PLEDGE AND SECURITY AGREEMENT
THIS PLEDGE AND SECURITY AGREEMENT (this "Agreement"), is made as of
November 26, 2002, by XXXXXXXX HOSPITALITY TRUST, INC., a Virginia corporation
("HH Trust"), XXXXXXXX HOSPITALITY LIMITED PARTNERSHIP, a Virginia limited
partnership ("HHLP"), TRS LEASING, INC., a Virginia corporation ("TRS Leasing"),
and SOLOMONS GP, LLC, a Delaware limited liability company ("Solomons GP", and
together with HH Trust, HHLP and TRS Leasing, each a "Pledgor" or, collectively,
"Pledgors"), each having an address at c/x Xxxxxxxx Hospitality Limited
Partnership, 0000 Xxxxxxxxx Xxxxx, Xxxxxxxx, Xxxxxxxx 00000, for the benefit of
GREENWICH CAPITAL FINANCIAL PRODUCTS, INC., a Delaware corporation, having an
address at 000 Xxxxxxxxx Xxxx, Xxxxxxxxx, Xxxxxxxxxxx 00000 (together with its
successors and assigns, collectively, "Lender").
RECITALS
A. Pursuant to that certain Loan Agreement (as same may be amended,
restated, replaced, supplemented, consolidated or otherwise modified, the "Loan
Agreement") dated as of the date hereof between the Lender, as lender, Solomons
Beacon Inn Limited Partnership ("Solomons Borrower") and TRS Subsidiary, LLC
("TRS Borrower" and together with Solomons Borrower, collectively, "Borrower"),
as borrower, the Lender has agreed to make a loan to Borrower in the principal
amount of $40,000,000 (the "Loan").
B. Pursuant to that certain Amended and Restated Agreement of Limited
Partnership of Solomons Borrower dated November 26, 2002, HH Trust is the owner
of a one percent (1%) limited partnership interest in Solomons Borrower, and
Solomons GP is the owner of a ninety-nine percent (99%) general partnership
interest in Solomons Borrower.
C. Pursuant to that certain Limited Liability Company Agreement of
Solomons GP dated November 26, 2002, HHLP is the one hundred percent (100%)
shareholder in Solomons GP.
D. Pursuant to that certain Limited Liability Company Agreement of
TRS Borrower dated November 26, 2002, TRS Leasing is the owner of a one hundred
percent (100%) membership interest in TRS Borrower.
E. To induce the Lender to make the Loan to Borrower, and for other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Pledgor has agreed to pledge and grant a first priority security
interest in the Collateral (as defined below) as security for the Obligations
(as defined below).
NOW, THEREFORE, for Ten Dollars ($10.00) and in consideration of the
mutual covenants and agreements herein contained, and other good and valuable
consideration, the receipt and sufficiency of which being hereby acknowledged,
Pledgor agrees as follows:
Section 1. Defined Terms. Unless otherwise provided herein, all capitalized
terms used but not defined in this Agreement shall have the respective meanings
ascribed thereto in the
Loan Agreement and, for the purposes of this Agreement, the following
capitalized terms shall have the following meanings:
1.1 "Assignment of Interest" shall have the meaning ascribed
thereto in Section 2 hereof.
1.2 "Charter Documents" shall mean the agreements and
instruments listed on Exhibit A hereto, as each of the same may hereafter be
amended, restated, replaced, supplemented or otherwise modified from time to
time.
1.3 "Collateral" shall have the meaning ascribed thereto in
Section 2 hereof.
1.4 "Obligations" shall mean all of the obligations of
Borrower to Lender under the Loan.
1.5 "Other Collateral" shall have the meaning ascribed thereto
in Section 4.7 hereof.
1.6 "Other Security Documents" shall have the meaning ascribed
thereto in Section 4.7 hereof.
1.7 "Pledged Interests" shall have the meaning ascribed
thereto in Section 2 hereof.
1.8 "Uniform Commercial Code" shall mean the Uniform
Commercial Code as in effect from time to time in the State of New York.
Section 2. Pledge and Delivery of Collateral.
2.1 The Pledge. As continuing collateral security for the
prompt payment and performance in full when due (whether at stated maturity, by
acceleration or otherwise) of the Obligations, each Pledgor hereby irrevocably
grants, pledges and assigns, subject to the terms of this Agreement and the
other Loan Documents, a continuing first priority lien on and security interest
in, and, as part of such grant, pledge and assignment, hereby assigns to Lender
as collateral security, all of such Pledgor's right, title and interest in the
following property, whether now owned by such Pledgor or hereafter acquired and
whether now existing or hereafter coming into existence (all being collectively
referred to herein as "Collateral"):
i. a one percent (1%) limited partnership interest in Solomons Borrower
held by HH Trust, together with the certificates (if any) evidencing the
same (the "Solomons Borrower LP Interests");
ii. a ninety-nine percent (99%) general partnership interest in Solomons
Borrower held by Solomons GP, together with the certificates (if any)
evidencing the same (the "Solomons Borrower GP Interests");
2
iii. a one hundred percent (100%) shareholder interest in Solomons GP held
by HHLP, together with the certificates (if any) evidencing the same (the
"Solomons GP Shareholder Interests");
iv. a one hundred percent (100%) membership interest in TRS Borrower held
by TRS Leasing, together with the certificates (if any) evidencing the same
(the "TRS Borrower Interests", and together with the Solomons Borrower LP
Interests, the Solomons Borrower GP Interests and the Solomons GP
Shareholder Interests, collectively, the "Pledged Interests");
v. all ownership interests, membership interests, shares, securities,
moneys, instruments or property representing a dividend, a distribution or
return of capital upon or in respect of the Pledged Interests, or otherwise
received in exchange therefor, and any warrants, rights or options issued
to the holders of, or otherwise in respect of, the Pledged Interests;
vi. all rights of such Pledgor under the applicable Charter Documents or
any other agreement or instrument relating to Solomons Borrower or TRS
Borrower, or the Pledged Interests, including, without limitation, (i) all
rights of such Pledgor to receive moneys or distributions with respect to
the Pledged Interests due and to become due under or pursuant to the
Charter Documents, (ii) all rights of such Pledgor to receive proceeds of
any insurance, indemnity, warranty or guaranty with respect to the Pledged
Interests, (iii) all claims of such Pledgor for damages arising out of or
for breach of or default under a Charter Document, and (iv) any right of
such Pledgor to perform thereunder and to compel performance and otherwise
exercise all rights and remedies thereunder; and
vii. all proceeds of and to any of the property of such Pledgor described
in clauses (i) through (v) above and, to the extent related to any property
described in said clauses or such proceeds, all books, correspondence,
credit files, records, invoices and other papers.
