EXHIBIT 10.4
FIRST AMENDMENT TO OPERATING AGREEMENT
OF PARK AT HIGHLANDS LLC
THIS FIRST AMENDMENT TO OPERATING AGREEMENT OF PARK AT HIGHLANDS LLC
(this "First Amendment") is made as of the 29th day of December, 1995, by and
between XX XXXX, an individual ("Xxxx") and WELLSFORD PARK HIGHLANDS CORP., a
Colorado corporation ("WPHC").
RECITALS
X. Xxxx and WPHC constitute all of the members (collectively, the
"Members") of Park at Highlands LLC, a Colorado limited liability company
(the "Company"), which is governed by that certain Operating Agreement of
Park at Highlands LLC (the "Operating Agreement") dated as of April 27, 1995.
B. The Members now desire to amend the Operating Agreement as set
forth herein.
C. Capitalized terms not otherwise defined herein shall have the
definitions set forth in the Operating Agreement.
NOW, THEREFORE, for and in consideration of the above recitals and other
good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, Xxxx and WPHC hereby agree to amend the Operating
Agreement as follows:
1. Construction Loan Outside Date. The Construction Loan Outside Date
as defined in Section 5.2.4 of the Operating Agreement is hereby postponed to
January 5, 1996
2. Cost Savings Fee. The first sentence of Section 7.4 of the
Operating Agreement is hereby deleted in its entirety and the following is
substituted therefor:
"The Company shall pay Xxxx at Final Closing a cost
savings fee equal to twenty-five percent (25%) of cost
savings, if any."
3. Attorneys Fees. The following paragraph is hereby added to the
Operating Agreement as new Section 19.17 thereof:
19.17 Attorneys Fees. Should any party hereto institute any legal
action or proceeding to enforce any provision of the Operating Agreement
or for damages by reason of any alleged breach of any provision of the
Operating Agreement or for any other judicial remedy, the prevailing
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party shall be entitled to receive from the non-prevailing party all
reasonable attorneys' fees and all court costs in connection with said
action or proceeding, in addition to any other award.
4. Exhibits to Operating Agreement. The Members hereby agree that the
exhibits listed below, a copy of each of which is attached hereto and
incorporated herein, are hereby attached to and made a part of the Operating
Agreement to the same effect as if each had been fully set forth in the
Operating Agreement at the date it was executed by the Members and that each
of the exhibits attached to this First Amendment is hereby substituted for
and shall supersede the corresponding exhibit attached to the Operating
Agreement, if any:
Exhibit C Deposit and Contract Administration Agreement
Exhibit E Description of Infrastructure
Exhibit F Description of Infrastructure Land
Exhibit J Property Management Agreement
Exhibit L Pledge and Security Agreement - Xxxx to WPHC
Exhibit M Pledge and Security Agreement - WPHC to Xxxx
Exhibit N Description of Plans and Specifications
Exhibit O Final Project Budget
Exhibit U Substitution Agreement
5. Full Force and Effect. The Operating Agreement, as specifically
amended herein, is hereby ratified by the Members and shall remain in full
force and effect.
6. Counterparts. This Amendment may be executed in any number of
counterparts, each of which shall be deemed to be an original and all of
which, when taken together, shall constitute one agreement binding on the
parties hereto, notwithstanding that all the parties may not have signed the
same counterpart. Signature pages from one counterpart may be removed and
attached to another counterpart to create one fully-executed document.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties hereto, being all of the Members of the
Company, have executed this Amendment as of the date first written above.
By: /s/ Xx Xxxx
____________________________________
Xx Xxxx
WELLSFORD PARK HIGHLANDS CORP., a
Colorado corporation
By: /s/ Xxxxxx X. XxxXxxxxx
____________________________________
Xxxxxx X. XxxXxxxxx, Vice President
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EXHIBIT C
DEPOSIT AND CONTRACT ADMINISTRATION AGREEMENT
This Deposit and Contract Administration Agreement ("Agreement") is made
as of the 2nd day of May, 1995, by and between THE XXXX COMPANY, a Colorado
corporation, located at 0000 X. Xxxxxx Xxxxxx, Xxxxx 000, Xxxxxx, Xxxxxxxx
00000, and WELLSFORD PARK HIGHLANDS CORP., a Colorado corporation, located at
000 00xx Xxxxxx, Xxxxx 0000, Xxxxxx, Xxxxxxxx 00000 (hereinafter called
"WPHC").
RECITALS
WHEREAS, The Xxxx Company and Mission Viejo Company, a California
corporation ("Mission"), previously entered into that certain Second Amended
and Restated Vacant Land Purchase and Sale Agreement on March 23, 1995 (the
"Purchase Agreement") for the purchase of approximately 182 acres of
unimproved real property in Xxxxxxx County, Colorado, being more particularly
described as Lots 1 through 5, Highlands Ranch Filing No. 126-A (the
"Property"); and
WHEREAS, by an Assignment and Assumption Agreement of even date
herewith, The Xxxx Company, in consideration of the sum of $300,000 paid to
it by WPHC, has assigned to WPHC all of its right, title and interest in (i)
the Purchase Agreement, and (ii) that certain xxxxxxx money deposit in the
amount of $300,000 (the "Deposit") previously paid to Mission in accordance
with the terms of the Purchase Agreement; and
WHEREAS, by an Assignment and Assumption Agreement of even date
herewith, WPHC has assigned all of its rights and obligations pursuant to the
terms and provisions of the Purchase Agreement with respect to the purchase
of "Phase I," as that term is defined in the Purcha se Agreement, to the Park
at Highlands LLC, a Colorado limited liability company ("PAH"); and
WHEREAS, The Xxxx Company and WPHC now desire to enter into a new
agreement to document the rights and obligations of The Xxxx Company and WPHC
with respect to the funds being deposited with WPHC pursuant to the terms of
this Agreement.
AGREEMENT
NOW, THEREFORE, the parties hereto, in consideration of the mutual
covenants herein contained, and respectively expressing the intention to be
legally bound hereby, covenant and agree as follows:
1. Receipt and Acknowledgement. WPHC hereby acknowledges the receipt
of the sum of $150,000 from The Xxxx Company, which will be held by WPHC, and
governed by the terms of this Agreement.
2. Reimbursement.
a. WPHC may sell or assign its interest in the Purchase
Agreement, with respect to the Property, or any part thereof, to an
entity jointly owned by Xx Xxxx and/or The Xxxx Company and Wellsford
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Residential Property Trust ("Wellsford") or an entity owned by Wellsford
("Approved Entity") for any reason whatsoever. If however, WPHC sells or
assigns its interest in the Purchase Agreement, with respect to the
Property or any part thereof, to any person or entity that does not
qualify as an Approved Entity, then WPHC shall, within five business
days from the execution of such sale or assignment, pay The Xxxx Company
the sum of $150,000.
b. If all or any portion of the Deposit is credited by Mission
towards the purchase price of all or any portion of the Property, then
WPHC shall pay 50% of the amount so credited by Mission, to The Xxxx
Company within five business days following the receipt of such credit
by WPHC.
c. If all or any portion of the Deposit is returned to WPHC by
Mission, for any reason whatsoever, then WPHC shall pay 50% of the
amount so returned to The Xxxx Company within five business days
following WPHC's receipt thereof.
d. If the Deposit is not returned or credited by Mission to WPHC,
then neither party shall be liable to the other for reimbursement of the
Deposit or any portion thereof, except as set forth in paragraph 2.a.
hereof.
3. Right of First Offer. If The Xxxx Company is not in default under
any agreements with WPHC or its affiliates, and if WPHC decides not to
purchase any of Phases II, III, IV or V, as defined in the Purchase
Agreement, WPHC agrees to notify The Xxxx Company at least 150 days before
the scheduled closing of such Phase, and The Xxxx Company shall have 90 days
to obtain another source of acquisition and development financing and to
present an offer to WPHC to acquire the subject parcel. If The Xxxx Company
fails to present an offer acceptable to WPHC in WPHC's sole discretion, WPHC
shall have no obligations to The Xxxx Company with respect to such parcel.
4. Entire Agreement. This is the entire agreement between the parties
and there are no other terms, obligations, covenants, representations,
statements or conditions, oral or otherwise, of any kind whatsoever. Any
agreement hereafter made shall be ineffective to change, modify, discharge or
effect an abandonment of this Agreement in whole or in part unless such
agreement is in writing and signed by the party against whom enforcement of
the change, modification, discharge or abandonment is sought.
5. No Further Obligations. The parties have no obligations or
liabilities of any nature or kind to the other party with respect to the
Deposit or the Purchase Agreement, except as expressly set forth in this
Agreement. WPHC shall have exclusive control over the Purchase Agreement, as
it relates to Phases II, III, IV and V, as described therein, and The Xxxx
Company has no interest whatsoever in the Purchase Agreement with respect to
Phases II, III, IV and V, except for any rights set forth in this Agreement.
None of the provisions of this Agreement constitute or create any agreement
or obligation by either party to (i) enter into a joint venture, partnership,
corporation, limited liability company or any other arrangement with the
other party, or to negotiate in good faith with respect to the same; (ii) to
enter into any agreements, or to negotiate in good faith with respect to the
same; (iii) to purchase or develop the Property, or any portion thereof; or
(iv) to act in any manner whatsoever, unless expressly provided for in this
Agreement or otherwise reduced to a definitive written agreement, executed by
the parties. The parties acknowledge and agree that they have no obligations
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with respect to Phases II, III, IV and V, as described in the Purchase
Agreement.
6. Miscellaneous.
a. Successors and Assigns. This Agreement shall be binding upon
and shall inure to the benefit of the parties hereto and their
respective heirs, executors, administrators, legal representatives,
successors and permitted assigns.
b. Governing Law. This Agreement shall be governed by and shall
be construed and interpreted in accordance with the laws of the State of
Colorado.
c. Notices. All notices, consents, approvals or other
communications which any of the parties to this Agreement may desire or
may be required to give hereunder shall be in writing and shall be given
by registered or certified mail, return receipt requested, postage
prepaid, or by personal delivery, delivery by courier, or by confirmed
telecopy or facsimile transmission, addressed as follows:
If to The Xxxx Company: The Xxxx Company
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxx 000
Xxxxxx, Xxxxxxxx 00000
Fax: 000-000-0000
and to: __________________________________
__________________________________
__________________________________
__________________________________
Fax: ____________________________
If to WPHC: Wellsford Park Highlands Corp.
000 00xx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxx 00000
Fax: 000-000-0000
Attn: Xxx XxxXxxxxx
and to: Xxxxx X. Xxxxx, Esq.
Xxxxxxxxxx Xxxxx Xxxxxx &
Xxxxxxxxxx, P.C.
000 00xx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxx 00000
Fax: 000-000-0000
Any such notice to WPHC or The Xxxx Company shall be deemed to be given,
received, and effective three days after such notice has been deposited in
the United States mail, addressed as aforesaid, or when personally delivered
to and received by the specified parties. All addresses for notices under
this Agreement shall be located within the United States of America.
7. Counterparts. This Agreement may be executed in counterparts.
8. Costs of Legal Proceedings. In the event that either party
institutes legal proceedings with respect to this Agreement or the
transaction contemplated hereby, the prevailing party shall be entitled to
recover its costs and expenses incurred in connection with such legal
6
proceedings, including, without limitation, reasonable attorneys' fees. The
terms of this paragraph shall survive the termination of this Agreement.
9. Liability of WPHC. No officer, director or shareholder of WPHC
shall be bound by or have any personal liability hereunder or under any
document, agreement, understanding or arrangement relating to this
transaction. The parties to this Agreement shall look solely to the assets
of WPHC for satisfaction of any liability of WPHC in respect of this
Agreement and all documents, agreements, understandings and arrangements
relating to this transaction and will not seek recourse or commence any
action against any of the directors, officers or shareholders of WPHC or any
of their personal assets for the performance or payment of any obligation
hereunder or thereunder. The foregoing shall also apply to any and all
future documents, agreements, understandings, arrangements and transactions
between the parties hereto.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
THE XXXX COMPANY:
THE XXXX COMPANY, a Colorado corporation
By: /s/ Xx Xxxx
___________________________________
Xx Xxxx, President
WPHC:
WELLSFORD PARK HIGHLANDS CORP.,
a Colorado corporation
By: /s/ Xxxxxx X. XxxXxxxxx
___________________________________
Xxxxxx X. XxxXxxxxx
Vice President
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EXHIBIT E
DESCRIPTION OF INFRASTRUCTURE
The following Description of Infrastructure uses substantially the same
categories as those in the Infrastructure Improvement Agreement. The
Aggregate of these categories comprises the Infrastructure for the Master
Development.
1. Overlot Grading. This includes rough grading for the Infrastructure
Land and some of the fine grading for the park.
2. Willows Water Line. This category includes the engineering and physical
relocation of a 30 inch Willows Water District water line as well Quebec
Street paving associated with the relocation.
3. Main Recreational Center & Grounds. This is the main recreational
facility for the Master Development. All apartment phases will share
its use. The rec center building will contain approximately 30,000
square feet and house a gym with exercise equipment, basketball court,
racquet ball court(s) and leasing offices. The rec center grounds are
expected to feature a pool & spa, volleyball court, tennis court(s),
pond and parking.
4. Water and Sewer Systems, Temporary Access Road. Included here is the
main water and sewer system that will serve the Master Development.
Additional water and sewer systems will be constructed with each
apartment phase and are not part of the Infrastructure. This category
also includes building of a temporary road that will be used as
construction access.
5. Entryway/Guardhouse/Paving. The main access/entry for the Master
Development is from Xxxxx Xxxxxx Xxxxxx. At this entry there will be
entry monuments, gates, walls and a guardhouse. Paving for the entry
and loop road (the entry and loop roads collectively comprise Tract A of
the Infrastructure Land) is also included as part of this category.
6. Public Utilities. A telephone distribution system will be installed
around the loop road which will be joint trenched with gas, electric and
cable TV facilities. Some or all of the above facilities may be
installed by parties unrelated to the Company.
7. Park Improvements. Tract B of the Infrastructure Land will be
landscaped and improved with a softball diamond, soccer field, golf
putting area and other similar improvements.
8. Xxxx Eagles Entry. A future entry for the Master Development may be
needed to provide with ingress/egress. It is contemplated that this
access would be from Xxxx Eagles Drive at the southern boundary of the
Master Development. This category will include entry monuments, gates
and associated road improvements.
