EXHIBIT 10.2
PLEDGE AGREEMENT
THIS PLEDGE AGREEMENT (this "Agreement"), dated as of July 16, 1998,
is entered into by Xxxxxxx-Xxxxxx Properties, Ltd., a Delaware corporation
("Pledgor"), in favor of Colony K-W, LLC, a Delaware limited liability company
("together with its successors and assigns, "Lender").
RECITALS
WHEREAS, Pledgor, Xxxxxxx-Xxxxxx International and K-W Properties, as
guarantors, Xxxxxxx-Xxxxxx, Inc., as borrower, and Lender are parties to that
certain Bridge Loan Agreement, dated as of the date hereof (as the same shall be
amended, restated, supplemented or otherwise modified from time to time in
accordance with its terms, the "Bridge Loan Agreement");
WHEREAS, it is a condition precedent to the making of loans under the
Bridge Loan Agreement that the Pledgor shall have entered into this Agreement
and granted the pledges provided herein;
WHEREAS, Pledgor wishes to grant pledges and security interests in
favor of Lender and will derive substantial benefit from the loan made pursuant
to the Bridge Loan Agreement; and
WHEREAS, Pledgor is the legal and beneficial owner of the shares of
capital stock listed opposite the name of Pledgor in Schedule I hereto
(collectively, the "Pledged Shares"), which shares constitute all of the issued
and outstanding shares of capital stock or similar equity securities of Xxxxxxx
Properties Ltd., an Illinois corporation, to be renamed Xxxxxxx-Xxxxxx
Properties, Ltd. ("Issuer").
NOW, THEREFORE, in consideration of the premises set forth herein and
in order to induce Lender to make Loans under the Bridge Loan Agreement, Pledgor
hereby agrees with Lender as follows:
SECTION 1. Certain Defined Terms. Capitalized terms used herein
without definition herein shall have the meanings provided in the Bridge Loan
Agreement. The following terms as used herein shall have the following meanings:
"Agreement" means this Pledge Agreement, as amended, restated or
supplemented or otherwise modified from time to time in accordance with its
terms.
"Bridge Loan Agreement" shall have the meaning set forth in the first
WHEREAS clause of this Agreement.
"Indemnitee" shall have the meaning set forth in Section 16.
"Issuer" means Xxxxxxx-Xxxxxx Properties, Ltd., an Illinois
corporation, formerly known as Xxxxxxx Properties Ltd.
"Lender" means Colony K-W, LLC and its successors and assigns,
pursuant to the terms of the Bridge Loan Agreement.
"Pledge Amendment" shall have the meaning set forth in Section 7.
"Pledged Collateral" means:
(a) the Pledged Shares and the certificates representing the Pledged
Shares and any interest of Pledgor in the entries on the books of any financial
intermediary pertaining to the Pledged Shares, and, subject to Section 8, all
dividends, cash, warrants, rights, instruments and other property or proceeds
from time to time received, receivable or otherwise distributed in respect of or
in exchange for any or all of the Pledged Shares;
(b) all additional shares of, and all securities convertible into and
warrants, options and other rights to purchase, stock (whether certificated or
uncertificated and now existing or hereafter created) of any issuer of the
Pledged Shares from time to time acquired by Pledgor in any manner (which shares
shall be deemed to be part of the Pledged Shares), the certificates or other
instruments representing such additional shares, securities, warrants, options
or other rights and any interest of Pledgor in the entries on the books of any
financial intermediary pertaining to such additional shares, and, subject to
Section 8, all dividends, cash, warrants, rights, instruments and other property
or proceeds from time to time received, receivable or otherwise distributed in
respect of or in exchange for any or all of such additional shares, securities,
warrants, options or other rights;
(c) to the extent not covered above, all Proceeds of the Pledged
Collateral described in clauses (a) and (b).
"Pledged Shares" shall have the meaning set forth in the fourth
WHEREAS clause of this Agreement.
"Pledgor" shall mean Xxxxxxx-Xxxxxx, Inc., a Delaware corporation.
"Proceeds" shall have the meaning assigned that term under the Uniform
Commercial Code (the "Code") as in effect in any relevant jurisdiction or under
relevant law and, in any event, shall include, but not be limited to, any and
all (i) proceeds of any indemnity or guaranty payable to Pledgor from time to
time with respect to any of the Pledged Collateral and (ii) any other amounts
from time to time paid or payable under or in connection with any of the Pledged
Collateral or otherwise receivable or received when the Pledged Collateral is or
proceeds thereof are sold, collected, exchanged or otherwise disposed of,
whether such disposition is voluntary or involuntary.
"Secured Obligations" shall have the meaning set forth in Section 3.
