.
6.04. Collateral.
(i) Notwithstanding anything to the contrary herein or in the
other Loan Documents, so long as no Event of Default shall have
occurred and be continuing and the Indebtedness has not been
accelerated, each Pledgor shall have the right to exercise all
management, voting, consensual and other powers of ownership pertaining
to the Collateral for all purposes not inconsistent with the terms of
this Agreement, the Loan Agreement and other Loan Documents; provided,
that (i) each Pledgor agrees that it will not vote the Collateral in
any manner that is inconsistent with the terms of this Agreement, the
Loan Agreement and other Loan Documents and (ii) Secured Party shall
execute and deliver to each Pledgor or cause to be executed and
delivered to each Pledgor all such proxies, powers of attorney,
dividend and other orders, and all such instruments, without recourse,
as each Pledgor may reasonably request for the purpose of enabling each
Pledgor to exercise the rights and powers which it is entitled to
exercise pursuant to this Section 6.04(a).
(ii) Any provisions of the Organizational Agreement
restricting the transferability of the membership interests in Borrower
shall not apply to the exercise by Secured Party of any of its rights
and remedies under the Loan Agreement or any Loan Document or to any
sale, assignment, transfer or other disposition by Secured Party of all
or any part of any membership interest in Borrower. Each Pledgor hereby
consents to the admission of Secured Party as a member and/or managing
member in Borrower pursuant to the exercise of Secured Party's rights
and remedies pursuant to this Agreement.
6.05. Events of Default, Etc. During the period after an Event
of Default has occurred and is continuing and upon acceleration of the
Indebtedness by Secured Party:
(i) Subject to the terms of this Section 6.05 (including,
without limitation, paragraph (d) hereof), Secured Party shall have all
of the rights and remedies with respect to the Collateral of a secured
party under the UCC (whether or not said UCC is in effect in the
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jurisdiction where the rights and remedies are asserted) and such
additional rights and remedies to which a secured party is entitled
under the laws in effect in any jurisdiction where any rights and
remedies hereunder may be asserted (including, without limitation, the
right, to the maximum extent permitted by law, to exercise all voting,
consensual and other powers of ownership pertaining to the Collateral
as if Secured Party were the sole and absolute owner thereof (and each
Pledgor agrees to take all such action as may be appropriate to give
effect to such right));
(ii) Secured Party may make any reasonable compromise or
settlement deemed desirable with respect to any of the Collateral and
may extend the time of payment, arrange for payment in installments, or
otherwise modify the terms of, any of the Collateral;
(iii) Secured Party may, in its name or in the name of the
Pledgors or otherwise, demand, xxx for, collect or receive any money or
property at any time payable or receivable on account of or in exchange
for any of the Collateral, but shall be under no obligation to do so;
and
(iv) Secured Party may, upon fifteen (15) days' prior notice
to the Pledgors of the time and place, with respect to the Collateral
or any part thereof which shall then be or shall thereafter come into
the possession, custody or control of Secured Party or any of its
agents, sell, lease, assign or otherwise dispose of all or any part of
such Collateral, at such place or places as Secured Party deems best,
and for cash or for credit or for future delivery (without thereby
assuming any credit risk), at a public or private sale, without demand
of performance or notice of intention to effect any such disposition or
of the time or place thereof (except such notice as is required above
or by applicable statute and cannot be waived), and any Person may be
the purchaser, lessee, assignee or recipient of any or all of the
Collateral so disposed of at any public sale (or, to the extent
permitted by law, at any private sale) and thereafter hold the same
absolutely, free from any claim or right of whatsoever kind, including
any right or equity of redemption (statutory or otherwise), of the
Pledgors, any such demand, notice and right or equity being hereby
expressly waived and released. Secured Party may, without notice or
publication, adjourn any public or private sale or cause the same to be
adjourned from time to time by announcement at the time and place fixed
for the sale, and such sale may be made at any time or place to which
the sale may be so adjourned.
The proceeds of each collection, sale or other realization of all or any part of
the Collateral shall be applied in accordance with Section 2.8 of the Loan
Agreement. As used in this Section 6, "proceeds" of Collateral shall mean cash,
securities and other property realized in respect of, and distributions in kind
of, Collateral, including any thereof received under any reorganization,
liquidation or adjustment of debt of the Pledgors or any issuer of or obligor on
any of the Collateral.