9. Professional Services and Miscellaneous. This category includes various
professional services associated with the development all Infrastructure
components. It includes architectural design, interior design of the
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Main Rec Center, landscape design, civil engineering, soils
engineering/testing, and legal services associated with closing the
Infrastructure Land and any ongoing document review. Field supervision,
general labor and other miscellaneous items, necessary for construction
of all Infrastructure components, are also included in this category.
This category also includes building the construction yard compound
which serves as a staging/storage area for the Master Development.
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EXHIBIT F
DESCRIPTION OF INFRASTRUCTURE LAND
Xxx 0X, Xxxxx X xxx Xxxxx X, Xxxxxxxxx Xxxxx Filing No. 126-A, 1st Amendment
as recorded at Reception No. 9560621
in the records of the Xxxxxxx County Clerk and Recorder's Office,
County of Xxxxxxx, State of Colorado
Lot 1B is the land on which the main recreational center will be situated to
service the Master Development.
Tract B is the land on which the main park will be situated to service the
Master Development.
Tract A is the land on which both the main access road and loop road will be
constructed to provide ingress and egress to the Master Development. The
loop road will encircle Lot 1B and Tract B. The main access road will
directly adjoin Xxxxx Xxxxxx Xxxxxx.
EXHIBIT J
PARK AT HIGHLANDS, LLC
PROPERTY MANAGEMENT AGREEMENT
This agreement (the "Agreement") is executed on the ____ day of
December, 1995 by and between PARK AT HIGHLANDS, LLC ("Owner"), and THE XXXX
COMPANY, a Colorado corporation ("Manager").
FOR GOOD AND VALUABLE CONSIDERATION, the receipt and sufficiency of
which is hereby acknowledged, Owner and Manager mutually agree as follows:
1. APPOINTMENT OF MANAGER
On and subject to the terms and conditions of this Agreement, Owner
hereby retains Manager commencing on January 1, 1996 (the "Commencement
Date") to manage and lease on behalf of Owner the following properties
(individually or collectively the "Property"): Xxxx Xxxxx xx Xxxxxxxx
Xxxx, Xxxxxxxxx Xxxxx, Xxxxxxxx.
0. TERM
This Agreement shall commence on the Commencement Date and, subject to
Section 8 below, shall expire on the "Termination Date" (as defined
below). "Termination Date" shall mean the earlier of Final Closing or
Removal of Xxxx as defined in the Operating Agreement of Park at
Highlands, LLC dated as of April 27, 1995 ("Operating Agreement").
3. MANAGEMENT FEES
In consideration of the performance by the Manager of its duties and
obligations hereunder, the Owner shall pay to the Manager a management
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fee equal to 2.5 % of "Gross Operating Revenues" (as defined below)
payable the last day of each calendar month with respect to that
calendar month. Manager shall submit to Owner an invoice detailing the
calculation of the management fee each month. "Gross Operating Revenues"
means the actual monthly cash collections from the customary operations
of the Property consisting of rental and vending machine receipts,
forfeited deposits, late charges, rent claim settlements net of any
collection fees, lease termination or modification payments and other
operating receipts, excluding applicable sales tax and refundable
deposits; Gross Operating Revenues shall not include any revenues from
condemnation or casualty proceeds, from the sale of any personal or real
property of Owner or from any source other than the customary operations
of the Property. Manager shall submit to Owner's or Owner's accounting
agent an invoice detailing the calculation of the management fee each
month.
4. AUTHORITY AND RESPONSIBILITIES OF MANAGER
4.01 Independent Contractor. In the performance of its duties
hereunder, the Manager shall be and act as an independent contractor,
with the sole duty to supervise, manage, operate, control and direct
performance of the details of its duties incident to the specified
duties and obligations hereunder, subject to the rights of the Owner, as
12
described herein. Nothing contained in this Agreement shall be deemed or
construed to create a partnership, joint venture, employment
relationship, or otherwise to create any liability for one party with
respect to indebtedness, liabilities or obligations of the other party
except as otherwise may be expressly set forth herein.
4.02 Standard of Care. Manager shall perform its duties and obligations
in a professional, competent, businesslike and efficient Manager as
would a first class property manager of apartment projects similar to
the Property.
4.03 Depository Account. Manager shall open, for the benefit of Owner,
a special, separate, FDIC insured, interest bearing account in a savings
institution identified by Owner (the "Depository Account") upon which
the only persons with signatory authority shall be the following
employees of Owner: Xxxxxxx Xxxxxxx, Chairman; Xx Xxxxxxxxx, President;
and Xxxxxxx Xxxxxx, Vice President. The Depository Account shall be the
sole and exclusive property of the Owner, and Manager shall have no
interest (legal or equitable) therein. Owner shall have the right to
change the signatories to the Depository Account in its sole discretion.
4.04 Business Plan.
(a) Manager shall prepare and present to Owner in the computer
model and word processing and spreadsheet software approved by Owner,
within thirty days of the Commencement Date and prior to November 15 of
each year thereafter during the term of this Agreement, an annual
business plan for the following calendar year, which once approved by
Owner shall be the business plan governing the management of the
Property (the "Business Plan").
(b) Manager shall include in the Business Plan the following:
(i) a twelve-month operating budget, using Owners' chart of
accounts (see Schedule B) for the following calendar
year, which once approved by Owner, shall be the budget
("Budget");
(ii) a 5-year budget for planned improvements based on a
detailed annual physical inspection of the Property
completed by Marlager;
(iii) a preventative maintenance plan for the Property
outlining the management plan to minimize long term
operating costs and to avoid deferred maintenance;
(iv) a marketing plan for the Property, including print and
other forms of advertising, use of apartment locators and
promotional activities and apartment pricing;
(v) market surveys;
(vi) tenant selection criteria to be used in the selection of
prospective tenants, including appropriate references,
income and credit history;
(vii) a copy of Manager's current policies and procedures which
shall include the following:
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(x) an environmental compliance plan outlining policies
and procedures for managing the disposal or storage of
hazardous materials and toxic substances (such plan shall
require that the Property shall not be the source of a
release or dispose of any hazardous materials or toxic
substances except as may be incidental to the operation
of an apartment project (e.g. cleaning supplies,
fertilizers, paint); and
(y) a legal compliance plan of actions necessary to
comply with all "Applicable Laws" (as defined below).
"Applicable Laws" shall mean any and all statutes,
ordinances, laws, rules, regulations, orders and
requirements of any federal, state or municipal
government, and appropriate departments, commissions,
boards and officers having jurisdiction over the use,
maintenance or operation of the Property, including
without limitation (A) laws prohibiting discrimination
based on race, religion, national origin, color, gender,
disability, age, sexual preference or any other
classification, (B) employment laws of any kind or
description, (C) laws regarding tenant security deposits,
(D) laws regarding the storage, release, and disposal of
hazardous materials, petroleum products, and toxic
substances, (E) laws and orders relating to the use of
minority business enterprises, to the extent any such
laws and orders are applicable in the performance of work
or furnishing of services, materials, equipment or
supplies hereunder, and (F) all orders and requirements
of local board of fire underwriters, or any other body
which may hereafter exercise similar functions including
any and all forms, reports and returns required by law to
be filed with any governmental authority in connection
with the use, maintenance or operation of the Property;
and
(viii) any other information, plan, survey, policies or
procedures as Owner may request.
(c) The Business plan shall be approved by the Owner before
implementation. All actions outlined in the Business Plan shall be
implemented by Manager on behalf of and at the expense of Owner, subject
to the limitations on expenses enumerated in the Budget. The Budget
shall be Manager's guideline for Owner's expectations of rental rates;
however, Manager shall be expected to continually test new rental levels
and to make adjustments with prompt notification to Owner as the market
shall permit or require. The Business Plan in conjunction with the
Budget shall constitute a major control under which Manager shall
operate, and Manager shall submit a report to Owner setting forth the
reasons for any variance therefrom as required under Owner's policies
and procedures attached hereto, and made a part hereof, as Schedule B
("Owner's Policies and Procedures ").
4.05 Leasing. Collection of Rents. etc.
(a) Manager shall use its best efforts consistent with the
standard of care set forth herein to lease apartment units, retain
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residents and maximize Gross Operating Revenues.
(b) Manager shall sign apartment leases on behalf of Owner in its
capacity as property manager hereunder. Manager shall only sign leases
in the form of lease approved by Owner and subject to Owner's Policies
and Procedures. Manager shall not enter into any lease which has a term
greater than 24 months. Manager shall attach as a rider to all leases
the text as presented in Schedule A. Manager shall investigate tenant
references and tenant credit histories and shall select tenants in
accordance with tenant selection criteria outlined in the Business Plan,
and shall apply resident selection criteria fairly to all prospective
tenants. Manager shall not discriminate against or segregate any person
or group of persons on account of race, color, religion, creed, sex,
national origin, age, or disability in leasing or managing the Property
nor shall Manager permit any such practice or practices of
discrimination or segregation with reference to the selection, location,
number, use, or occupancy of tenants. Manager shall assess the leasing
practices on a regular basis to assure that no such practices of
discrimination are occurring on the Property. Manager shall report any
such incidents or claims of discrimination to Owner immediately.
(c) Manager shall collect rents, security deposits and other
charges payable by tenants in accordance with the tenant leases, and
shall collect income due Owner with respect to the Property from all
other sources, and shall deposit all such income received immediately
upon receipt in the Depository Account for each Property
(d) Manager shall, at Owner's expense, subject to limits set
forth in the Budget and the Business Plan, terminate leases, evict
tenants, institute and settle suits for delinquent payments as Manager
deems advisable. In connection therewith, Manager may, at Owner's
expense and subject to the limitations on expenses enumerated in the
Budget, consult and retain legal counsel.
4.06 Repair. Maintenance and Service.
(a) Manager shall, at Owner's expense and subject to the
limitations set forth in the Budget and the Business Plan, maintain the
Property in good repair and condition.
(b) In name of Owner and subject to the other terms and
conditions of this Agreement, Manager in its capacity hereunder shall
execute contracts for water, electricity, gas, telephone, television,
vermin or pest extermination and any other services which are necessary
to properly maintain the Property. Manager shall include in any such
contracts the text in Schedule A. Manager shall, in Owner's name and at
Owner's expense, hire and discharge independent contractors for the
repair and maintenance of the Property and shall include in any such
contract the text as presented in Schedule A. Other than leases, Manager
shall not, without the prior written consent of the Owner, enter into
any contract in name of Owner which may not be terminated with 30 days
notice. Manager shall act at arms length with all contractors and shall
employ no affiliated entities without Owner's prior written consent.
Notwithstanding the foregoing, Owner shall have the right to require
Manager to use certain contractors and suppliers for any service,
supply, maintenance, repair or utility for the Property, including
cable, landscaping or security service.
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4.07 Manager's Employees.
(a) Manager shall have in its employ at all times a sufficient
number of employees to enable it to professionally manage the Property
in accordance with the terms of this Agreement. Owner shall have the
right to require that Manager have a minimum or maximum number of
employees at the Property and to approve or require the removal or
replacement of any employee working at the Property. Manager shall
prepare, execute and file all forms, reports and returns required by
Applicable Laws. All payroll costs for on-site employees shall be at
Owner's expense. All matters pertaining to the employment and
supervision of such employees shall be the sole responsibility of the
Manager, which in all respects shall be the employer of such employees,
and Owner shall have no liability with respect to such matters.
Notwithstanding the foregoing, Manager shall not, without consent of
Owner, transfer any employee from the Property to a similar on-site
position at a property in the area managed by Manager on behalf of a
third party.
(b) Manager shall employ at its sole expense a regional manager
to oversee the operations of the Property who shall frequently, but not
less than bi-weekly, visit the Property performing inspections and
providing guidance and training to the on-site staff. The assignment of
this regional manager to oversee the Property shall be approved by
Owner. The regional manager's supervision of more than seven (7)
properties including the Property or other considerations may be cause
for Owner to withhold or rescind said approval.
(c) Manager shall maintain, at Owner's expense, workers
compensation (or other private insurance acceptable to Owner) for all
on-site employees at limits not less than the statutory amount. Manager
shall prepare, execute and file all forms, reports and returns required
by Applicable Laws.
4.08 Insurance.
(a) Manager shall, at its sole cost and expense, procure and
maintain in full force and effect, throughout the existence of this
Agreement, policies of insurance as detailed below in subsection (b), on
which Owner shall be named insured. These policies shall be issued by an
insurance company licensed to do business in the state in which the
Property is located with an AM Best rating of A-, V or better. Manager
shall be covered under such policies for its indemnity obligations
hereunder subject to the limits set forth below. Manager shall promptly
furnish to Owner certificates of insurance acceptable to Owner as
evidence of the insurance coverage required hereunder. Manager shall
obtain a written obligation on the part of each insurance carrier to
notify Owner at least 30 days prior to any cancellation or material
change of any such policy.
(b) The following policies of insurance shall be procured and
maintained by Manager:
1. Employer's liability insurance in an amount not less than
$250,000 per occurrence.
2. Blanket crime coverage, including employee dishonesty and
depositor's forgery endorsements, protecting Manager against
16
fraudulent or dishonest acts of its employees, whether acting alone
or with others, with limits of liability of not less than $25,000
per Property, not to exceed $100,000 in aggregate if more than one
Property is managed, on which Owner shall be loss payee.
3. Professional liability insurance covering the activities
of Manager written on a "claims made" basis with limits of at least
$1,000,000 with a maximum deductible of $10,000. Any loss within
the deductible shall be borne by Manager. Coverage shall be
maintained in effect during the period of the Agreement and for not
less than two (2) years after termination of the Agreement.
4.09 Reports. Manager shall prepare and send to Owner reports in
accordance with Owner's Policies and Procedures, including, i) monthly
status report (Owner's form); ii) monthly statements approved by Manager
showing all receipts and disbursements; iii) an accompanying letter
explaining any significant events at the Property, as well as any
variances from budget in excess of +/- 10% on any operating statement
detailed item; iv) planned improvement logs (Owner's form); v) market
study; vi) copies of significant incident reports; and vii) other
analyses as should from time to time be reasonably requested by Owner.
