FIRST AMENDMENT TO OPERATING AGREEMENT
OF RED CANYON AT PALOMINO PARK LLC
THIS FIRST AMENDMENT TO OPERATING AGREEMENT OF RED CANYON AT PALOMINO
PARK LLC (this "First Amendment") is made as of the 19th day of May, 1997, by
and between XX XXXX, an individual ("Xxxx") and WELLSFORD PARK HIGHLANDS
CORP., a Colorado corporation ("WPHC").
RECITALS
X. Xxxx and WPHC constitute all of the members (collectively, the
"Members") of Red Canyon at Palomino Park LLC, a Colorado limited liability
company (the "Company"), which is governed by that certain Operating Agreement
of Red Canyon at Palomino Park LLC (the "Operating Agreement") dated as of
April 17, 1996.
B. The Members now desire to amend the Operating Agreement as set forth
herein.
C. Capitalized terms not otherwise defined herein shall have the
definitions set forth in the Operating Agreement.
NOW, THEREFORE, for and in consideration of the above recitals and other
good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, Xxxx and WPHC hereby agree to amend the Operating
Agreement as follows:
15. Operating Deficit Guaranty.
a. Section 6.4 of the Operating Agreement, which provides for the
making of the Operating Deficit Guaranty by Xxxx, is hereby deleted in its
entirety.
b. The definition of Operating Deficit Payments which appears in
Section 1(bn) of the Operating Agreement is hereby deleted.
c. Section 4.4 of the Operating Agreement, which provides for
Operating Deficit Payments by Xxxx, is hereby deleted in its entirety.
d. The phrase "Xxxx shall make either a Development Deficit Payment
or an Operating Deficit Payment" which appears in the second sentence of
Section 6.16 of the Operating Agreement is hereby deleted and the following is
substituted therefor: "Xxxx shall make a Development Deficit Payment."
e. The phrase "and Operating Deficits" which appears in the fifth
sentence of Section 7.6 of the Operating Agreement is hereby deleted.
f. Section 12.12.1.5 of the Operating Agreement, which provides a
cause for removal of Xxxx as the manager, and as a member, of the Company, is
hereby deleted in its entirety and the following is substituted therefor:
"12.12.1.5 The Project having incurred any Operating
Deficits after the Conversion Date; provided, however,
that the Company will remain liable to Xxxx for payment of
certain fees to Xxxx pursuant to Article 7 of this
Agreement and WPHC will remain liable to continue making
Capital Contributions to fund Operating Deficits pursuant
to Section 4.1.2(b) of this Agreement; provided, further,
that all such obligations shall survive Xxxx'x removal;"
g. The phrase "or the Operating Deficit Guaranty," which appears in
Section 18.9 of the Operating Agreement is hereby deleted in its entirety.
16. Operating Deficit Capital Contributions.
a. Section 4.1.2(b) of the Operating Agreement is hereby denoted as
Section 4.1.2(c) and the following Section 4.1.2(b) is hereby added to the
Operating Agreement:
"(b) WPHC shall have the right, but not the obligation,
to make Capital Contributions from time to time in its
sole and absolute discretion to fund Operating Deficits or
other expenses incurred by the Company. Notwithstanding
the foregoing, so long as: (i) Xxxx is not in material
default under this Agreement, and (ii) Xxxx has personally
guaranteed the Construction Loan pursuant to Section 5.2.4
and is not in material default under such guaranty, then
WPHC shall be obligated to make Capital Contributions to
fund: (y) prior to Final Completion, the amount (if any)
by which Operating Expenses exceed Gross Operating
Revenue, and (z) Operating Deficits which were incurred
during the period between Final Completion and payment in
full of the Construction Loan."
b. The phrase "to the Members in accordance with their respective
Percentage Interests", which describes the distribution of Cash Flow and
appears in Section 10.1 of the Operating Agreement, is hereby deleted in its
entirety and the following is substituted therefor:
"to the Members as follows: (i) first, to WPHC, until it
has received aggregate distributions equal to the amount
of Capital Contributions made by it pursuant to
Section 4.1.2(b), (ii) then, to the Members in accordance
with their respective Percentage Interests".
c. The phrase "all fees paid to Xxxx or its Affiliates (excluding
the property management fee paid to The Xxxx Company after the Conversion
Date)" which appears in the definition of Development Costs in
Section 1(ac)(v) of the Operating Agreement is hereby deleted in its entirety
and the following is substituted therefor:
"all fees paid to Xxxx or its Affiliates (excluding the
property management fee paid to The Xxxx Company)".
d. The phrase "all Operating Expenses incurred prior to the
Conversion Date" which appears in the definition of Development Costs in
Section 1(ac)(viii) of the Operating Agreement is hereby deleted in its
entirety and the following is substituted therefor:
"all Operating Expenses incurred prior to the Conversion
Date, excluding all Operating Expenses (except real estate
taxes, assessments, personal property taxes and insurance)
incurred in buildings which have achieved Substantial
Completion with respect to their units and have been made
available to the property management company for immediate
leasing and occupancy".
17. Construction Loan.
a. The phrase "the Construction Loan Closing must take place on or
before October 31, 1996, provided, however, such date shall be extended to a
date not later than December 31, 1996" which appears in Section 5.2.4 of the
Operating Agreement is hereby deleted in its entirety and the following is
substituted therefor:
"the Construction Loan Closing must take place on or
before May 31, 1997, provided, however, such date shall be
extended to a date not later than June 30, 1997".
b. The following definition is hereby added to Section 1 of the
Operating Agreement:
""Budgeted Construction Loan Interest" means that amount
which appears in the line item of the Final Project Budget
(attached hereto as Exhibit O) denoted as "CONSTR. LOAN
INTEREST"".
c. The following text is hereby appended to the end of
Section 5.2.7 of the Operating Agreement:
"Xxxx'x obligation to the Company and to WPHC to guarantee
interest payments on the Construction Loan applies to
payments which are due and payable through Substantial
Completion; Xxxx shall not be responsible for guaranteeing
payments which come due after Substantial Completion.
Nothing in this Section 5.2.7 shall relieve Xxxx of those
obligations which accrue prior to Substantial Completion."
d. The following text is hereby appended to the end of Section 6.3
of the Operating Agreement:
"Notwithstanding anything to the contrary in this
Agreement, the Members agree that, prior to the
Substantial Completion, all debt service expenses shall be
paid only from the funds reserved for Budgeted
Construction Loan Interest and from Development Deficit
Payments, not from any other funds of the Company
(including, without limitation, Net Operating Income);
provided, however, that Net Operating Income shall be used
to pay debt service expenses if so requested by either the
Construction Lender or WPHC (such payments are herein
referred to as "NOI Construction Loan Interest Payments").
Without the prior written consent of WPHC, the funds
reserved as Budgeted Construction Loan Interest will be
used for the sole purpose of debt service expenses on the
Construction Loan and for no other purpose (including,
without limitation, the payment of Development Deficits).
Any funds remaining after the payment of debt service on
the Construction Loan will be treated as net Cash Flow."
e. The following definition is hereby added to Section 1 of the
Operating Agreement:
"NOI Construction Loan Interest Payments" has the
definition given it in Section 6.3 hereof."
f. The definition of "Development Deficits" which appears in
Section 1(ad) of the Operating Agreement is hereby deleted in its entirety and
the following is substituted therefor:
""Development Deficits" means the positive amount, if any,
by which Development Costs exceed the sum of: (a) the
Capital Contributions of the Members required to be made
at the Initial Closing, (b) the Final Closing Capital
Contribution, and (c) the aggregate NOI Construction Loan
Interest Payments, for the period prior to the Conversion
Date."
18. No Incentive Fee.
a. Section 7.5 of the Operating Agreement, which provides for the
Incentive Fee to Xxxx, is hereby deleted in its entirety. The definition of
Incentive Fee which appears in Section 1(as) of the Operating Agreement will
remain a part of the Operating Agreement, but solely for the purpose of
allocating Infrastructure Costs as described in Section 1(ai)(i) of the
Operating Agreement.
b. The phrase "and accrued but unpaid Incentive Fees" which appears
in Section 1(ai)(i)(B) of the Operating Agreement is hereby deleted.
c. The second sentence of Section 1(bk) is hereby deleted in its
entirety.
d. Exhibit P of the Operating Agreement shall remain a part of the
Operating Agreement, but solely for the purpose of calculating the allocation
of Infrastructure Costs.
e. The phrase "except the Incentive Fee" which appears in the third
and sixth sentences of Section 7.6 of the Operating Agreement is hereby
deleted from each such sentence.
f. The phrase ", excluding, however the Incentive Fee" which
appears in the first sentence of Section 8.3.3 of the Operating Agreement is
hereby deleted in its entirety.
19. Cost Savings.
a. The phrase "twenty-five percent (25%)" which appears in
Sections 7.4 and 4.1.2(c) of the Operating Agreement is hereby replaced with
the phrase "fifty percent (50%)" in each of said Sections of the Operating
Agreement.
b. The definition of "Cost Savings" which appears in Section 1(z)
of the Operating Agreement is hereby deleted in its entirety and the following
is substituted therefor:
""Cost Savings" means the positive amount, if any, equal
to: (i) Total Budgeted Development Costs, minus (ii) the
undisbursed amount of Budgeted Construction Loan Interest
through the Final Closing, adjusted by subtracting
therefrom the aggregate NOI Construction Loan Interest
Payments, minus (iii) the actual Development Costs
incurred on the Final Closing Date."
20. Xxxx Reimbursable Expenses. The Members hereby agree that Xxxx had
no Reimbursable Expenses and that Exhibit A (indicating no Reimbursable
Expenses), a copy of which is attached hereto, is hereby attached to and made
a part of the Operating Agreement as Exhibit A thereto, to the same effect as
if it had been fully set forth in the Operating Agreement at the date the
Operating Agreement was executed by the Members.
21. Initial Project Budget. The Members hereby agree that there was no
Initial Project Budget and that Exhibit I (indicating no Initial Project
Budget), a copy of which is attached hereto, is hereby attached to and made a
part of the Operating Agreement as Exhibit I thereto, to the same effect as if
it had been fully set forth in the Operating Agreement at the date the
Operating Agreement was executed by the Members.
22. Property Management Agreement. The Members hereby agree that the
Property Management Agreement, a copy of which is attached hereto, is hereby
attached to and made a part of the Operating Agreement as Exhibit J thereto,
to the same effect as if it had been fully set forth in the Operating
Agreement at the date the Operating Agreement was executed by the Members.
23. Description of Infrastructure. The Members hereby agree that the
Description of Infrastructure, a copy of which is attached hereto, is hereby
attached to and made a part of the Operating Agreement as Exhibit E thereto,
to the same effect as if it had been fully set forth in the Operating
Agreement at the date the Operating Agreement was executed by the Members.
24. Description of Infrastructure Land. The Members hereby agree that
the Description of Infrastructure Land, a copy of which is attached hereto, is
hereby attached to and made a part of the Operating Agreement as Exhibit F
thereto, to the same effect as if it had been fully set forth in the Operating
Agreement at the date the Operating Agreement was executed by the Members.
25. Pledge and Security Agreement by Xxxx. The Members hereby agree
that the Pledge and Security Agreement by Xxxx, a copy of which is attached
hereto, is hereby attached to and made a part of the Operating Agreement as
Exhibit L thereto, to the same effect as if it had been fully set forth in the
Operating Agreement at the date the Operating Agreement was executed by the
Members.
26. Pledge and Security Agreement by WPHC. The Members hereby agree
that the Pledge and Security Agreement by WPHC, a copy of which is attached
hereto, is hereby attached to and made a part of the Operating Agreement as
Exhibit M thereto, to the same effect as if it had been fully set forth in the
Operating Agreement at the date the Operating Agreement was executed by the
Members.
27. Plans and Specifications. The Members hereby agree that the Plans
and Specifications, a copy of which is attached hereto, is hereby attached to
and made a part of the Operating Agreement as Exhibit N thereto, to the same
effect as if it had been fully set forth in the Operating Agreement at the
date the Operating Agreement was executed by the Members.
28. Final Project Budget. The Members hereby agree that the Final
Project Budget, a copy of which is attached hereto, is hereby attached to and
made a part of the Operating Agreement as Exhibit O thereto, to the same
effect as if it had been fully set forth in the Operating Agreement at the
date the Operating Agreement was executed by the Members.
29. Infrastructure Budget. The Members hereby agree that the
Infrastructure Budget, a copy of which is attached hereto, is hereby attached
to and made a part of the Operating Agreement as Exhibit T thereto, to the
same effect as if it had been fully set forth in the Operating Agreement at
the date the Operating Agreement was executed by the Members.
30. Substitution Agreement. The Members hereby agree that the
Substitution Agreement, a copy of which is attached hereto, is hereby attached
to and made a part of the Operating Agreement as Exhibit U thereto, to the
same effect as if it had been fully set forth in the Operating Agreement at
the date the Operating Agreement was executed by the Members.
31. Headings and Captions. The headings and captions of this First
Amendment are inserted for convenience only and are in no way intended to
describe, interpret, define, or limit the scope, extent or intent of this
First Amendment, the Operating Agreement or any provisions thereof.
32. Full Force and Effect. The Operating Agreement, as specifically
amended herein, is hereby ratified by the Members and shall remain in full
force and effect.
33. Counterparts. This First Amendment may be executed in any number of
counterparts, each of which shall be deemed to be an original and all of
which, when taken together, shall constitute one agreement binding on the
parties hereto, notwithstanding that all the parties may not have signed the
same counterpart. Signature pages from one counterpart may be removed and
attached to another counterpart to create one fully-executed document.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the parties hereto, being all of the Members of the
Company, have executed this First Amendment as of the date first written
above.
/s/ Xx Xxxx
_____________________________________
Xx Xxxx
WELLSFORD PARK HIGHLANDS CORP.,
a Colorado corporation
By:/s/ Xxxxx X. Xxxxxx
__________________________________
Xxxxx X. Xxxxxx, Vice President
EXHIBIT A
XXXX REIMBURSABLE EXPENSES
None.
EXHIBIT E
DESCRIPTION OF INFRASTRUCTURE
EXHIBIT F
DESCRIPTION OF INFRASTRUCTURE LAND
EXHIBIT I
INITIAL PROJECT BUDGET
None.