The Pledgors recognize that, by reason of certain prohibitions
contained in the Securities Act of 1933, as amended (the "Securities Act"), and
applicable state securities laws, Secured Party may be compelled, with respect
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to any sale of all or any part of the Collateral which constitutes a "security"
under the Securities Act, to limit purchasers to those who will agree, among
other things, to acquire such Collateral for their own account, for investment
and not with a view to the distribution or resale thereof. The Pledgors
acknowledge that any such private sale may be at prices and on terms less
favorable to Secured Party than those obtainable through a public sale without
such restrictions, and, notwithstanding such circumstances, agree that any such
private sale shall be deemed to have been made in a commercially reasonable
manner and that Secured Party shall not have any obligation to engage in public
sales and no obligation to delay the sale of any such Collateral for the period
of time necessary to permit the respective issuer thereof to register it for
public sale.
6.06. Removals, Etc. Without at least thirty (30) days' prior
notice to Secured Party, no Pledgor shall (a) maintain any of its books and
records with respect to the Collateral pledged by it hereunder at any office or
maintain its principal place of business at any place other than at the address
indicated beneath its signature hereto or (b) change its corporate or
partnership name, or the name under which it does business, from the name shown
on the signature pages hereto.
6.07. Private Sale. Secured Party shall not incur any
liability as a result of the sale of the Collateral, or any part thereof, at any
private sale pursuant to Section 6.05 hereof conducted in a commercially
reasonable manner. The Pledgors hereby waive any claims against Secured Party by
reason of the fact that the price at which the Collateral may have been sold at
such a private sale was less than the price which might have been obtained at a
public sale or was less than the aggregate amount of the Secured Obligations.
6.08. Attorney-in-Fact. Upon the occurrence and during the
continuance of any Event of Default, Secured Party is hereby appointed the
attorney-in-fact of each of the Pledgors for the purpose of carrying out the
provisions of this Section 6 and taking any action and executing any instruments
which Secured Party may deem necessary or advisable to accomplish the purposes
hereof, which appointment as attorney-in-fact is irrevocable and coupled with
interest. Without limiting the generality of the foregoing, so long as Secured
Party shall be entitled under this Section 6 to make collections in respect of
the Collateral, Secured Party shall have the right and power to receive, endorse
and collect all checks made payable to the order of the Pledgors representing
any dividend, payment or other distribution in respect of the Collateral or any
part thereof and to give full discharge for the same.
6.09. Termination. When all of the Secured Obligations shall
have been paid in full, this Agreement shall terminate and Secured Party shall
forthwith cause to be assigned, transferred and delivered, against receipt but
without any recourse, warranty or representation whatsoever, any remaining
Collateral and money received in respect thereof, to or on the order of the
respective Pledgor.
6.10. Expenses. Each Pledgor jointly and severally agrees to
pay and the Secured Obligations shall include all reasonable out-of-pocket
expenses (including reasonable expenses for legal services of every kind) of, or
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incident to, the enforcement of any of the provisions of this Section 6, or
performance by Secured Party of any obligations of the Pledgors in respect of
the Collateral which the Pledgors have failed or refused to perform, or any
actual or attempted sale, or any exchange, enforcement, collection, compromise
or settlement in respect of any of the Collateral, and for the care of the
Collateral and defending or asserting rights and claims of Secured Party in
respect thereof, by litigation or otherwise.
6.11. Further Assurances. The Pledgors agree that, from time
to time upon the request of Secured Party, such Pledgors will execute and
deliver such further documents and do such other acts and things as Secured
Party may reasonably request in order fully to effectuate the purposes of this
Agreement.
Section 7. Miscellaneous.
7.01. No Waiver. No failure on the part of Secured Party or
any of its agents to exercise and no delay in exercising, and no course of
dealing with respect to, any right, power or remedy hereunder shall operate as a
waiver thereof, and no single or partial exercise by Secured Party or any of its
agents of any right, power or remedy hereunder shall preclude any other or
further exercise thereof or the exercise of any other right, power or remedy.
The remedies provided herein are cumulative and are not exclusive of any
remedies provided by law.