4.10 Operating Expenses.
(a) Manager shall cause the Property to incur proper operating
expenses in exercising its authority and performing all of its duties
and obligations hereunder. Manager shall use reasonable efforts to
minimize such expenses by obtaining competitive pricing on all services
and obtaining at least three bids on major expenditures. Manager shall
use reasonable efforts to comply with the limitations on expenditures
set forth in the Budget. Manager shall obtain Owner's prior written
consent before incurring on behalf of Owner any single expenditure in
excess of two thousand five hundred dollars ($2,500) excluding utility
bills and other normal and recurring expenses included in the Budget,
except in an emergency in which case Manager may incur expenses
reasonably necessary to protect life and property. Manager shall notify
Owner of any such emergency expenses as soon as practicable after they
are incurred.
(b) Manager shall timely request payment by Owner of all proper
costs and expenses incurred by the operation of the Property as
contemplated herein. All costs for which payment is requested shall be
coded by the on-site manager in accordance with Owner's standard chart
of accounts, attached in Schedule B. Manager shall not request payment
of invoices to itself other than for the following items: i) the cost of
sending Property related material by overnight courier at Owner's
request, ii) forms and other items ordered in bulk by Manager and used
by the Property, iii) third-party payroll processing, and iv) the
Management Fee. Manager shall not request payment of any invoices,
whether to itself or a third party, marked-up above cost. Manager is not
required to monitor or request payment for taxes, escrows or debt
service, which costs Owner will monitor and pay.
4.11 Legal Proceeding and Compliance with Applicable Laws.
(a) Manager shall promptly notify Owner in writing of the service
of any legal process upon Manager (although Manager is not authorized to
accept service of process on behalf of the Owner), or the occurrence of
17
any casualty loss, injury or damage on or about the Property;
(b) Manager shall fully comply with all Applicable Laws in
connection with this Agreement, the performance of its obligations
hereunder, its own operations and its hiring, discharge and retention of
employees. Manager shall perform, on behalf and upon approval of Owner
and at Owner's expense, all such acts in and about the Property which
shall be reasonably necessary to comply with Applicable Laws.
4.12 Policies and Procedures.
(a) Manager shall maintain files of all original documents
relating to leases, vendors and all other business of the Property in an
orderly fashion at the Property, which files shall be the property of
Owner and shall at all times be open to Owner's inspection.
(b) Manager shall comply with the policies and procedures
attached hereto as Schedule B. Owner may periodically make alterations
to these policies and procedures and will provide such updates to
Manager.
5. RESPONSIBILITIES OF OWNER
5.01 Accounting. Owner shall provide accounting services for the
payment of all proper expenses of the Property, and shall provide to
Manager all accounting reports necessary for Manager to discharge its
obligations hereunder by the 5th of each month or the next subsequent
business day.
5.02 Liability. Owner shall maintain sole and primary public liability
and property damage insurance with respect to occurrences on or about
the Property, with liability limits of not less than $1,000,000 per
person and per occurrence, and excess liability with limits of not less
than $10,000,000, and rental income insurance, and naming the Manager as
an additional insured. Owner shall maintain such fire, hazard and other
insurance in such amounts as are proper in judgment of Owner. The
maintenance of fire, hazard and other insurance shall be the sole
responsibility of Owner and not Manager.
6. INDEMNIFICATION
6.01 Indemnification of Owner. The Manager shall indemnify, defend and
hold harmless Owner against any and all liabilities, costs, expenses,
damages, penalties, interest, injuries and obligations, including
reasonable attorneys' fees ("Claims") incurred by Owner as a result of
(a) any act by Manager outside the scope of its authority hereunder, (b)
any act or failure to act constituting negligence, misconduct, fraud or
breach of this Agreement, (c) Claims made by current or former employees
or applicants for employment arising from hiring, supervising or firing
same, or (d) any act by Manager, its employees, agents or contractors in
violation of any Applicable Law.
6.02 Indemnification of Manager. Owner shall indemnify and hold
harmless Manager against any and all Claims incurred by Manager as a
result of acts of Manager made within the scope of its authorities,
excluding, however, (a) Claims which arise from the negligence,
misconduct, fraud or breach of this Agreement by Manager, (b) Claims
made by current or former employees or applicants for employment arising
18
from hiring, supervising or firing of same, or (c) any act by Manager,
its employees, agents or contractors in violation of any Applicable Law.
6.03 General Provisions. The provisions of this Section shall survive
the termination of this Agreement.
7. DEFAULTS
7.01 Manager's Event of Default. Manager shall be deemed to be in
default hereunder upon the happening of any of the following ("Manager's
Event of Default"):
(a) The failure by Manager to keep, observe or perform any
covenant, agreement, term or provision of this Agreement to be kept,
observed or performed by Manager relating to any of the Properties, and
such default shall continue, in full or in part, for a period of ten
(10) days after written notice thereof by Owner to Manager, including
without limitation, the following:
(i) failure to make any payment or perform any financial
obligation required hereby;
(ii) failure to prepare and present a complete Budget or
Business Plan as required hereby;
(iii) failure to collect Gross Operating Revenue as required
hereby;
(iv) failure to deposit Gross Operating Revenue due Owner as
required hereby;
(v) failure to maintain the Property as required hereby;
(vi) an act or omission of Manager in violation of any
Applicable Law; or
(vii) failure to comply with Owner's Policies and Procedures.
(b) Notwithstanding paragraph (a), the occurrence of any of
the following shall be a Manager's Event of Default and Manager shall
not have the right to cure such action:
(i) The request by Manager of payment of any invoice, whether
to itself or a third party, marked-up above cost as
prohibited herein.
(ii) The aggregate operating expenses excluding real estate
taxes and improvements as reported for any Property on an
accrual basis shall:
(x) in any consecutive three-month period exceed by 10%
or more the aggregate amount included in the Budget
for those same expenses for such three-month period;
or
(y) in any one-month period exceed by 20% or more the
amount included in the Budget for those same
expenses for such month.
19
(iii) The failure by Manager to meet the standard of care set
forth herein for the performance of its duties at any of
the Properties.
(c) The making of a general assignment by Manager for benefit of
its creditors, the filing by Manager with any bankruptcy court of
competent jurisdiction of a voluntary petition under Title 11 of U.S.
Code, as amended from time to time, the filing by Manager of any
petition or answer seeking any reorganization, arrangement, composition,
readjustment, liquidation, dissolution, or similar relief under any
present or future federal or state act or law relating to bankruptcy,
insolvency, or other relief for debtors, Manager being the subject of
any order for relief issued under such Title 11 of the U.S. Code, as
amended from time to time, or the dissolution or liquidation of Manager;
and
(d) The misapplication or misappropriation of funds held by
Manager in trust for Owner.
(e) Any default of Xx Xxxx under the Operating Agreement.
(f) Removal of Xx Xxxx under the Operating Agreement.
7.02 Remedies of Owner. Upon the occurrence of a Manager's Event of
Default, Owner shall be entitled (i) to terminate in writing this
Agreement effective as of the xxxx designated by Owner (which may be the
date Upon which notice is given), and/or (ii) to pursue any remedy at
law or in equity, including without limitation, specific performance.
All of Owner's rights and remedies shall be cumulative.
7.03 Owner's Event of Default. Owner shall be deemed to be in default
hereunder (an "Owner's Event of Default") if Owner shall fail to keep,
observe or perform any covenant, agreement, term or provision of this
Agreement to be kept, observed or performed by Owner, and such default
shall continue for a period of thirty (30) days after written notice
thereof by Manager to Owner, or if such default cannot be cured within
such thirty (30) day period, then such additional period as shall be
reasonable, provided Owner commences to cure such default within such
thirty (30) day period and proceeds diligently to prosecute such cure to
completion.
7.04 Remedies of Manager. Upon the occurrence of an Owner's Event of
Default, Manager shall be entitled (i) to terminate in writing this
Agreement effective as of the date designated by Owner which is at least
10 days after receipt of such notice of termination by Owner, and/or
(ii) to pursue an action for the actual compensatory damages incurred by
Manager. Manager expressly agrees that termination and monetary damages
are its sole rights and remedies with respect to an Owner's Event of
Default and Owner expressly waives and releases the right to seek
equitable relief, including specific performance or injunctive relief,
and to xxx for any consequential or punitive damages.
8. TERMINATION RIGHTS
8.01 Expiration of Term. If not sooner terminated, this Agreement shall
terminate on the expiration of its term set forth in Section 2 hereof.
20
8.02 Termination by Owner Upon Manager Event of Default. Upon a Manager
Event of Default, Owner may terminate this Agreement as specified in
Section 7.02 hereof.
8.03 Termination by Manager Upon Owner Event of Default. Upon an Owner
Event of Default, Manager may terminate this Agreement as specified in
Section 7.04 hereof.
8.04 Termination by Owner. Upon removal of Xxxx under the Operating
Agreement this agreement shall terminate.
8.05 Termination Upon Sale of the Property. If the Property is sold,
conveyed or transferred during the term hereof, this Agreement shall
terminate.
8.06 Termination After Initial Term. If the parties hereto agree to
continue this Agreement after the initial term hereof, Owner shall then
be entitled to terminate this Agreement upon thirty (30) days written
notice.
8.07 Effect of Termination Upon Payment of Fees. Upon the termination
of this Agreement for any reason, Manager shall be entitled to its
earned, but unpaid fees, for the period prior to the termination.
Manager shall not be entitled to any fees relating to the period after
the date of termination of this Agreement; provided that in the case of
termination by Owner pursuant to Section 8.04, Manager shall be entitled
to actual, compensatory damages as specified in Section 7.04.
8.08 Delivery of Property Upon Termination. Immediately after
termination of this Agreement for any reason, Manager shall deliver to
or as directed by Owner all funds, checks, keys, lease files, books and
records and other Confidential Information to Owner. Immediately after
termination, Manager shall leave the Property and cause its employees to
leave the Property without causing any damage thereto. Under no
circumstances shall any default by Owner give rise to any lien on the
Property or give rise to a right of Manager to stay on the Property
after the date of termination without the express consent of Owner.
8.09 Effect of Termination on Park at Highlands. LLC. The termination
of this Agreement shall not affect or impair the rights and remedies of
the parties to the Operating Agreement of Park at Highlands, LLC under
such Operating Agreement, including any right of a party to receive
fees, compensation or distributions under such Operating Agreement.
9. CONFIDENTIALITY
9.01 Preservation of Confidentiality. In connection with the
performance of obligations hereunder, Manager acknowledges that it will
have access to "Confidential Information" (as defined below). Manager
shall treat such Confidential Information as proprietary to Owner and
private, and shall preserve the confidentiality thereof and not
disclose, or cause or permit its employees, agents or contractors to
disclose, such Confidential Information. Notwithstanding the foregoing,
Manager shall have the right to disclose Confidential Information if and
to the extent it is required by legal process or by operation of law to
disclose any Confidential Information. "Confidential Information" shall
mean the books, records, business practices, methods of operations,
computer software, financial models, financial information, policies and
21
procedures, and other information relating to Owner and the Property
(including any such information relating to the Property generated by
the Manager) which are not available to the public.
9.02 Property Right in Confidential Information. All Confidential
Information shall remain the property of Owner and Manager shall have no
ownership interest therein.
10. SURVIVAL OF AGREEMENT
All indemnity obligations set forth herein, all obligations to pay
earned and accrued fees and expenses, all confidentiality obligations,
and all obligations to perform and duties accrued prior to the date of
termination shall survive the termination of this Agreement.
11. ENFORCEMENT OF AGREEMENT
This Agreement, its interpretation, performance and enforcement, and the
rights and remedies of the parties hereto, shall be governed and
construed by and in accordance with the law of the State in which the
Property is located. If any action at law or in equity is brought to
enforce or interpret the provisions of this Agreement, the prevailing
party shall be entitled to recover reasonable costs, including
attorney's fees, incurred to maintain such action, from the prevailing
party.
12. ASSIGNMENT
Manager shall not sell, assign or otherwise transfer by operation of law
or otherwise all or any part of its rights or obligations under this
Agreement. Owner may assign this Agreement to a successor owner of the
Property.
13. NOTICES
Any notice required by this Agreement shall be deemed to be delivered
when delivered, if delivered by overnight courier, personal delivery or
registered or certified mail, return receipt requested, addressed to the
parties at the following addresses or such changed address as such party
may fix by notice thereof:
If to Owner: Park at Highlands, LLC
c/o Wellsford Residential Property Trust
000 00xx Xxxxxx, Xxxxx 0000
Xxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxx
Vice President
If to Manager: The Xxxx Company
0000 X. Xxxxxx Xxxxxx Xxxxxxx, Xxxxx 000
Xxxxxx, XX 00000
Attention: Xx. Xx Xxxx - President
14. MISCELLANEOUS
14.01 Captions. The captions of this Agreement are inserted only
for the purpose of convenient reference and do not define, limit or
prescribe the scope or intent of this Agreement or any part hereof.
22
14.02 Schedules. Each schedule attached hereto forms a material
part of this Agreement and is incorporated herein by reference.
14.03 Modifications and Changes. This Agreement cannot be changed
or modified except by another agreement in writing, signed by the
parties sought to be charged therewith.
14.04 Entire Agreement. This Agreement embodies the entire
understanding of the parties, and there are no further agreements or
understandings, written or oral, in effect between the parties relating
to the subject matter hereof.
EXECUTED as of the date set forth above.
OWNER: MANAGER:
PARK AT HIGHLANDS, LLC THE XXXX COMPANY
a Colorado corporation
By:_________________________________ By:___________________________________
Name:_________________________________
Title:________________________________
23
INDEX TO SCHEDULES
Schedule A - Attachment to All Contracts Executed by Manager on Behalf of
Owner
Schedule B - Owner's Policies and Procedures to be Followed by Manager.
24
SCHEDULE A
This Agreement and all documents, agreements, understandings and arrangements
have been executed or entered into by ________________________________ as
agent of Wellsford Residential Property Trust (the "Company") which has been
formed as a Maryland real estate investment trust pursuant to a Declaration
of Trust dated as of July 10, 1992, as amended, and not individually, and
neither the trustees, officers or shareholders of the Company shall be bound
or have any personal liability hereunder or thereunder. All persons dealing
with the Company shall look solely to the assets of this Agreement and all
related documents, agreements, understandings and arrangements and will not
seek recourse or commence any action against any of the trustees, officers or
shareholders of the Company or any of their personal assets for the
performance or payment of any obligation hereunder or thereunder. The
foregoing shall also apply to any future documents, agreements,
understandings, arrangements and transactions between the parties hereto.