"Securities Act" means the Securities Act of 1933, as from time to
time amended.
"Underlying Debt" shall have the meaning set forth in Section 3.
SECTION 2. Pledge of Security. Pledgor hereby pledges to Lender and
grants to Lender a first priority security interest in the Pledged Collateral.
SECTION 3. Security for Obligations. This Agreement secures, and the
Pledged Collateral is collateral security for, (i) the prompt payment and
performance in full when due, whether at stated maturity, by acceleration or
otherwise (including the payment of amounts that would become due but for the
operation of the automatic stay under Section 362(a) of the Bankruptcy Code and
the operation of Sections 502(b) and 506(b) of the Bankruptcy Code or any
successor provision thereto, and all interest accruing on the Obligations after
the filing of a petition by or against the Pledgor or any of its Subsidiaries
under the Bankruptcy Code, in accordance with and at the rate (including the
Default Rate) specified in the Bridge Loan Agreement whether or not the claim
for such interest is allowed as a claim after such filing in any proceeding
under the Bankruptcy Code), of all obligations of Pledgor under the Loan
Documents, whether now existing or hereafter arising, voluntary or involuntary,
whether or not jointly owed with others, direct or indirect, absolute or
contingent, liquidated or unliquidated, and whether or not from time to time
decreased or extinguished and later increased, created or incurred and all or
any portion of such obligations that are paid to the extent all or any part of
such payment is avoided or recovered directly or indirectly from Lender as a
preference, fraudulent transfer or otherwise (all such obligations being the
"Underlying Debt") and (ii) all obligations or liabilities of every nature of
Pledgor now or hereafter existing under this Agreement (all such obligations of
Pledgor, together with the Underlying Debt, being the "Secured Obligations").
SECTION 4. Delivery of Pledged Collateral. All certificates or
instruments representing or evidencing the Pledged Collateral shall be delivered
to and held by or on behalf of Lender pursuant hereto and shall be in suitable
form for transfer by delivery, or, as applicable, shall be accompanied by
Pledgor's endorsement, where necessary, or duly executed instruments of transfer
or assignment in blank, all in form and substance satisfactory to Lender. If an
Event of Default shall have occurred and be continuing, Lender shall have the
right, at any time in its discretion and without notice to Pledgor, to transfer
to or to register in the name of Lender or any of its nominees any or all of the
Pledged Collateral, subject only to the revocable rights specified in Section
8(a) hereof. In addition, if an Event of Default shall have occurred and be
continuing, Lender shall have the right at any time to exchange certificates or
instruments representing or evidencing Pledged Collateral for certificates or
instruments of smaller or larger denominations.
SECTION 5. Representations and Warranties. Pledgor represents and
warrants as follows:
(a) Pledged Collateral. All of the Pledged Shares pledged by Pledgor
have been duly authorized and validly issued and are fully paid and
nonassessable. The Pledged Shares constitute all of the issued and outstanding
shares of the Issuer and there are no outstanding options, warrants, rights to
subscribe, stock purchase rights or other agreements outstanding with respect
to, or property that is now or hereafter convertible into, or that requires the
issuance or sale of, any Pledged Shares.
(b) Ownership of Pledged Collateral. Pledgor is the sole legal, record
and beneficial owner of the Pledged Collateral pledged by Pledgor free and clear
of any Lien except for the security interest created by this Agreement.
(c) Consents. No consent of any other party (including, without
limitation, stockholders or creditors of Pledgor or any Person under any
contractual obligation of Pledgor) and no consent, authorization, approval or
other action by, and no notice to or filing with, any governmental authority or
regulatory body is required either (i) for the pledge by Pledgor of the Pledged
Collateral pursuant to this Agreement and the grant by Pledgor of the security
interest granted hereby or for the execution, delivery or performance of this
Agreement by Pledgor or (ii) for the exercise by Lender of the voting or other
rights provided for in this Agreement or the remedies in respect of the Pledged
Collateral pursuant to this Agreement (except (x) those which have been obtained
or made and (y) as may be required in connection with a disposition of Pledged
Collateral by laws affecting the offering and sale of securities generally or
the disposition of collateral generally).