7.02. Notices. All notices, requests and other communications
provided for herein (including, without limitation, any modifications of, or
waivers or consents under, this Agreement) shall be given or made in writing
delivered to the intended recipient, in the case of Secured Party, as provided
in Section 8.6 of the Loan Agreement or, in the case of Pledgors, addressed as
follows:
in the case of Non-Managing Member:
Asset Investors Corporation
0000 Xxxxx Xxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxx, Xxxxxxxx 00000
in the case of Managing Member:
Asset Investors Operating Partnership, L.P.
c/o Asset Investors Corporation
0000 Xxxxx Xxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxx, Xxxxxxxx 00000
and, in the case of either Pledgor, a copy to:
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
000 Xxxxx Xxxxx Xxxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxx Xxxxxx, Xx., Esq.
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or, in any case, at such other address as shall be designated by such party in a
notice to each other party. Except as otherwise provided in this Agreement, all
such communications shall be deemed to have been duly given when personally
delivered or, in the case of a mailed notice, upon receipt, in each case given
or addressed as aforesaid.
7.03. Waivers, Etc. This Agreement may be amended or modified
only by an instrument in writing signed by each Pledgor and Secured Party, and
any provision of this Agreement may be waived by Secured Party. Any waiver shall
be effective only in the specific instance and for the specified purpose for
which it was given.
7.04. Successors and Assigns. This Agreement shall be binding
upon, and shall inure to the benefit of the respective successors and assigns
of, each Pledgor and Secured Party; provided, however, that no Pledgor shall
assign or transfer its rights and obligations hereunder without the prior
written consent of Secured Party and Secured Party shall not assign or transfer
its rights or obligations, except in compliance with the Loan Agreement.
7.05. Counterparts. This Agreement may be executed in any
number of counterparts, all of which when taken together shall constitute one
and the same instrument and any of the parties hereto may execute this Agreement
by signing any such counterpart.
7.06. Agents. Secured Party may employ agents and
attorneys-in-fact in connection herewith and shall not be responsible for the
negligence or misconduct of any such agents or attorneys-in-fact selected by it
in good faith.
7.07. Severability. If any provision hereof is invalid or
unenforceable in any jurisdiction, then, to the fullest extent permitted by law,
(a) the other provisions hereof shall remain in full force and effect in such
jurisdiction and shall be liberally construed in favor of Secured Party in order
to carry out the intentions of the parties hereto as nearly as may be possible
and (b) the invalidity or unenforceability of any provision hereof in any
jurisdiction shall not affect the validity or enforceability of such provision
in any other jurisdiction.
7.08. Headings. Headings appearing herein are used solely for
convenience of reference and are not intended to affect the interpretation of
any provision of this Agreement.
7.09. SUBMISSION TO JURISDICTION. EACH PLEDGOR HEREBY SUBMITS
TO TILE NONEXCLUSIVE JURISDICTION OF THE UNITED STATES DISTRICT COURT FOR THE
SOUTHERN DISTRICT OF NEW YORK AND OF ANY NEW YORK STATE COURT SITTING IN NEW
YORK CITY FOR THE PURPOSES OF ALL LEGAL PROCEEDINGS ARISING OUT OF OR RELATING
TO THIS AGREEMENT, ANY OF THE OTHER LOAN DOCUMENTS TO WHICH IT IS A PARTY OR ANY
OF THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. EACH PLEDGOR HEREBY
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH
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IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF THE VENUE OF ANY SUCH PROCEEDING
BROUGHT IN SUCH A COURT AND ANY CLAIM THAT ANY SUCH PROCEEDING BROUGHT IN SUCH A
COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
7.10. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT
REFERENCE TO THE CONFLICTS OF LAWS PROVISIONS THEREOF.
7.11. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY AND ALL RIGHT TO
TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS
AGREEMENT, ANY OF THE OTHER LOAN DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED
HEREBY OR THEREBY.
7.12. Security Agreement. This Agreement shall constitute a
"security agreement" within the meaning of the UCC. Pledgors by executing and
delivering this Agreement have granted and hereby grant to Secured Party, as
security for the Secured Obligations, a security interest in the Collateral that
may be subject to the UCC.
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and delivered as of the day and year first above
written.
ASSET INVESTORS OPERATING
PARTNERSHIP, L.P.,
a Delaware limited partnership
By: ASSET INVESTORS CORPORATION,
a Maryland corporation,
its General Partner
By: /s/Xxxxx X. Xxxxxx
---------------------------
Name: Xxxxx X. Xxxxxx
Title: Chief Financial Officer
ASSET INVESTORS CORPORATION,
a Maryland corporation,
By: /s/Xxxxx X. Xxxxxx
---------------------------------
Name: Xxxxx X. Xxxxxx
Title: Chief Financial Officer