25
SCHEDULE B
OWNER'S POLICIES AND PROCEDURES TO BE FOLLOWED BY MANAGER
26
EXHIBIT L
PLEDGE AND SECURITY AGREEMENT - XXXX TO WPHC
THIS PLEDGE AND SECURITY AGREEMENT (this "Agreement") is made as of the
27th day of April, 1995, by XX XXXX, an individual, having an address of 0000
Xxxxx Xxxxxx Xxxxxx, Xxxxx 000, Xxxxxx, Xxxxxxxx 00000 ("Pledgor"), for the
benefit of WELLSFORD PARK HIGHLANDS CORP., a Colorado corporation, having an
office at 000 Xxxxxxxxxxx Xxxxxx, Xxxxx 0000, Xxxxxx, Xxxxxxxx 00000
("Pledgee").
RECITALS
A. Pledgor is the Manager and a Member of Park at Highlands LLC, a
Colorado limited liability company (the "Limited Liability Company"), which
Limited Liability Company is governed by its Operating Agreement dated as of
April 27, 1995 (the "Operating Agreement"), by and between Pledgee and
Pledgor.
B. Pledgee is also a Member in the Limited Liability Company.
C. In order to secure the full payment and performance by Pledgor of
all of Pledgor's obligations under the Operating Agreement, as such Operating
Agreement may be now or hereafter amended, modified or restated (said
obligations under the Operating Agreement are hereinafter referred to as the
"Obligations"), Pledgor is entering into this Agreement for the benefit of
Pledgee.
AGREEMENT
NOW, THEREFORE, in consideration of the recitals, covenants and
agreements set forth herein, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties
hereby agree as follows:
1. Definitions.
a. "Collateral" shall mean:
(i) All of Pledgor's right, title and interest in the
ownership interests of Pledgor in Limited Liability Company,
whether now owned or hereafter acquired, including, without
limitation, its Interest (as defined in the Operating Agreement) in
the Limited Liability Company, the right of Pledgor, if any, to any
benefits to which Pledgor may be entitled pursuant to the Operating
Agreement or the Colorado Limited Liability Company Act, Colo. Rev.
Statutes Sections 7-80-101 to 7-80-913, as amended from time to
time (the "Act"), and Pledgor's right to receive payments, fees,
distributions and allocations under or in connection with the
Operating Agreement (whether as Member or as Manager), as such
Operating Agreement may be modified or extended from time to time
with the consent of the Pledgee; and
(ii) All proceeds, whether cash proceeds or noncash
proceeds, and products of any and all of the foregoing.
27
b. "Event of Default" shall mean an event of default described
in Section 8 herein.
2. Pledge of Collateral and Grant of Security Interest. Pledgor does
hereby unconditionally and irrevocably assign, pledge, convey, transfer,
deliver, set over and grant unto Pledgee, its successors and assigns, as
security for Pledgor's complete and timely payment and performance of the
Obligations, a continuing first lien security interest under the Uniform
Commercial Code of the State of Colorado in the Collateral. Pledgor hereby
further grants to Pledgee all rights in the Collateral as are available to a
secured party of such collateral under the Uniform Commercial Code of the
State of Colorado (being the principal place of business of Pledgor and the
location of Pledgor's residence) and, concurrently herewith, shall deliver to
Pledgee duly executed UCC-1 financing statements suitable for filing in the
State of Colorado with respect to the Collateral.
3. Delivery to Pledgee.
a. Pledgor agrees to execute and to use its best efforts to
cause all other necessary parties, and any successors and assigns thereof, to
execute and deliver to Pledgee such other agreements, instruments and
documentation as Pledgee may reasonably request from time to time to effect
the conveyance, transfer, and grant to Pledgee of Pledgor's right, title and
interest in and to the Collateral as security for the Obligations.
b. Concurrently with the execution of this Agreement, Pledgor
has caused each of the Members of the Limited Liability Company, other than
Pledgee, to execute the Consent to Security Interest and Agreement in the
form attached hereto as Schedule A (the "Consent") evidencing the consent of
the Members to the assignment of Pledgor's Limited Liability Company
interests and their agreement to be bound by Section 4 of this Agreement, and
Pledgor covenants to execute, if required by Pledgee, an amendment to the
Operating Agreement in such form as Pledgee may reasonably require to reflect
the substitution of Pledgee in place of Pledgor as Manager of the Limited
Liability Company upon the occurrence of an Event of Default. Pledgor
further agrees to execute and to cause the other Members of the Limited
Liability Company to execute and deliver to the Pledgee such other
agreements, instruments and documentation as Pledgee may reasonably request
from time to time to effectuate the conveyance, transfer, assignment and
grant to Pledgee of all of Pledgor's right, title and interest in and to the
Collateral and to evidence the substitution of the Pledgee in place of
Pledgor as Manager in the Limited Liability Company.
4. Proceeds and Products of the Collateral.
a. Notwithstanding any of the foregoing, unless and until there
occurs an Event of Default, Pledgee agrees to forbear from exercising its
right to receive all benefits pertaining to the Collateral (except as
otherwise permitted under the Operating Agreement), and Pledgor shall be
permitted to exercise all rights and to receive all benefits of the
Collateral, including, without limitation, the right to exercise all voting,
approval, consent and similar rights of Pledgor pertaining to the Collateral,
payments due under, proceeds, whether cash proceeds or noncash proceeds, and
products of the Collateral and to retain and enjoy the same.
b. Pledgor acknowledges and agrees with Pledgee, that unless Pledgee
otherwise consents, in Pledgee's sole discretion, Pledgor shall not exercise
28
any voting, approval, consent or other rights with respect to the Collateral
at any time after (i) the occurrence of an Event of Default and (ii) receipt
of notice from Pledgee instructing Pledgor not to exercise any such voting,
approval, consent or other rights with respect to the Collateral, provided,
however, that Pledgor shall exercise any such right it may have under the
agreements comprising the Collateral with respect to the business affairs of
the Limited Liability Company as is reasonably necessary to protect and
preserve the Collateral.
c. Upon or at any time after the occurrence of an Event of Default,
Pledgee, at its option, to be exercised in its sole discretion by written
notice to Pledgor, may exercise all rights and remedies granted under this
Agreement, including, without limitation, the right to require the obligors
under the Collateral to make all payments due under and to pay all proceeds,
whether cash proceeds or noncash proceeds, and products of the Collateral to
Pledgee. Upon the giving of any such notice, the security constituted by
this Agreement shall become immediately enforceable by Pledgee, without any
presentment, further demand, protest or other notice of any kind, all of
which are hereby expressly and irrevocably waived by Pledgor. Pledgor hereby
authorizes and directs each respective obligor under the agreements
constituting the Collateral, that upon receipt of written notice from Pledgee
of an Event of Default by Pledgor hereunder, to assign, set over, transfer,
distribute, pay and deliver any and all Collateral or said payments, proceeds
or products of the Collateral to Pledgee, at such address as Pledgee may
direct, at such time and in such manner as Collateral and such payments,
proceeds and products of the Collateral would otherwise be distributed,
transferred, paid or delivered to Pledgor. The respective obligors under the
agreements constituting the Collateral shall be entitled to conclusively rely
on such notice and make all such assignments and transfers of the Collateral
and all such payments with respect to the Collateral and pay all such
proceeds and products of the Collateral to Pledgee and shall have no
liability to Pledgor for any loss or damage Pledgor may incur by reason of
said reliance.
5. No Assumption. Notwithstanding any of the foregoing, whether or
not an Event of Default shall have occurred, and whether or not Pledgee
elects to foreclose on its security interest in the Collateral as set forth
herein, neither the execution of this Agreement, receipt by Pledgee of any of
Pledgor's right, title and interest in and to the Collateral and the
payments, proceeds and products of the Collateral, now or hereafter due to
Pledgor from any obligor of the Collateral, nor Pledgee's foreclosure of its
security interest in the Collateral, shall in any way be deemed to obligate
Pledgee to assume any of Pledgor's obligations, duties or liabilities under
the Collateral or any agreements constituting the Collateral, as presently
existing or as hereafter amended, or under any and all other agreements now
existing or hereafter drafted or executed (collectively, the "Pledgor's
Liabilities"), unless Pledgee otherwise agrees to assume any or all of
Pledgor's Liabilities in writing. In the event of foreclosure by Pledgee of
its security interest in the Collateral, Pledgor shall remain bound and
obligated to perform the Pledgor's Liabilities to the extent required under
the Operating Agreement, and Pledgee shall not be deemed to have assumed any
of the Pledgor's Liabilities, except as provided in the preceding sentence.
In the event the entity or person acquiring the Collateral at a foreclosure
sale elects to assume the Pledgor's Liabilities, such assignee shall agree to
be bound by the terms and provisions of the applicable agreement.
6. Indemnification. Pledgor hereby agrees to indemnify, defend and
hold Pledgee, its successors and assigns harmless from and against any and
29
all damages, losses, claims, costs or expenses (including without limitation,
reasonable attorneys' fees) and any other liabilities whatsoever that Pledgee
or its successors or assigns may incur by reason of Pledgor's failure to
comply with the terms and conditions of this Agreement or by reason of any
unpermitted assignment of Pledgor's right, title and interest in and to any
or all of the Collateral.
7. Representations, Warranties and Covenants. In addition to the
representations made by Pledgor in the Operating Agreement, Pledgor makes the
following representations and warranties, and Pledgor covenants and agrees to
provide written notices to Pledgee within ten (10) days after Pledgor becomes
aware that any of the following is no longer true and correct and to perform
diligently all acts reasonably necessary to maintain or restore the truth and
correctness, in all material respects, of the following:
a. Pledgor acknowledges that the Operating Agreement and any
other agreements constituting the Collateral, currently are in full
force and effect and have not been amended or modified, except by
Pledgor and Pledgee in writing.
b. Pledgor has the full right and title to its interest in the
Collateral and has the full power, legal right and authority to pledge,
convey, transfer and assign such interest. None of the Collateral is
subject to any existing assignment, claim, lien, pledge, transfer or
other security interest of any character, or to any attachment, levy,
garnishment or other judicial process or to any claim for set-off,
counterclaim, deduction or discount. Pledgor shall not, without the
prior written consent of Pledgee, which consent may be granted or denied
in Pledgee's sole discretion, further convey, transfer, set over or
pledge to any party any of its interests in the Collateral. Pledgor
agrees to (i) warrant and defend its title to the Collateral and the
security interest created by this Agreement against all claims of all
persons, and (ii) maintain and preserve the Collateral and such security
interests.
c. The pledge of the Collateral pursuant to this Agreement
creates a valid first priority security interest in the Collateral,
securing the performance of the Obligations, which security interest
shall be perfected upon the filing of the UCC-1 Financing Statements
referred to in Paragraph 2 of this Agreement.
d. Pledgor's Social Security Number is: ###-##-####, and
Pledgor's principal residence is located at Xxx Xxxxxx Xxxxxx, Xxxxxx,
Xxxxxxxx 00000.
e. Pledgor agrees that it shall not, without at least thirty
(30) days' prior written notification to Pledgee, move or otherwise
change its place of residence.
f. To the best knowledge of Pledgor, neither the execution and
delivery of this Agreement by Pledgor nor the consummation of the
transactions herein contemplated nor the fulfillment of the terms hereof
(i) violate the terms of any agreement, indenture, mortgage, deed of
trust, equipment lease, instrument or other document to which Pledgor is
a party, or (ii) conflict with any law, order, rule or regulation
applicable to Pledgor or any court or any government, regulatory body or
administrative agency or other governmental body having jurisdiction
over Pledgor or its properties, or (iii) result in or require the
30
creation or imposition of any lien (other than the first priority lien
of Pledgee in the Collateral contemplated hereby).
g. No consent or approval which has not been obtained prior to
the date hereof of any other person or entity and no authorization,
approval or other action by, and no notice to or filing with any
governmental body, regulatory authority or securities exchange, was or
is necessary as a condition to the validity of the pledge hereunder of
the Collateral and such pledge is effective to vest in the Pledgee the
rights of Pledgee in the Collateral as set forth herein.
h. Pledgor shall comply in all material respects with all
requirements of law applicable to the Collateral or any part thereof.
i. Pledgor shall pay and discharge all taxes, assessments and
governmental charges or levies against any Collateral prior to
delinquency thereof and shall keep all Collateral free of all unpaid
charges whatsoever.
8. Event of Default. Each of the following shall constitute an Event
of Default hereunder:
a. A breach of any representation, warranty, covenant or
obligation of Pledgor shall have occurred under the Operating Agreement
and such breach shall not have been cured within any applicable grace
period provided therein; or
b. Any warranty, representation or statement of the Pledgor in
this Agreement proves to have been false in any material respect when
made or furnished; or
c. There occurs the issuance of a writ, order of attachment or
garnishment with respect to any of the Collateral and such writ, order
of attachment or garnishment is not dismissed and removed within thirty
(30) days thereafter; or
d. A material breach or violation of any covenant or agreement
contained herein shall have occurred, which is not cured within thirty
(30) days after notice has been given to Pledgor by Pledgee.
Any Event of Default under this Agreement shall be an event of default
by Pledgor under the Operating Agreement.
9. Remedies.
a. Upon the occurrence of an Event of Default, Pledgee may by
giving notice of such Event of Default, at its option, do any one or more of
the following:
(i) Take control of the Collateral and thereafter exercise all
rights and powers of Pledgor with respect to the Collateral; and
(ii) Without notice to or demand upon Pledgor, make such payments
and do such acts as Pledgee may deem necessary to protect its
security interest in the Collateral, including, without limitation,
paying, purchasing, contesting or compromising any encumbrance,
charge or lien which is prior to or superior to the security
interest granted hereunder, and in exercising any such powers or
31
authority to pay all expenses incurred in connection therewith; and
(iii) Require Pledgor to take all actions necessary to deliver
such Collateral to Pledgee, or an agent or representative
designated by Pledgee; and
(iv) Foreclose upon this Agreement as herein provided or in any
commercially reasonable manner permitted by law, and exercise any
and all of the rights and remedies conferred upon Pledgee by the
Operating Agreement, or in any other document executed by Pledgor
in connection with the Obligations secured hereby; and sell or
cause to be sold the Collateral, without affecting in any way the
rights or remedies to which Pledgee may be entitled under the other
such instruments; and
(v) Sell or otherwise dispose of the Collateral at public sale,
without having the Collateral at the place of sale, and upon terms
and in such manner as is commercially reasonable, may determine.