(d) Neither the execution and delivery of this Agreement by the
Pledgor nor the consummation of the transactions herein contemplated nor the
fulfillment of the terms hereof (i) violate the Pledgor's or the Issuer's,
charter or bylaws, (ii) violate the terms of any agreement, indenture, mortgage,
deed of trust, equipment lease, instrument or other document to which the
Pledgor or the Issuer, is a party, or by which any of them may be bound or to
which any of their properties or assets may be subject, which violation or
conflict would have a material adverse effect on the financial condition,
business, assets or liabilities of the Pledgor and the Issuer taken as a whole,
or on the value of the Pledged Collateral or a material adverse effect on the
security interests hereunder, or (iii) conflict with any law, order, rule or
regulation applicable to the Pledgor or the Issuer, of any court or any
government, regulatory body or administrative agency or other governmental body
having jurisdiction over the Pledgor or the Issuer or its or their properties,
or (iv) result in or require the creation or imposition of any Lien (other than
the Lien contemplated hereby in favor of Lender), upon or with respect to any of
the property now owned or hereafter acquired by the Pledgor or the Issuer, which
violation or conflict would have a material adverse effect on the financial
condition, business, assets or liabilities of the Pledgor and the Issuer taken
as a whole, or on the value of the Pledged Collateral or a material adverse
effect on the security interests hereunder.
(e) Perfection. The pledge and delivery to Lender of the Pledged
Collateral pursuant to this Agreement creates a valid and perfected first
priority security interest of Lender in the Pledged Collateral of Pledgor,
securing the payment and performance of the Secured Obligations, subject to no
Liens other than Permitted Liens, and all actions necessary or desirable to
perfect and protect such security interest have been duly taken.
(f) Regulations T, U and X. The pledge of the Pledged Collateral
pursuant to this Agreement does not violate Regulations T, U or X of the Board
of Governors of the Federal Reserve System.
SECTION 6. Certain Covenants. Pledgor hereby covenants that, until the
Secured Obligations have been indefeasibly paid in full and the Bridge Loan
Agreement has been terminated, Pledgor will:
(a) not, (i) sell, assign (by operation of law or otherwise) or
otherwise dispose of, or grant any option with respect to, any of the Pledged
Collateral pledged hereunder by Pledgor, (ii) create or permit to exist any Lien
upon or with respect to any of the Pledged Collateral, except for the security
interest under this Agreement or (iii) permit the Issuer to merge or consolidate
with any Person;
(b) (i) cause the Issuer not to issue any stock or other securities or
membership interests in addition to or in substitution for the Pledged Shares
issued by the Issuer, except to Pledgor, (ii) pledge hereunder, immediately upon
its acquisition (directly or indirectly) thereof, any and all additional shares
of stock, membership interests or other securities of each issuer of Pledged
Shares, and (iii) pledge hereunder, immediately upon its acquisition (directly
or indirectly) thereof, any and all shares of stock or membership interests of
any Person which, after the date of this Agreement, becomes, as a result of any
occurrence, a direct Subsidiary of Pledgor;
(c) promptly deliver to Lender all written notices received by it with
respect to the Pledged Collateral; and
(d) cause the Issuer to maintain its existence as an Illinois
corporation.
SECTION 7. Further Assurances; Pledge Amendments.
(a) Pledgor agrees that at any time and from time to time, at the
expense of Pledgor, Pledgor shall promptly execute and deliver all further
instruments and documents, and take all further actions, that may be necessary
or appropriate, or that Lender may reasonably request, in order to perfect and
protect any security interest granted or purported to be granted hereby or to
enable Lender to exercise and enforce its rights and remedies hereunder with
respect to any Pledged Collateral.
(b) Pledgor further agrees that it will, upon obtaining any additional
shares of stock, membership interests or other securities required to be pledged
hereunder, promptly (and in any event within ten days) deliver to Lender a
Pledge Amendment, duly executed by Pledgor, in substantially the form of
Schedule II hereto (a "Pledge Amendment"), in respect of the additional shares
of stock or membership interests to be pledged pursuant to this Agreement.
Pledgor hereby authorizes Lender to attach each Pledge Amendment to this
Agreement and agrees that all Pledged Shares listed on any Pledge Amendment
delivered to Lender shall for all purposes hereunder be considered Pledged
Collateral.
SECTION 8. Voting Rights; Dividends; Etc.
(a) So long as no Event of Default (as defined below) shall have
occurred and be continuing:
(i) Pledgor shall be entitled to exercise any and all voting and
other consensual rights pertaining to the Pledged Collateral or any part
thereof for any purpose not in violation of the terms of any of the Loan
Documents. It is understood, however, that neither (A) the voting by
Pledgor of any Pledged Shares for or Pledgor's consent to the election of
directors at a regularly scheduled annual or other meeting of stockholders
or with respect to incidental matters at any such meeting nor (B) Pledgor's
consent to or approval of any action otherwise permitted under each of the
Loan Documents shall be deemed inconsistent with the terms of any of the
Loan Documents within the meaning of this Section 8(a)(i), and no notice of
any such voting or consent need be given to Lender.