2.2 Delivery of the Collateral. All certificates or
instruments, if any, representing or evidencing the 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 shall be accompanied by duly executed
instruments of transfer, stock powers endorsed by each Pledgor, as applicable,
in blank, or assignments in blank, all in form and substance satisfactory to
Lender. Upon the occurrence and during the continuance of an Event of Default,
Lender shall have the right, at any time, in its discretion upon notice to
Pledgors, to transfer to or to register in the name of Lender or its nominee any
or all of the Collateral. Prior to or concurrently with the execution and
delivery of this Agreement, each Pledgor shall deliver to Lender an assignment
of interest endorsed by such Pledgor in blank in the form set forth on Exhibit B
hereto (an "Assignment of Interest"), for the Pledged Interests owned by each
Pledgor, respectively, transferring all of such Pledged Interests in blank, duly
executed by each respective Pledgor and undated. Lender shall have the right, at
any time in its discretion upon the occurrence and during the continuance of an
Event of Default and without notice to Pledgors, to transfer to, and to
designate on such Pledgor's Assignment of Interest, any Person to whom the
Pledged Interests are sold in accordance with the provisions hereof. In
addition, Lender shall have the right at any time to exchange any Assignment of
Interest representing or evidencing the Pledged Interests or any
3
portion thereof for one or more additional or substitute Assignments of Interest
representing or evidencing smaller or larger percentages of the Pledged
Interests represented or evidenced thereby, subject to the terms thereof.
2.3 Obligations Unconditional. The obligations of each Pledgor
hereunder are absolute and unconditional, irrespective of the value,
genuineness, validity, regularity or enforceability of the Guaranty, the Loan
Agreement, the Note, any other Loan Documents, or any other agreement or
instrument referred to herein or therein, or any substitution, release or
exchange of any guarantee of or security for any of the Obligations, and, to the
fullest extent permitted by applicable law, irrespective of any other
circumstance whatsoever which might otherwise constitute a legal or equitable
discharge or defense of a surety or Pledgor, it being the intent of this Section
2.4 that the obligations of each Pledgor hereunder shall be absolute and
unconditional under any and all circumstances. Without limiting the generality
of the foregoing, it is agreed that the occurrence of any one or more of the
following shall not affect the liability of each Pledgor hereunder:
i. at any time or from time to time, without notice to such Pledgor, the
time for any performance of or compliance with any of the Obligations shall
be extended, or such performance or compliance shall be waived;
ii. any of the acts mentioned in any of the provisions of the Guaranty,.
the Loan Agreement, the Note, or any other Loan Documents, or any other
agreement or instrument referred to herein or therein shall be done or
omitted;
iii. the maturity of any of the Obligations shall be accelerated, or any of
the Obligations shall be modified, supplemented or amended in any respect,
or any right under the Loan Agreement, the Note, or any other Loan
Documents, or any other agreement or instrument referred to herein or
therein shall be waived or any other guarantee of any of the Obligations or
any security or collateral therefor shall be terminated, released or
exchanged in whole or in part or otherwise dealt with; or
iv. any lien or security interest granted to, or in favor of Lender as
security for any of the Obligations shall fail to be perfected or shall be
released.
Section 3. Reinstatement. The obligations of each Pledgor under this
Agreement shall be automatically reinstated if and to the extent that for any
reason any payment by or on behalf of such Pledgor in respect of the Obligations
is rescinded or must be otherwise restored by any holder of any of the
Obligations, whether as a result of any proceedings in bankruptcy or
reorganization or otherwise and such Pledgor agrees that it will indemnify
Lender on demand for all reasonable costs and expenses (including, without
limitation, fees of counsel) incurred by Lender in connection with such
rescission or restoration.
Section 4. Representations, Warranties of Pledgor. Each Pledgor represents,
warrants and covenants that:
4
4.1 Existence.
i. HH Trust (a) is a corporation duly organized and validly existing
under the laws of Virginia; (b) has all requisite power, and has all
governmental licenses, authorizations, consents and approvals necessary, to
own its assets and carry on its business as now being or as proposed to be
conducted; and (c) is qualified to do business in all jurisdictions in
which the nature of the business conducted by it makes such qualification
necessary.
ii. Solomons GP (a) is a limited liability company duly organized and
validly existing under the laws of Delaware; (b) has all requisite power,
and has all governmental licenses, authorizations, consents and approvals
necessary, to own its assets and carry on its business as now being or as
proposed to be conducted; and (c) is qualified to do business in all
jurisdictions in which the nature of the business conducted by it makes
such qualification necessary.
iii. TRS Leasing (a) is a corporation duly organized and validly existing
under the laws of Virginia; (b) has all requisite power, and has all
governmental licenses, authorizations, consents and approvals necessary, to
own its assets and carry on its business as now being or as proposed to be
conducted; and (c) is qualified to do business in all jurisdictions in
which the nature of the business conducted by it makes such qualification
necessary.