Pledgee may be a purchaser at any sale; and
(vi) Exercise any remedies of a secured party under the Uniform
Commercial Code of the State of Colorado or any other applicable
law; and
(vii) Exercise any remedies available to Pledgee under the
Operating Agreement, including, but not limited to, the removal of
the Pledgor as the Manager and a Member of the Limited Liability
Company and exercise of any rights of offset in favor of Pledgee as
the Manager and a Member of the Limited Liability Company; and
(viii) Notwithstanding anything to the contrary contained in this
Agreement, at any time after an Event of Default Pledgee may, by
delivering written notice to the Limited Liability Company and to
the Pledgor, succeed, or designate its nominee or designee to
succeed, to all right, title and interest of Pledgor (including,
without limitation, the right, if any, to vote on or take any
action with respect to the matters of the Limited Liability
Company) as the Manager and/or a Member of the Limited Liability
Company in respect of the Collateral. Pledgor hereby irrevocably
authorizes and directs the Limited Liability Company on receipt of
any such notice (a) to deem and treat Pledgee or such nominee or
designee in all respects as the Manager and/or a Member (and not
merely an assignee of the Manager and/or a Member) of such Limited
Liability Company, entitled to exercise all the rights, powers and
privileges (including the right to vote on or take any action with
respect to Limited Liability Company matters pursuant to the
Operating Agreement, to receive all distributions, to be credited
with the capital account and to have all other rights, powers and
privileges appertaining to the Collateral to which Pledgor would
have been entitled had the Collateral not been transferred to
Pledgee or such nominee or designee), and (b) to file amended
Articles of Organization for such Limited Liability Company, if
required, admitting Pledgee or such nominee or designee as the
Manager and/or a Member of the Limited Liability Company in place
of Pledgor; and
(ix) The rights granted to Pledgee under this Agreement are of a
special, unique, unusual and extraordinary character. The loss of
32
any of such rights cannot be reasonably or adequately compensated
by way of damages in any action at law, and any material breach by
Pledgor of any of Pledgor's covenants, agreements, obligations
representations or warranties under this Agreement will cause
Pledgee irreparable injury and damage. In the event of any such
breach, Pledgee shall be entitled, as a matter of right, to
injunctive relief or other equitable relief in any court of
competent jurisdiction to prevent the violation or contravention of
any of the provisions of this Agreement or to compel compliance
with the terms of this Agreement by Pledgor. Pledgee is absolutely
and irrevocably authorized and empowered by Pledgor to demand
specific performance of each of the covenants, agreements,
representations and warranties of Pledgor in this Agreement.
Pledgor hereby irrevocably waives any defense based on the adequacy
of any remedy at law which might otherwise be asserted by Pledgor
as a bar to the remedy of specific performance in any action
brought by Pledgee against Pledgor to enforce any of the covenants
or agreements of Pledgor in this Agreement.
b. Unless the Collateral is perishable or threatens to decline
speedily in value or is of a type customarily sold on a recognized market,
Pledgee shall give Pledgor at least ten (10) days' prior written notice of
the time and place of any public sale of the Collateral subject to this
Agreement or other intended disposition thereof to be made. Such notice shall
be conclusively deemed to have been delivered to Pledgor at the address set
forth in subsection 7(d) of this Agreement, unless Pledgor shall notify
Pledgee in writing of any change of its place of residence and provide
Pledgee with the address of its new place of residence.
c. The proceeds of any sale under Subsections 9(a)(iv) and (v)
above shall be applied as follows:
(i) To the repayment of all reasonable costs and expenses of
retaking, holding and preparing for the sale and the selling of the
Collateral (including actual reasonable legal expenses and
attorneys' fees) and the discharge of all assessments,
encumbrances, charges or liens, if any, on the Collateral prior to
the lien hereof (except any taxes, assessments, encumbrances,
charges or liens subject to which such sale shall have been made);
(ii) To the payment of the whole amount, if any, of the
Obligations, as and when the same become due; and
(iii) The aggregate surplus, if any, shall be paid to Pledgor in a
lump sum, without recourse to Pledgee, or as a court of competent
jurisdiction may direct.
d. Pledgee shall have the right to enforce one or more remedies
under this Agreement and under the Operating Agreement, successively or
concurrently, and such action shall not operate to estop or prevent Pledgee
from pursuing any further remedy which it may have, and any repossession or
retaking or sale of the Collateral pursuant to the terms hereof shall not
operate to release Pledgor until full payment of any deficiency has been made
in cash.
e. PLEDGOR ACKNOWLEDGES THAT PLEDGEE MAY BE UNABLE TO EFFECT A
PUBLIC SALE OF ALL OR ANY PART OF THE COLLATERAL AND MAY BE COMPELLED TO
RESORT TO ONE OR MORE PRIVATE SALES TO A RESTRICTED GROUP OF PURCHASERS
WHO
33
WILL BE OBLIGATED TO AGREE, AMONG OTHER THINGS, TO ACQUIRE THE COLLATERAL FOR
ITS OWN ACCOUNT, FOR INVESTMENT AND NOT WITH A VIEW TO THE DISTRIBUTION OR
RESALE THEREOF. PLEDGOR FURTHER ACKNOWLEDGES THAT ANY SUCH PRIVATE SALES MAY BE
AT PRICES AND ON TERMS LESS FAVORABLE THAN THOSE OF PUBLIC SALES, AND AGREES
THAT PROVIDED SUCH PRIVATE SALES ARE MADE IN A COMMERCIALLY REASONABLE MANNER,
PLEDGEE SHALL HAVE NO OBLIGATION TO DELAY SALE OF ANY COLLATERAL TO PERMIT THE
ISSUER THEREOF TO REGISTER IT FOR PUBLIC SALE UNDER THE SECURITIES ACT OF 1933.
PLEDGOR AGREES THAT PLEDGEE SHALL BE PERMITTED TO TAKE SUCH ACTIONS AS PLEDGEE
DEEMS REASONABLY NECESSARY IN DISPOSING OF THE COLLATERAL TO AVOID CONDUCTING A
PUBLIC DISTRIBUTION OF SECURITIES IN VIOLATION OF THE SECURITIES ACT OF 1933 OR
THE SECURITIES LAWS OF ANY STATE, AS NOW ENACTED OR AS THE SAME MAY IN THE
FUTURE BE AMENDED, PROVIDED THAT ANY SUCH ACTIONS SHALL BE COMMERCIALLY
REASONABLE. IN ADDITION, PLEDGOR AGREES TO EXECUTE, FROM TIME TO TIME, ANY
AMENDMENT TO THIS AGREEMENT OR OTHER DOCUMENT AS PLEDGEE MAY REASONABLY REQUIRE
TO EVIDENCE THE ACKNOWLEDGEMENTS AND CONSENTS OF PLEDGOR SET FORTH IN THIS
SECTION.
10. Attorneys Fees. Pledgor agrees to pay to Pledgee, without demand,
reasonable attorneys' fees and all reasonable costs and other reasonable
expenses which Pledgee expends or incurs in collecting any amounts payable by
Pledgor with respect to an Event of Default, hereunder or in enforcing this
Agreement against Pledgor whether or not suit is filed.
11. Further Documentation. Pledgor hereby agrees to execute, from time
to time, one or more financing statements and such other instruments as may
be required to perfect the security interest created hereby, including any
continuation or amendments of such financing statements, and pay the cost of
filing or recording the same in the public records specified by Pledgee.
12. Waiver and Estoppel. Pledgor represents and acknowledges that it
knowingly waives each and every one of the following rights, and agrees that
it will be estopped from asserting any argument to the contrary: (a) any
promptness in making any claim or demand hereunder; (b) any defense that may
arise by reason of the incapacity, lack of authority, death or disability of
Pledgor; (c) any defense based upon an election of remedies by Pledgee which
destroys or otherwise impairs any or all of the Collateral; (d) the right of
Pledgor to proceed against Pledgee or any other person, for reimbursement;
and (e) all duty or obligation of the Pledgee to perfect, protect, retain or
enforce any security for the payment of amounts payable by Pledgor hereunder.
TO THE FULLEST EXTENT PERMITTED BY LAW, EACH PARTY TO THIS AGREEMENT SEVERALLY,
KNOWINGLY, IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY AND ALL RIGHTS TO TRIAL BY
JURY IN ANY ACTION, SUIT OR COUNTERCLAIM BROUGHT BY ANY PARTY TO THIS AGREEMENT
ARISING IN CONNECTION WITH, OUT OF OR OTHERWISE RELATING TO THIS AGREEMENT.
No delay or failure on the part of Pledgee in the exercise of any right
or remedy against Pledgor or any other party against whom Pledgee may have
any rights, shall operate as a waiver of any agreement or obligation
contained herein, and no single or partial exercise by Pledgee of any rights
or remedies hereunder shall preclude other or further exercise thereof or
other exercise of any other right or remedy whether contained in this
Agreement or in any of the other documents regarding the Obligations,
including without limitation the Operating Agreement. No waiver of the
rights of Pledgee hereunder or in connection herewith and no release of
Pledgor shall be effective unless executed in writing by Pledgee. No actions
of Pledgee permitted under this Agreement shall in any way impair or affect
the enforceability of any agreement or obligation contained herein.
34
13. Independent Obligations. The obligations of Pledgor are
independent of the obligations of any other party which may be initially or
otherwise responsible for performance or payment of the Obligations, and a
separate action or actions for payment, damages or performance may be brought
and prosecuted by Pledgee against Pledgor, individually, for the full amount
of the Obligations then due and payable, whether or not an action is brought
against any other party, whether or not Pledgee is involved in any
proceedings and whether or not Pledgee or Pledgor or other person is joined
in any action or proceedings.
14. No Offset Rights of Pledgor. No lawful act of commission or
omission of any kind or at any time upon the part of Pledgee shall in any way
affect or impair the rights of Pledgee to enforce any right, power or benefit
under this Agreement, and no set-off, recoupment, reduction or diminution of
any obligation which Pledgor has or may have against Pledgee or against any
other party shall be available against Pledgee in any suit or action brought
by Pledgee to enforce any right, power or benefit under this Agreement.
15. Power of Attorney. Pledgor hereby appoints Pledgee as his
attorney-in-fact to execute and file, effective upon the occurrence of an
Event of Default, on his behalf any financing statements, continuation
statements or other documentation required to perfect or continue the
security interest created hereby. This power, being coupled with an
interest, shall be irrevocable until all amounts secured hereby have been
paid, satisfied and discharged in full. Pledgor acknowledges and agrees that
the exercise by Pledgee of its rights under this Section 15 will not be
deemed a satisfaction of the amounts owed Pledgee unless Pledgee so elects in
writing.
16. GOVERNING LAW. THE PARTIES HERETO AGREE THAT THIS AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF COLORADO
WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW. SUCH PARTIES FURTHER AGREE
THAT IN THE EVENT OF DEFAULT, THIS AGREEMENT MAY BE ENFORCED IN THE DISTRICT
COURT IN AND FOR XXX XXXX XXX XXXXXX XX XXXXXX, XXXXX OF COLORADO AND THEY DO
HEREBY SUBMIT TO THE JURISDICTION OF SUCH COURT REGARDLESS OF THEIR RESIDENCE OR
WHERE THIS AGREEMENT MAY BE EXECUTED.
17. Successors and Assigns. All agreements, covenants, conditions and
provisions of this Agreement shall inure to the benefit of and be binding
upon the respective heirs, personal representatives successors and assigns of
the parties hereto.
18. Notices. Whenever any party hereto shall desire to, or be required
to, give or serve any notice, demand, request or other communication with
respect to this Agreement, each such notice, demand, request or communication
shall be in writing and shall be effective only if the same is delivered by
personal service (including, without limitation, courier or express service)
or mailed certified or registered mail, postage prepaid, return receipt
requested, or sent by telegram to the parties at the addresses shown
throughout this Agreement or such other addresses which the parties may
provide to one another in accordance herewith. If notice is sent to Pledgee,
a copy of such notice shall also be given to Xxxxx X. Xxxxx, Esq., Xxxxxxxxxx
Hyatt Xxxxxx & Xxxxxxxxxx, P.C., 000 00xx Xxxxxx, Xxxxx 0000, Xxxxxx,
Xxxxxxxx 00000. If notice is sent to Pledgor, a copy of such notice shall
also be given to Xxxx X. Xxxxxxx, Esq., Haligman & Lottner, First Interstate
Tower North, 000 Xxxxxxxxxxx Xxxxxx, Xxxxx 0000, Xxxxxx, Xxxxxxxx 00000-0000.
Notices delivered personally will be effective upon delivery to an authorized
35
representative of the party at the designated address; notices sent by mail
in accordance with the above paragraph will be effective upon execution of
the Return Receipt Requested.
19. Consent of Pledgor. Pledgor consents to the exercise by Pledgee of
any rights of Pledgor in accordance with the provisions of this Agreement.
20. Severability. Every provision of this Agreement is intended to be
severable. In the event any term or provision hereof is declared by a court
of competent jurisdiction to be illegal or invalid for any reason whatsoever,
such illegality or invalidity shall not affect the legality or validity of
the balance of the terms and provisions hereof, which terms and provisions
shall remain binding and enforceable.
21. Amendment. This Agreement may be modified or rescinded only by a
writing expressly relating to this Agreement and signed by all of the
parties.
22. Termination. This Agreement shall terminate, and shall be of no
further force or effect, upon the earlier to occur of the following: (i) full
payment and performance of the Obligations of the Pledgor, (ii) acquisition
by Pledgor or an affiliate of Pledgor of 100% ownership interest in the
Limited Liability Company, or (iii) upon the mutual consent of Pledgor and
Pledgee.
23. Certain Matters with respect to Wellsford Residential Property
Trust. This Agreement and all documents, agreements, understandings and
arrangements relating to this transaction have been executed by the
undersigned on behalf of Pledgee in his/her capacity as an officer or
director of Pledgee, and not individually, and neither the directors,
officers or shareholders of Pledgee shall be bound by or have any personal
liability hereunder or thereunder. The parties to this Agreement shall look
solely to the assets of Pledgee for satisfaction of any liability of Pledgee
in respect of this Agreement and all documents, agreements, understandings
and arrangements relating to this transaction and will not seek recourse or
commence any action against any of the directors, officers or shareholders of
Pledgee or any of their personal assets for the performance or payment of any
obligation hereunder or thereunder. The foregoing shall also apply to all and
any future documents, agreements, understandings, arrangements and
transactions between the parties hereto with respect to the Collateral or
this Agreement.