EXHIBIT J
PROPERTY MANAGEMENT AGREEMENT
(See attached)
RED CANYON AT PALOMINO PARK, LLC
PROPERTY MANAGEMENT AGREEMENT
This agreement (the "Agreement") is executed on the 6th day of May, 1997
by and between RED CANYON AT PALOMINO PARK, LLC ("Owner"), and THE XXXX
COMPANY, a Colorado corporation ("Manager").
FOR GOOD AND VALUABLE CONSIDERATION, the receipt and sufficiency of which
is hereby acknowledged, Owner and Manager mutually agree as follows:
1. APPOINTMENT OF MANAGER
On and subject to the terms and conditions of this Agreement, Owner
hereby retains Manager commencing on January 1, 1997 (the "Commencement
Date") to manage and lease on behalf of Owner the following properties
(individually or collectively the "Property"): Red Canyon at Palomino
Park, Highlands Ranch, Colorado.
2. TERM
This Agreement shall commence on the Commencement Date and, subject to
Section 8 below, shall expire on the "Termination Date" (as defined
below). "Termination Date" shall mean the earlier of Final Closing or
removal of Xxxx as defined in the Operating Agreement of Red Canyon at
Palomino Park, LLC dated as of April 17, 1996 ("Operating Agreement").
3. MANAGEMENT FEES
In consideration of the performance by the Manager of its duties and
obligations hereunder, the Owner shall pay to the Manager a management
fee equal to 2.5% of "Gross Operating Revenues" (as defined below)
payable the last day of each calendar month with respect to that calendar
month. Manager shall submit to Owner an invoice detailing the
calculation of the management fee each month. "Gross Operating Revenues"
means the actual monthly cash collections from the customary operations
of the Property consisting of rental and vending machine receipts,
forfeited deposits, late charges, rent claim settlements net of any
collection fees, lease termination or modification payments and other
operating receipts, excluding applicable sales tax and refundable
deposits); Gross Operating Revenues shall not include any revenues from
condemnation or casualty proceeds, from the sale of any personal or real
property of Owner or from any source other than the customary operations
of the Property. Manager shall submit to Owner's or Owner's accounting
agent an invoice detailing the calculation of the management fee each
month.
4. AUTHORITY AND RESPONSIBILITIES OF MANAGER
4.01 Independent Contractor. In the performance of its duties hereunder,
the Manager shall be and act as an independent contractor, with the sole
duty to supervise, manage, operate, control and direct performance of the
details of its duties incident to the specified duties and obligations
hereunder, subject to the rights of the Owner, as described herein.
Nothing contained in this Agreement shall be deemed or construed to
create a partnership, joint venture, employment relationship, or
otherwise to create any liability for one party with respect to
indebtedness, liabilities or obligations of the other party except as
otherwise may be expressly set forth herein.
4.02 Standard of Care. Manager shall perform its duties and obligations
in a professional, competent, businesslike and efficient Manager as would
a first class property manager of apartment projects similar to the
Property.
4.03 Depository Account. Manager shall open, for the benefit of Owner, a
special, separate, FDIC insured, interest bearing account in a savings
institution identified by Owner (the "Depository Account") upon which the
only persons with signatory authority shall be the following employees of
Owner: Xxxxxxx Xxxxxxx, Chairman; Xx Xxxxxxxxx, President; and Xxxxxxx
Xxxxxx, Vice President. The Depository Account shall be the sole and
exclusive property of the Owner, and Manager shall have no interest
(legal or equitable) therein. Owner shall have the right to change the
signatories to the Depository Account in its sole discretion.
4.04 Business Plan.
(a) Manager shall prepare and present to Owner in the computer
model and word processing and spreadsheet software approved by Owner,
within thirty days of the Commencement Date and prior to November 15 of
each year thereafter during the term of this Agreement, an annual
business plan for the following calendar year, which once approved by
Owner shall be the business plan governing the management of the Property
(the "Business Plan").
(b) Manager shall include in the Business Plan the following:
(i) a twelve-month operating budget, using Owners' chart of
accounts (see Schedule B) for the following calendar year,
which once approved by Owner, shall be the budget
("Budget");
(ii) a 5-year budget for planned improvements based on a
detailed annual physical inspection of the Property
completed by Manager;
(iii) a preventative maintenance plan for the Property
outlining the management plan to minimize long term
operating costs and to avoid deferred maintenance;
(iv) a marketing plan for the Property, including print and
other forms of advertising, use of apartment locators and
promotional activities and apartment pricing;
(v) market surveys;
(vi) tenant selection criteria to be used in the selection of
prospective tenants, including appropriate references,
income and credit history;
(vii) a copy of Manager's current policies and procedures
which shall include the following:
(x) an environmental compliance plan outlining policies
and procedures for managing the disposal or storage of
hazardous materials and toxic substances (such plan shall
require that the Property shall not be the source of a
release or dispose of any hazardous materials or toxic
substances except as may be incidental to the operation of
an apartment project (e.g. cleaning supplies, fertilizers,
paint); and
(y) a legal compliance plan of actions necessary to
comply with all "Applicable Laws" (as defined below).
"Applicable laws shall mean any and all statutes,
ordinances, laws, rules, regulations, orders and
requirements of any federal, state or municipal
government, and appropriate departments, commissions,
boards and officers having jurisdiction over the use,
maintenance or operation of the Property, including
without limitation (A) laws prohibiting discrimination
based on race, religion, national origin, color, gender,
disability, age, sexual preference or any other
classification, (B) employment laws of any kind or
description, (C) laws regarding tenant security deposits,
(D) laws regarding the storage, release, and disposal of
hazardous materials, petroleum products, and toxic
substances, (E) laws and orders relating to the use of
minority business enterprises, to the extent any such laws
and orders are applicable in the performance of work or
furnishing of services, materials, equipment or supplies
hereunder, and (F) all orders and requirements of local
board of fire underwriters, or any other body which may
hereafter exercise similar functions including any and all
forms, reports and returns required by law to be filed
with any governmental authority in connection with the
use, maintenance or operation of the Property; and
(viii) any other information, plan, survey, policies or
procedures as Owner may request.
(c) The Business plan shall be approved by the Owner before
implementation. All actions outlined in the Business Plan shall be
implemented by Manager on behalf of and at the expense of Owner, subject
to the limitations on expenses enumerated in the Budget. The Budget
shall be Managers's guideline for Owner's expectations of rental rates;
however, Manager shall be expected to continually test new rental levels
and to make adjustments with prompt notification to Owner as the market
shall permit or require. The Business Plan in conjunction with the
Budget, shall constitute a major control under which Manager shall
operate, and Manager shall submit a report to Owner setting forth the
reasons for any variance therefrom as required under Owner's policies and
procedures attached hereto, and made a part hereof, as Schedule B
("Owners' Policies and Procedures").
4.05 Leasing, Collection of Rents, etc.
(a) Manager shall use its best efforts consistent with the standard
of care set forth herein to lease apartments units, retain residents and
maximize Gross Operating Revenues.
(b) Manager shall sign apartment leases on behalf of Owner in its
capacity as property manager hereunder. Manager shall only sign leases
in the form of lease approved by Owner and subject to Owner's Policies
and Procedures. Manager shall not enter into any lease which has a term
greater than 24 months. Manager shall attach as a rider to all leases
the text as presented in Schedule A. Manager shall investigate tenant
references and tenant credit histories and shall select tenants in
accordance with tenant selection criteria outlined in the Business Plan,
and shall apply resident selection criteria fairly to all prospective
tenants. Manager shall not discriminate against or segregate any person
or group of persons on account of race, color, religion, creed, sex,
national origin, age, or disability in leasing or managing the Property
nor shall Manager permit any such practice or practices of discrimination
or segregation with reference to the selection, location, number, use, or
occupancy of tenants. Manager shall assess the leasing practices on a
regular basis to assure that no such practices of discrimination are
occurring on the Property. Manager shall report any such incidents or
claims of discrimination to Owner immediately.
(c) Manager shall collect rents, security deposits and other
charges payable by tenants in accordance with the tenant leases, and
shall collect income due Owner with respect to the Property from all
other sources, and shall deposit all such income received immediately
upon receipt in the Depository Account for each Property
(d) Manager shall, at Owner's expense, subject to limits set forth
in the Budget and the Business Plan, terminate leases, evict tenants,
institute and settle suits for delinquent payments as Manager deems
advisable. In connection therewith, Manager may, at Owner's expense and
subject to the limitations on expenses enumerated in the Budget, consult
and retain legal counsel.
4.06 Repair, Maintenance and Service.
(a) Manager shall, at Owner's expense and subject to the
limitations set forth in the Budget and the Business Plan, maintain the
Property in good repair and condition.
(b) In name of Owner and subject to the other terms and conditions
of this Agreement, Manager in its capacity hereunder shall execute
contracts for water, electricity, gas, telephone, television, vermin or
pest extermination and any other services which are necessary to properly
maintain the Property. Manager shall include in any such contracts the
text in Schedule A. Manager shall, in Owner's name and at Owner's
expense, hire and discharge independent contractors for the repair and
maintenance of the Property and shall include in any such contract the
text as presented in Schedule A. Other than leases, Manager shall not,
without the prior written consent of the Owner, enter into any contract
in name of Owner which may not be terminated with 30 days notice.
Manager shall act at arms length with all contractors and shall employ no
affiliated entities without Owner's prior written consent.
Notwithstanding the foregoing, Owner shall have the right to require
Manager to use certain contractors and suppliers for any service, supply,
maintenance, repair or utility for the Property, including cable,
landscaping or security service.
4.07 Manager's Employees.
(a) Manager shall have in its employ at all times a sufficient
number of employees to enable it to professionally manage the Property in
accordance with the terms of this Agreement. Owner shall have the right
to require that Manager have a minimum or maximum number of employees at
the Property and to approve or require the removal or replacement of any
employee working at the Property. Manager shall prepare, execute and
file all forms, reports and returns required by Applicable Laws. All
payroll costs for on-site employees shall be at Owner's expense. All
matters pertaining to the employment and supervision of such employees
shall be the sole responsibility of the Manager, which in all respects
shall be the employer of such employees, and Owner shall have no
liability with respect to such matters. Notwithstanding the foregoing,
Manager shall not, without consent of Owner, transfer any employee from
the Property to a similar on-site position at a property in the area
managed by Manager on behalf of a third party.
(b) Manager shall employ at its sole expense a regional manager to
oversee the operations of the Property who shall frequently, but not less
than bi-weekly, visit the Property performing inspections and providing
guidance and training to the on-site staff. The assignment of this
regional manager to oversee the Property shall be approved by Owner. The
regional manager's supervision of more than seven (7) properties
including the Property or other considerations may be cause for Owner to
withhold or rescind said approval.
(c) Manager shall maintain, at Owner's expense, workers
compensation (or other private insurance acceptable to Owner) for all
on-site employees at limits not less than the statutory amount. Manager
shall prepare, execute and file all forms, reports and returns required
by Applicable Laws.
4.08 Insurance.
(a) Manager shall, at its sole cost and expense, procure and
maintain in full force and effect, throughout the existence of this
Agreement, policies of insurance as detailed below in subsection (b), on
which Owner shall be named insured. These policies shall be issued by an
insurance company licensed to do business in the state in which the
Property is located with an AM Best rating of A-, V or better. Manager
shall be covered under such policies for its indemnity obligations
hereunder subject to the limits set forth below. Manager shall promptly
furnish to Owner certificates of insurance acceptable to Owner as
evidence of the insurance coverage required hereunder. Manager shall
obtain a written obligation on the part of each insurance carrier to
notify Owner at least 30 days prior to any cancellation or material
change of any such policy.
(b) The following policies of insurance shall be procured and
maintained by Manager:
1. Employer's liability insurance in an amount not less than
$250,000 per occurrence.
2. Blanket crime coverage, including employee dishonesty and
depositor's forgery endorsements, protecting Manager against
fraudulent or dishonest acts of its employees, whether acting alone
or with others, with limits of liability of not less than $25,000
per Property, not to exceed $100,000 in aggregate if more than one
Property is managed, on which Owner shall be loss payee.
3. Professional liability insurance covering the activities of
Manager written on a "claims made" basis with limits of at least
$1,000,000 with a maximum deductible of $10,000. Any loss within
the deductible shall be borne by Manager. Coverage shall be
maintained in effect during the period of the Agreement and for not
less than two (2) years after termination of the Agreement.
4.09 Reports. Manager shall prepare and send to Owner reports in
accordance with Owner's Policies and Procedures, including, i) monthly
status report (Owner's form); ii) monthly statements approved by Manager
showing all receipts and disbursements; iii) an accompanying letter
explaining any significant events at the Property, as well as any
variances from budget in excess of +/- 10% on any operating statement
detailed item; iv) planned improvement logs (Owner's form); v) market
study; vi) copies of significant incident reports; and, vii) other
analyses as should from time to time be reasonably requested by Owner.
4.10 Operating Expenses.
(a) Manager shall cause the Property to incur proper operating
expenses in exercising its authority and performing all of its duties and
obligations hereunder. Manager shall use reasonable efforts to minimize
such expenses by obtaining competitive pricing on all services and
obtaining at least three bids on major expenditures. Manager shall use
reasonable efforts to comply with the limitations on expenditures set
forth in the Budget. Manager shall obtain Owner's prior written consent
before incurring on behalf of Owner any single expenditure in excess of
two thousand five hundred dollars ($2,500) excluding utility bills and
other normal and recurring expenses included in the Budget, except in an
emergency in which case Manager may incur expenses reasonably necessary
to protect life and property. Manager shall notify Owner of any such
emergency expenses as soon as practicable after they are incurred.
(b) Manager shall timely request payment by Owner of all proper
costs and expenses incurred by the operation of the Property as
contemplated herein. All costs for which payment is requested shall be
coded by the on-site manager in accordance with Owner's standard chart of
accounts, attached in Schedule B. Manager shall not request payment of
invoices to itself other than for the following items: i) the cost of
sending Property related material by overnight courier at Owner's request
ii) forms and other items ordered in bulk by Manager and used by the
Property, iii) third-party payroll processing, and iv) the Management
Fee. Manager shall not request payment of any invoices, whether to
itself or a third party, marked-up above cost. Manager is not required
to monitor or request payment for taxes, escrows or debt service, which
costs Owner will monitor and pay.