(ii) to the extent not prohibited under the Bridge Loan
Agreement, Pledgor shall be entitled to receive and retain, and to utilize
free and clear of the lien of this Agreement, any and all dividends and
other distributions paid in respect of the Pledged Collateral; provided,
however, that any and all dividends, interest and other distributions paid
or payable in additional equity securities, or warrants, options or similar
rights to acquire additional equity securities shall be, and shall
forthwith be delivered to Lender to hold as, Pledged Collateral and shall,
if received by Pledgor, be received in trust for the benefit of Lender, be
segregated from the other property or funds of Pledgor and be forthwith
delivered to Lender as Pledged Collateral in the same form as so received
(with all necessary endorsements).
(iii) Lender shall promptly execute and deliver (or cause to be
executed and delivered) to Pledgor all such proxies, dividend payment
orders and other instruments as Pledgor may from time to time reasonably
request for the purpose of enabling Pledgor to exercise the voting and
other consensual rights which it is entitled to exercise pursuant to
paragraph (i) above and to receive the dividends, principal or interest
payments which it is authorized to receive and retain pursuant to paragraph
(ii) above.
(b) Upon the occurrence and during the continuance of an Event of
Default:
(i) Upon written notice from Lender to Pledgor, all rights of
Pledgor to exercise the voting and other consensual rights which it would
otherwise be entitled to exercise pursuant to Section 8(a)(i) shall cease,
and all such rights shall thereupon become vested in Lender who shall
thereupon have the right to exercise such voting and other consensual
rights.
(ii) All rights of Pledgor to receive the dividends, interest and
other payments which it would otherwise be authorized to receive and retain
pursuant to Section 8(a)(ii) shall cease, and all such rights shall
thereupon become vested in Lender who shall thereupon have the right to
receive and hold as Pledged Collateral such dividends, interest and other
payments which shall, upon written notice from Lender, be paid to Lender.
(iii) All dividends, interest and other payments which are
received by Pledgor contrary to the provisions of paragraph (ii) of this
Section 8(b) shall be received in trust for the benefit of Lender, shall be
segregated from other funds of Pledgor and shall forthwith be paid over to
Lender as Pledged Collateral in the same form as so received (with any
necessary endorsements).
(c) In order to permit Lender to exercise the voting and other
consensual rights which it may be entitled to exercise pursuant to Section
8(b)(i) hereof and to receive all dividends and other distributions which it may
be entitled to receive under Section 8(a)(ii) hereof or Section 8(b)(ii) hereof,
Pledgor shall promptly execute and deliver (or cause to be executed and
delivered) to Lender all such proxies, dividend payment orders and other
instruments as Lender may from time to time reasonably request.
SECTION 9. Lender Appointed Attorney-in-Fact. Pledgor hereby
irrevocably appoints Lender as Pledgor's attorney-in-fact, with full authority
in the place and stead of Pledgor and in the name of Pledgor or otherwise, from
time to time, during the continuation of an Event of Default, in Lender's
reasonable discretion to take any action and to execute any instrument,
including but not limited to financing and continuation statements, which Lender
may deem necessary or advisable, subject to the terms and conditions of this
Agreement, to accomplish the purposes of this Agreement, including, without
limitation, (a) to receive, endorse and collect all instruments made payable to
Pledgor representing any dividend, principal or interest payment or other
distribution in respect of the Pledged Collateral or any part thereof and to
give full discharge for the same, and (b) to ask, demand, collect, xxx for,
recover, compound, receive and give acquittance and receipts for moneys due and
to become due under or in respect of any of the Pledged Collateral, and to file
any claims or take any action or institute any proceedings which Lender may deem
necessary or desirable for the collection of any of the Pledged Collateral or to
enforce the rights of Lender with respect to any of the Pledged Collateral.
SECTION 10. Lender May Perform. If Pledgor fails to perform any
agreement contained herein, then, during an Event of Default, Lender may itself
perform, or cause performance of, such agreement, and the expenses of Lender
incurred in connection therewith shall be payable by Pledgor under Section 16(b)
hereof.
SECTION 11. Standard of Care. The powers conferred on Lender hereunder
are solely to protect its interest in the Pledged Collateral and shall not
impose on it any duty to exercise such powers. Lender shall be deemed to have
exercised reasonable care in the custody and preservation of the Pledged
Collateral in its possession if the Pledged Collateral is accorded treatment
substantially equivalent to that which Lender accords its own property
consisting of negotiable securities, it being understood that Lender shall have
no responsibility for (a) ascertaining or taking action with respect to calls,
conversions, exchanges, maturities, tenders or other matters relating to any
Pledged Collateral, whether or not Lender has or is deemed to have knowledge of
such matters, (b) taking any necessary steps (other than steps taken in
accordance with the standard of care set forth above to maintain possession of
the Pledged Collateral) to preserve rights against any parties with respect to
any Pledged Collateral, (c) taking any necessary steps to collect or realize
upon the Secured Obligations or any guarantee therefor, or any part thereof, or
any of the Pledged Collateral or (d) initiating any action to protect the
Pledged Collateral against the possibility of a decline in market value.