iv. HHLP (a) is a limited partnership duly organized and validly existing
under the laws of Virginia; (b) has all requisite power, and has all
governmental licenses, authorizations, consents and approvals necessary, to
own its assets and carry on its business as now being or as proposed to be
conducted; and (c) is qualified to do business in all jurisdictions in
which the nature of the business conducted by it makes such qualification
necessary.
x. Xxxxxxxx Borrower (a) is a limited partnership duly organized, validly
existing and in good standing under the laws of the State of Maryland; (b)
has all requisite power, and has all material governmental licenses,
authorizations, consents and approvals necessary to own its assets and
carry on its business as now being or as proposed to be conducted; and (c)
is qualified to do business in all jurisdictions in which the nature of the
business conducted by it makes such qualification necessary.
vi. TRS Borrower (a) is a limited liability company duly organized,
validly existing and in good standing under the laws of the State of
Delaware; (b) has all requisite power, and has all material governmental
licenses, authorizations, consents and approvals necessary to own its
assets and carry on its business as now being or as proposed to be
conducted; and (c) is qualified to do business in all jurisdictions in
which the nature of the business conducted by it makes such qualification
necessary.
4.2 Litigation. Except as disclosed to Lender in writing prior
to the date of this Agreement, there are no legal or arbitral proceedings or any
proceedings by or before any Governmental Authority or agency, now pending or
(to the knowledge of such Pledgor)
5
threatened against such Pledgor, the Collateral, TRS Leasing, TRS Manager and/or
Borrower, the outcome of which is likely to have a material adverse effect on
the financial condition of such entity or the transactions contemplated by this
Agreement or any other Loan Document.
4.3 No Breach. None of the execution and delivery of this
Pledge or any other Loan Document to which such Pledgor is a party, the
consummation of the transactions herein or therein contemplated and compliance
with the terms and provisions hereof or thereof will conflict with or result in
a breach of, or require any consent (except such consents as have been obtained)
under the organizational documents of such Pledgor, TRS Leasing, TRS Manager or
Borrower, or any applicable law or regulation, or any order, writ, injunction or
decree of any court or Governmental Authority, or any agreement or instrument to
which such Pledgor is a party or by which it is bound or to which it is subject,
or constitute a default under any such agreement or instrument, or (except for
the lien arising pursuant to this Agreement) result in the creation or
imposition of any lien upon any of the revenues or assets of such Pledgor
pursuant to the terms of any such agreement or instrument.
4.4 Necessary Action. Such Pledgor has all necessary power and
authority to execute, deliver and perform its obligations under this Agreement;
the execution, delivery and performance by such Pledgor of this Agreement has
been duly authorized by all necessary action on its part; and this Agreement has
been duly and validly executed and delivered by such Pledgor and constitutes its
legal, valid and binding obligation, enforceable in accordance with its terms,
subject to bankruptcy, insolvency, moratorium or other similar laws affecting
the enforcement of creditors' rights in general and to general principles of
equity.
4.5 Approvals. No authorizations, approvals and consents of,
and no filings and registrations with, any governmental or regulatory authority
or agency are necessary for (a) the execution, delivery or performance by such
Pledgor of this Agreement or for the validity or enforceability thereof, (b) the
grant by such Pledgor of the assignments and security interests granted hereby,
or the pledge by such Pledgor of the Collateral pursuant hereto, (c) the
perfection or maintenance of the pledge, assignment and security interest
created hereby (including the first priority nature of such pledge, assignment
and security interest) except for the filing of financing statements under the
Uniform Commercial Code or (d) the exercise by Lender of all rights and remedies
in respect of the Collateral pursuant to this Agreement.
4.6 Ownership. HH Trust owns a one percent (1%) limited
partnership interest in Solomons Borrower, which interests in Solomons Borrower
are not subject to any security interests, liens, encumbrances or adverse
claims. Solomons GP owns a ninety-nine percent (99%) general partnership
interest in Solomons Borrower, which interest in Solomons Borrower is not
subject to any security interests, liens, encumbrances or adverse claims. HHLP
is the one-hundred percent (100%) shareholder of Solomons GP, which interests in
Solomons GP are not subject to any security interests, liens, encumbrances or
adverse claims. TRS Leasing owns a one-hundred percent (100%) membership
interest in TRS Borrower, which interest in TRS Borrower is not subject to any
security interests, liens, encumbrances or adverse claims.
6
4.7 Pledged Interest and Contract Rights.
i. Pledgors are the sole beneficial and legal owners of and have good and
indefeasible title to the Collateral and no Lien exists or will exist upon
the Collateral at any time (and no right or option to acquire the same
exists in favor of any other Person), except for the pledge and security
interest in favor of the Lender created or provided for herein.
ii. The Pledged Interests are not and will not be subject to any
contractual restriction upon the transfer thereof (except for any such
restrictions contained herein).
4.8 Principal Place of Business and State of Organization. No
Pledgor will change its principal place of business or state of organization
unless such Pledgor has previously notified Lender thereof and taken such action
as is necessary or reasonably requested by Lender to cause the security interest
of Lender in the Collateral to continue to be perfected.
4.9 Valid Security Interest. This Agreement creates a valid
security interest in the Collateral, securing the payment of the Obligations,
and upon the filing in the appropriate filing offices of the financing
statements to be delivered pursuant to this Agreement, such security interests
will be perfected, first priority security interests, and all filings and other
actions necessary to perfect such security interests will have been duly taken.
Section 5. Covenants of Pledgor.
5.1 No Transfer. Unless expressly permitted under the Loan
Agreement, Pledgors will not sell, assign, transfer, exchange, or otherwise
dispose of, or grant any option with respect to, the Collateral, nor will they
create, incur or permit to exist any pledge, lien, mortgage, hypothecation,
security interest, charge, option or any other encumbrance with respect to any
Collateral, or any interest therein, or any proceeds thereof, except for the
lien and security interest provided for by this Agreement.