4.11 Legal Proceedings and Compliance with Applicable Laws.
(a) Manager shall promptly notify Owner in writing of the service
of any legal process upon Manager (although Manager is not authorized to
accept service of process on behalf of the Owner), or the occurrence of
any casualty loss, injury or damage on or about the Property;
(b) Manager shall fully comply with all Applicable Laws in
connection with this Agreement, the performance of its obligations
hereunder, its own operations and its hiring, discharge and retention of
employees. Manager shall perform, on behalf and upon approval of Owner
and at Owner's expense, all such acts in and about the Property which
shall be reasonably necessary to comply with Applicable Laws.
4.12 Policies and Procedures.
(a) Manager shall maintain files of all original documents relating
to leases, vendors and all other business of the Property in an orderly
fashion at the Property, which files shall be the property of Owner and
shall at all times be open to Owner's inspection.
(b) Manager shall comply with the policies and procedures attached
hereto as Schedule B. Owner may periodically make alterations to these
policies and procedures and will provide such updates to Manager.
5. RESPONSIBILITIES OF OWNER
5.01 Accounting. Owner shall provide accounting services for the
payment of all proper expenses of the property, and shall provide to
Manager all accounting reports necessary for Manager to discharge its
obligations hereunder by the 5th of each month or the next subsequent
business day.
5.02 Liability. Owner shall maintain sole and primary public
liability and property damage insurance with respect to occurrences on or
about the Property, with liability limits of not less than $1,000,000 per
person and per occurrence, and excess liability with limits of not less
than $10,000,000, and rental income insurance, and naming the Manager as
an additional insured. Owner shall maintain such fire, hazard and other
insurance in such amounts as are proper in judgment of Owner. The
maintenance of fire, hazard and other insurance shall be the sole
responsibility of Owner and not Manager.
6. INDEMNIFICATION
6.01 Indemnification of Owner. The Manager shall indemnify, defend
and hold harmless Owner against any and all liabilities, costs, expenses,
damages, penalties, interest, injuries and obligations, including
reasonable attorneys' fees ("Claims") incurred by Owner as a result of
(a) any act by Manager outside the scope of its authority hereunder, (b)
any act or failure to act constituting negligence, misconduct, fraud or
breach of this Agreement, (c) Claims made by current or former employees
or applicants for employment arising from hiring, supervising or firing
same, or (d) any act by Manager, its employees, agents or contractors in
violation of any Applicable Law.
6.02 Indemnification of Manager. Owner shall indemnify and hold harmless
Manager against any and all Claims incurred by Manager as a result of
acts of Manager made within the scope of its authorities, excluding,
however, (a) Claims which arise from the negligence, misconduct, fraud or
breach of this Agreement by Manager, (b) Claims made by current or former
employees or applicants for employment arising from hiring, supervising
or firing of same, or (c) any act by Manager, its employees, agents or
contractors in violation of any Applicable Law.
6.03 General Provisions. The provisions of this Section shall survive the
termination of this Agreement.
7. DEFAULTS
7.01 Manager's Event of Default. Manager shall be deemed to be in
default hereunder upon the happening of any of the following ("Manager's
Event of Default"):
(a) The failure by Manager to keep, observe or perform any
covenant, agreement, term or provision of this Agreement to be kept,
observed or performed by Manager relating to any of the Properties, and
such default shall continue, in full or in part, for a period of ten (10)
days after written notice thereof by Owner to Manager, including without
limitation, the following:
(i) failure to make any payment or perform any financial
obligation required hereby;
(ii) failure to prepare and present a complete Budget or
Business Plan as required hereby;
(iii) failure to collect Gross Operating Revenue as
required hereby;
(iv) failure to deposit Gross Operating Revenue due Owner as
required hereby;
(v) failure to maintain the Property as required hereby;
(vi) an act or omission of Manager in violation of any
Applicable Law; or
(vii) failure to comply with Owner's Policies and
Procedures.
(b) Notwithstanding paragraph (a), the occurrence of any of the
following shall be a Manager's Event of Default and Manager shall not
have the right to cure such action:
(i) The request by Manager of payment of any invoice, whether
to itself or a third party, marked-up above cost as
prohibited herein.
(ii) The aggregate operating expenses excluding real estate
taxes and improvements as reported for any Property on an
accrual basis shall:
(x) in any consecutive three month period exceed by 10%
or more the aggregate amount included in the Budget
for those same expenses for such three-month period;
or
(y) in any one-month period exceed by 20% or more the
amount included in the Budget for those same expenses
for such month.
(iii) The failure by Manager to meet the standard of care
set forth herein for the performance of its duties at
any of the Properties.
(c) The making of a general assignment by Manager for benefit of
its creditors, the filing by Manager with any bankruptcy court of
competent jurisdiction of a voluntary petition under Title 11 of U.S.
Code, as amended from time to time, the filing by Manager of any petition
or answer seeking any reorganization, arrangement, composition,
readjustment, liquidation, dissolution, or similar relief under any
present or future federal or state act or law relating to bankruptcy,
insolvency, or other relief for debtors, Manager being the subject of any
order for relief issued under such Title 11 of the U.S. Code, as amended
from time to time, or the dissolution or liquidation of Manager; and
(d) The misapplication or misappropriation of funds held by Manager
in trust for Owner.
7.02 Remedies of Owner. Upon the occurrence of a Manager's Event of
Default, Owner shall be entitled (i) to terminate in writing this
Agreement effective as of the date designated by Owner (which may be the
date upon which notice is given), and/or (ii) to pursue any remedy at law
or in equity, including without limitation, specific performance. All of
Owner's rights and remedies shall be cumulative.
7.03 Owner's Event of Default. Owner shall be deemed to be in default
hereunder (an "Owner's Event of Default") if Owner shall fail to keep,
observe or perform any covenant, agreement, term or provision of this
Agreement to be kept, observed or performed by Owner, and such default
shall continue for a period of thirty (30) days after written notice
thereof by Manager to Owner, or if such default cannot be cured within
such thirty (30) day period, then such additional period as shall be
reasonable, provided Owner commences to cure such default within such
thirty (30) day period and proceeds diligently to prosecute such cure to
completion.
7.04 Remedies of Manager. Upon the occurrence of an Owner's Event of
Default or upon a termination of this Agreement by Owner without cause
pursuant to Section 8.04 hereof, Manager shall be entitled (i) to
terminate in writing this Agreement effective as of the date designated
by Owner which is at least 10 days after receipt of such notice of
termination by Owner, and/or (ii) to pursue an action for the actual
compensatory damages incurred by Manager. Manager expressly agrees that
termination and monetary damages are its sole rights and remedies with
respect to an Owner's Event of Default and Owner expressly waives and
releases the right to seek equitable relief, including specific
performance or injunctive relief, and to xxx for any consequential or
punitive damages.
8. TERMINATION RIGHTS
8.01 Expiration of Term. If not sooner terminated, this Agreement shall
terminate on the expiration of its term set forth in Section 2 hereof.
8.02 Termination By Owner Upon Manager Event of Default. Upon a Manager
Event of Default, Owner may terminate this Agreement as specified in
Section 7.02 hereof.
8.03 Termination By Manager Upon Owner Event of Default. Upon an Owner
Event of Default, Manager may terminate this Agreement as specified in
Section 7.04 hereof.
8.04 Termination By Owner Without Cause. Even in the absence of an
express right to terminate this Agreement and after the "Conversion Date"
as defined in ___________, Owner may terminate this Agreement upon
written notice at any time delivered to Manager effective as of the date
designated by Owner (which may be the date upon which notice is given);
provided that in such event Manager shall be entitled to pursue its
remedy for compensatory damages for early termination pursuant to Section
7.04 hereof.
8.05 Termination Upon Sale of the Property. If the Property is sold,
conveyed or transferred during the term hereof, this Agreement shall
term.
8.06 Termination After Initial Term. If the parties hereto agree to
continue this Agreement after the initial term hereof, Owner shall then
be entitled to terminate this Agreement upon thirty (30) days written
notice.
8.07 Effect of Termination Upon Payment of Fees. Upon the termination of
this Agreement for any reason, Manager shall be entitled to its earned,
but unpaid fees, for the period prior to the termination. Manager shall
not be entitled to any fees relating to the period after the date of
termination of this Agreement; provided that in the case of termination
by Owner pursuant to Section 8.04, Manager shall be entitled to actual,
compensatory damages as specified in Section 7.04.
8.08 Delivery of Property Upon Termination. Immediately after
termination of this Agreement for any reason, Manager shall deliver to or
as directed by Owner all funds, checks, keys, lease files, books and
records and other Confidential Information to Owner. Immediately after
termination, Manager shall leave the Property and cause its employees to
leave the Property without causing any damage thereto. Under no
circumstances shall any default by Owner give rise to any lien on the
Property or give rise to a right of Manager to stay on the Property after
the date of termination without the express consent of Owner.
8.09 Effect of Termination on Village at the Bear LLC. The termination
of this Agreement shall not affect or impair the rights and remedies of
the parties to the Operating Agreement of Village at the Bear LLC under
such Operating Agreement, including any right of a party to receive fees,
compensation or distributions under such Operating Agreement.
9. CONFIDENTIALITY
9.01 Preservation of Confidentiality. In connection with the performance
of obligations hereunder, Manager acknowledges that it will have access
to "Confidential Information" (as defined below). Manager shall treat
such Confidential Information as proprietary to Owner and private, and
shall preserve the confidentiality thereof and not disclose, or cause or
permit its employees, agents or contractors to disclose, such
Confidential Information. Notwithstanding the foregoing, Manager shall
have the right to disclose Confidential Information if and to the extent
it is required by legal process or by operation of law to disclose any
Confidential Information. "Confidential Information" shall mean the
books, records, business practices, methods of operations, computer
software, financial models, financial information, policies and
procedures, and other information relating to Owner and the Property
(including any such information relating to the Property generated by the
Manager), which are not available to the public.
9.02 Property Right in Confidential Information. All Confidential
Information shall remain the property of Owner and Manager shall have no
ownership interest therein.
10. SURVIVAL OF AGREEMENT
All indemnity obligations set forth herein, all obligations to pay earned
and accrued fees and expenses, all confidentiality obligations, and all
obligations to perform and duties accrued prior to the date of
termination shall survive the termination of this Agreement.
11. ENFORCEMENT OF AGREEMENT
This Agreement, its interpretation, performance and enforcement, and the
rights and remedies of the parties hereto, shall be governed and
construed by and in accordance with the law of the State in which the
Property is located. If any action at law or in equity is brought to
enforce or interpret the provisions of this Agreement, the prevailing
party shall be entitled to recover reasonable costs, including attorney's
fees, incurred to maintain such action, from the prevailing party.
12. ASSIGNMENT
Manager shall not sell, assign or otherwise transfer by operation of law
or otherwise all or any part of its rights or obligations under this
Agreement. Owner may assign this Agreement to a successor owner of the
Property.
13. NOTICES
Any notice required by this Agreement shall be deemed to be delivered
when delivered, if delivered by overnight courier, personal delivery or
registered or certified mail, return receipt requested, addressed to the
parties at the following addresses or such changed address as such party
may fix by notice thereof:
If to Owner: Red Canyon at Palomino Park, LLC
c/o Wellsford Residential Property Trust
000 00xx Xxxxxx, Xxxxx 0000
Xxxxxx, XX 00000
Attention: Xxxxx X. Xxxxxx - Vice President
If to Manager: The Xxxx Company
0000 X. Xxxxxx Xxxxxx Xxxxxxx, Xxxxx 000
Xxxxxx, XX 00000
Attention: Xx. Xx Xxxx - President
14. MISCELLANEOUS
14.01 Captions. The captions of this Agreement are inserted only for
the purpose of convenient reference and do not define, limit or prescribe
the scope or intent of this Agreement or any part hereof.
14.02 Schedules. Each schedule attached hereto forms a material part
of this Agreement and is incorporated herein by reference.
14.03 Modifications and Changes. This Agreement cannot be changed or
modified except by another agreement in writing, signed by the parties
sought to be charged therewith.
14.04 Entire Agreement. This Agreement embodies the entire
understanding of the parties, and there are no further agreements or
understandings, written or oral, in effect between the parties relating
to the subject matter hereof.
EXECUTED as of the date set forth above.
OWNER: MANAGER:
RED CANYON AT PALOMINO PARK, LLC THE XXXX COMPANY
a Colorado corporation
By:/s/ Xx Xxxx By:/s/ Xxxxxx X. Xxxxx
---------------------- ------------------------------
Xx Xxxx Name: Xxxxxx X. Xxxxx
Manager Title: VP
INDEX TO SCHEDULES
Schedule A - Attachment to All Contracts Executed by Manager on Behalf of
Owner
Schedule B - Owner's Policies and Procedures to be Followed by Manager.
SCHEDULE A
This Agreement and all documents, agreements, understandings and arrangements
have been executed or entered into by _____________________________ as agent
of Wellsford Residential Property Trust (the Company) which has been formed as
a Maryland real estate investment trust pursuant to a Declaration of Trust
dated as of July 10, 1992, as amended, and not individually, and neither the
trustees, officers or shareholders of the Company shall be bound or have any
personal liability hereunder or thereunder. All persons dealing with the
company shall look solely to the assets of this Agreement and all related
documents, agreements, understandings and arrangements and will not seek
recourse or commence any action against any of the trustees, officers or
shareholders of the Company or any of their personal assets for the
performance or payment of any obligation hereunder or thereunder. The
foregoing shall also apply to any future documents, agreements,
understandings, arrangements and transactions between the parties hereto.
SCHEDULE B
OWNER'S POLICIES AND PROCEDURES TO BE FOLLOWED BY MANAGER
EXHIBIT L
PLEDGE AND SECURITY AGREEMENT BY XXXX
(See attached)
PLEDGE AND SECURITY AGREEMENT
THIS PLEDGE AND SECURITY AGREEMENT (this "Agreement") is made as of the
17th day of April, 1996, by XX XXXX, an individual, having an address of 0000
Xxxxx Xxxxxx Xxxxxx, Xxxxx 000, Xxxxxx, Xxxxxxxx 00000 ("Pledgor"), for the
benefit of WELLSFORD PARK HIGHLANDS CORP., a Colorado corporation, having an
office at 000 Xxxxxxxxxxx Xxxxxx, Xxxxx 0000, Xxxxxx, Xxxxxxxx 00000
("Pledgee").