SECTION 12. Events of Default. The occurrence of any "Event of
Default" as defined in the Bridge Loan Agreement shall constitute an Event of
Default under this Agreement.
SECTION 13. Remedies upon Default. If any Event of Default shall have
occurred and be continuing:
(a) Lender may exercise in respect of the Pledged Collateral, in
addition to other rights and remedies provided for herein or otherwise available
to it, all the rights and remedies of a secured party on default under the
Uniform Commercial Code as in effect in the State of New York (or any other
state with jurisdiction over the Pledged Collateral) at that time, and Lender
may also in its sole discretion, without notice (except as specified below),
sell the Pledged Collateral or any part thereof in one or more parcels at public
or private sale, at any exchange, broker's board or at any of Lender's offices
or elsewhere, for cash, on credit or for future delivery, at such time or times
and at such price or prices and upon such other terms as are commercially
reasonable, irrespective of the impact of any such sales on the market price of
the Pledged Collateral. Lender may be the purchaser of any or all of the Pledged
Collateral at any such sale and shall be entitled, for the purpose of bidding
and making settlement or payment of the purchase price for all or any portion of
the Pledged Collateral sold at any such public sale, to use and apply any of the
Secured Obligations as a credit on account of the purchase price of any Pledged
Collateral payable by Lender at such sale. Each purchaser at any such sale shall
hold the property sold absolutely free from any claim or right on the part of
Pledgor, and Pledgor hereby waives (to the extent permitted by law) all rights
of redemption, stay and/or appraisal which it now has or may at any time in the
future have under any rule of law or statute now existing or hereafter enacted.
Pledgor agrees that, to the extent notice of sale shall be required by law, at
least ten days' notice to Pledgor of the time and place of any public sale or
the time after which any private sale is to be made shall constitute reasonable
notification. Lender shall not be obligated to make any sale of Pledged
Collateral regardless of notice of sale having been given. Lender may adjourn
any public or private sale from time to time by announcement at the time and
place fixed therefor, and such sale may, without further notice, be made at the
time and place to which it was so adjourned. Pledgor hereby waives any claims
against Lender arising by reason of the fact that the price at which any Pledged
Collateral may have been sold at such a private sale was less than the price
which might have been obtained at a public sale, even if Lender accepts the
first offer received and does not offer such Pledged Collateral to more than one
offeree. If the proceeds of any sale or other disposition of the Pledged
Collateral are insufficient to pay all the Secured Obligations, Pledgor shall be
liable for the deficiency and the fees of any attorneys employed by Lender to
collect such deficiency.
(b) Pledgor recognizes that, by reason of certain prohibitions
contained in the Securities Act and applicable state securities laws, Lender may
be compelled, with respect to any sale of all or any part of the Pledged
Collateral conducted without prior registration or qualification of such Pledged
Collateral under the Securities Act and/or such state securities laws, to limit
purchasers to those who will agree, among other things, to acquire the Pledged
Collateral for their own account, for investment and not with a view to the
distribution or resale thereof. Pledgor acknowledges that any such private sales
may be at prices and on terms less favorable to Lender than those obtainable
through a public sale without such restrictions (including, without limitation,
a public offering made pursuant to a registration statement under the Securities
Act) and, notwithstanding such circumstances, Pledgor agrees that any such
private sale shall be deemed to have been made in a commercially reasonable
manner and that Lender shall have no obligation to engage in public sales and no
obligation to delay the sale of any Pledged Collateral for the period of time
necessary to permit the issuer thereof to register it for a form of public sale
requiring registration under the Securities Act or under applicable state
securities laws, even if such issuer would, or should, agree to so register it.
(c) If Lender, in its sole discretion, determines that it is necessary
or advisable to effect a public registration of all or part of the Pledged
Collateral pursuant to the Securities Act, then Pledgor shall cause the issuers
of the Pledged Shares to execute and deliver, and cause the directors and
officers of such issuers to execute and deliver, all at Pledgor's expense, all
such instruments and documents, and to do or cause to be done all such other
acts and things as may be necessary or, in the reasonable judgment of Lender,
advisable to register such shares under the provisions of the Securities Act and
to cause the registration statement relating thereto to become effective and to
remain effective for a period of twelve (12) months from the initial effective
date thereof, and to make all amendments thereto or to the related prospectus or
both that, in the reasonable judgment of Lender, are necessary or advisable, all
in conformity with the requirements of the Securities Act and the rules and
regulations promulgated thereunder. Pledgor agrees to cause such issuers to (i)
comply with the provisions of the securities or "Blue Sky" laws of any
jurisdiction designated by Lender and (ii) make available to its security
holders, as soon as practicable, an earnings statement that will satisfy the
provisions of Section 11(a) of the Securities Act. All expenses incurred in
complying with this Section 13(c), including without limitation, all
registration and filing fees (including all expenses incident to filing with the
National Association of Securities Dealers, Inc.), printing expenses, fees and
disbursements of counsel for Pledgor or for such issuers, the reasonable fees
and expenses of not more than one counsel (together with appropriate local
counsel) for Lender, expenses of any special audits incident to or required by
any such registration and expenses or complying with the securities or "Blue
Sky" laws of any jurisdictions, shall be paid by Pledgor.