5.2 No Waiver, Amendment, Etc. No Pledgor shall directly or
indirectly, without the prior written consent of Lender, attempt to waive,
alter, amend, modify, supplement or change in any way, or release, subordinate,
terminate or cancel in whole or in part, or give any consent under, any of the
instruments, documents, policies or agreements constituting the Collateral or
any of the rights or interests of such Pledgor as party, holder, mortgagee or
beneficiary thereunder. Each Pledgor agrees that all rights to do any and all of
the foregoing have been assigned to Lender, but such Pledgor agrees that, upon
request from Lender from time to time, such Pledgor shall do any of the
foregoing or shall join Lender in doing so or shall confirm the right of Lender
to do so and shall execute such instruments and undertake such actions as Lender
may reasonably request in connection therewith.
5.3 Settlement and Release. Pledgors shall not make any
election, compromise, adjustment or settlement in respect of any of the
Collateral.
5.4 Preservation of Collateral. Lender may, in its discretion,
for the account and expense of either Pledgor pay any amount or do any act
required of such Pledgor hereunder or requested by Lender to preserve, protect,
maintain or enforce the Obligations, the
7
Collateral or the security interests granted herein, provided such Pledgor has
failed to pay such amount or take such action within ten (10) days after written
demand by Lender. Any such payment shall be deemed an advance by Lender to such
Pledgor and shall be payable by such Pledgor within twenty (20) days after
written demand together with interest thereon at the Default Rate from the date
expended by Lender until paid.
5.5 Warranty of Title. Pledgors shall warrant and defend the
right, title and interest of Lender in and to the Collateral and the proceeds
thereof against the claims and demands of all persons whomsoever.
5.6 Files and Records. Pledgors shall maintain, at their
principal office, and, upon request, make available to Lender the originals, or
copies in any case where the originals have been delivered to Lender of the
instruments, documents, policies and agreements constituting the Collateral (to
the extent not held by Lender) and related documents and instruments, and all
files, surveys, certificates, correspondence, appraisals, computer programs,
tapes, discs, cards, accounting records and other information and data relating
to the Collateral.
5.7 Litigation. Pledgors shall promptly give to Lender notice
of all pending legal or arbitration proceedings, and of all proceedings pending
by or before any governmental or regulatory authority or agency, affecting
Pledgors, TRS Leasing, TRS Manager or Borrower, if such proceedings are likely
to have a material adverse effect on the financial condition of such entity or
the transactions contemplated by this Agreement or any other Loan Document.
5.8 Existence, etc. Pledgors shall and shall cause Borrower,
Solomons GP, TRS Leasing and TRS Manager to preserve and maintain their
existence and all of their material rights, privileges and franchises.
5.9 Charter Documents. Each Pledgor shall, at its expense:
i. perform and observe all the terms and provisions of the applicable
Charter Documents to be performed or observed by it, maintain the
applicable Charter Documents in full force and effect, enforce the
applicable Charter Documents in accordance with their respective terms, and
to take all such action to such end as may be from time to time reasonably
requested by Lender; and
ii. furnish to Lender promptly upon receipt thereof copies of all notices,
requests and other documents received by such Pledgor under or pursuant to
the Charter Documents, and from time to time furnish to Lender such
information and reports regarding the Collateral as Lender may reasonably
request.
5.10 Financing Statements. Each Pledgor hereby (a) authorizes
Lender to execute and file at any time or times, one or more UCC financing
statements covering the Collateral and UCC assignment financing statements
assigning the UCC financing statements which constitute part of the Collateral;
and (b) appoints Lender as its agent and attorney-in-fact to execute in the name
of such Pledgor any UCC financing statement or amendment, or collateral
assignment of any instrument, document, policy or agreement constituting the
Collateral or other
8
instrument or filing or recordation to perfect or continue the perfection of the
security interest so long as any Obligation remains unpaid.
Section 6. Further Assurances; Remedies. In furtherance of the grant of
the pledge and security interest pursuant to Section 2 hereof, each Pledgor
hereby agrees with Lender as follows:
6.1 Delivery and Other Perfection. Each Pledgor shall:
i. if any of the above-described Collateral required to be pledged by
such Pledgor under Section 2.1 hereof is received by such Pledgor,
forthwith either (x) transfer and deliver to Lender such Collateral so
received by such Pledgor (together with the certificates (if any) for any
such Collateral, including assignments duly endorsed in blank and
accompanied in the case of shares by undated stock powers duly executed in
blank) all of which thereafter shall be held by Lender, pursuant to the
terms of this Agreement, as part of the Collateral or (y) take such other
action as Lender shall deem reasonably necessary or appropriate to duly
record the lien created hereunder in such Collateral referred to in said
Section 2.1;
ii. give, execute, deliver, file and/or record any financing statement,
notice, instrument, document, agreement or other papers that may be
necessary or desirable (in the reasonable judgment of Lender) to create,
preserve, perfect or validate the security interest granted pursuant hereto
or to enable Lender to exercise and enforce its rights hereunder with
respect to such pledge and security interest, including, without
limitation, causing any or all of the Collateral to be transferred of
record into the name of Lender or its nominee (and Lender agrees that if
any Collateral is transferred into its name or the name of its nominee,
Lender will thereafter promptly give to Pledgor copies of any notices and
communications received by it with respect to the Collateral); and
iii. permit representatives of Lender, upon reasonable notice, at any time
during normal business hours to inspect and make abstracts from its books
and records pertaining to the Collateral, and permit representatives of
Lender to be present at such Pledgor's place of business to receive copies
of all communications and remittances relating to the Collateral, and
forward copies of any notices or communications received by such Pledgor
with respect to the Collateral, all in such manner as Lender may reasonably
require.