RECITALS
A. Pledgor is the Manager and a Member of Red Canyon at Palomino Park
LLC, a Colorado limited liability company (the "Limited Liability Company"),
which Limited Liability Company is governed by its Operating Agreement dated
as of April 17, 1996 (the "Operating Agreement"), by and between Pledgee and
Pledgor.
B. Pledgee is also a Member in the Limited Liability Company.
C. In order to secure the full payment and performance by Pledgor of
all of Pledgor's obligations under the Operating Agreement, as such Operating
Agreement may be now or hereafter amended, modified or restated (said
obligations under the Operating Agreement are hereinafter referred to as the
"Obligations"), Pledgor is entering into this Agreement for the benefit of
Pledgee.
AGREEMENT
NOW, THEREFORE, in consideration of the recitals, covenants and
agreements set forth herein, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties
hereby agree as follows:
1. Definitions.
a. "Collateral" shall mean:
(i) All of Pledgor's right, title and interest in the
ownership interests of Pledgor in the Limited Liability Company,
whether now owned or hereafter acquired, including, without
limitation, its Interest (as defined in the Operating Agreement) in
the Limited Liability Company, the right of Pledgor, if any, to any
benefits to which Pledgor may be entitled pursuant to the Operating
Agreement or the Colorado Limited Liability Company Act, Colo. Rev.
Statutes Sections 7-80-101 to 7-80-913, as amended from time to time
(the "Act"), and Pledgor's right to receive payments, fees,
distributions and allocations under or in connection with the
Operating Agreement (whether as Member or as Manager), as such
Operating Agreement may be modified or extended from time to time
with the consent of the Pledgee; and
(ii) All proceeds, whether cash proceeds or noncash proceeds,
and products of any and all of the foregoing.
b. "Event of Default" shall mean an event of default described in
Section 8 herein.
2. Pledge of Collateral and Grant of Security Interest. Pledgor does
hereby unconditionally and irrevocably assign, pledge, convey, transfer,
deliver, set over and grant unto Pledgee, its successors and assigns, as
security for Pledgor's complete and timely payment and performance of the
Obligations, a continuing first lien security interest under the Uniform
Commercial Code of the State of Colorado in the Collateral. Pledgor hereby
further grants to Pledgee all rights in the Collateral as are available to a
secured party of such collateral under the Uniform Commercial Code of the
State of Colorado (being the principal place of business of Pledgor and the
location of Pledgor's residence) and, concurrently herewith, shall deliver to
Pledgee duly executed UCC-1 financing statements suitable for filing in the
State of Colorado with respect to the Collateral.
3. Delivery to Pledgee.
a. Pledgor agrees to execute and to use its best efforts to cause
all other necessary parties, and any successors and assigns thereof, to
execute and deliver to Pledgee such other agreements, instruments and
documentation as Pledgee may reasonably request from time to time to effect
the conveyance, transfer, and grant to Pledgee of Pledgor's right, title and
interest in and to the Collateral as security for the Obligations.
b. Concurrently with the execution of this Agreement, Pledgor has
caused each of the Members of the Limited Liability Company, other than
Pledgee, to execute the Consent to Security Interest and Agreement in the form
attached hereto as Schedule A (the "Consent") evidencing the consent of the
Members to the assignment of Pledgor's Limited Liability Company interests and
their agreement to be bound by Section 4 of this Agreement, and Pledgor
covenants to execute, if required by Pledgee, an amendment to the Operating
Agreement in such form as Pledgee may reasonably require to reflect the
substitution of Pledgee in place of Pledgor as Manager of the Limited
Liability Company upon the occurrence of an Event of Default. Pledgor further
agrees to execute and to cause the other Members of the Limited Liability
Company to execute and deliver to Pledgee such other agreements, instruments
and documentation as Pledgee may reasonably request from time to time to
effectuate the conveyance, transfer, assignment and grant to Pledgee of all of
Pledgor's right, title and interest in and to the Collateral and to evidence
the substitution of the Pledgee in place of Pledgor as Manager in the Limited
Liability Company.
4. Proceeds and Products of the Collateral.
a. Notwithstanding any of the foregoing, unless and until there
occurs an Event of Default, Pledgee agrees to forbear from exercising its
right to receive all benefits pertaining to the Collateral (except as
otherwise permitted under the Operating Agreement), and Pledgor shall be
permitted to exercise all rights and to receive all benefits of the
Collateral, including, without limitation, the right to exercise all voting,
approval, consent and similar rights of Pledgor pertaining to the Collateral,
payments due under, proceeds, whether cash proceeds or noncash proceeds, and
products of the Collateral and to retain and enjoy the same.
b. Pledgor acknowledges and agrees with Pledgee, that unless Pledgee
otherwise consents, in Pledgee's sole discretion, Pledgor shall not exercise
any voting, approval, consent or other rights with respect to the Collateral
at any time after (i) the occurrence of an Event of Default and (ii) receipt
of notice from Pledgee instructing Pledgor not to exercise any such voting,
approval, consent or other rights with respect to the Collateral, provided,
however, that Pledgor shall exercise any such right it may have under the
agreements comprising the Collateral with respect to the business affairs of
the Limited Liability Company as is reasonably necessary to protect and
preserve the Collateral.
c. Upon or at any time after the occurrence of an Event of Default,
Pledgee, at its option, to be exercised in its sole discretion by written
notice to Pledgor, may exercise all rights and remedies granted under this
Agreement, including, without limitation, the right to require the obligors
under the Collateral to make all payments due under and to pay all proceeds,
whether cash proceeds or noncash proceeds, and products of the Collateral to
Pledgee. Upon the giving of any such notice, the security constituted by this
Agreement shall become immediately enforceable by Pledgee, without any
presentment, further demand, protest or other notice of any kind, all of which
are hereby expressly and irrevocably waived by Pledgor. Pledgor hereby
authorizes and directs each respective obligor under the agreements
constituting the Collateral, that upon receipt of written notice from Pledgee
of an Event of Default by Pledgor hereunder, to assign, set over, transfer,
distribute, pay and deliver any and all Collateral or said payments, proceeds
or products of the Collateral to Pledgee, at such address as Pledgee may
direct, at such time and in such manner as the Collateral and such payments,
proceeds and products of the Collateral would otherwise be distributed,
transferred, paid or delivered to Pledgor. The respective obligors under the
agreements constituting the Collateral shall be entitled to conclusively rely
on such notice and make all such assignments and transfers of the Collateral
and all such payments with respect to the Collateral and pay all such proceeds
and products of the Collateral to Pledgee and shall have no liability to
Pledgor for any loss or damage Pledgor may incur by reason of said reliance.
5. No Assumption. Notwithstanding any of the foregoing, whether or not
an Event of Default shall have occurred, and whether or not Pledgee elects to
foreclose on its security interest in the Collateral as set forth herein,
neither the execution of this Agreement, receipt by Pledgee of any of
Pledgor's right, title and interest in and to the Collateral and the payments,
proceeds and products of the Collateral, now or hereafter due to Pledgor from
any obligor of the Collateral, nor Pledgee's foreclosure of its security
interest in the Collateral, shall in any way be deemed to obligate Pledgee to
assume any of Pledgor's obligations, duties or liabilities under the
Collateral or any agreements constituting the Collateral, as presently
existing or as hereafter amended, or under any and all other agreements now
existing or hereafter drafted or executed (collectively, the "Pledgor's
Liabilities"), unless Pledgee otherwise agrees to assume any or all of
Pledgor's Liabilities in writing. In the event of foreclosure by Pledgee of
its security interest in the Collateral, Pledgor shall remain bound and
obligated to perform the Pledgor's Liabilities to the extent required under
the Operating Agreement, and Pledgee shall not be deemed to have assumed any
of the Pledgor's Liabilities, except as provided in the preceding sentence.
In the event the entity or person acquiring the Collateral at a foreclosure
sale elects to assume the Pledgor's Liabilities, such assignee shall agree to
be bound by the terms and provisions of the applicable agreement.
6. Indemnification. Pledgor hereby agrees to indemnify, defend and
hold Pledgee, its successors and assigns harmless from and against any and all
damages, losses, claims, costs or expenses (including without limitation,
reasonable attorneys' fees) and any other liabilities whatsoever that Pledgee
or its successors or assigns may incur by reason of Pledgor's failure to
comply with the terms and conditions of this Agreement or by reason of any
unpermitted assignment of Pledgor's right, title and interest in and to any or
all of the Collateral.
7. Representations, Warranties and Covenants. In addition to the
representations made by Pledgor in the Operating Agreement, Pledgor makes the
following representations and warranties, and Pledgor covenants and agrees to
provide written notices to Pledgee within ten (10) days after Pledgor becomes
aware that any of the following is no longer true and correct and to perform
diligently all acts reasonably necessary to maintain or restore the truth and
correctness, in all material respects, of the following:
a. Pledgor acknowledges that the Operating Agreement and any other
agreements constituting the Collateral, currently are in full force and
effect and have not been amended or modified, except by Pledgor and
Pledgee in writing.
b. Pledgor has the full right and title to its interest in the
Collateral and has the full power, legal right and authority to pledge,
convey, transfer and assign such interest. None of the Collateral is
subject to any existing assignment, claim, lien, pledge, transfer or
other security interest of any character, or to any attachment, levy,
garnishment or other judicial process or to any claim for set-off,
counterclaim, deduction or discount. Pledgor shall not, without the
prior written consent of Pledgee, which consent may be granted or denied
in Pledgee's sole discretion, further convey, transfer, set over or
pledge to any party any of its interests in the Collateral. Pledgor
agrees to (i) warrant and defend its title to the Collateral and the
security interest created by this Agreement against all claims of all
persons, and (ii) maintain and preserve the Collateral and such security
interests.
c. The pledge of the Collateral pursuant to this Agreement creates
a valid first priority security interest in the Collateral, securing the
performance of the Obligations, which security interest shall be
perfected upon the filing of the UCC-1 Financing Statements referred to
in Paragraph 2 of this Agreement.
d. Pledgor's Social Security Number is: ###-##-####, and Pledgor's
principal residence is located at Xxx Xxxxxx Xxxxxx, Xxxxxx, Xxxxxxxx
00000.
e. Pledgor agrees that it shall not, without at least thirty (30)
days' prior written notification to Pledgee, move or otherwise change its
place of residence.
f. To the best knowledge of Pledgor, neither the execution and
delivery of this Agreement by Pledgor nor the consummation of the
transactions herein contemplated nor the fulfillment of the terms hereof
(i) violate the terms of any agreement, indenture, mortgage, deed of
trust, equipment lease, instrument or other document to which Pledgor is
a party, or (ii) conflict with any law, order, rule or regulation
applicable to Pledgor or any court or any government, regulatory body or
administrative agency or other governmental body having jurisdiction over
Pledgor or its properties, or (iii) result in or require the creation or
imposition of any lien (other than the first priority lien of Pledgee in
the Collateral contemplated hereby).
g. No consent or approval which has not been obtained prior to the
date hereof of any other person or entity and no authorization, approval
or other action by, and no notice to or filing with any governmental
body, regulatory authority or securities exchange, was or is necessary as
a condition to the validity of the pledge hereunder of the Collateral and
such pledge is effective to vest in the Pledgee the rights of Pledgee in
the Collateral as set forth herein.
h. Pledgor shall comply in all material respects with all
requirements of law applicable to the Collateral or any part thereof.
i. Pledgor shall pay and discharge all taxes, assessments and
governmental charges or levies against any Collateral prior to
delinquency thereof and shall keep all Collateral free of all unpaid
charges whatsoever.
8. Event of Default. Each of the following shall constitute an Event
of Default hereunder:
a. A breach of any representation, warranty, covenant or
obligation of Pledgor shall have occurred under the Operating Agreement
and such breach shall not have been cured within any applicable grace
period provided therein; or
b. Any warranty, representation or statement of the Pledgor in
this Agreement proves to have been false in any material respect when
made or furnished; or
c. There occurs the issuance of a writ, order of attachment or
garnishment with respect to any of the Collateral and such writ, order of
attachment or garnishment is not dismissed and removed within thirty (30)
days thereafter; or
d. A material breach or violation of any covenant or agreement
contained herein shall have occurred, which is not cured within thirty
(30) days after notice has been given to Pledgor by Pledgee.
Any Event of Default under this Agreement shall be an event of default by
Pledgor under the Operating Agreement.