(d) If Lender determines to exercise its right to sell any or all of
the Pledged Collateral, upon written request, Pledgor shall and shall cause each
issuer of any Pledged Shares to be sold hereunder from time to time to furnish
to Lender all such information as Lender may reasonably request in order to
facilitate such sale.
SECTION 14. Application of Proceeds. All Proceeds received by Lender
in respect of any sale of, collection from, or other realization upon all or any
part of the Pledged Collateral may, in the discretion of Lender, be held by
Lender as Pledged Collateral for, and/or then or at any time thereafter applied
in whole or in part by Lender against the Secured Obligations in the following
order of priority:
FIRST: To the payment of all costs and expenses of such sale,
collection or other realization, and all expenses, liabilities and advances
made or incurred by Lender in connection therewith and all amounts for
which Lender is entitled to indemnification and reimbursement hereunder and
all advances made by Lender hereunder for the account of the Pledgor or for
the payment of all costs and expenses paid or incurred by Lender in
connection with the exercise of any right or remedy hereunder, all in
accordance with Section 16 hereof;
SECOND: To the payment in full of all Secured Obligations in
accordance with the Bridge Loan Agreement; and
THIRD: To the payment to or upon the order of Pledgor, or to whosoever
may be lawfully entitled to receive the same or as a court of competent
jurisdiction may direct, of any surplus then remaining from such proceeds.
SECTION 15. Actions by Lender. During the continuation of an Event of
Default, Lender shall have the right hereunder, in its sole discretion, to make
demands, to give notices, to exercise or refrain from exercising any rights, and
to take or refrain from taking any action with respect to the Pledged Collateral
(including, without limitation, the release or substitution of Pledged
Collateral).
SECTION 16. Indemnity and Expenses.
(a) Pledgor agrees to indemnify Lender and each of the officers,
directors, agents, employees and affiliates of Lender (each an "Indemnitee"),
from and against any and all claims, losses and liabilities in any way relating
to, growing out of or resulting from this Agreement and the Transactions
contemplated hereby (including, without limitation, enforcement of this
Agreement), except claims, losses or liabilities resulting from the gross
negligence or willful misconduct of the Indemnitee seeking indemnification.
(b) Pledgor will upon demand pay to Lender the amount of any and all
reasonable costs and expenses, including the reasonable fees and expenses of its
counsel and of any experts and agents, which Lender may incur in connection with
(i) the administration of this Agreement, (ii) the custody or preservation of,
or the sale of, collection from, or other realization upon, any of the Pledged
Collateral, (iii) the exercise or enforcement of any of the rights of Lender
hereunder or (iv) the failure by Pledgor to perform or observe any of the
provisions hereof.
SECTION 17. Waivers of Pledgor.
(a) Pledgor hereby waives any right to require Lender to: (i) proceed
against Pledgor, any guarantor of any of the Secured Obligations or any other
person or entity; (ii) proceed against or exhaust any other security held from
Pledgor or any other person or entity; (iii) give notice to Pledgor of the
terms, time and place of any public or private sale of the Pledged Collateral or
any other security, or otherwise comply with Section 9504 of the Uniform
Commercial Code (except as set forth in Section 13(a)(i)); (iv) pursue any other
remedy in Lender's power; or (v) make or give any presentments, demands for
performance, notices of nonperformance, protests, notices of protest or notices
of dishonor in connection with any obligations or evidences of indebtedness
which constitute in whole or in part the Secured Obligations or in connection
with the creation of new or additional Secured Obligations;
(b) Pledgor waives any defense arising by reason of: (i) any
disability or other defense of Pledgor or any other entity, including, without
limitation, any defense based on or arising out of the unenforceability of any
of the Secured Obligations, legal or equitable discharge of the Secured
Obligations or this Agreement or any statute of limitations affecting Pledgor's
liability hereunder; (ii) the cessation from any cause whatsoever, other than
payment in full, of the Secured Obligations or the release or substitution of
any sureties or guarantors of the Secured Obligations; (iii) any act or omission
(other than as a result of the gross negligence or willful misconduct of the
Lender) by Lender which directly or indirectly results in or aids the discharge
of Pledgor or any of the Secured Obligations by operation of law or otherwise;
(iv) the release of any other collateral securing the Secured Obligations or the
failure by Lender to perfect or maintain the perfection of any such other
collateral; (v) any modification of the Secured Obligations, in any form
whatsoever, including, but not limited to the renewal, extension, acceleration
or other change in the time for payment of the Secured Obligations, and any
change in the terms of the Secured Obligations, including, but not limited to,
any increase or decrease of the rate of interest on the Secured Obligations; and
(vi) any law limiting the liability of or exonerating guarantors or sureties;
and
(c) until all the Secured Obligations shall have been paid in full,
Pledgor waives any right to enforce any remedy which Lender now has or may
hereafter have against any person or entity guaranteeing or securing the Secured
Obligations, and waives any benefit of, or any right to participate in any
security whatsoever now or hereafter held by Lender for the Secured Obligations.