[SIGNATURE PAGE FOLLOWS]
36
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
PLEDGOR: ______________________________________________
Xx Xxxx
PLEDGEE: WELLSFORD PARK HIGHLANDS CORP., a Colorado
corporation
By:___________________________________________
Name:____________________________________
Title:___________________________________
STATE OF ____________ )
) ss.
COUNTY OF ___________ )
The foregoing instrument was acknowledged before me this __ day of
__________________, 1995, by Xx Xxxx.
WITNESS my hand and official seal.
My commission expires: ______________________________________.
Address:
________________________________
(SEAL) Notary Public
STATE OF ____________ )
) ss.
COUNTY OF ___________ )
The foregoing instrument was acknowledged before me this _____ day of
__________, 199__, by _________________________ as _______________ of
Wellsford Park Highlands Corp., a Colorado corporation.
WITNESS my hand and official seal.
My commission expires: _____________________________________.
Address:
_________________________________________
(SEAL) Notary Public
37
EXHIBIT A
CONSENT TO SECURITY INTEREST AND AGREEMENT
OF THE MEMBERS
OF PARK AT HIGHLANDS LLC,
a Colorado Limited Liability Company
The undersigned, being all the members of PARK AT HIGHLANDS LLC, a
Colorado limited liability company (the "Limited Liability Company") hereby
represent and certify to Wellsford Park Highlands Corp., a Colorado
corporation (the "Secured Party") as follows:
1. The Limited Liability Company has received notice from the Secured
Party that the Secured Party has a security interest in the following
collateral ("Collateral") registered to Xx Xxxx (the "Debtor"):
(i) All of the right, title and interest of the Debtor in the
Limited Liability Company, whether now owned or hereafter acquired,
including, without limitation, the Debtor's Interest (as defined in
the Operating Agreement) in the Limited Liability Company and its
right to receive payments, fees, distributions and allocations
under or in connection with the Operating Agreement (whether as
Member or as Manager), as such Operating Agreement may be modified
or extended from time to time with the consent of the Secured
Parties; and
(ii) All proceeds, whether cash proceeds or noncash proceeds,
and products of any and all of the foregoing.
2. Other than the notice from the Secured Party referred to above, the
Limited Liability Company has not received any notice from any entity or
person claiming an adverse claim against, lien on or security interest in the
Collateral.
3. The security interest of the Secured Party referred to above was
duly registered in the books and records of the Limited Liability Company
effective April 27, 1995.
4. Interests in the Limited Liability Company, whether as Member or as
Manager, are not represented in any certificate, instrument or document, and
such interest may be assigned, transferred or pledged without the party
receiving such assignment, transfer or pledge taking physical possession of
any certificate, instrument or document.
5. The Members hereby consent to the execution and delivery of the Pledge
and Security Agreement by the Debtor and agree hereby to be bound by Section
4 thereof to assign, set over, transfer, distribute, pay and deliver the
Collateral and any and all payments, proceeds or products due to Debtor under
the Collateral to the Secured Party.
The Members hereby consent to the admission of the Secured Party (or its
nominee, designee or any person acquiring its interest under the Pledge and
Security Agreement), as a Manager of the Limited Liability Company upon
receipt of notice by the Secured Party of an Event of Default by the Debtor
thereunder, and (ii) that the Secured Party or such nominees, designees or
persons acquiring the Secured Party's interest thereunder shall not be deemed
38
to have assumed any of Debtor's liability by virtue of such admission as the
Manager of the Limited Liability Company.
This Agreement and all documents, agreements, understandings and
arrangements relating to this transaction have been executed by the
undersigned on behalf of the Secured Party in his/her capacity as an officer
or trustee of the Secured Party, and not individually, and neither the
directors, officers or shareholders of the Secured Party shall be bound by or
have any personal liability hereunder or thereunder. The parties to this
Agreement shall look solely to the assets of the Secured Party for
satisfaction of any liability of the Secured Party in respect of this
Agreement and all documents, agreements, understandings and arrangements
relating to this transaction and will not seek recourse or commence any
action against any of the directors, officers or shareholders of the Secured
Party or any of their personal assets for the performance or payment of any
obligation hereunder or thereunder. The foregoing shall also apply to all
and any future documents, agreements, understandings, arrangements and
transactions between the parties hereto with respect to the Collateral or
this Agreement.
EXECUTED as of the date set forth above.
MEMBERS: WELLSFORD PARK HIGHLANDS CORP., a Colorado
corporation
By:___________________________________________
Name:____________________________________
Title:___________________________________
______________________________________________
XX XXXX, an individual
AGREED TO AND CONCURRED:
SOLE MANAGER
_______________________________
XX XXXX
39
EXHIBIT M
PLEDGE AND SECURITY AGREEMENT
THIS PLEDGE AND SECURITY AGREEMENT (this "Agreement") is made as of
the 27th day of April, 1995, by WELLSFORD PARK HIGHLANDS CORP., a Colorado
corporation, having an office at 000 Xxxxxxxxxxx Xxxxxx, Xxxxx 0000, Xxxxxx,
Xxxxxxxx 00000 ("Pledgor"), for the benefit of XX XXXX, an individual,
having an address of 0000 Xxxxx Xxxxxx Xxxxxx, Xxxxx 000, Xxxxxx, Xxxxxxxx
00000 ("Pledgee").
RECITALS
A. Pledgor is a Member of Park at Highlands LLC, a Colorado limited
liability company (the "Limited Liability Company"), which Limited Liability
Company is governed by its Operating Agreement dated as of April 27, 1995
(the "Operating Agreement"), by and between Pledgor and Pledgee.
B. Pledgee also is a Member, as well as the Manager, in the Limited
Liability Company.
C. In order to secure the full payment and performance by Pledgor of
all of Pledgor's obligations under the Operating Agreement, as such Operating
Agreement may be now or hereafter amended, modified or restated (said
obligations under the Operating Agreement are hereinafter referred to as the
"Obligations"), Pledgor is entering into this Agreement for the benefit of
Pledgee.
AGREEMENT
NOW, THEREFORE, in consideration of the recitals, covenants and
agreements set forth herein, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties
hereby agree as follows:
1. Definitions.
a. "Collateral" shall mean:
(i) All of Pledgor's right, title and interest in the
ownership interests of Pledgor in the Limited Liability Company,
whether now owned or hereafter acquired, including, without
limitation, its Interest (as defined in the Operating Agreement) in
the Limited Liability Company, the right of Pledgor, if any, to any
benefits to which Pledgor may be entitled pursuant to the Operating
Agreement or the Colorado Limited Liability Company Act, Colo. Rev.
Stat. Sections 7-80-101 to 7-80-913, as amended from time to time
(the "Act"), and Pledgor's right to receive payments, fees,
distributions and allocations under or in connection with the
Operating Agreement (whether as Member or as Manager), as such
Operating Agreement may be modified or extended from time to time
with the consent of the Pledgee; and
40
(ii) All proceeds, whether cash proceeds or noncash proceeds,
and products of any and all of the foregoing.
b. "Event of Default" shall mean an event of default described in
Section 8 herein.
2. Pledge of Collateral and Grant of Security Interest. Pledgor does
hereby unconditionally and irrevocably assign, pledge, convey, transfer,
deliver, set over and grant unto Pledgee, its successors and assigns, as
security for Pledgor's complete and timely payment and performance of the
Obligations, a continuing first lien security interest under the Uniform
Commercial Code of the State of Colorado in the Collateral. Pledgor hereby
further grants to Pledgee all rights in the Collateral as are available to a
secured party of such collateral under the Uniform Commercial Code of the
State of Colorado (being the principal place of business of Pledgor) and,
concurrently herewith, shall deliver to Pledgee duly executed UCC-1 financing
statements suitable for filing in the State of Colorado with respect to the
Collateral.
3. Delivery to Pledgee.
a. Pledgor agrees to execute and to use its best efforts to cause
all other necessary parties, and any successors and assigns thereof, to
execute and deliver to Pledgee such other agreements, instruments and
documentation as Pledgee may reasonably request from time to time to effect
the conveyance, transfer, and grant to Pledgee of Pledgor's right, title and
interest in and to the Collateral as security for the Obligations.
b. Concurrently with the execution of this Agreement, Pledgor has
caused each of the Members of the Limited Liability Company, other than
Pledgee, to execute the Consent to Security Interest and Agreement in the
form attached hereto as Schedule A (the "Consent") evidencing the consent of
the Members to the assignment of Pledgor's Limited Liability Company
interests and their agreement to be bound by Section 4 of this Agreement.
Pledgor further agrees to execute and to cause the other Members of the
Limited Liability Company to execute and deliver to Pledgee such other
agreements, instruments and documentation as Pledgee may reasonably request
from time to time to effectuate the conveyance, transfer, assignment and
grant to Pledgee of all of Pledgor's right, title and interest in and to the
Collateral.
4. Proceeds and Products of the Collateral.
a. Notwithstanding any of the foregoing, unless and until there
occurs an Event of Default, Pledgee agrees to forbear from exercising his
right to receive all benefits pertaining to the Collateral (except as
otherwise permitted under the Operating Agreement), and Pledgor shall be
permitted to exercise all rights and to receive all benefits of the
Collateral, including, without limitation, the right to exercise all voting,
approval, consent and similar rights of Pledgor pertaining to the Collateral,
payments due under, proceeds, whether cash proceeds or noncash proceeds, and
products of the Collateral and to retain and enjoy the same.
b. Pledgor acknowledges and agrees with Pledgee, that unless
41
Pledgee otherwise consents, in Pledgee's sole discretion, Pledgor shall not
exercise any voting, approval, consent or other rights with respect to the
Collateral at any time after (i) the occurrence of an Event of Default and
(ii) receipt of notice from Pledgee instructing Pledgor not to exercise any
such voting, approval, consent or other rights with respect to the
Collateral, provided, however, that Pledgor shall exercise any such right it
may have under the agreements comprising the Collateral with respect to the
business affairs of the Limited Liability Company as is reasonably necessary
to protect and preserve the Collateral.
c. Upon or at any time after the occurrence of an Event of
Default, Pledgee, at his option to be exercised in his sole discretion by
written notice to Pledgor, may exercise all rights and remedies granted under
this Agreement, including, without limitation, the right to require the
obligors under the Collateral to make all payments due under and to pay all
proceeds, whether cash proceeds or noncash proceeds, and products of the
Collateral to Pledgee. Upon the giving of any such notice, the security
constituted by this Agreement shall become immediately enforceable by
Pledgee, without any presentment, further demand, protest or other notice of
any kind, all of which are hereby expressly and irrevocably waived by
Pledgor. Pledgor hereby authorizes and directs each respective obligor under
the agreements constituting the Collateral, that upon receipt of written
notice from Pledgee of an Event of Default by Pledgor hereunder, to assign,
set over, transfer, distribute, pay and deliver any and all Collateral or
said payments, proceeds or products of the Collateral to Pledgee, at such
address as Pledgee may direct, at such time and in such manner as the
Collateral and such payments, proceeds and products of the Collateral would
otherwise be distributed, transferred, paid or delivered to Pledgor. The
respective obligors under the agreements constituting the Collateral shall be
entitled to conclusively rely on such notice and make all such assignments
and transfers of the Collateral and all such payments with respect to the
Collateral and pay all such proceeds and products of the Collateral to
Pledgee and shall have no liability to Pledgor for any loss or damage Pledgor
may incur by reason of said reliance.
5. No Assumption. Notwithstanding any of the foregoing, whether or
not an Event of Default shall have occurred, and whether or not Pledgee
elects to foreclose on his security interest in the Collateral as set forth
herein, neither the execution of this Agreement, receipt by Pledgee of any of
Pledgor's right, title and interest in and to the Collateral and the
payments, proceeds and products of the Collateral, now or hereafter due to
Pledgor from any obligor of the Collateral, nor Pledgee's foreclosure of his
security interest in the Collateral, shall in any way be deemed to obligate
Pledgee to assume any of Pledgor's obligations, duties or liabilities under
the Collateral or any agreements constituting the Collateral, as presently
existing or as hereafter amended, or under any and all other agreements now
existing or hereafter drafted or executed (collectively, the "Pledgor's
Liabilities"), unless Pledgee otherwise agrees to assume any or all of the
Pledgor's Liabilities in writing. In the event of foreclosure by Pledgee of
his security interest in the Collateral, Pledgor shall remain bound and
obligated to perform the Pledgor's Liabilities to the extent required under
the Operating Agreement and Pledgee shall not be deemed to have assumed any
of the Pledgor's Liabilities, except as provided in the preceding sentence.
In the event the entity or person acquiring the Collateral at a foreclosure
sale elects to assume the Pledgor's Liabilities, such assignee shall agree to
be bound by the terms and provisions of the applicable agreement.
42
6. Indemnification. Pledgor hereby agrees to indemnify, defend and
hold Pledgee, his successors and assigns harmless from and against any and
all damages, losses, claims, costs or expenses (including without limitation,
reasonable attorneys' fees) and any other liabilities whatsoever that Pledgee
or his successors or assigns may incur by reason of Pledgor's failure to
comply with the terms and conditions of this Agreement or by reason of any
unpermitted assignment of Pledgor's right, title and interest in and to any
or all of the Collateral.