6.2 Preservation of Rights. Except in accordance with
applicable law, Lender shall not be required to take steps necessary to preserve
any rights against prior parties to any of the Collateral.
6.3 Pledged Collateral.
i. Each Pledgor shall not and shall not have the right to directly or
indirectly, without the prior written consent of Lender, attempt to waive,
alter, amend, modify, supplement or change in any way, or release,
subordinate, terminate or cancel in whole or in part, or give any consent
under, any of the instruments, documents, policies or agreements
constituting the Collateral or exercise any of the rights, options or
interests of
9
such Pledgor as party, holder, mortgagee or beneficiary thereunder except
as otherwise expressly permitted under the Loan Agreement. Each Pledgor
agrees that all rights to do any and all of the foregoing have been
assigned to and may be exercised by Lender but such Pledgor agrees that,
upon request from Lender from time to time, such Pledgor shall do any of
the foregoing or shall join Lender in doing so or shall confirm the right
of Lender to do so and shall execute such instruments and undertake such
actions as Lender may request in connection therewith. Each Pledgor shall
not make any election, compromise, adjustment or settlement in respect of
any of the Collateral. Notwithstanding anything herein to the contrary, so
long as no Event of Default shall have occurred and be continuing, each
Pledgor shall have the right to exercise all of such Pledgor's rights under
the Charter Documents to which it is a party for all purposes not
inconsistent with any of the terms of this Agreement, the Loan Agreement or
any other Loan Document or any other instrument or agreement referred to
herein or therein, provided that such Pledgor agrees that it will not take
any action in any manner that is inconsistent with the terms of this
Agreement, the Loan Agreement or any other Loan Document or any such other
instrument or agreement. Lender shall execute and deliver to each Pledgor
or cause to be executed and delivered to each Pledgor all such proxies,
powers of attorney, distribution and other orders, and all such
instruments, without representation, recourse or warranty, as such Pledgor
may reasonably request for the purpose of enabling such Pledgor to exercise
the rights and powers which it is entitled to exercise pursuant to this
Section 6.3.
ii. Anything to the contrary notwithstanding, (i) Pledgors shall remain
liable under the applicable Charter Documents to perform all of their
duties and obligations thereunder to the same extent as if this Agreement
had not been executed, (ii) the exercise by Lender of any of the rights
hereunder shall not release Pledgors from any of their duties or
obligations under the Charter Documents, and (iii) Lender shall have no
obligation or liability under the Charter Documents by reason of this
Agreement, nor shall Lender be obligated to perform any of the obligations
or duties of Pledgors thereunder or to take any action to collect or
enforce any claim for payment assigned hereunder.
6.4 Events of Default, etc. During the period during which an
Event of Default shall have occurred and be continuing:
i. Lender shall have all of the rights and remedies with respect to the
Collateral of a secured party under the Uniform Commercial Code (whether or
not said Code is in effect in the jurisdiction where the rights and
remedies are asserted) and such additional rights and remedies to which a
secured party is entitled under the laws in effect in any jurisdiction
where any rights and remedies hereunder may be asserted, including, without
limitation, the right, to the maximum extent permitted by law, to exercise
all voting, consensual and other powers of ownership pertaining to the
Collateral as if Lender were the sole and absolute owner thereof (and each
Pledgor agrees to take all such action as may be appropriate to give effect
to such right);
ii. Lender in its discretion may, in its name or in the name of either
Pledgor or otherwise, demand, xxx for, collect or receive any money or
property at any time payable
10
or receivable on account of or in exchange for any of the Collateral, but
shall be under no obligation to do so;
iii. Lender may, at its option, apply all or any part of the Collateral to
the Obligations in such order and priority as shall be selected by Lender;
iv. Lender may, upon ten (10) days' prior written notice to either
Pledgor of the time and place, with respect to the Collateral or any part
thereof which shall then be or shall thereafter come into the possession,
custody or control of Lender or any of its agents, sell, assign or
otherwise dispose of all or any part of such Collateral, at such place or
places as Lender deems best, and for cash or on credit or for future
delivery (without thereby assuming any credit risk), at public or private
sale, without demand of performance or notice of intention to effect any
such disposition or of time or place thereof (except such notice as is
required above or by applicable statute and cannot be waived) and Lender or
anyone else may be the purchaser, assignee or recipient of any or all of
the Collateral so disposed of at any public sale (or, to the extent
permitted by law, at any private sale), and thereafter hold the same
absolutely, free from any claim or right of whatsoever kind, including any
right or equity of redemption (statutory or otherwise), of such Pledgor,
any such demand, notice or right and equity being hereby expressly waived
and released. Unless prohibited by applicable law, Lender may, without
notice or publication, adjourn any public or private sale or cause the same
to be adjourned from time to time by announcement at the time and place
fixed for the sale, and such sale may be made at any time or place to which
the same may be so adjourned;
v. Lender may exercise all membership rights, powers and privileges to
the same extent as Pledgor is entitled to exercise such rights, powers and
privileges;
vi. Lender may accelerate the indebtedness secured hereby;
vii. Lender may, in connection with a sale of the Pledged Interests, cause
each purchaser of all or any part of any Pledged Interests to be admitted
as a new member or owner of Solomons Borrower, Solomons GP or TRS Borrower
to the extent of such Pledged Interests, and cause such Pledgor to withdraw
as a member or owner of such Borrower to the extent such Pledged Interests
are sold, and complete by inserting the Effective Date (as defined therein)
and the name of the assignee thereunder and deliver to such assignee each
Assignment of Interest executed and delivered by such Pledgor and, if
appropriate, cause one or more amended or restated certificates of limited
partnership, certificates of limited liability company or articles of
incorporation to be filed with respect to Borrower;
viii. Lender may exercise any and all rights and remedies of each Pledgor
under or in connection with the applicable Charter Documents or otherwise
in respect of the Collateral, including, without limitation, any and all
rights of such Pledgor to demand or otherwise require payment of any amount
under, or performance of any provisions of, the Charter Documents; and
11
ix. all payments received, directly or indirectly, by either Pledgor under
or in connection with the Charter Documents or otherwise in respect of the
Collateral shall be received in trust for the benefit of Lender, shall be
segregated from other funds of such Pledgor and shall be forthwith paid
over to Lender in the same form as so received (with any necessary
endorsement).