9. Remedies.
a. Upon the occurrence of an Event of Default, Pledgee may by
giving notice of such Event of Default, at its option, do any one or more of
the following:
(i) Take control of the Collateral and thereafter exercise all
rights and powers of Pledgor with respect to the Collateral; and
(ii) Without notice to or demand upon Pledgor, make such payments
and do such acts as Pledgee may deem necessary to protect its
security interest in the Collateral, including, without limitation,
paying, purchasing, contesting or compromising any encumbrance,
charge or lien which is prior to or superior to the security
interest granted hereunder, and in exercising any such powers or
authority to pay all expenses incurred in connection therewith; and
(iii) Require Pledgor to take all actions necessary to deliver such
Collateral to Pledgee, or an agent or representative designated by
Pledgee; and
(iv) Foreclose upon this Agreement as herein provided or in any
commercially reasonable manner permitted by law, and exercise any
and all of the rights and remedies conferred upon Pledgee by the
Operating Agreement, or in any other document executed by Pledgor in
connection with the Obligations secured hereby; and sell or cause to
be sold the Collateral, without affecting in any way the rights or
remedies to which Pledgee may be entitled under the other such
instruments; and
(v) Sell or otherwise dispose of the Collateral at public sale,
without having the Collateral at the place of sale, and upon terms
and in such manner as is commercially reasonable; Pledgee may be a
purchaser at any sale; and
(vi) Exercise any remedies of a secured party under the Uniform
Commercial Code of the State of Colorado or any other applicable
law; and
(vii) Exercise any remedies available to Pledgee under the
Operating Agreement, including, but not limited to, the removal of
the Pledgor as the Manager and a Member of the Limited Liability
Company and exercise of any rights of offset in favor of Pledgee as
the Manager and a Member of the Limited Liability Company; and
(viii) Notwithstanding anything to the contrary contained in this
Agreement, at any time after an Event of Default Pledgee may, by
delivering written notice to the Limited Liability Company and to
Pledgor, succeed, or designate its nominee or designee to succeed,
to all right, title and interest of Pledgor (including, without
limitation, the right, if any, to vote on or take any action with
respect to the matters of the Limited Liability Company) as the
Manager and/or a Member of the Limited Liability Company in respect
of the Collateral. Pledgor hereby irrevocably authorizes and
directs the Limited Liability Company on receipt of any such notice
(a) to deem and treat Pledgee or such nominee or designee in all
respects as the Manager and/or a Member (and not merely an assignee
of the Manager and/or a Member) of such Limited Liability Company,
entitled to exercise all the rights, powers and privileges
(including the right to vote on or take any action with respect to
Limited Liability Company matters pursuant to the Operating
Agreement, to receive all distributions, to be credited with the
capital account and to have all other rights, powers and privileges
appertaining to the Collateral to which Pledgor would have been
entitled had the Collateral not been transferred to Pledgee or such
nominee or designee), and (b) to file amended Articles of
Organization for such Limited Liability Company, if required,
admitting Pledgee or such nominee or designee as the Manager and/or
a Member of the Limited Liability Company in place of Pledgor; and
(ix) The rights granted to Pledgee under this Agreement are of a
special, unique, unusual and extraordinary character. The loss of
any of such rights cannot be reasonably or adequately compensated by
way of damages in any action at law, and any material breach by
Pledgor of any of Pledgor's covenants, agreements, obligations
representations or warranties under this Agreement will cause
Pledgee irreparable injury and damage. In the event of any such
breach, Pledgee shall be entitled, as a matter of right, to
injunctive relief or other equitable relief in any court of
competent jurisdiction to prevent the violation or contravention of
any of the provisions of this Agreement or to compel compliance with
the terms of this Agreement by Pledgor. Pledgee is absolutely and
irrevocably authorized and empowered by Pledgor to demand specific
performance of each of the covenants, agreements, representations
and warranties of Pledgor in this Agreement. Pledgor hereby
irrevocably waives any defense based on the adequacy of any remedy
at law which might otherwise be asserted by Pledgor as a bar to the
remedy of specific performance in any action brought by Pledgee
against Pledgor to enforce any of the covenants or agreements of
Pledgor in this Agreement.
b. Unless the Collateral is perishable or threatens to decline
speedily in value or is of a type customarily sold on a recognized market,
Pledgee shall give Pledgor at least ten (10) days' prior written notice of the
time and place of any public sale of the Collateral subject to this Agreement
or other intended disposition thereof to be made. Such notice shall be
conclusively deemed to have been delivered to Pledgor at the address set forth
in subsection 7(d) of this Agreement, unless Pledgor shall notify Pledgee in
writing of any change of its place of residence and provide Pledgee with the
address of its new place of residence.
c. The proceeds of any sale under Subsections 9(a)(iv) and (v)
above shall be applied as follows:
(i) To the repayment of all reasonable costs and expenses of
retaking, holding and preparing for the sale and the selling of the
Collateral (including actual reasonable legal expenses and
attorneys' fees) and the discharge of all assessments, encumbrances,
charges or liens, if any, on the Collateral prior to the lien hereof
(except any taxes, assessments, encumbrances, charges or liens
subject to which such sale shall have been made);
(ii) To the payment of the whole amount, if any, of the
Obligations, as and when the same become due; and
(iii) The aggregate surplus, if any, shall be paid to Pledgor in a
lump sum, without recourse to Pledgee, or as a court of competent
jurisdiction may direct.
d. Pledgee shall have the right to enforce one or more remedies
under this Agreement and under the Operating Agreement, successively or
concurrently, and such action shall not operate to estop or prevent Pledgee
from pursuing any further remedy which it may have, and any repossession or
retaking or sale of the Collateral pursuant to the terms hereof shall not
operate to release Pledgor until full payment of any deficiency has been made
in cash.
e. PLEDGOR ACKNOWLEDGES THAT PLEDGEE MAY BE UNABLE TO EFFECT A
PUBLIC SALE OF ALL OR ANY PART OF THE COLLATERAL AND MAY BE COMPELLED TO
RESORT TO ONE OR MORE PRIVATE SALES TO A RESTRICTED GROUP OF PURCHASERS WHO
WILL BE OBLIGATED TO AGREE, AMONG OTHER THINGS, TO ACQUIRE THE COLLATERAL FOR
ITS OWN ACCOUNT, FOR INVESTMENT AND NOT WITH A VIEW TO THE DISTRIBUTION OR
RESALE THEREOF. PLEDGOR FURTHER ACKNOWLEDGES THAT ANY SUCH PRIVATE SALES MAY
BE AT PRICES AND ON TERMS LESS FAVORABLE THAN THOSE OF PUBLIC SALES, AND
AGREES THAT PROVIDED SUCH PRIVATE SALES ARE MADE IN A COMMERCIALLY REASONABLE
MANNER, PLEDGEE SHALL HAVE NO OBLIGATION TO DELAY SALE OF ANY COLLATERAL TO
PERMIT THE ISSUER THEREOF TO REGISTER IT FOR PUBLIC SALE UNDER THE SECURITIES
ACT OF 1933. PLEDGOR AGREES THAT PLEDGEE SHALL BE PERMITTED TO TAKE SUCH
ACTIONS AS PLEDGEE DEEMS REASONABLY NECESSARY IN DISPOSING OF THE COLLATERAL
TO AVOID CONDUCTING A PUBLIC DISTRIBUTION OF SECURITIES IN VIOLATION OF THE
SECURITIES ACT OF 1933 OR THE SECURITIES LAWS OF ANY STATE, AS NOW ENACTED OR
AS THE SAME MAY IN THE FUTURE BE AMENDED, PROVIDED THAT ANY SUCH ACTIONS SHALL
BE COMMERCIALLY REASONABLE. IN ADDITION, PLEDGOR AGREES TO EXECUTE, FROM TIME
TO TIME, ANY AMENDMENT TO THIS AGREEMENT OR OTHER DOCUMENT AS PLEDGEE MAY
REASONABLY REQUIRE TO EVIDENCE THE ACKNOWLEDGEMENTS AND CONSENTS OF PLEDGOR
SET FORTH IN THIS SECTION.
10. Attorneys Fees. Pledgor agrees to pay to Pledgee, without demand,
reasonable attorneys' fees and all reasonable costs and other reasonable
expenses which Pledgee expends or incurs in collecting any amounts payable by
Pledgor with respect to an Event of Default, hereunder or in enforcing this
Agreement against Pledgor whether or not suit is filed.
11. Further Documentation. Pledgor hereby agrees to execute, from time
to time, one or more financing statements and such other instruments as may be
required to perfect the security interest created hereby, including any
continuation or amendments of such financing statements, and pay the cost of
filing or recording the same in the public records specified by Pledgee.
12. Waiver and Estoppel. Pledgor represents and acknowledges that it
knowingly waives each and every one of the following rights, and agrees that
it will be estopped from asserting any argument to the contrary: (a) any
promptness in making any claim or demand hereunder; (b) any defense that may
arise by reason of the incapacity, lack of authority, death or disability of
Pledgor; (c) any defense based upon an election of remedies by Pledgee which
destroys or otherwise impairs any or all of the Collateral; (d) the right of
Pledgor to proceed against Pledgee or any other person, for reimbursement; and
(e) all duty or obligation of the Pledgee to perfect, protect, retain or
enforce any security for the payment of amounts payable by Pledgor hereunder.
TO THE FULLEST EXTENT PERMITTED BY LAW, EACH PARTY TO THIS AGREEMENT
SEVERALLY, KNOWINGLY, IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY AND ALL
RIGHTS TO TRIAL BY JURY IN ANY ACTION, SUIT OR COUNTERCLAIM BROUGHT BY ANY
PARTY TO THIS AGREEMENT ARISING IN CONNECTION WITH, OUT OF OR OTHERWISE
RELATING TO THIS AGREEMENT.
No delay or failure on the part of Pledgee in the exercise of any right
or remedy against Pledgor or any other party against whom Pledgee may have any
rights, shall operate as a waiver of any agreement or obligation contained
herein, and no single or partial exercise by Pledgee of any rights or remedies
hereunder shall preclude other or further exercise thereof or other exercise
of any other right or remedy whether contained in this Agreement or in any of
the other documents regarding the Obligations, including without limitation
the Operating Agreement. No waiver of the rights of Pledgee hereunder or in
connection herewith and no release of Pledgor shall be effective unless
executed in writing by Pledgee. No actions of Pledgee permitted under this
Agreement shall in any way impair or affect the enforceability of any
agreement or obligation contained herein.
13. Independent Obligations. The obligations of Pledgor are independent
of the obligations of any other party which may be initially or otherwise
responsible for performance or payment of the Obligations, and a separate
action or actions for payment, damages or performance may be brought and
prosecuted by Pledgee against Pledgor, individually, for the full amount of
the Obligations then due and payable, whether or not an action is brought
against any other party, whether or not Pledgee is involved in any proceedings
and whether or not Pledgee or Pledgor or any other person is joined in any
action or proceedings.
14. No Offset Rights of Pledgor. No lawful act of commission or
omission of any kind or at any time upon the part of Pledgee shall in any way
affect or impair the rights of Pledgee to enforce any right, power or benefit
under this Agreement, and no set-off, recoupment, reduction or diminution of
any obligation which Pledgor has or may have against Pledgee or against any
other party shall be available against Pledgee in any suit or action brought
by Pledgee to enforce any right, power or benefit under this Agreement.
15. Power of Attorney. Pledgor hereby appoints Pledgee as his attorney-
in-fact to execute and file, effective upon the occurrence of an Event of
Default, on his behalf any financing statements, continuation statements or
other documentation required to perfect or continue the security interest
created hereby. This power, being coupled with an interest, shall be
irrevocable until all amounts secured hereby have been paid, satisfied and
discharged in full. Pledgor acknowledges and agrees that the exercise by
Pledgee of its rights under this Section 15 will not be deemed a satisfaction
of the amounts owed Pledgee unless Pledgee so elects in writing.
16. GOVERNING LAW. THE PARTIES HERETO AGREE THAT THIS AGREEMENT SHALL
BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
COLORADO WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW. SUCH PARTIES
FURTHER AGREE THAT IN THE EVENT OF DEFAULT, THIS AGREEMENT MAY BE ENFORCED IN
THE DISTRICT COURT IN AND FOR XXX XXXX XXX XXXXXX XX XXXXXX, XXXXX OF COLORADO
AND THEY DO HEREBY SUBMIT TO THE JURISDICTION OF SUCH COURT REGARDLESS OF
THEIR RESIDENCE OR WHERE THIS AGREEMENT MAY BE EXECUTED.
17. Successors and Assigns. All agreements, covenants, conditions and
provisions of this Agreement shall inure to the benefit of and be binding upon
the respective heirs, personal representatives, successors and assigns of the
parties hereto.
18. Notices. Whenever any party hereto shall desire to, or be required
to, give or serve any notice, demand, request or other communication with
respect to this Agreement, each such notice, demand, request or communication
shall be in writing and shall be effective only if the same is delivered by
personal service (including, without limitation, courier or express service)
or mailed certified or registered mail, postage prepaid, return receipt
requested, or sent by telegram to the parties at the addresses shown
throughout this Agreement or such other addresses which the parties may
provide to one another in accordance herewith. If notice is sent to Pledgee,
a copy of such notice shall also be given to Xxxxx X. Xxxxx, Esq., Xxxxxxxxxx
Hyatt Xxxxxx & Xxxxxxxxxx, P.C., 000 00xx Xxxxxx, Xxxxx 0000, Xxxxxx, Xxxxxxxx
00000. If notice is sent to Pledgor, a copy of such notice shall also be
given to Xxxx X. Xxxxxxx, Esq., Haligman & Lottner, First Interstate Tower
North, 000 Xxxxxxxxxxx Xxxxxx, Xxxxx 0000, Xxxxxx, Xxxxxxxx 00000-0000.
Notices delivered personally will be effective upon delivery to an authorized
representative of the party at the designated address; notices sent by mail in
accordance with the above paragraph will be effective upon execution of the
Return Receipt Requested.
19. Consent of Pledgor. Pledgor consents to the exercise by Pledgee of
any rights of Pledgor in accordance with the provisions of this Agreement.
20. Severability. Every provision of this Agreement is intended to be
severable. In the event any term or provision hereof is declared by a court
of competent jurisdiction to be illegal or invalid for any reason whatsoever,
such illegality or invalidity shall not affect the legality or validity of the
balance of the terms and provisions hereof, which terms and provisions shall
remain binding and enforceable.
21. Amendment. This Agreement may be modified or rescinded only by a
writing expressly relating to this Agreement and signed by all of the parties.
22. Termination. This Agreement shall terminate, and shall be of no
further force or effect, upon the earlier to occur of the following: (i) full
payment and performance of the Obligations of the Pledgor, (ii) acquisition by
Pledgor or an affiliate of Pledgor of 100% ownership interest in the Limited
Liability Company, or (iii) upon the mutual consent of Pledgor and Pledgee.
23. Certain Matters With Respect to Pledgee. This Agreement and all
documents, agreements, understandings and arrangements relating to this
transaction have been executed by the undersigned on behalf of Pledgee in
his/her capacity as an officer or director of Pledgee, and not individually,
and neither the directors, officers or shareholders of Pledgee shall be bound
by or have any personal liability hereunder or thereunder. The parties to
this Agreement shall look solely to the assets of Pledgee for satisfaction of
any liability of Pledgee in respect of this Agreement and all documents,
agreements, understandings and arrangements relating to this transaction and
will not seek recourse or commence any action against any of the directors,
officers or shareholders of Pledgee or any of their personal assets for the
performance or payment of any obligation hereunder or thereunder. The
foregoing shall also apply to all and any future documents, agreements,
understandings, arrangements and transactions between the parties hereto with
respect to the Collateral or this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
PLEDGOR: __________________________________________
Xx Xxxx
PLEDGEE: WELLSFORD PARK HIGHLANDS CORP., a Colorado
corporation
By:_______________________________________
Name:________________________________
Title:_______________________________
STATE OF ____________ )
) ss.
COUNTY OF ___________ )
The foregoing instrument was acknowledged before me this __ day of
__________________, 1997, by Xx Xxxx.
WITNESS my hand and official seal.