SECTION 18. Continuing Security Interest; Transfer of Indebtedness.
This Agreement shall create a continuing security interest in the Pledged
Collateral and shall, unless released and/or terminated pursuant to the Bridge
Loan Agreement, (a) remain in full force and effect until indefeasible payment
in full of all Secured Obligations, (b) be binding upon Pledgor, its successors
and assigns, and (c) inure, together with the rights and remedies of Lender
hereunder, to the benefit of Lender and its successors, and permitted
transferees and assigns. Without limiting the generality of the foregoing clause
(c), upon any assignment by Lender of any Debt of the Borrower held by it to any
other person or entity, such other person or entity shall thereupon become
vested with all the benefits in respect thereof granted to Lender herein or
otherwise. Upon the date upon which the Secured Obligations have been
indefeasibly paid and performed in full and the Bridge Loan Agreement has
terminated, this Agreement shall automatically terminate and (x) Pledgor shall
be entitled to the return, upon its request and at its expense, against receipt
and without recourse to Lender, of such of the Pledged Collateral pledged by
Pledgor hereunder as shall not have been sold or otherwise applied pursuant to
the terms hereof prior to such request, (y) Lender's security interest in and
lien on such Pledged Collateral shall be simultaneously released upon the making
of such request and (z) Lender shall, at Pledgor's expense, execute and/or
deliver such documents as Pledgor shall reasonably request to evidence such
release.
SECTION 19. No Waiver by Lender; Authority of Pledgor. No failure on
the part of Lender to exercise, and no course of dealing with respect to, and no
delay in exercising, any right, power or remedy hereunder shall operate as a
waiver thereof; nor shall any single or partial exercise by Lender of any right,
power or remedy hereunder preclude any other or further exercise thereof or the
exercise of any other right, power or remedy. The remedies herein provided are
cumulative to the fullest extent permitted by law and are not exclusive of any
remedies provided by law. It is not necessary for Lender to inquire into the
powers of Pledgor or the officers, directors or agents acting or purporting to
act on behalf of Pledgor.
SECTION 20. Amendment, Etc. No amendment or waiver of any provision of
this Agreement, nor consent to any departure by Pledgor herefrom, shall in any
event be effective unless the same shall be in writing and signed by Lender, and
then such waiver or consent shall be effective only in the specific instance and
for the specific purpose for which given.
SECTION 21. Addresses for Notices. Unless otherwise specifically
provided herein, any notice or other communication herein required or permitted
to be given shall be given as provided under Section 9.1 of the Bridge Loan
Agreement.
SECTION 22. Governing Law; Terms. THIS AGREEMENT SHALL BE GOVERNED BY,
AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK, INCLUDING, WITHOUT LIMITATION, SECTIONS 5-1401 AND 5-1402 OF NEW YORK
GENERAL OBLIGATIONS LAW AND SECTION 327(b) OF NEW YORK CIVIL PRACTICE LAWS.
EXCEPT AS REQUIRED BY MANDATORY PROVISIONS OF LAW AND EXCEPT TO THE EXTENT THAT
THE VALIDITY OR PERFECTION OF THE SECURITY INTEREST HEREUNDER, OR REMEDIES
HEREUNDER, IN RESPECT OF ANY PARTICULAR PLEDGED COLLATERAL ARE GOVERNED BY THE
LAWS OF A JURISDICTION OTHER THAN THE STATE OF NEW YORK. Unless otherwise
defined herein, terms defined in Article 9 of the Code are used herein as
therein defined.