The proceeds of each collection, sale or other disposition under this Section
6.4 shall be applied by Lender to the Obligations pursuant to Section 6.6
hereof.
Pledgors recognize that, by reason of certain prohibitions contained in the
Securities Act of 1933, as amended, and applicable state securities laws, Lender
may be compelled, with respect to any sale of all or any part of the Collateral,
to limit purchasers to those who will 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. Pledgors acknowledge 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, and, notwithstanding such
circumstances, 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
Collateral for the period of time necessary to permit the issuer thereof to
register it for public sale.
6.5 Private Sale. Lender shall not incur any liability as a
result of the sale of the Collateral, or any part thereof, at any private sale
pursuant to Section 6.4 hereof conducted in a commercially reasonable manner.
Pledgors hereby waive any claims against Lender arising by reason of the fact
that the price at which the Collateral may have been sold at such a private sale
was less than the price which might have been obtained at a public sale or was
less than the aggregate amount of the Obligations, even if Lender accepts the
first offer received and does not offer the Collateral to more than one offeree.
6.6 Application of Proceeds. Except as otherwise herein
expressly provided, the proceeds of any collection, sale or other realization of
all or any part of the Collateral pursuant hereto, and any other cash at the
time held by Lender under this Section 6, shall be applied by Lender:
First, to the payment of the costs and expenses of such
collection, sale or other realization, including reasonable
out-of-pocket costs and expenses of Lender and the fees and
expenses of their respective agents and counsel, and all
expenses, and advances made or incurred by Lender in connection
therewith;
Next, to the payment in full of the Obligations; and
Finally, to the payment to Pledgors, or their successors or
assigns, or as a court of competent jurisdiction may direct, of
any surplus then remaining.
As used in this Section 6, "proceeds" of Collateral shall mean cash, securities
and other property realized in respect of, and distributions in kind of,
Collateral, including any thereof received
12
under any reorganization, liquidation or adjustment of debt of Pledgors or any
issuer of or obligor on any of the Collateral.
6.7 Attorney-in-Fact. Without limiting any rights or powers
granted by this Agreement to Lender while no Event of Default has occurred and
is continuing, upon the occurrence and during the continuance of any Event of
Default Lender is hereby appointed the attorney-in-fact of each Pledgor for the
purpose of carrying out the provisions of this Section 6 and taking any action
and executing any instruments which Lender may deem necessary or advisable to
accomplish the purposes hereof, which appointment as attorney-in-fact is
irrevocable and coupled with an interest. Without limiting the generality of the
foregoing, so long as Lender shall be entitled under this Section 6 to make
collections in respect of the Collateral, Lender shall have the right and power
to receive, endorse and collect all checks made payable to the order of such
Pledgor representing any payment or other distribution in respect of the
Collateral or any part thereof and to give full discharge for the same.
6.8 Enforcement Expenses. Pledgors agree to pay to Lender all
out-of-pocket expenses (including reasonable expenses for legal services of
every kind) of, or incident to, the enforcement of any of the provisions of this
Section 6, or performance by Lender of any obligations of Pledgors in respect of
the Collateral which Pledgors have failed or refused to perform, or any actual
or attempted sale, or any exchange, enforcement, collection, compromise or
settlement in respect of any of the Collateral, and for the care of the
Collateral and defending or asserting rights and claims of Lender in respect
thereof, by litigation or otherwise and all such expenses shall be Obligations
to Lender secured under Section 2 hereof.
Section 7. Termination. Upon the payment and performance in full of all
Obligations, this Agreement shall terminate and Lender shall forthwith cause to
be assigned, transferred and delivered, against receipt but without any
recourse, warranty or representation whatsoever, any remaining Collateral and
money received in respect thereof, to or on the order of Pledgors.
Section 8. Miscellaneous.
8.1 No Waiver. No failure on the part of Lender or any of its
agents 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 or any of its agents
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
provided herein are cumulative and are not exclusive of any remedies provided by
law.
8.2 Governing Law.
i. THIS AGREEMENT WAS NEGOTIATED IN THE STATE OF NEW YORK, AND MADE BY
PLEDGORS AND ACCEPTED BY LENDER IN THE STATE OF NEW YORK, AND THE PROCEEDS
OF THE NOTE SECURED HEREBY WERE DISBURSED FROM THE STATE OF NEW YORK, WHICH
STATE THE PARTIES AGREE HAS A SUBSTANTIAL RELATIONSHIP TO THE PARTIES AND
TO THE UNDERLYING TRANSACTION EMBODIED
13
HEREBY, AND IN ALL RESPECTS, INCLUDING, WITHOUT LIMITING THE GENERALITY OF
THE FOREGOING, MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE, THIS
AGREEMENT AND THE OBLIGATIONS ARISING HEREUNDER SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK APPLICABLE
TO CONTRACTS MADE AND PERFORMED IN SUCH STATE (WITHOUT REGARD TO PRINCIPLES
OF CONFLICT LAWS) AND ANY APPLICABLE LAW OF THE UNITED STATES OF AMERICA.
TO THE FULLEST EXTENT PERMITTED BY LAW, PLEDGORS HEREBY UNCONDITIONALLY AND
IRREVOCABLY WAIVE ANY CLAIM TO ASSERT THAT THE LAW OF ANY OTHER
JURISDICTION GOVERNS THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS, AND THIS
AGREEMENT AND THE OTHER LOAN DOCUMENTS SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK PURSUANT TO SECTION
5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW.
ii. ANY LEGAL SUIT, ACTION OR PROCEEDING AGAINST LENDER OR PLEDGORS
ARISING OUT OF OR RELATING TO THIS AGREEMENT MAY AT LENDER'S OPTION BE
INSTITUTED IN ANY FEDERAL OR STATE COURT IN XXX XXXX XX XXX XXXX, XXXXXX XX
XXX XXXX, PURSUANT TO SECTION 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS
LAW, AND PLEDGORS WAIVE ANY OBJECTIONS WHICH THEY MAY NOW OR HEREAFTER HAVE
BASED ON VENUE AND/OR FORUM NON CONVENIENS OF ANY SUCH SUIT, ACTION OR
PROCEEDING, AND PLEDGORS HEREBY IRREVOCABLY SUBMIT TO THE JURISDICTION OF
ANY SUCH COURT IN ANY SUIT, ACTION OR PROCEEDING. EACH PLEDGOR DOES HEREBY
DESIGNATE AND APPOINT
CT Corporation System
000 0/xx/ Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
AS ITS AUTHORIZED AGENT TO ACCEPT AND ACKNOWLEDGE ON ITS BEHALF SERVICE OF
ANY AND ALL PROCESS WHICH MAY BE SERVED IN ANY SUCH SUIT, ACTION OR
PROCEEDING IN ANY FEDERAL OR STATE COURT IN NEW YORK, NEW YORK, AND AGREES
THAT SERVICE OF PROCESS UPON SAID AGENT AT SAID ADDRESS AND WRITTEN NOTICE
OF SAID SERVICE MAILED OR DELIVERED TO SUCH PLEDGOR IN THE MANNER PROVIDED
HEREIN SHALL BE DEEMED IN EVERY RESPECT EFFECTIVE SERVICE OF PROCESS UPON
SUCH PLEDGOR IN ANY SUCH SUIT, ACTION OR PROCEEDING IN THE STATE OF NEW
YORK. EACH PLEDGOR (I) SHALL GIVE PROMPT NOTICE TO LENDER OF ANY CHANGED
ADDRESS OF ITS AUTHORIZED AGENT HEREUNDER, (II) MAY AT ANY TIME AND FROM
TIME TO TIME DESIGNATE A SUBSTITUTE AUTHORIZED AGENT WITH AN OFFICE IN NEW
YORK, NEW YORK (WHICH SUBSTITUTE AGENT AND OFFICE SHALL BE
14
DESIGNATED AS THE PERSON AND ADDRESS FOR SERVICE OF PROCESS), AND (III)
SHALL PROMPTLY DESIGNATE SUCH A SUBSTITUTE IF ITS AUTHORIZED AGENT CEASES
TO HAVE AN OFFICE IN NEW YORK, NEW YORK OR IS DISSOLVED WITHOUT LEAVING A
SUCCESSOR.
8.3 Notices. All notices, consents, approvals and requests
required or permitted hereunder (a "Notice") shall be given in writing and shall
be effective for all purposes if either hand delivered with receipt
acknowledged, or by a nationally recognized overnight delivery service (such as
Federal Express), or by certified or registered United States mail, return
receipt requested, postage prepaid, or by facsimile and confirmed by facsimile
answer back, in each case addressed as follows (or to such other address or
Person as a party shall designate from time to time by notice to the other
party): If to Lender: Greenwich Capital Financial Products, Inc., 000 Xxxxxxxxx
Xxxx, Xxxxxxxxx, Xxxxxxxxxxx 00000, Attention: Mortgage Loan Department,
Telecopier (000) 000-0000, with a copy to: Xxxx Xxxxxxx LLP, 000 Xxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxxxxx Xxxxxxx, Esq., Telecopier: (212)
836-8689; if to any Pledgor: c/x Xxxxxxxx Hospitality Limited Partnership, 0000
Xxxxxxxxx Xxxxx, Xxxxxxxx, Xxxxxxxx 00000, Attention: Chief Financial Officer,
Telecopier: (000) 000-0000, with a copy to: Xxxxxxxxx, Xxxxxxx & Xxxxx, 000 X.
Xxxxxxx Xxxxxx, Xxxxx 000, Xxxxxxxxx, Xxxxxxxx 00000, Attention: Xxxxx X.
Xxxxxxxx, Esq., Telecopier: (000) 000-0000. A notice shall be deemed to have
been given: in the case of hand delivery, at the time of delivery; in the case
of registered or certified mail, when delivered or the first attempted delivery
on a Business Day; in the case of overnight delivery, upon the first attempted
delivery on a Business Day; or in the case of facsimile, upon the confirmation
of such facsimile transmission.
8.4 Waivers, etc. The terms of this Agreement may be waived,
altered or amended only by an instrument in writing duly executed by Pledgors
and Lender. Any such amendment or waiver shall be binding upon Lender and
Pledgors.
8.5 Successors and Assigns. This Agreement shall be binding
upon the successors and assigns of Pledgors and inure to the benefit of the
successors and assigns of Lender (provided, however, that Pledgors shall not
assign or transfer their rights hereunder without the prior written consent of
Lender). Without limiting the foregoing, Lender may at any time and from time to
time without the consent of Pledgors, assign or otherwise transfer all or any
portion of its rights and remedies under this Agreement to any other person or
entity, either separately or together with other property of Pledgors for such
purposes in connection with a transfer of Lender's interest in the other Loan
Documents and on such terms as Lender shall elect, and such other person or
entity shall thereupon become vested with all of the rights and obligations in
respect thereof granted to Lender herein or otherwise. Without limiting the
foregoing, in connection with any assignment of the Loan, Lender may assign or
otherwise transfer all of its rights and remedies under this Agreement to the
assignee and such assignee shall thereupon become vested with all of the rights
and obligations in respect thereof granted to Lender herein or otherwise. Each
representation and agreement made by each Pledgor in this Agreement shall be
deemed to run to, and each reference in this Agreement to Lender shall be deemed
to refer to, Lender and each of its successors and assigns.