7. Representations, Warranties and Covenants. In addition to the
representations made by Pledgor in the Operating Agreement, if any, Pledgor
makes the following representations and warranties, which shall be deemed to
be continuing representations and warranties, and Pledgor covenants and
agrees to provide written notice to Pledgee within ten (10) days after
Pledgor becomes aware that any of the following is no longer true and correct
and to perform diligently all acts reasonably necessary to maintain or
restore the truth and correctness, in all material respects, of the
following:
a. Pledgor acknowledges that the Operating Agreement and any
other agreements constituting the Collateral, currently are in full force and
effect and have not been amended or modified, except by Pledgor and Pledgee
in writing.
b. Pledgor has the full right and title to its interest in the
Collateral and has the full power, legal right and authority to pledge,
convey, transfer and assign such interest. None of the Collateral is subject
to any existing assignment, claim, lien, pledge, transfer or other security
interest of any character, or to any attachment, levy, garnishment or other
judicial process or to any claim for set-off, counterclaim, deduction or
discount. Pledgor shall not, without the prior written consent of Pledgee,
which consent may be granted or denied in Pledgee's sole discretion, further
convey, transfer, set over or pledge to any party any of its interests in the
Collateral. Pledgor agrees to (i) warrant and defend its title to the
Collateral and the security interest created by this Agreement against all
claims of all persons, and (ii) maintain and preserve the Collateral and such
security interests.
c. The pledge of the Collateral pursuant to this Agreement
creates a valid first priority security interest in the Collateral, securing
the performance of the Obligations, which security interest shall be
perfected upon the filing of the UCC-1 Financing Statements referred to in
Paragraph 2 of this Agreement.
d. Pledgor's Employer Identification number is: Applied For
. Pledgor's principal place of business is located at: 000 Xxxxxxxxxxx
Xxxxxx, Xxxxx 0000, Xxxxxx, Xxxxxxxx 00000.
e. Pledgor agrees that it shall not, without at least thirty (30)
days' prior written notification to Pledgee, move or otherwise change its
principal place of business.
f. To the best knowledge of Pledgor, neither the execution and
delivery of this Agreement by Pledgor nor the consummation of the
transactions herein contemplated nor the fulfillment of the terms hereof (i)
violate the terms of any agreement, indenture, mortgage, deed of trust,
43
equipment lease, instrument or other document to which Pledgor is a party, or
(ii) conflict with any law, order, rule or regulation applicable to Pledgor
or any court or any government, regulatory body or administrative agency or
other governmental body having jurisdiction over Pledgor or its properties,
or (iii) result in or require the creation or imposition of any lien (other
than the first priority lien of Pledgee in the Collateral contemplated
hereby).
g. No consent or approval which has not been obtained prior to
the date hereof of any other person or entity and no authorization, approval
or other action by, and no notice to or filing with any governmental body,
regulatory authority or securities exchange, was or is necessary as a
condition to the validity of the pledge hereunder of the Collateral and such
pledge is effective to vest in the Pledgee the rights of the Pledgee in the
Collateral as set forth herein.
h. Pledgor shall comply in all material respects with all
requirements of law applicable to the Collateral or any part thereof.
i. Pledgor shall pay and discharge all taxes, assessments and
governmental charges or levies against any Collateral prior to delinquency
thereof and shall keep all Collateral free of all unpaid charges whatsoever.
8. Event of Default. Each of the following shall constitute an Event
of Default hereunder:
a. A failure of Pledgor to make a Capital Contribution pursuant
to the Operating Agreement within thirty (30) days of receipt by Pledgor of
written demand from Pledgee, provided that the fact that such amount is due
and payable is not in dispute, or that any dispute has been finally
determined by a court having jurisdiction or through another means that is
mutually acceptable to the Pledgor and Pledgee; or
b. Any warranty, representation or statement of the Pledgor in
this Agreement proves to have been false in any material respect when made or
furnished; or
c. There occurs the issuance of a writ, order of attachment or
garnishment with respect to any of the Collateral and such writ, order of
attachment or garnishment is not dismissed and removed within thirty (30)
days thereafter.
d. A material breach or violation of any covenant or agreement
contained herein shall have occurred, which is not cured within thirty (30)
days after notice has been given to Pledgor by Pledgee.
Any Event of Default under this Agreement shall be an event of default
by Pledgor under the Operating Agreement.
9. Remedies.
a. Upon the occurrence of an Event of Default, Pledgee may, by
giving notice of such Event of Default, at his option, do any one or more of
the following:
(i) Take control of the Collateral, collect, and thereafter
44
exercise all rights and powers of Pledgor with respect to the
Collateral; and
(ii) Without notice to or demand upon Pledgor, make such
payments and do such acts as Pledgee may deem necessary to protect
his security interest in the Collateral, including, without
limitation, paying, purchasing, contesting or compromising any
encumbrance, charge or lien which is prior to or superior to the
security interest granted hereunder, and in exercising any such
powers or authority to pay all expenses incurred in connection
therewith; and
(iii) Require Pledgor to take all actions necessary to deliver
such Collateral to Pledgee, or an agent or representative
designated by Pledgee; and
(iv) Foreclose upon this Agreement as herein provided or in
any commercially reasonable manner permitted by law, and exercise
any and all of the rights and remedies conferred upon Pledgee by
the Operating Agreement, or in any other document executed by
Pledgor in connection with the Obligations secured hereby; and sell
or cause to be sold the Collateral, without affecting in any way
the rights or remedies to which Pledgee may be entitled under the
other such instruments; and
(v) Sell or otherwise dispose of the Collateral at public
sale, without having the Collateral at the place of sale, and upon
terms and in such manner as is commercially reasonable; Pledgee may
be a purchaser at any sale; and
(vi) Exercise any remedies of a secured party under the
Uniform Commercial Code of the State of Colorado or any other
applicable law; and
(vii) Exercise any remedies available to Pledgee under the
Operating Agreement; and
(viii) Notwithstanding anything to the contrary contained in
this Agreement, at any time after an Event of Default Pledgee may,
by delivering written notice to the Limited Liability Company and
to Pledgor, succeed, or designate its nominee or designee to
succeed, to all right, title and interest of Pledgor (including,
without limitation, the right, if any, to vote on or take any
action with respect to the matters of the Limited Liability
Company) as a Member of the Limited Liability Company in respect of
the Collateral. Pledgor hereby irrevocably authorizes and directs
the Limited Liability Company on receipt of any such notice (a) to
deem and treat Pledgee or such nominee or designee in all respects
as a Member (and not merely an assignee of a Member) of such
Limited Liability Company, entitled to exercise all the rights,
powers and privileges (including the right to vote on or take any
action with respect to Limited Liability Company matters pursuant
to the Operating Agreement, to receive all distributions, to be
credited with the capital account and to have all other rights,
powers and privileges appertaining to the Collateral to which
Pledgor would have been entitled had the Collateral not been
transferred to Pledgee or such nominee or designee), and (b) to
file amended Articles of Organization for such Limited Liability
45
Company, if required, admitting Pledgee or such nominee or designee
as a Member of the Limited Liability Company in place of Pledgor;
and
(ix) The rights granted to Pledgee under this Agreement are of
a special, unique, unusual and extraordinary character. The loss
of any of such rights cannot be reasonably or adequately
compensated by way of damages in any action at law, and any
material breach by Pledgor of any of Pledgor's covenants,
agreements, obligations, representations or warranties under this
Agreement will cause Pledgee irreparable injury and damage. In the
event of any such breach, Pledgee shall be entitled, as a matter of
right, to injunctive relief or other equitable relief in any court
of competent jurisdiction to prevent the violation or contravention
of any of the provisions of this Agreement or to compel compliance
with the terms of this Agreement by Pledgor. Pledgee is absolutely
and irrevocably authorized and empowered by Pledgor to demand
specific performance of each of the covenants, agreements,
representations and warranties of Pledgor in this Agreement.
Pledgor hereby irrevocably waives any defense based on the adequacy
of any remedy at law which might otherwise be asserted by Pledgor
as a bar to the remedy of specific performance in any action
brought by Pledgee against Pledgor to enforce any of the covenants
or agreements of Pledgor in this Agreement.
b. Unless the Collateral is perishable or threatens to decline
speedily in value or is of a type customarily sold on a recognized market,
Pledgee shall give Pledgor at least ten (10) days' prior written notice of
the time and place of any public sale of the Collateral subject to this
Agreement or other intended disposition thereof to be made. Such notice
shall be conclusively deemed to have been delivered to Pledgor at the address
set forth in subsection 7(d) of this Agreement, unless Pledgor shall notify
Pledgee in writing of any change of its principal place of business and
provide Pledgee with the address of its new place of business.
c. The proceeds of any sale under subsections 9(a)(iv) and (v)
above shall be applied as follows:
(i) To the repayment of all reasonable costs and expenses of
retaking, holding and preparing for the sale and the selling of the
Collateral (including actual reasonable legal expenses and
attorneys' fees) and the discharge of all assessments,
encumbrances, charges or liens, if any, on the Collateral prior to
the lien hereof (except any taxes, assessments, encumbrances,
charges or liens subject to which such sale shall have been made);
(ii) To the payment of the whole amount, if any, of the
Obligations, as and when the same become due; and
(iii) The aggregate surplus, if any, shall be paid to Pledgor
in a lump sum, without recourse to Pledgee, or as a court of
competent jurisdiction may direct.
d. Pledgee shall have the right to enforce one or more remedies
under this Agreement and under the Operating Agreement, successively or
concurrently, and such action shall not operate to estop or prevent Pledgee
from pursuing any further remedy which he may have, and any repossession or
retaking or sale of the Collateral pursuant to the terms hereof shall not
46
operate to release Pledgor until full payment of any deficiency has been made
in cash.
e. PLEDGOR ACKNOWLEDGES THAT PLEDGEE MAY BE UNABLE TO EFFECT A
PUBLIC SALE OF ALL OR ANY PART OF THE COLLATERAL AND MAY BE COMPELLED TO RESORT
TO ONE OR MORE PRIVATE SALES TO A RESTRICTED GROUP OF PURCHASERS WHO WILL BE
OBLIGATED TO AGREE, AMONG OTHER THINGS, TO ACQUIRE THE COLLATERAL FOR THEIR OWN
ACCOUNT, FOR INVESTMENT AND NOT WITH A VIEW TO THE DISTRIBUTION OR RESALE
THEREOF. PLEDGOR FURTHER ACKNOWLEDGES THAT ANY SUCH PRIVATE SALES MAY BE AT
PRICES AND ON TERMS LESS FAVORABLE THAN THOSE OF PUBLIC SALES, AND AGREES THAT
PROVIDED SUCH PRIVATE SALES ARE MADE IN A COMMERCIALLY REASONABLE MANNER,
PLEDGEE SHALL HAVE NO OBLIGATION TO DELAY SALE OF ANY COLLATERAL TO PERMIT THE
ISSUER THEREOF TO REGISTER IT FOR PUBLIC SALE UNDER THE SECURITIES ACT OF 1933.
PLEDGOR AGREES THAT PLEDGEE SHALL BE PERMITTED TO TAKE SUCH ACTIONS AS PLEDGEE
DEEMS REASONABLY NECESSARY IN DISPOSING OF THE COLLATERAL TO AVOID CONDUCTING A
PUBLIC DISTRIBUTION OF SECURITIES IN VIOLATION OF THE SECURITIES ACT OF 1933 OR
THE SECURITIES LAWS OF ANY STATE, AS NOW ENACTED OR AS THE SAME MAY IN THE
FUTURE BE AMENDED, PROVIDED THAT ANY SUCH ACTIONS SHALL BE COMMERCIALLY
REASONABLE. IN ADDITION, PLEDGOR AGREES TO EXECUTE, FROM TIME TO TIME, ANY
AMENDMENT TO THIS AGREEMENT OR OTHER DOCUMENT AS PLEDGEE MAY REASONABLY REQUIRE
TO EVIDENCE THE ACKNOWLEDGEMENTS AND CONSENTS OF PLEDGOR SET FORTH IN THIS
SECTION.
10. Attorneys Fees. Pledgor agrees to pay to Pledgee, without demand,
reasonable attorneys' fees and all reasonable costs and other reasonable
expenses which Pledgee expends or incurs in collecting any amounts payable by
Pledgor with respect to an Event of Default hereunder or in enforcing this
Agreement against Pledgor, whether or not suit is filed.
11. Further Documentation. Pledgor hereby agrees to execute, from time
to time, one or more financing statements and such other instruments as may
be required to perfect the security interest created hereby, including any
continuation or amendments of such financing statements, and pay the cost of
filing or recording the same in the public records specified by Pledgee.
12. Waiver and Estoppel. Pledgor represents and acknowledges that it
knowingly waives each and every one of the following rights, and agrees that
it will be estopped from asserting any argument to the contrary: (a) any
promptness in making any claim or demand hereunder; (b) any defense that may
arise by reason of the incapacity or lack of authority of Pledgor; (c) any
defense based upon an election of remedies by Pledgee which destroys or
otherwise impairs any or all of the Collateral; (d) the right of Pledgor to
proceed against Pledgee or any other person, for reimbursement; and (e) all
duty or obligation of the Pledgee to perfect, protect, retain or enforce any
security for the payment of amounts payable by Pledgor hereunder.
TO THE FULLEST EXTENT PERMITTED BY LAW, EACH PARTY TO THIS AGREEMENT SEVERALLY,
KNOWINGLY, IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY AND ALL RIGHTS TO TRIAL BY
JURY IN ANY ACTION, SUIT OR COUNTERCLAIM BROUGHT BY ANY PARTY TO THIS AGREEMENT
ARISING IN CONNECTION WITH, OUT OF OR OTHERWISE RELATING TO THIS AGREEMENT.
No delay or failure on the part of Pledgee in the exercise of any right
or remedy against Pledgor or any other party against whom Pledgee may have
any rights, shall operate as a waiver of any agreement or obligation
47
contained herein, and no single or partial exercise by Pledgee of any rights
or remedies hereunder shall preclude other or further exercise thereof or
other exercise of any other right or remedy whether contained in this
Agreement or in any of the other documents regarding the Obligations,
including without limitation the Operating Agreement. No waiver of the
rights of Pledgee hereunder or in connection herewith and no release of
Pledgor shall be effective unless in writing executed by Pledgee. No actions
of Pledgee permitted under this Agreement shall in any way impair or affect
the enforceability of any agreement or obligation contained herein.
13. Independent Obligations. The obligations of Pledgor are
independent of the obligations of any other party which may be initially or
otherwise responsible for performance or payment of the Obligations, and a
separate action or actions for payment, damages or performance may be brought
and prosecuted by Pledgee against Pledgor, individually, for the full amount
of the Obligations then due and payable, whether or not an action is brought
against any other party, whether or not Pledgee is involved in any
proceedings and whether or not Pledgee or Pledgor or other person is joined
in any action or proceedings.
14. Lawful Acts of Pledgee. No lawful act of commission or omission of
any kind or at any time upon the part of Pledgee shall in any way affect or
impair the rights of Pledgee to enforce any right, power or benefit under
this Agreement.
15. Power of Attorney. Pledgor hereby appoints Pledgee as its
attorney-in-fact to execute and file, effective upon the occurrence of an
Event of Default, on its behalf any financing statements, continuation
statements or other documentation required to perfect or continue the
security interest created hereby. This power, being coupled with an
interest, shall be irrevocable until all amounts secured hereby have been
paid, satisfied and discharged in full. Pledgor acknowledges and agrees that
the exercise by Pledgee of his rights under this Section 15 will not be
deemed a satisfaction of the amounts owed Pledgee unless Pledgee so elects in
writing.