My commission expires: ______________________________________.
Address:
________________________________
(SEAL) Notary Public
STATE OF ____________ )
) ss.
COUNTY OF ___________ )
The foregoing instrument was acknowledged before me this _____ day of
__________, 1997, by _________________________ as _______________ of Wellsford
Park Highlands Corp., a Colorado corporation.
WITNESS my hand and official seal.
My commission expires: _____________________________________.
Address:
_____________________________________
(SEAL) Notary Public
SCHEDULE A
CONSENT TO SECURITY INTEREST AND AGREEMENT
OF THE MEMBERS
OF RED CANYON AT PALOMINO PARK LLC,
a Colorado Limited Liability Company
The undersigned, being all the members of RED CANYON AT PALOMINO PARK
LLC, a Colorado limited liability company (the "Limited Liability Company")
hereby represent and certify to Wellsford Park Highlands Corp., a Colorado
corporation (the "Secured Party") as follows:
1. The Limited Liability Company has received notice from the Secured
Party that the Secured Party has a security interest in the following
collateral ("Collateral") registered to Xx Xxxx (the "Debtor"):
(i) All of the right, title and interest of the Debtor in the
Limited Liability Company, whether now owned or hereafter acquired,
including, without limitation, the Debtor's Interest (as defined in
the Operating Agreement) in the Limited Liability Company and its
right to receive payments, fees, distributions and allocations under
or in connection with the Operating Agreement (whether as Member or
as Manager), as such Operating Agreement may be modified or extended
from time to time with the consent of the Secured Party; and
(ii) All proceeds, whether cash proceeds or noncash proceeds,
and products of any and all of the foregoing.
2. Other than the notice from the Secured Party referred to above, the
Limited Liability Company has not received any notice from any entity or
person claiming an adverse claim against, lien on or security interest in the
Collateral.
3. The security interest of the Secured Party referred to above was
duly registered in the books and records of the Limited Liability Company
effective April 17, 1996.
4. Interests in the Limited Liability Company, whether as Member or as
Manager, are not represented in any certificate, instrument or document, and
such interest may be assigned, transferred or pledged without the party
receiving such assignment, transfer or pledge taking physical possession of
any certificate, instrument or document.
The Members hereby consent to the execution and delivery of the Pledge
and Security Agreement by the Debtor and agree hereby to be bound by Section 4
thereof to assign, set over, transfer, distribute, pay and deliver the
Collateral and any and all payments, proceeds or products due to Debtor under
the Collateral to the Secured Party.
The Members hereby consent to the admission of the Secured Party (or its
nominee, designee or any person acquiring its interest under the Pledge and
Security Agreement), as a Manager of the Limited Liability Company upon
receipt of notice by the Secured Party of an Event of Default by the Debtor
thereunder, and (ii) that the Secured Party or such nominees, designees or
persons acquiring the Secured Party's interest thereunder shall not be deemed
to have assumed any of Debtor's liability by virtue of such admission as the
Manager of the Limited Liability Company.
This Agreement and all documents, agreements, understandings and
arrangements relating to this transaction have been executed by the
undersigned on behalf of the Secured Party in his/her capacity as an officer
or trustee of the Secured Party, and not individually, and neither the
directors, officers or shareholders of the Secured Party shall be bound by or
have any personal liability hereunder or thereunder. The parties to this
Agreement shall look solely to the assets of the Secured Party for
satisfaction of any liability of the Secured Party in respect of this
Agreement and all documents, agreements, understandings and arrangements
relating to this transaction and will not seek recourse or commence any action
against any of the directors, officers or shareholders of the Secured Party or
any of their personal assets for the performance or payment of any obligation
hereunder or thereunder. The foregoing shall also apply to all and any future
documents, agreements, understandings, arrangements and transactions between
the parties hereto with respect to the Collateral or this Agreement.
EXECUTED as of the date set forth above.
MEMBERS: WELLSFORD PARK HIGHLANDS CORP., a Colorado
corporation
By:_______________________________________
Name:________________________________
Title:_______________________________
__________________________________________
XX XXXX, an individual
AGREED TO AND CONCURRED:
SOLE MANAGER
_______________________________
XX XXXX
EXHIBIT M
PLEDGE AND SECURITY AGREEMENT BY WPHC
(See attached)
PLEDGE AND SECURITY AGREEMENT
THIS PLEDGE AND SECURITY AGREEMENT (this "Agreement") is made as of
the 17th day of April, 1996, by WELLSFORD PARK HIGHLANDS CORP., a Colorado
corporation, having an office at 000 Xxxxxxxxxxx Xxxxxx, Xxxxx 0000, Xxxxxx,
Xxxxxxxx 00000 ("Pledgor"), for the benefit of XX XXXX, an individual, having
an address of 0000 Xxxxx Xxxxxx Xxxxxx, Xxxxx 000, Xxxxxx, Xxxxxxxx 00000
("Pledgee").
RECITALS
A. Pledgor is a Member of Red Canyon at Palomino Park LLC, a Colorado
limited liability company (the "Limited Liability Company"), which Limited
Liability Company is governed by its Operating Agreement dated as of April 17,
1996 (the "Operating Agreement"), by and between Pledgor and Pledgee.
B. Pledgee also is a Member, as well as the Manager, in the Limited
Liability Company.
C. In order to secure the full payment and performance by Pledgor of
all of Pledgor's obligations under the Operating Agreement, as such Operating
Agreement may be now or hereafter amended, modified or restated (said
obligations under the Operating Agreement are hereinafter referred to as the
"Obligations"), Pledgor is entering into this Agreement for the benefit of
Pledgee.
AGREEMENT
NOW, THEREFORE, in consideration of the recitals, covenants and
agreements set forth herein, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties
hereby agree as follows:
1. Definitions.
a. "Collateral" shall mean:
(i) All of Pledgor's right, title and interest in the
ownership interests of Pledgor in the Limited Liability Company,
whether now owned or hereafter acquired, including, without
limitation, its Interest (as defined in the Operating Agreement) in
the Limited Liability Company, the right of Pledgor, if any, to any
benefits to which Pledgor may be entitled pursuant to the Operating
Agreement or the Colorado Limited Liability Company Act, Colo. Rev.
Stat. Sections 7-80-101 to 7-80-913, as amended from time to time
(the "Act"), and Pledgor's right to receive payments, fees,
distributions and allocations under or in connection with the
Operating Agreement (whether as Member or as Manager), as such
Operating Agreement may be modified or extended from time to time
with the consent of Pledgee; and
(ii) All proceeds, whether cash proceeds or noncash proceeds,
and products of any and all of the foregoing.
b. "Event of Default" shall mean an event of default described in
Section 8 herein.
2. Pledge of Collateral and Grant of Security Interest. Pledgor does
hereby unconditionally and irrevocably assign, pledge, convey, transfer,
deliver, set over and grant unto Pledgee, its successors and assigns, as
security for Pledgor's complete and timely payment and performance of the
Obligations, a continuing first lien security interest under the Uniform
Commercial Code of the State of Colorado in the Collateral. Pledgor hereby
further grants to Pledgee all rights in the Collateral as are available to a
secured party of such Collateral under the Uniform Commercial Code of the
State of Colorado (being the principal place of business of Pledgor) and,
concurrently herewith, shall deliver to Pledgee duly executed UCC-1 financing
statements suitable for filing in the State of Colorado with respect to the
Collateral.
3. Delivery to Pledgee.
a. Pledgor agrees to execute and to use its best efforts to cause
all other necessary parties, and any successors and assigns thereof, to
execute and deliver to Pledgee such other agreements, instruments and
documentation as Pledgee may reasonably request from time to time to effect
the conveyance, transfer, and grant to Pledgee of Pledgor's right, title and
interest in and to the Collateral as security for the Obligations.
b. Concurrently with the execution of this Agreement, Pledgor has
caused each of the Members of the Limited Liability Company, other than
Pledgee, to execute the Consent to Security Interest and Agreement in the form
attached hereto as Schedule A (the "Consent") evidencing the consent of the
Members to the assignment of Pledgor's Limited Liability Company interests and
their agreement to be bound by Section 4 of this Agreement. Pledgor further
agrees to execute and to cause the other Members of the Limited Liability
Company to execute and deliver to Pledgee such other agreements, instruments
and documentation as Pledgee may reasonably request from time to time to
effectuate the conveyance, transfer, assignment and grant to Pledgee of all of
Pledgor's right, title and interest in and to the Collateral.
4. Proceeds and Products of the Collateral.
a. Notwithstanding any of the foregoing, unless and until there
occurs an Event of Default, Pledgee agrees to forbear from exercising his
right to receive all benefits pertaining to the Collateral (except as
otherwise permitted under the Operating Agreement), and Pledgor shall be
permitted to exercise all rights and to receive all benefits of the
Collateral, including, without limitation, the right to exercise all voting,
approval, consent and similar rights of Pledgor pertaining to the Collateral,
payments due under, proceeds, whether cash proceeds or noncash proceeds, and
products of the Collateral and to retain and enjoy the same.
b. Pledgor acknowledges and agrees with Pledgee, that unless
Pledgee otherwise consents, in Pledgee's sole discretion, Pledgor shall not
exercise any voting, approval, consent or other rights with respect to the
Collateral at any time after (i) the occurrence of an Event of Default and
(ii) receipt of notice from Pledgee instructing Pledgor not to exercise any
such voting, approval, consent or other rights with respect to the Collateral,
provided, however, that Pledgor shall exercise any such right it may have
under the agreements comprising the Collateral with respect to the business
affairs of the Limited Liability Company as is reasonably necessary to protect
and preserve the Collateral.
c. Upon or at any time after the occurrence of an Event of
Default, Pledgee, at his option to be exercised in his sole discretion by
written notice to Pledgor, may exercise all rights and remedies granted under
this Agreement, including, without limitation, the right to require the
obligors under the Collateral to make all payments due under and to pay all
proceeds, whether cash proceeds or noncash proceeds, and products of the
Collateral to Pledgee. Upon the giving of any such notice, the security
constituted by this Agreement shall become immediately enforceable by Pledgee,
without any presentment, further demand, protest or other notice of any kind,
all of which are hereby expressly and irrevocably waived by Pledgor. Pledgor
hereby authorizes and directs each respective obligor under the agreements
constituting the Collateral, that upon receipt of written notice from Pledgee
of an Event of Default by Pledgor hereunder, to assign, set over, transfer,
distribute, pay and deliver any and all Collateral or said payments, proceeds
or products of the Collateral to Pledgee, at such address as Pledgee may
direct, at such time and in such manner as the Collateral and such payments,
proceeds and products of the Collateral would otherwise be distributed,
transferred, paid or delivered to Pledgor. The respective obligors under the
agreements constituting the Collateral shall be entitled to conclusively rely
on such notice and make all such assignments and transfers of the Collateral
and all such payments with respect to the Collateral and pay all such proceeds
and products of the Collateral to Pledgee and shall have no liability to
Pledgor for any loss or damage Pledgor may incur by reason of said reliance.
5. No Assumption. Notwithstanding any of the foregoing, whether or not
an Event of Default shall have occurred, and whether or not Pledgee elects to
foreclose on his security interest in the Collateral as set forth herein,
neither the execution of this Agreement, receipt by Pledgee of any of
Pledgor's right, title and interest in and to the Collateral and the payments,
proceeds and products of the Collateral, now or hereafter due to Pledgor from
any obligor of the Collateral, nor Pledgee's foreclosure of his security
interest in the Collateral, shall in any way be deemed to obligate Pledgee to
assume any of Pledgor's obligations, duties or liabilities under the
Collateral or any agreements constituting the Collateral, as presently
existing or as hereafter amended, or under any and all other agreements now
existing or hereafter drafted or executed (collectively, the "Pledgor's
Liabilities"), unless Pledgee otherwise agrees to assume any or all of the
Pledgor's Liabilities in writing. In the event of foreclosure by Pledgee of
his security interest in the Collateral, Pledgor shall remain bound and
obligated to perform the Pledgor's Liabilities to the extent required under
the Operating Agreement and Pledgee shall not be deemed to have assumed any of
the Pledgor's Liabilities, except as provided in the preceding sentence. In
the event the entity or person acquiring the Collateral at a foreclosure sale
elects to assume the Pledgor's Liabilities, such assignee shall agree to be
bound by the terms and provisions of the applicable agreement.
6. Indemnification. Pledgor hereby agrees to indemnify, defend and
hold Pledgee, his successors and assigns harmless from and against any and all
damages, losses, claims, costs or expenses (including without limitation,
reasonable attorneys' fees) and any other liabilities whatsoever that Pledgee
or his successors or assigns may incur by reason of Pledgor's failure to
comply with the terms and conditions of this Agreement or by reason of any
unpermitted assignment of Pledgor's right, title and interest in and to any or
all of the Collateral.
7. Representations, Warranties and Covenants. In addition to the
representations made by Pledgor in the Operating Agreement, if any, Pledgor
makes the following representations and warranties, which shall be deemed to
be continuing representations and warranties, and Pledgor covenants and agrees
to provide written notice to Pledgee within ten (10) days after Pledgor
becomes aware that any of the following is no longer true and correct and to
perform diligently all acts reasonably necessary to maintain or restore the
truth and correctness, in all material respects, of the following:
a. Pledgor acknowledges that the Operating Agreement and any other
agreements constituting the Collateral, currently are in full force and effect
and have not been amended or modified, except by Pledgor and Pledgee in
writing.
b. Pledgor has the full right and title to its interest in the
Collateral and has the full power, legal right and authority to pledge,
convey, transfer and assign such interest. None of the Collateral is subject
to any existing assignment, claim, lien, pledge, transfer or other security
interest of any character, or to any attachment, levy, garnishment or other
judicial process or to any claim for set-off, counterclaim, deduction or
discount. Pledgor shall not, without the prior written consent of Pledgee,
which consent may be granted or denied in Pledgee's sole discretion, further
convey, transfer, set over or pledge to any party any of its interests in the
Collateral. Pledgor agrees to (i) warrant and defend its title to the
Collateral and the security interest created by this Agreement against all
claims of all persons, and (ii) maintain and preserve the Collateral and such
security interests.
c. The pledge of the Collateral pursuant to this Agreement creates
a valid first priority security interest in the Collateral, securing the
performance of the Obligations, which security interest shall be perfected
upon the filing of the UCC-1 Financing Statements referred to in Paragraph 2
of this Agreement.
d. Pledgor's Employer Identification number is: 00-0000000.
Pledgor's principal place of business is located at: 000 Xxxxxxxxxxx Xxxxxx,
Xxxxx 0000, Xxxxxx, Xxxxxxxx 00000.
e. Pledgor agrees that it shall not, without at least thirty (30)
days' prior written notification to Pledgee, move or otherwise change its
principal place of business.
f. To the best knowledge of Pledgor, neither the execution and
delivery of this Agreement by Pledgor nor the consummation of the transactions
herein contemplated nor the fulfillment of the terms hereof (i) violate the
terms of any agreement, indenture, mortgage, deed of trust, equipment lease,
instrument or other document to which Pledgor is a party, or (ii) conflict
with any law, order, rule or regulation applicable to Pledgor or any court or
any government, regulatory body or administrative agency or other governmental
body having jurisdiction over Pledgor or its properties, or (iii) result in or
require the creation or imposition of any lien (other than the first priority
lien of Pledgee in the Collateral contemplated hereby).
g. No consent or approval which has not been obtained prior to the
date hereof of any other person or entity and no authorization, approval or
other action by, and no notice to or filing with any governmental body,
regulatory authority or securities exchange, was or is necessary as a
condition to the validity of the pledge hereunder of the Collateral and such
pledge is effective to vest in the Pledgee the rights of the Pledgee in the
Collateral as set forth herein.
h. Pledgor shall comply in all material respects with all
requirements of law applicable to the Collateral or any part thereof.
i. Pledgor shall pay and discharge all taxes, assessments and
governmental charges or levies against any Collateral prior to delinquency
thereof and shall keep all Collateral free of all unpaid charges whatsoever.
8. Event of Default. Each of the following shall constitute an Event
of Default hereunder:
a. A failure of Pledgor to make a Capital Contribution pursuant to
the Operating Agreement within thirty (30) days of receipt by Pledgor of
written demand from Pledgee, provided that the fact that such amount is due
and payable is not in dispute, or that any dispute has been finally determined
by a court having jurisdiction or through another means that is mutually
acceptable to Pledgor and Pledgee; or
b. Any warranty, representation or statement of Pledgor in this
Agreement proves to have been false in any material respect when made or
furnished; or
c. There occurs the issuance of a writ, order of attachment or
garnishment with respect to any of the Collateral and such writ, order of
attachment or garnishment is not dismissed and removed within thirty (30) days
thereafter.
d. A material breach or violation of any covenant or agreement
contained herein shall have occurred, which is not cured within thirty (30)
days after notice has been given to Pledgor by Pledgee.
Any Event of Default under this Agreement shall be an event of default by
Pledgor under the Operating Agreement.
9. Remedies.
a. Upon the occurrence of an Event of Default, Pledgee may, by
giving notice of such Event of Default, at his option, do any one or more of
the following:
(i) Take control of the Collateral, collect, and thereafter
exercise all rights and powers of Pledgor with respect to the
Collateral; and
(ii) Without notice to or demand upon Pledgor, make such
payments and do such acts as Pledgee may deem necessary to protect
his security interest in the Collateral, including, without
limitation, paying, purchasing, contesting or compromising any
encumbrance, charge or lien which is prior to or superior to the
security interest granted hereunder, and in exercising any such
powers or authority to pay all expenses incurred in connection
therewith; and
(iii) Require Pledgor to take all actions necessary to deliver
such Collateral to Pledgee, or an agent or representative designated
by Pledgee; and
(iv) Foreclose upon this Agreement as herein provided or in any
commercially reasonable manner permitted by law, and exercise any
and all of the rights and remedies conferred upon Pledgee by the
Operating Agreement, or in any other document executed by Pledgor in
connection with the Obligations secured hereby; and sell or cause to
be sold the Collateral, without affecting in any way the rights or
remedies to which Pledgee may be entitled under the other such
instruments; and
(v) Sell or otherwise dispose of the Collateral at public
sale, without having the Collateral at the place of sale, and upon
terms and in such manner as is commercially reasonable; Pledgee may
be a purchaser at any sale; and
(vi) Exercise any remedies of a secured party under the Uniform
Commercial Code of the State of Colorado or any other applicable
law; and
(vii) Exercise any remedies available to Pledgee under the
Operating Agreement; and
(viii) Notwithstanding anything to the contrary contained in this
Agreement, at any time after an Event of Default Pledgee may, by
delivering written notice to the Limited Liability Company and to
Pledgor, succeed, or designate its nominee or designee to succeed,
to all right, title and interest of Pledgor (including, without
limitation, the right, if any, to vote on or take any action with
respect to the matters of the Limited Liability Company) as a Member
of the Limited Liability Company in respect of the Collateral.
Pledgor hereby irrevocably authorizes and directs the Limited
Liability Company on receipt of any such notice (a) to deem and
treat Pledgee or such nominee or designee in all respects as a
Member (and not merely an assignee of a Member) of such Limited
Liability Company, entitled to exercise all the rights, powers and
privileges (including the right to vote on or take any action with
respect to Limited Liability Company matters pursuant to the
Operating Agreement, to receive all distributions, to be credited
with the capital account and to have all other rights, powers and
privileges appertaining to the Collateral to which Pledgor would
have been entitled had the Collateral not been transferred to
Pledgee or such nominee or designee), and (b) to file amended
Articles of Organization for such Limited Liability Company, if
required, admitting Pledgee or such nominee or designee as a Member
of the Limited Liability Company in place of Pledgor; and
(ix) The rights granted to Pledgee under this Agreement are of
a special, unique, unusual and extraordinary character. The loss of
any of such rights cannot be reasonably or adequately compensated by
way of damages in any action at law, and any material breach by
Pledgor of any of Pledgor's covenants, agreements, obligations,
representations or warranties under this Agreement will cause
Pledgee irreparable injury and damage. In the event of any such
breach, Pledgee shall be entitled, as a matter of right, to
injunctive relief or other equitable relief in any court of
competent jurisdiction to prevent the violation or contravention of
any of the provisions of this Agreement or to compel compliance with
the terms of this Agreement by Pledgor. Pledgee is absolutely and
irrevocably authorized and empowered by Pledgor to demand specific
performance of each of the covenants, agreements, representations
and warranties of Pledgor in this Agreement. Pledgor hereby
irrevocably waives any defense based on the adequacy of any remedy
at law which might otherwise be asserted by Pledgor as a bar to the
remedy of specific performance in any action brought by Pledgee
against Pledgor to enforce any of the covenants or agreements of
Pledgor in this Agreement.
b. Unless the Collateral is perishable or threatens to decline
speedily in value or is of a type customarily sold on a recognized market,
Pledgee shall give Pledgor at least ten (10) days' prior written notice of the
time and place of any public sale of the Collateral subject to this Agreement
or other intended disposition thereof to be made. Such notice shall be
conclusively deemed to have been delivered to Pledgor at the address set forth
in subsection 7(d) of this Agreement, unless Pledgor shall notify Pledgee in
writing of any change of its principal place of business and provide Pledgee
with the address of its new place of business.
c. The proceeds of any sale under subsections 9(a)(iv) and (v)
above shall be applied as follows:
(i) To the repayment of all reasonable costs and expenses of
retaking, holding and preparing for the sale and the selling of the
Collateral (including actual reasonable legal expenses and
attorneys' fees) and the discharge of all assessments, encumbrances,
charges or liens, if any, on the Collateral prior to the lien hereof
(except any taxes, assessments, encumbrances, charges or liens
subject to which such sale shall have been made);
(ii) To the payment of the whole amount, if any, of the
Obligations, as and when the same become due; and
(iii) The aggregate surplus, if any, shall be paid to Pledgor in
a lump sum, without recourse to Pledgee, or as a court of competent
jurisdiction may direct.
d. Pledgee shall have the right to enforce one or more remedies
under this Agreement and under the Operating Agreement, successively or
concurrently, and such action shall not operate to estop or prevent Pledgee
from pursuing any further remedy which he may have, and any repossession or
retaking or sale of the Collateral pursuant to the terms hereof shall not
operate to release Pledgor until full payment of any deficiency has been made
in cash.
e. PLEDGOR ACKNOWLEDGES THAT PLEDGEE MAY BE UNABLE TO EFFECT A
PUBLIC SALE OF ALL OR ANY PART OF THE COLLATERAL AND MAY BE COMPELLED TO
RESORT TO ONE OR MORE PRIVATE SALES TO A RESTRICTED GROUP OF PURCHASERS WHO
WILL BE OBLIGATED TO AGREE, AMONG OTHER THINGS, TO ACQUIRE THE COLLATERAL FOR
THEIR OWN ACCOUNT, FOR INVESTMENT AND NOT WITH A VIEW TO THE DISTRIBUTION OR
RESALE THEREOF. PLEDGOR FURTHER ACKNOWLEDGES THAT ANY SUCH PRIVATE SALES MAY
BE AT PRICES AND ON TERMS LESS FAVORABLE THAN THOSE OF PUBLIC SALES, AND
AGREES THAT PROVIDED SUCH PRIVATE SALES ARE MADE IN A COMMERCIALLY REASONABLE
MANNER, PLEDGEE SHALL HAVE NO OBLIGATION TO DELAY SALE OF ANY COLLATERAL TO
PERMIT THE ISSUER THEREOF TO REGISTER IT FOR PUBLIC SALE UNDER THE SECURITIES
ACT OF 1933. PLEDGOR AGREES THAT PLEDGEE SHALL BE PERMITTED TO TAKE SUCH
ACTIONS AS PLEDGEE DEEMS REASONABLY NECESSARY IN DISPOSING OF THE COLLATERAL
TO AVOID CONDUCTING A PUBLIC DISTRIBUTION OF SECURITIES IN VIOLATION OF THE
SECURITIES ACT OF 1933 OR THE SECURITIES LAWS OF ANY STATE, AS NOW ENACTED OR
AS THE SAME MAY IN THE FUTURE BE AMENDED, PROVIDED THAT ANY SUCH ACTIONS SHALL
BE COMMERCIALLY REASONABLE. IN ADDITION, PLEDGOR AGREES TO EXECUTE, FROM TIME
TO TIME, ANY AMENDMENT TO THIS AGREEMENT OR OTHER DOCUMENT AS PLEDGEE MAY
REASONABLY REQUIRE TO EVIDENCE THE ACKNOWLEDGEMENTS AND CONSENTS OF PLEDGOR
SET FORTH IN THIS SECTION.
10. Attorneys Fees. Pledgor agrees to pay to Pledgee, without demand,
reasonable attorneys' fees and all reasonable costs and other reasonable
expenses which Pledgee expends or incurs in collecting any amounts payable by
Pledgor with respect to an Event of Default hereunder or in enforcing this
Agreement against Pledgor, whether or not suit is filed.
11. Further Documentation. Pledgor hereby agrees to execute, from time
to time, one or more financing statements and such other instruments as may be
required to perfect the security interest created hereby, including any
continuation or amendments of such financing statements, and pay the cost of
filing or recording the same in the public records specified by Pledgee.
12. Waiver and Estoppel. Pledgor represents and acknowledges that it
knowingly waives each and every one of the following rights, and agrees that
it will be estopped from asserting any argument to the contrary: (a) any
promptness in making any claim or demand hereunder; (b) any defense that may
arise by reason of the incapacity or lack of authority of Pledgor; (c) any
defense based upon an election of remedies by Pledgee which destroys or
otherwise impairs any or all of the Collateral; (d) the right of Pledgor to
proceed against Pledgee or any other person for reimbursement; and (e) all
duty or obligation of Pledgee to perfect, protect, retain or enforce any
security for the payment of amounts payable by Pledgor hereunder.
TO THE FULLEST EXTENT PERMITTED BY LAW, EACH PARTY TO THIS AGREEMENT
SEVERALLY, KNOWINGLY, IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY AND ALL
RIGHTS TO TRIAL BY JURY IN ANY ACTION, SUIT OR COUNTERCLAIM BROUGHT BY ANY
PARTY TO THIS AGREEMENT ARISING IN CONNECTION WITH, OUT OF OR OTHERWISE
RELATING TO THIS AGREEMENT.
No delay or failure on the part of Pledgee in the exercise of any right
or remedy against Pledgor or any other party against whom Pledgee may have any
rights, shall operate as a waiver of any agreement or obligation contained
herein, and no single or partial exercise by Pledgee of any rights or remedies
hereunder shall preclude other or further exercise thereof or other exercise
of any other right or remedy whether contained in this Agreement or in any of
the other documents regarding the Obligations, including without limitation
the Operating Agreement. No waiver of the rights of Pledgee hereunder or in
connection herewith and no release of Pledgor shall be effective unless in
writing executed by Pledgee. No actions of Pledgee permitted under this
Agreement shall in any way impair or affect the enforceability of any
agreement or obligation contained herein.
13. Independent Obligations. The obligations of Pledgor are independent
of the obligations of any other party which may be initially or otherwise
responsible for performance or payment of the Obligations, and a separate
action or actions for payment, damages or performance may be brought and
prosecuted by Pledgee against Pledgor, individually, for the full amount of
the Obligations then due and payable, whether or not an action is brought
against any other party, whether or not Pledgee is involved in any proceedings
and whether or not Pledgee or Pledgor or any other person is joined in any
action or proceedings.
14. Lawful Acts of Pledgee. No lawful act of commission or omission of
any kind or at any time upon the part of Pledgee shall in any way affect or
impair the rights of Pledgee to enforce any right, power or benefit under this
Agreement.
15. Power of Attorney. Pledgor hereby appoints Pledgee as its attorney-
in-fact to execute and file, effective upon the occurrence of an Event of
Default, on its behalf any financing statements, continuation statements or
other documentation required to perfect or continue the security interest
created hereby. This power, being coupled with an interest, shall be
irrevocable until all amounts secured hereby have been paid, satisfied and
discharged in full. Pledgor acknowledges and agrees that the exercise by
Pledgee of his rights under this Section 15 will not be deemed a satisfaction
of the amounts owed Pledgee unless Pledgee so elects in writing.
16. GOVERNING LAW. THE PARTIES HERETO AGREE THAT THIS AGREEMENT SHALL
BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
COLORADO WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW. SUCH PARTIES
FURTHER AGREE THAT IN THE EVENT OF DEFAULT, THIS AGREEMENT MAY BE ENFORCED IN
THE DISTRICT COURT IN AND FOR XXX XXXX XXX XXXXXX XX XXXXXX, XXXXX OF COLORADO
AND THEY DO HEREBY SUBMIT TO THE JURISDICTION OF SUCH COURT REGARDLESS OF
THEIR RESIDENCE OR WHERE THIS AGREEMENT MAY BE EXECUTED.
17. Successors and Assigns. All agreements, covenants, conditions and
provisions of this Agreement shall inure to the benefit of and be binding upon
the respective heirs, personal representatives, successors and assigns of the
parties hereto.
18. Notices. Whenever any party hereto shall desire to, or be required
to, give or serve any notice, demand, request or other communication with
respect to this Agreement, each such notice, demand, request or communication
shall be in writing and shall be effective only if the same is delivered by
personal service (including, without limitation, courier or express service)
or mailed certified or registered mail, postage prepaid, return receipt
requested, or sent by telegram to the parties at the addresses shown
throughout this Agreement or such other addresses which the parties may
provide to one another in accordance herewith. If notice is sent to Pledgor,
a copy of such notice shall also be given to Xxxxx X. Xxxxx, Esq., Xxxxxxxxxx
Hyatt Xxxxxx & Xxxxxxxxxx, P.C., 000 00xx Xxxxxx, Xxxxx 0000, Xxxxxx, Xxxxxxxx
00000. If notice is sent to Pledgee, a copy of such notice shall also be
given to Xxxx X. Xxxxxxx, Esq., Haligman & Lottner, PC, 000 00xx Xxxxxx,
Xxxxx 0000, Xxxxxx, Xxxxxxxx 00000. Notices delivered personally will be
effective upon delivery to an authorized representative of the party at the
designated address; notices sent by mail in accordance with the above
paragraph will be effective upon execution of the Return Receipt Requested.
19. Consent of Pledgor. Pledgor consents to the exercise by Pledgee of
any rights of Pledgor in accordance with the provisions of this Agreement.
20. Severability. Every provision of this Agreement is intended to be
severable. In the event any term or provision hereof is declared by a court
of competent jurisdiction to be illegal or invalid for any reason whatsoever,
such illegality or invalidity shall not affect the legality or validity of the
balance of the terms and provisions hereof, which terms and provisions shall
remain binding and enforceable.
21. Amendment. This Agreement may be modified or rescinded only by a
writing expressly relating to this Agreement and signed by all of the parties.
22. Limitation of Liability. No officer, director or shareholder of
Pledgor shall be bound by or have any personal liability hereunder or under
any documents, agreements, understandings or arrangements relating to this
transaction. The parties to this Agreement shall look solely to the assets of
Pledgor for satisfaction of any liability of Pledgor in respect of this
Agreement and all documents, agreements, understandings and arrangements
relating to this transaction and will not seek recourse or commence action
against any of the directors, officers or shareholders of Pledgor or any of
their personal assets for the performance or payment of any obligation
hereunder or thereunder. The foregoing shall also apply to all and any future
documents, agreements, understandings, arrangements and transactions between
the parties hereto with respect to the Obligations, the Collateral or this
Agreement.
23. Termination. This Agreement shall terminate, and shall be of no
further force or effect, upon the earlier to occur of the following: (i) full
payment and performance of the Obligations of the Pledgor, (ii) acquisition by
Pledgor or an affiliate of Pledgor of 100% ownership interest in the Limited
Liability Company, or (iii) upon the mutual consent of Pledgor and Pledgee.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
PLEDGOR: WELLSFORD PARK HIGHLANDS CORP., a Colorado
corporation
By:__________________________________
Name: ____________________________
Title: ___________________________
PLEDGEE: _____________________________________
Xx Xxxx
STATE OF ____________ )
) ss.
COUNTY OF __________ )
The foregoing instrument was acknowledged before me this ____ day of
_______________, 1997, by _________________________ as _______________ of
Wellsford Park Highlands Corp., a Colorado corporation.
WITNESS my hand and official seal.
My commission expires: ___________________________________.
Address:
________________________________
(SEAL) Notary Public
STATE OF COLORADO )
) ss.
COUNTY OF ________ )
The foregoing instrument was acknowledged before me this __ day of
__________, 1997, by Xx Xxxx.
WITNESS my hand and official seal.
My commission expires: _____________________________________.
Address:
________________________________
(SEAL) Notary Public
SCHEDULE A
CONSENT TO SECURITY INTEREST AND AGREEMENT
OF THE MEMBERS
OF RED CANYON AT PALOMINO PARK LLC,
a Colorado Limited Liability Company
The undersigned, being all the members of RED CANYON AT PALOMINO PARK
LLC, a Colorado limited liability company (the "Limited Liability Company")
hereby represent and certify to Xx Xxxx, an individual having an address at
0000 Xxxxx Xxxxxx Xxxxxx, Xxxxx 000, Xxxxxx, Xxxxxxxx 00000 (the "Secured
Party") as follows:
1. The Limited Liability Company has received notice from the Secured
Party that the Secured Party has a security interest in the following
collateral (the "Collateral") registered to Wellsford Park Highlands Corp., a
Colorado corporation (the "Debtor"):
GAR All of the right, title and interest of the Debtor in the
Limited Liability Company, whether now owned or hereafter acquired,
including, without limitation, the Debtor's Interest (as defined in
the Operating Agreement) in the Limited Liability Company and its
right to receive payments and distributions from the Limited
Liability Company and allocations under or in connection with the
Operating Agreement, as such Operating Agreement may be modified or
extended from time to time with the written consent of the Secured
Party; and
(ii) All proceeds, whether cash proceeds or noncash proceeds,
and products of any and all of the foregoing.
2. Other than the notice from the Secured Party referred to above, the
Limited Liability Company has not received any notice from any entity or
person claiming an adverse claim against, lien on or security interest in the
Collateral.
3. The security interest of the Secured Party referred to above was
duly registered in the books and records of the Limited Liability Company
effective April 17, 1996.
4. Interests in the Limited Liability Company are not represented in
any certificate, instrument or document, and such Interests may be assigned,
transferred or pledged without the party receiving such assignment, transfer
or pledge taking physical possession of any certificate, instrument or
document.
5. The Members hereby consent to the execution and delivery of that
certain the Pledge and Security Agreement by the Debtor and agree hereby to be
bound by Section 4 thereof to assign, set over, transfer, distribute, pay and
deliver the Collateral and any and all payments, proceeds or products due to
the Debtor under the Collateral to the Secured Party.
This agreement and all documents, agreements, understandings and
arrangements relating to this transaction have been executed by the
undersigned on behalf of Wellsford Park Highlands Corp., a Colorado
corporation ("WPHC") in his/her capacity as an officer or director of WPHC,
and not individually, and neither the directors, officers or shareholders of
WPHC shall be bound by or have any personal liability hereunder or thereunder.
The parties to this agreement shall look solely to the assets of WPHC for
satisfaction of any liability of WPHC in respect of this agreement and all
documents, agreements, understandings and arrangements relating to this
transaction and will not seek recourse or commence any action against any of
the directors, officers or shareholders of WPHC or any of their personal
assets for the performance or payment of any obligation hereunder or
thereunder. The foregoing shall also apply to all and any future documents,
agreements, understandings, arrangements and transactions between the parties
hereto with respect to the Collateral or this Agreement.
EXECUTED as of the date set forth above.
MEMBERS: WELLSFORD PARK HIGHLANDS CORP., a Colorado
corporation
By:_______________________________________
Name: _________________________________
Title: ________________________________
__________________________________________
XX XXXX, an individual
AGREED TO AND CONCURRED:
SOLE MANAGER
__________________________________________
Xx Xxxx
EXHIBIT N
PLANS AND SPECIFICATIONS
EXHIBIT O
FINAL PROJECT BUDGET
EXHIBIT T
INFRASTRUCTURE BUDGET
EXHIBIT U
SUBSTITUTION AGREEMENT
(See attached)
SUBSTITUTION AGREEMENT
THIS SUBSTITUTION AGREEMENT (this "Agreement") is made and entered into
as of the 17th day of April, 1996, by and among XX XXXX, an individual
("Xxxx"), WELLSFORD PARK HIGHLANDS CORP., a Colorado corporation ("WPHC"), and
THE XXXX COMPANY, a Colorado corporation (the "Company").
RECITALS
A. WPHC is a Member of Red Canyon at Palomino Park LLC, a Colorado
limited liability company (the "LLC"), which LLC is governed by its Operating
Agreement dated as of April 17, 1996 (the "Operating Agreement") by and
between WPHC and Xxxx.
X. Xxxx is also a Member, as well as the Manager, in the LLC and is the
principal officer and shareholder of the Company.
C. In order to facilitate WPHC's appointment of the Company as a
substitute Member and the Manager of the LLC upon the death or disability of
Xxxx in accordance with Section 12.13 of the Operating Agreement and to bind
the Company to the agreements set forth in said Section 12.13, the parties
hereto now desire to enter into this Agreement.
AGREEMENT
NOW, THEREFORE, in consideration of the execution of the Operating
Agreement and of the recitals, covenants and agreements set forth herein, and
for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto agree as follows:
1. Request for Substitute Manager. In the event that Xxxx should die
or WPHC shall elect to remove Xxxx as manager due to disability (such an event
is hereinafter referred to as a "Triggering Event"), WPHC shall have the
right, at its sole option, to request in writing that: (a) the Company shall
acquire from Xxxx (or from his estate, if Xxxx is deceased) the entire
interest of Xxxx in the LLC; (b) the Company shall be admitted as a Member of
the LLC and substituted for Xxxx as Member and Manager under the Operating
Agreement; and (c) the Company shall assume, in writing, all of the
obligations of the Manager and of a Member under the Operating Agreement, as
the same may be amended from time to time. The foregoing actions under items
(a), (b) and (c) shall be effective upon the next business day after WPHC
delivers its written request to the Company and Xxxx. Notwithstanding
anything to the contrary contained herein or in the Operating Agreement, if
the Company is substituted for Xxxx as a Member and Manager, then Xxxx (or his
estate if Xxxx is deceased) shall remain liable for the performance of the
obligations of the Manager under the Operating Agreement, in accordance with
Section 12.12.3.2 thereof.
2. Failure to Request a Substitute Manager. If WPHC fails to exercise
its option under Section 12.13 of the Operating Agreement and this Agreement
to cause the Company to be substituted for Xxxx as the Manager within ninety
(90) days after the date of a Triggering Event, then such right shall
automatically terminate and Xxxx (and his estate) shall be released from all
responsibilities and obligations as Manager under the Operating Agreement
arising after the effective date of Xxxx'x withdrawal or Removal (as said term
is defined in the Operating Agreement) from the LLC in connection with the
Triggering Event.
3. Attorneys Fees. In the event any litigation or other legal
proceedings or alternative dispute resolution proceedings are brought for the
enforcement of or arise out of this Agreement, the prevailing party shall be
entitled to recover from the non-prevailing party all reasonable attorneys'
fees and costs and all other reasonable expenses, in addition to any other
relief or damages obtained.
4. Further Documentation. The parties hereby agree to execute, from
time to time, such other documents as may be reasonably necessary to
effectuate the intent of this Agreement and Section 12.13 of the Operating
Agreement.
5. GOVERNING LAW. THE PARTIES HERETO AGREE THAT THIS AGREEMENT SHALL
BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
COLORADO WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW. SUCH PARTIES
FURTHER AGREE THAT THIS AGREEMENT MAY BE ENFORCED IN THE DISTRICT COURT IN AND
FOR XXX XXXX XXX XXXXXX XX XXXXXX, XXXXX OF COLORADO AND THEY DO HEREBY SUBMIT
TO THE JURISDICTION OF SUCH COURT REGARDLESS OF THEIR RESIDENCE OR WHERE THIS
AGREEMENT MAY BE EXECUTED.
6. Successors and Assigns. All agreements, covenants, conditions and
provisions of this Agreement shall inure to the benefit of and be binding upon
the respective heirs, personal representatives, successors and assigns of the
parties hereto.
7. Notices. Whenever any party hereto shall desire to, or be required
to, give or serve any notice, demand, request or other communication with
respect to this Agreement, each such notice, demand, request or communication
shall be in writing and shall be effective only if the same is delivered by
personal service (including, without limitation, courier or express service)
or mailed certified or registered mail, postage prepaid, return receipt
requested, or sent by telegram to the parties at the addresses shown in the
Operating Agreement or such other addresses which the parties may provide to
one another in accordance therewith. The notice address for the Company shall
be the same as the notice address for Xxxx. If notice is sent to WPHC, a copy
of such notice shall also be given to Xxxxx X. Xxxxx, Esq., Xxxxxxxxxx Xxxxx
Xxxxxx & Xxxxxxxxxx, P.C., 000 00xx Xxxxxx, Xxxxx 0000, Xxxxxx, Xxxxxxxx
00000. If notice is sent to Xxxx or the Company, a copy of such notice shall
also be given to Xxxx Xxxxxxx, Esq., Haligman and Lottner, First Interstate
Tower North, 000 Xxxxxxxxxxx Xxxxxx, Xxxxx 0000, Xxxxxx, Xxxxxxxx 00000-0000.
Notices delivered personally will be effective upon delivery to an authorized
representative of the party at the designated address; notices sent by mail in
accordance with the above paragraph will be effective upon execution of the
Return Receipt Requested.
8. Severability. Every provision of this Agreement is intended to be
severable. In the event any term or provision hereof is declared by a court
of competent jurisdiction to be illegal or invalid for any reason whatsoever,
such illegality or invalidity shall not affect the legality or validity of the
balance of the terms and provisions hereof, which terms and provisions shall
remain binding and enforceable.
9. Capitalized Terms. All capitalized terms not otherwise defined
herein shall have the meanings set forth in the Operating Agreement.
10. Amendment. This Agreement may be modified or rescinded only by a
writing expressly relating to this Agreement and signed by all of the parties.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
________________________________________
XX XXXX, individually
WELLSFORD PARK HIGHLANDS CORP.,
a Colorado corporation
By:_____________________________________
Its:____________________________________
THE XXXX COMPANY, a Colorado corporation
By:_____________________________________
Its:____________________________________