15
8.6 Expenses, Indemnification.
i. Pledgors agree to pay or reimburse Lender for paying: (1) all
reasonable out-of-pocket expenses of Lender (including, without limitation,
the reasonable fees and expenses of counsel to Lender), in connection with
(A) the negotiation, preparation, execution and delivery of this Agreement
and (B) any amendment, modification or waiver of any of the terms of this
Agreement requested or initiated by Pledgors; (2) all costs and expenses of
Lender (including reasonable counsel's fees) in connection with any Event
of Default and any enforcement or collection proceedings resulting
therefrom; and (3) all transfer, stamp, documentary or other similar taxes,
assessments or charges levied by any governmental or revenue authority in
respect of this Agreement, or any other document referred to herein and all
costs, expenses, taxes, assessments and other charges incurred in
connection with any filing, registration, recording or perfection of any
security interest contemplated by this Agreement or any document referred
to herein.
ii. Pledgors hereby agree to indemnify Lender and its directors, officers,
employees and agents from, and hold each of them harmless against, any and
all losses, liabilities, claims, damages or expenses incurred by any of
them arising out of or by reason of any claim of any Person (1) relating to
or arising out of the acts or omissions of Pledgors under this Agreement or
the Charter Documents (but excluding any such losses, liabilities, claims,
damages or expenses incurred by reason of the gross negligence or willful
misconduct of the Person to be indemnified), or (2) resulting from the
ownership of or lien on any Collateral, including, without limitation, the
reasonable fees and disbursements of counsel incurred in connection with
any such investigation or litigation or other proceedings (but excluding
any such losses, liabilities, claims, damages or expenses incurred by
reason of the gross negligence or willful misconduct of the Person to be
indemnified).
8.7 No Liability on Part of Lender. Lender, by its acceptance
of this Agreement, the Collateral and any payments on account thereof, shall not
be deemed to have assumed or to have become liable for any of the obligations or
liabilities of Pledgors. Lender shall have no duty to collect any sums due in
respect of any of the Collateral in its possession or control, or to enforce,
protect or preserve any rights pertaining thereto, and Lender shall not be
liable for failure to collect or realize upon the Collateral, or any part
thereof, or for any delay in so doing, nor shall Lender be under any obligation
to take any action whatsoever with regard thereto. Lender shall, if requested by
the payor of any Revenue Payment, give receipts for any payments received by
Lender on account of the Collateral.
8.8 Further Assurances. Pledgors agree that, from time to time
upon the written request of Lender, Pledgors will execute and deliver such
further documents and do such other acts and things as Lender may reasonably
request in order fully to effect the purposes of this Agreement.
8.9 Delay Not a Waiver. Neither any failure nor any delay on
the part of Lender in insisting upon strict performance of any term, condition,
covenant or agreement, or exercising any right, power, remedy or privilege
hereunder, shall operate as or constitute a
16
waiver thereof, nor shall a single or partial exercise thereof preclude any
other future exercise, or the exercise of any other right, power, remedy or
privilege.
8.10 Counterparts. This Agreement may be executed in any number
of counterparts, all of which taken together shall constitute one and the same
instrument and any of the parties hereto may execute this Agreement by signing
any such counterpart.
8.11 Severability. If any provision hereof is invalid and
unenforceable in any jurisdiction, then, to the fullest extent permitted by law,
(i) the other provisions hereof shall remain in full force and effect in such
jurisdiction and shall be liberally construed in favor of Lender in order to
carry out the intentions of the parties hereto as nearly as may be possible and
(ii) the invalidity or unenforceability of any provision hereof in any
jurisdiction shall not affect the validity or enforceability of such provision
in any other jurisdiction.
8.12 Limitation of Liability. The liability of Pledgors
hereunder shall be subject to the provisions of Section of the Loan Agreement.
[Remainder of Page Intentionally Left Blank]
17
IN WITNESS WHEREOF, Pledgors have caused this Pledge and Security
Agreement to be duly executed as of the day and year first above written.
XXXXXXXX HOSPITALITY TRUST, INC., a Virginia
corporation
By: /s/ Xxxxxx X. Xxxxxxxxxx
----------------------------------------
Name: Xxxxxx X. Xxxxxxxxxx
Title: President
SOLOMONS GP, LLC, a Delaware limited
liability company
By: /s/ Xxxxxx X. Xxxxxxxxxx
-----------------------------------------
Name: Xxxxxx X. Xxxxxxxxxx
Title: President
TRS LEASING, INC., a Virginia corporation
By: /s/ Xxxxxx X. Xxxxxxxxxx
-----------------------------------------
Name: Xxxxxx X. Xxxxxxxxxx
Title: President
XXXXXXXX HOSPITALITY LIMITED PARTNERSHIP,
a Virginia limited partnership
By: Xxxxxxxx Hospitality REIT Trust, a
Maryland trust
By: Xxxxxxxx Hospitality Trust, Inc., a
Virginia corporation
By: /s/ Xxxxxx X. Xxxxxxxxxx
------------------------------------
Name: Xxxxxx X. Xxxxxxxxxx
Title: President
18
SCHEDULE OF EXHIBITS
--------------------
Exhibit A - Charter Documents
Exhibit B - Form of Assignment of Interest (HH Trust)