16. GOVERNING LAW. THE PARTIES HERETO AGREE THAT THIS AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF COLORADO
WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW. SUCH PARTIES FURTHER AGREE
THAT IN THE EVENT OF DEFAULT, THIS AGREEMENT MAY BE ENFORCED IN THE DISTRICT
COURT IN AND FOR XXX XXXX XXX XXXXXX XX XXXXXX, XXXXX OF COLORADO AND THEY DO
HEREBY SUBMIT TO THE JURISDICTION OF SUCH COURT REGARDLESS OF THEIR RESIDENCE OR
WHERE THIS AGREEMENT MAY BE EXECUTED.
17. Successors and Assigns. All agreements, covenants, conditions and
provisions of this Agreement shall inure to the benefit of and be binding
upon the respective heirs, personal representatives, successors and assigns
of the parties hereto.
18. Notices. Whenever any party hereto shall desire to, or be required
to, give or serve any notice, demand, request or other communication with
respect to this Agreement, each such notice, demand, request or communication
48
shall be in writing and shall be effective only if the same is delivered by
personal service (including, without limitation, courier or express service)
or mailed certified or registered mail, postage prepaid, return receipt
requested, or sent by telegram to the parties at the addresses shown
throughout this Agreement or such other addresses which the parties may
provide to one another in accordance herewith. If notice is sent to Pledgor,
a copy of such notice shall also be given to Xxxxx X. Xxxxx, Esq., Xxxxxxxxxx
Hyatt Xxxxxx & Xxxxxxxxxx, P.C., 000 00xx Xxxxxx, Xxxxx 0000, Xxxxxx,
Xxxxxxxx 00000. If notice is sent to Pledgee, a copy of such notice shall
also be given to Xxxx X. Xxxxxxx, Esq., Haligman & Lottner, PC, 000 00xx
Xxxxxx, Xxxxx 0000, Xxxxxx, Xxxxxxxx 00000. Notices delivered personally
will be effective upon delivery to an authorized representative of the party
at the designated address; notices sent by mail in accordance with the above
paragraph will be effective upon execution of the Return Receipt Requested.
19. Consent of Pledgor. Pledgor consents to the exercise by Pledgee of
any rights of Pledgor in accordance with the provisions of this Agreement.
20. Severability. Every provision of this Agreement is intended to be
severable. In the event any term or provision hereof is declared by a court
of competent jurisdiction to be illegal or invalid for any reason whatsoever,
such illegality or invalidity shall not affect the legality or validity of
the balance of the terms and provisions hereof, which terms and provisions
shall remain binding and enforceable.
21. Amendment. This Agreement may be modified or rescinded only by a
writing expressly relating to this Agreement and signed by all of the
parties.
22. Limitation of Liability. No officer, director or shareholder of
Pledgor shall be bound by or have any personal liability hereunder or under
any documents, agreements, understandings or arrangements relating to this
transaction. The parties to this Agreement shall look solely to the assets
of Pledgor for satisfaction of any liability of Pledgor in respect of this
Agreement and all documents, agreements, understandings and arrangements
relating to this transaction and will not seek recourse or commence action
against any of the directors, officers or shareholders of Pledgor or any of
their personal assets for the performance or payment of any obligation
hereunder or thereunder. The foregoing shall also apply to all and any
future documents, agreements, understandings, arrangements and transactions
between the parties hereto with respect to the Obligations, the Collateral or
this Agreement.
23. Termination. This Agreement shall terminate, and shall be of no
further force or effect, upon the earlier to occur of the following: (i)
full payment and performance of the Obligations of the Pledgor, (ii)
acquisition by Pledgor or an affiliate of Pledgor of 100% ownership interest
in the Limited Liability Company, or (iii) upon the mutual consent of Pledgor
and Pledgee.
[SIGNATURE PAGE FOLLOWS]
49
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
PLEDGOR: WELLSFORD PARK HIGHLANDS CORP., a Colorado
corporation
By:______________________________________
Name:_________________________________
Title:________________________________
PLEDGEE: _________________________________________
Xx Xxxx
STATE OF ____________ )
) ss.
COUNTY OF ___________ )
The foregoing instrument was acknowledged before me this ____ day of
_______________, 199__, by _________________________ as _______________ of
Wellsford Park Highlands Corp., a Colorado corporation.
WITNESS my hand and official seal.
My commission expires: ___________________________________.
Address:
________________________________
(SEAL) Notary Public
STATE OF COLORADO )
) ss.
COUNTY OF ___________ )
The foregoing instrument was acknowledged before me this __ day of
__________, 199__, by Xx Xxxx.
WITNESS my hand and official seal.
My commission expires: _____________________________________.
Address:
________________________________
(SEAL) Notary Public
50
SCHEDULE A TO
EXHIBIT H-2
CONSENT TO SECURITY INTEREST AND AGREEMENT
OF THE MEMBERS
OF PARK AT HIGHLANDS LLC,
a Colorado Limited Liability Company
The undersigned, being all the members of PARK AT HIGHLANDS LLC, a
Colorado limited liability company (the "Limited Liability Company") hereby
represent and certify to Xx Xxxx, an individual having an address at 0000
Xxxxx Xxxxxx Xxxxxx, Xxxxx 000, Xxxxxx, Xxxxxxxx 00000 (the "Secured Party")
as follows:
1. The Limited Liability Company has received notice from the Secured
Party that the Secured Party has a security interest in the following
collateral (the "Collateral") registered to Wellsford Park Highlands Corp., a
Colorado corporation (the "Debtor"):
(i) All of the right, title and interest of the Debtor in the
Limited Liability Company, whether now owned or hereafter acquired,
including, without limitation, the Debtor's Interest (as defined in
the Operating Agreement) in the Limited Liability Company and its
right to receive payments and distributions from the Limited
Liability Company and allocations under or in connection with the
Operating Agreement, as such Operating Agreement may be modified or
extended from time to time with the written consent of the Secured
Party; and
(ii) All proceeds, whether cash proceeds or noncash proceeds,
and products of any and all of the foregoing.
2. Other than the notice from the Secured Party referred to above, the
Limited Liability Company has not received any notice from any entity or
person claiming an adverse claim against, lien on or security interest in the
Collateral.
3. The security interest of the Secured Party referred to above was
duly registered in the books and records of the Limited Liability Company
effective April 27, 1995.
4. Interests in the Limited Liability Company are not represented in
any certificate, instrument or document, and such Interests may be assigned,
transferred or pledged without the party receiving such assignment, transfer
or pledge taking physical possession of any certificate, instrument or
document.
5. The Members hereby consent to the execution and delivery of that
certain the Pledge and Security Agreement by the Debtor and agree hereby to
be bound by Section 4 thereof to assign, set over, transfer, distribute, pay
and deliver the Collateral and any and all payments, proceeds or products due
to Debtor under the Collateral to the Secured Party.
This agreement and all documents, agreements, understandings and
arrangements relating to this transaction have been executed by the
undersigned on behalf of Wellsford Park Highlands Corp., a Colorado
51
corporation ("WPHC") in his/her capacity as an officer or director of WPHC,
and not individually, and neither the directors, officers or shareholders of
WPHC shall be bound by or have any personal liability hereunder or
thereunder. The parties to this agreement shall look solely to the assets of
WPHC for satisfaction of any liability of WPHC in respect of this agreement
and all documents, agreements, understandings and arrangements relating to
this transaction and will not seek recourse or commence any action against
any of the directors, officers or shareholders of WPHC or any of their
personal assets for the performance or payment of any obligation hereunder or
thereunder. The foregoing shall also apply to all and any future documents,
agreements, understandings, arrangements and transactions between the parties
hereto with respect to the Collateral or this Agreement.
EXECUTED as of the date set forth above.
MEMBERS: WELLSFORD PARK HIGHLANDS CORP., a Colorado
corporation
By: __________________________________________
Name:______________________________________
Title: ____________________________________
______________________________________________
XX XXXX, an individual
AGREED TO AND CONCURRED:
SOLE MANAGER
____________________________
Xx Xxxx
52
EXHIBIT N
DESCRIPTION OF PLANS/SPECIFICATIONS
53
EXHIBIT O
FINAL PROJECT BUDGET
54
EXHIBIT U
SUBSTITUTION AGREEMENT
THIS SUBSTITUTION AGREEMENT (this "Agreement") is made and entered into
as of the ____ day of December 1995, by and among Xx Xxxx, an individual
("Xxxx"), Wellsford Park Highlands Corp., a Colorado corporation ("WPHC"),
and The Xxxx Company, a Colorado corporation (the "Company").
RECITALS
A. WPHC is a Member of Park at Highlands LLC, a Colorado limited
liability company (the "LLC"), which LLC is governed by its Operating
Agreement dated as of April 27, 1995 (the "Operating Agreement") by and
between WPHC and Xxxx.
X. Xxxx is also a Member, as well as the Manager, in the LLC and is
the principal officer and shareholder of the Company.
C. In order to facilitate WPHC's appointment of the Company as a
substitute Member and the Manager of the LLC upon the death or disability of
Xxxx in accordance with Section 12.13 of the Operating Agreement and to bind
the Company to the agreements set forth in said Section 12.13, the parties
hereto now desire to enter into this Agreement.
AGREEMENT
NOW, THEREFORE, in consideration of the execution of the Operating
Agreement and of the recitals, covenants and agreements set forth herein, and
for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto agree as follows:
a. Request for Substitute Manager. In the event that Xxxx should die
or WPHC shall elect to remove Xxxx as manager due to disability (such an
event is hereinafter referred to as a "Triggering Event"), WPHC shall have
the right, at its sole option, to request in writing that: (a) the Company
shall acquire from Xxxx (or from his estate, if Xxxx is deceased) the entire
interest of Xxxx in the LLC; (b) the Company shall be admitted as a Member of
the LLC and substituted for Xxxx as Member and Manager under the Operating
Agreement; and (c) the Company shall assume, in writing, all of the
obligations of the Manager and of a Member under the Operating Agreement, as
the same may be amended from time to time. The foregoing actions under items
(a), (b) and (c) shall be effective upon the next business day after WPHC
delivers its written request to the Company and Xxxx. Notwithstanding
anything to the contrary contained herein or in the Operating Agreement, if
the Company is substituted for Xxxx as a Member and Manager, then Xxxx (or
his estate if Xxxx is deceased) shall remain liable for the performance of
the obligations of the Manager under the Operating Agreement, in accordance
with Section 12.12.3.2 thereof.
b. Failure to Request a Substitute Manager. If WPHC fails to exercise
its option under Section 12.13 of the Operating Agreement and this Agreement
to cause the Company to be substituted for Xxxx as the Manager within ninety
(90) days after the date of a Triggering Event, then such right shall
automatically terminate and Xxxx (and his estate) shall be released from all
55
responsibilities and obligations as Manager under the Operating Agreement
arising after the effective date of Xxxx'x withdrawal or Removal (as said
term is defined in the Operating Agreement,) from the LLC in connection with
the Triggering Event.
c. Attorneys Fees. In the event any litigation or other legal
proceedings or alternative dispute resolution proceedings are brought for the
enforcement of or arise out of this Agreement, the prevailing party shall be
entitled to recover from the non-prevailing party all reasonable attorneys'
fees and costs and all other reasonable expenses, in addition to any other
relief or damages obtained.
d. Further Documentation. The parties hereby agree to execute, from
time to time, such other documents as may be reasonably necessary to
effectuate the intent of this Agreement and Section 12.13 of the Operating
Agreement.
e. GOVERNING LAW. THE PARTIES HERETO AGREE THAT THIS AGREEMENT SHALL
BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
COLORADO WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW. SUCH PARTIES FURTHER
AGREE THAT THIS AGREEMENT MAY BE ENFORCED IN THE DISTRICT COURT IN AND FOR XXX
XXXX XXX XXXXXX XX XXXXXX, XXXXX OF COLORADO AND THEY DO HEREBY SUBMIT TO THE
JURISDICTION OF SUCH COURT REGARDLESS OF THEIR RESIDENCE OR WHERE THIS AGREEMENT
MAY BE EXECUTED.
f. Successors and Assigns. All agreements, covenants, conditions and
provisions of this Agreement shall inure to the benefit of and be binding
upon the respective heirs, personal representatives, successors and assigns
of the parties hereto.
g. Notices. Whenever any party hereto shall desire to, or be required
to, give or serve any notice, demand, request or other communication with
respect to this Agreement, each such notice, demand, request or communication
shall be in writing and shall be effective only if the same is delivered by
personal service (including, without limitation, courier or express service)
or mailed certified or registered mail, postage prepaid, return receipt
requested, or sent by telegram to the parties at the addresses shown in the
Operating Agreement or such other addresses which the parties may provide to
one another in accordance therewith. The notice address for the Company
shall be the same as the notice address for Xxxx. If notice is sent to WPHC,
a copy of such notice shall also be given to Xxxxx X. Xxxxx, Esq., Xxxxxxxxxx
Xxxxx Xxxxxx & Xxxxxxxxxx, P.C., 000 00xx Xxxxxx, Xxxxx 0000, Xxxxxx,
Xxxxxxxx 00000. If notice is sent to Xxxx or the Company, a copy of such
notice shall also be given to Xxxx Xxxxxxx, Esq., Haligman and Lottner, First
Interstate Tower North, 000 Xxxxxxxxxxx Xxxxxx, Xxxxx 0000, Xxxxxx, Xxxxxxxx
00000-0000. Notices delivered personally will be effective upon delivery to
an authorized representative of the party at the designated address; notices
sent by mail in accordance with the above paragraph will be effective upon
execution of the Return Receipt Requested.
h. Severability. Every provision of this Agreement is intended to be
severable. In the event any term or provision hereof is declared by a court
of competent jurisdiction to be illegal or invalid for any reason whatsoever,
such illegality or invalidity shall not affect the legality or validity of
the balance of the terms and provisions hereof, which terms and provisions
shall remain binding and enforceable.
i. Capitalized Terms. All capitalized terms not otherwise defined
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herein shall have the meanings set forth in the Operating Agreement.
j. Amendment. This Agreement may be modified or rescinded only by a
writing expressly relating to this Agreement and signed by all of the
parties.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
________________________________________
XX XXXX, individually
WELLSFORD PARK HIGHLANDS CORP., a
Colorado corporation
By:_____________________________________
Its:____________________________________
THE XXXX COMPANY, a Colorado corporation
By:_____________________________________
Its:____________________________________
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