SECTION 23. Severability. Any provisions of this Agreement which are
prohibited or unenforceable in any jurisdiction shall, as to such jurisdictions,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
SECTION 24. Consent to Jurisdiction and Service of Process. (a) Any
legal action or proceeding with respect to this Agreement and any action for
enforcement of any judgment in respect thereof may be brought in the courts of
the State of New York or of the United States of America for the Southern
District of New York, and, by execution and delivery of this Agreement, each of
Pledgor and Lender hereby accepts for itself and in respect of its property,
generally and unconditionally, the non-exclusive jurisdiction of the aforesaid
courts and any appellate courts from any thereof. Each of the parties hereto
agrees that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment or
in any other manner provided by law. Nothing in this Agreement shall affect any
right that Lender may otherwise have to bring any action or proceeding relating
to this Agreement against Pledgor or its properties in the courts of any
jurisdiction.
(b) Pledgor hereby irrevocably and unconditionally waives, to the
fullest extent it may legally and effectively do so, any objection which it may
now or hereafter have to the laying of venue of any suit, action or proceeding
arising out of or relating to this Agreement in any court referred to in
paragraph (a) of this Section. Each of the parties hereto hereby irrevocably
waives, to the fullest extent permitted by law, the defense of an inconvenient
forum to the maintenance of such action or proceeding in any such court.
(c) Each party to this Agreement irrevocably consents to service of
process in the manner provided for notices in Section 21 hereof. Nothing in this
Agreement will affect the right of any party to this Agreement to serve process
in any other manner permitted by law.
SECTION 25. Marshaling; Payments Set Aside. Lender shall not be under
any obligation to marshal any assets in favor of Pledgor or any other party or
against or in payment of any or all of the Secured Obligations. To the extent
that Pledgor makes a payment or payments to Lender or Lender enforces its
security interests or exercises its rights of setoff, and such payment or
payments or proceeds of such enforcement or setoff or any part thereof are
subsequently invalidated, declared to be fraudulent or preferential, set aside
and/or required to be repaid to a trustee, receiver or any other party under any
bankruptcy law, state or federal law, common law or equitable cause, then to the
extent of such recovery, the obligation or part thereof originally intended to
be satisfied, and all Liens, rights and remedies therefor, shall be revived and
continued in full force and effect as if such payment had not been made or such
enforcement or setoff had not occurred.
SECTION 26. Headings. Section and subsection headings in this
Agreement are included herein for convenience of reference only and shall not
constitute a part of this Agreement or be given any substantive effect.
SECTION 27. Counterparts. This Agreement and any amendments, waivers,
consents or supplements may be executed in any number of counterparts, each of
which when so executed and delivered shall be deemed an original and all of
which together shall constitute one and the same Agreement.
[Remainder of page intentionally left blank.]
IN WITNESS WHEREOF, Pledgor has caused this Pledge Agreement to be
duly executed and delivered by its officers thereunto duly authorized as of the
date first above written.
"PLEDGOR"
XXXXXXX-XXXXXX PROPERTIES, LTD.
By:___________________________
Name:
Title:
"LENDER"
COLONY K-W, LLC,
By: Colony Investors III, L.P.,
a Delaware limited partnership,
its sole and managing member
By: Colony Capital III, L.P.,
a Delaware limited partnership,
its general partner
By: ColonyGP III, Inc.,
a Delaware corporation,
its general partner
By: _____________________
Name:
Title:
SCHEDULE I
to the Pledge Agreement
Attached to and forming a part of the Pledge Agreement dated as of
July 16, 1998 between Pledgor and Lender.
Pledgor: Xxxxxxx-Xxxxxx Properties, Ltd.
Percent of
Class Stock Number Shares Issued
Stock Issuer of Stock Certificate Nos. of Shares and Outstanding
------------ -------- ---------------- --------- ---------------
Xxxxxxx Properties Ltd. (to be
renamed Xxxxxxx-Xxxxxx Properties, Common 24 39,763 100
Ltd.)
SCHEDULE II
to the Pledge Agreement
[FORM OF PLEDGE AMENDMENT]
This Pledge Amendment, dated _______ __, ____, is delivered pursuant
to Section 8 of the Pledge Agreement referred to below. The undersigned hereby
agrees that this Pledge Amendment may be attached to the Pledge Agreement dated
as of July 16, 1998, between Xxxxxxx-Xxxxxx Properties, Ltd. and Lender (the
"Pledge Agreement"; capitalized terms defined therein being used herein as
therein defined) and that the Pledged Shares listed on this Pledge Amendment
shall be deemed to be part of the Pledged Shares and shall become part of the
Pledged Collateral and shall secure the Secured Obligations as provided in the
Pledge Agreement.
XXXXXXX-XXXXXX PROPERTIES, LTD.
By:______________________
Name:
Title:
