Exhibit 10.6
STOCK PLEDGE
THIS STOCK PLEDGE (this "AGREEMENT") is made and given as of this
_____ day of _______, 1997, by SHOLODGE, INC., a Tennessee corporation (the
"PLEDGOR"), for the benefit of ________________, a Maryland real estate
investment trust (together with its successors and assigns, the "SECURED
PARTY").
W I T N E S S E T H:
WHEREAS, pursuant to a Lease Agreement, dated as of _____ __,
1997 (the "LEASE"), the Secured Party leased to
______________________________, a _________________________ (the "TENANT"),
and the Tenant leased from the Secured Party certain premises as more
particularly described in and subject to and upon the terms and conditions
set forth in the Lease; and
WHEREAS, the Pledgor owns all of the outstanding shares of
capital stock of the Tenant and shall derive direct substantial benefit
from the transactions contemplated by the Lease; and
NOW, THEREFORE, in consideration of the foregoing and for other
good and valuable consideration, the mutual receipt and legal sufficiency
of which are hereby acknowledged, the parties hereto hereby agree as
follows:
SECTION 1. CERTAIN TERMS. Capitalized terms used and not
otherwise defined in this Agreement shall have the meanings ascribed to
such terms in the Lease.
SECTION 2. PLEDGE. The Pledgor hereby pledges to the Secured
Party the shares of capital stock of the Tenant (the "PLEDGED STOCK")
listed in EXHIBIT A attached hereto (the Pledged Stock and any additional
securities or collateral pledged hereunder, collectively, the "PLEDGED
COLLATERAL"), and the Pledgor hereby grants to the Secured Party a security
interest in all of the Pledged Collateral as security for the due and
punctual payment and performance of the Secured Obligations (as hereinafter
defined).
SECTION 3. SECURED OBLIGATIONS. For purposes of this Agreement,
the term "SECURED OBLIGATIONS" shall mean the payment and performance of
each and every obligation of the Tenant to the Secured Party, under the
Lease, whether now existing or hereafter arising, and including, without
limitation, payment of the Rent.
SECTION 4. REPRESENTATIONS OF THE PLEDGOR. The Pledgor
covenants that the Pledged Stock is duly and validly pledged to the Secured
Party in accordance with law and the Pledgor shall warrant and defend the
Secured Party's right, title and security interest in and to the Pledged
Stock against the claims and demands of all persons whomsoever. The
Pledgor represents and warrants to the Secured Party that the Pledgor has
good title to all the Pledged Stock, free and clear of all claims,
mortgages, pledges, liens, security interests and other encumbrances of
every nature whatsoever; that the Pledged Stock is not subject to any
restriction on transfer contained in the charter documents or by-laws of
the Tenant or in any agreement or instrument to which the Tenant or the
Pledgor are a party or by which the Tenant or the Pledgor is bound which
would prohibit or restrict the pledge of the Pledged Stock hereunder or the
disposition thereof upon default hereunder; that all of the Pledged Stock
has been duly and validly issued and is fully paid and nonassessable; and
that the Pledged Stock constitutes all of the presently issued and
outstanding shares of the capital stock of the Tenant. The Pledgor
covenants and agrees that if any additional shares of the capital stock of
the Tenant are acquired by the Pledgor after the date hereof the same shall
constitute a part of the Pledged Collateral and shall be pledged with the
Secured Party as provided in SECTION 2 upon such acquisition.
SECTION 5. COVENANTS OF THE PLEDGOR. The Pledgor hereby
covenants and agrees that it shall not sell, convey or otherwise dispose of
any of the Pledged Collateral nor create, incur or permit to exist any
pledge, mortgage, lien, charge, encumbrance or any security interest
whatsoever with respect to any of the Pledged Collateral or the proceeds
thereof, other than the liens on and security interests in the Pledged
Collateral created hereby. The Pledgor further covenants and agrees that
it shall not consent to or approve the issuance of any additional shares of
the capital stock of the Tenant.
SECTION 6. DISTRIBUTIONS, ETC. Upon the dissolution, winding
up, liquidation or reorganization of the Tenant, whether in bankruptcy,
insolvency or receivership proceedings or upon an assignment for the
benefit of creditors or any other marshalling of the assets and liabilities
of the Tenant, if any sum shall be paid or any property shall be
distributed upon or with respect to any of the Pledged Collateral, such sum
shall be paid over to the Secured Party, to be held as collateral security
for the Secured Obligations. If any stock dividend shall be declared on
any of the Pledged Collateral, or any share of stock or fraction thereof
shall be issued pursuant to any stock split involving any of the Pledged
Collateral, or any distribution of capital (excluding cash dividends) shall
be made on any of the Pledged Collateral, [or any property shall be
distributed upon or with respect to the Pledged Collateral pursuant to
recapitalization or reclassification of the capital of the Tenant], the
shares or other property so distributed shall be delivered to the Secured
Party to be held as collateral security for the Secured Obligations.
SECTION 7. EVENT OF DEFAULT. For purposes of this Agreement,
the term "EVENT OF DEFAULT" shall mean (a) the occurrence of an Event of
Default under the Lease; (b) the failure of the Pledgor to comply with any
of its covenants or obligations under this Agreement and the continuation
thereof for a period of thirty 30 days after written notice thereof;
PROVIDED, HOWEVER, that if such default is susceptible of cure but such
cure cannot be accomplished with due diligence within such period of time
and if in addition the Pledgor commences to cure or cause to be cured such
default within thirty (30) days after written notice thereof from the
Secured Party and thereafter prosecutes the curing of such default with all
due diligence, such period of time shall be extended to such period of time
(not to exceed an additional one (1) year in the aggregate) as may be
necessary to cure such default with all due diligence; or (c) any
representation or warranty contained herein or made by the Pledgor in
connection herewith shall prove to have been false or misleading in any
material respect when made.
SECTION 8. REMEDIES. (a) Upon the occurrence of an Event of
Default, the Secured Party may cause all or any of the Pledged Collateral
to be transferred into its name or into the name of its nominee or
nominees, subject to the provisions of the Uniform Commercial Code or other
applicable law.
(b) Upon the occurrence and during the continuance of an Event
of Default, the Secured Party shall be entitled to exercise the voting
power with respect to the Pledged Collateral, to receive and retain, as
collateral security for the Secured Obligations, any and all dividends or
other distributions at any time and from time to time declared or made upon
any of the Pledged Collateral, and to exercise any and all such rights of
payment, conversion, exchange, subscription or any other rights, privileges
or options pertaining to the Pledged Collateral as if it were the absolute
owner thereof, including, without limitation, all such rights under any
shareholders agreement, and further including, without limitation, the
right to exchange, at its discretion, any and all of the Pledged Collateral
upon the merger, consolidation, reorganization, recapitalization or other
readjustment of the Tenant, upon the exercise of any such right, privilege
or option pertaining to the Pledged Collateral, and in connection
therewith, to deposit and deliver any and all of the Pledged Collateral
with any committee, depositary, transfer agent, registrar or other
designated agency upon such terms and conditions as the Secured Party may
determine.
(c) Upon the occurrence and during the continuance of an Event
of Default, the Secured Party shall have all of the rights and remedies of
a secured party under the Uniform Commercial Code or other applicable law
and shall have the right to sell, resell, assign and deliver all or any of
the Pledged Collateral in one or more parcels at any exchange or broker's
board or at public or private sale. The Secured Party shall give the
Pledgor at least ten (10) days' prior written notice of the time and place
of any public sale thereof or of the time after which any private sale or
any other intended disposition thereof is to be made. Any such notice
shall be deemed to meet any requirement hereunder or under any applicable
law (including the Uniform Commercial Code) that reasonable notification be
given of the time and place of such sale or other disposition. Such notice
may be given without any demand of performance or other demand, all such
demands being hereby expressly waived by the Pledgor to the extent
permitted by applicable law. All such sales shall be at such commercially
reasonable price or prices as the Secured Party shall deem best and either
for cash or on credit or for future delivery (without assuming any
responsibility for credit risk). At any such sale or sales, the Secured
Party may purchase any or all of the Pledged Collateral to be sold thereat
upon such terms as the Secured Party may deem best. Upon any such sale or
sales, the Pledged Collateral so purchased shall be held by the purchaser
absolutely free from any claims or rights of any kind or nature of the
Pledgor, including any equity of redemption and any similar rights, all
such equity of redemption and any similar rights being hereby expressly
waived and released by the Pledgor to the extent permitted by applicable
law. In the event any consent, approval or authorization of any
governmental agency will be necessary to effectuate any such sale or sales,
the Pledgor shall execute, and hereby agrees to cause the Tenant to
execute, all such applications or other instruments as may be required.
The proceeds of any such sale or sales, together with any other additional
collateral security at the time received and held hereunder, shall be
received and applied: FIRST, to the payment of all costs and expenses of
such sale, including attorneys' fees; and SECOND, to the payment of the
Secured Obligations in such order of priority as the Secured Party shall
determine; and any surplus thereafter remaining shall be paid to the
Pledgor or to whomever may be legally entitled thereto (including, if
applicable, any subordinated creditor of the Pledgor).
The Pledgor recognizes that the Secured Party may be unable to
effect a public sale of all or a part of the Pledged Collateral by reason
of certain prohibitions contained in the Securities Act of 1933, and may be
compelled to resort to one or more private sales to a restricted group of
purchasers who will be obliged to agree, among other things, to acquire
such Pledged Collateral for their own accounts, for investment and not with
a view to the distribution or resale thereof. The Pledgor agrees that
private sales so made may be at prices and upon other terms less favorable
to the seller than if such Pledged Collateral were sold at public sales,
and that the Secured Party shall have no obligation to delay sale of any
such Pledged Collateral for the period of time necessary to permit such
Pledged Collateral to be registered for public sale under the Securities
Act of 1933. The Pledgor agrees that private sales made under the
foregoing circumstances may be deemed to have been made in a commercially
reasonable manner. Nothing herein shall be deemed to require the Pledgor
to effect a registration of the Pledged Collateral under the Securities Act
of 1933.
(d) Upon the occurrence and during the continuance of any Event
of Default, the Secured Party, in its discretion, may demand, xxx for
and/or collect any money or property at any time due, payable or
receivable, to which it may be entitled hereunder, on account of or in
exchange for any of the Pledged Collateral. Upon the occurrence and during
the continuance of any Event of Default, the Secured Party shall further
have the right, for and in the name, place and stead of the Pledgor, to
execute endorsements, assignments, or other instruments of conveyance or
transfer with respect to all or any of the Pledged Collateral.
(e) The Secured Party shall not be obligated to do any of the
acts hereinabove authorized and in the event that the Secured Party elects
to do any such act, the Secured Party shall not be responsible to the
Pledgor, other than for gross negligence or willful misconduct.
SECTION 9. RIGHTS OF SECURED PARTY. No course of dealing
between the Pledgor and the Secured Party nor any failure to exercise, nor
any delay in exercising, on the part of the Secured Party, any right, power
or privilege hereunder or under any of the Secured Obligations, shall
operate as a waiver thereof; nor shall any single or partial exercise of
any right, power or privilege hereunder or thereunder preclude any other or
further exercise thereof or the exercise of any other right, power or
privilege. The rights and remedies herein provided and provided under any
of the Secured Obligations are cumulative and are in addition to, and not
exclusive of, any rights or remedies provided by law, including, without
limitation, the rights and remedies of a secured party under the Uniform
Commercial Code.
SECTION 10. ASSIGNMENT, ETC. No waiver by the Secured Party or
by any other holder of Secured Obligations of any default shall be
effective unless in writing nor operate as a waiver of any other default or
of the same default on a future occasion. In the event of a sale or
assignment by the Secured Party of its interest under the Lease, the
Secured Party may assign or transfer its rights and interest under this
Agreement in whole or in part to the purchaser or assignee of such
interest, whereupon such purchaser or purchasers shall become vested with
all of the powers and rights given to the Secured Party hereunder, and the
Secured Party shall thereafter be forever released and fully discharged
from any liability or responsibility thereafter arising hereunder with
respect to the rights and interests so assigned.
SECTION 11. DUTY OF SECURED PARTY. Beyond the exercise of
reasonable care to assure the safe custody of the Pledged Collateral while
held hereunder, the Secured Party shall have no duty or liability to
collect any sums due in respect thereof or to protect or preserve rights
pertaining thereto, and shall be relieved of all responsibility for the
Pledged Collateral upon surrendering the same to the Pledgor.
SECTION 12. WAIVERS, ETC. To the extent permitted by applicable
law, the Pledgor, on its own behalf and on behalf of its successors and
assigns, hereby waives presentment, demand, payment, notice of dishonor,
protest and, except as otherwise provided herein, all other demands and
notices in connection with this Agreement or the enforcement of the rights
of the Secured Party hereunder or in connection with any Secured
Obligations. The Secured Party may release, supersede, exchange or modify
any collateral security it may from time to time hold and release,
surrender or modify the liability of any third party without giving notice
hereunder to the Pledgor. The Secured Party shall be under no duty to
exhaust its rights against any such collateral security or any such third
party before realizing on the Pledged Collateral. Such modifications,
changes, renewals, releases or other actions shall in no way affect the
Pledgor' obligations hereunder.
The Pledgor further waives any right it may have under the
Constitution of The Commonwealth of Massachusetts (or under the
constitution of any other state in which the any of the Pledged Collateral
may be located), or under the Constitution of the United States of America,
to notice (except for notice specifically required hereby) or to a judicial
hearing prior to the exercise of any right or remedy provided by this
Agreement to the Secured Party, and waives its rights, if any, to set aside
or invalidate any sale duly consummated in accordance with the foregoing
provisions hereof on the grounds (if such be the case) that the sale was
consummated without a prior judicial hearing. THE PLEDGOR'S WAIVERS UNDER
THIS SECTION 12 HAVE BEEN MADE VOLUNTARILY, INTELLIGENTLY AND KNOWINGLY AND
AFTER THE Pledgor HAS BEEN APPRISED AND COUNSELED BY ITS ATTORNEYS AS TO
THE NATURE THEREOF AND ITS POSSIBLE ALTERNATIVE RIGHTS.
SECTION 13. FURTHER ASSURANCES AS TO COLLATERAL;
ATTORNEY-IN-FACT. From time to time hereafter, the Pledgor shall execute
and deliver, or will cause to be executed and delivered, such additional
instruments, certificates or documents (including without limitation
financing statements, renewal statements, collateral assignments and other
security documents), and shall take all such actions, as the Secured Party
may reasonably request, for the purposes of implementing or effectuating
the provisions of this Agreement or of more fully perfecting or renewing
the Secured Party's rights with respect to the Pledged Collateral (or with
respect to any additions thereto or replacements or proceeds thereof or
with respect to any other property or assets hereafter acquired by the
Pledgor which may be deemed to be a part of the Pledged Collateral)
pursuant hereto and thereto. The Secured Party is hereby appointed the
attorney-in-fact, with full power of substitution, of the Pledgor for the
purpose of carrying out the provisions of this Agreement and taking any
action, including, without limitation, executing, delivering and filing
applications, certificates, instruments and other documents and papers with
governmental authorities, and executing any instruments, including without
limitation, assignments, conveyances and transfers which are required to be
taken or executed by the Pledgor under this Agreement, on its behalf and in
its name which appointment is coupled with an interest, is irrevocable and
durable and shall survive the subsequent dissolution, disability or
incapacity of the Pledgor; PROVIDED, HOWEVER, that the Secured Party shall
not be entitled to take any action required of the Pledgor under this
Agreement unless the Secured Party has made written demand on the Pledgor
to take such action and the Pledgor, having been afforded a reasonable time
to take such action, fails to do so.
SECTION 14. NOTICES. (a) Any and all notices, demands,
consents, approvals, offers, elections and other communications required or
permitted under this Agreement shall be deemed adequately given if in
writing and the same shall be delivered either in hand, by telecopier with
written acknowledgment of receipt, or by mail or Federal Express or similar
expedited commercial carrier, addressed to the recipient of the notice,
postpaid and registered or certified with return receipt requested (if by
mail), or with all freight charges prepaid (if by Federal Express or
similar carrier).
(b) All notices required or permitted to be sent hereunder shall
be deemed to have been given for all purposes of this Agreement upon the
date of acknowledged receipt, in the case of a notice by telecopier, and,
in all other cases, upon the date of receipt or refusal, except that
whenever under this Agreement a notice is either received on a day which is
not a Business Day or is required to be delivered on or before a specific
day which is not a Business Day, the day of receipt or required delivery
shall automatically be extended to the next Business Day.
(c) All such notices shall be addressed,
if to the Secured Party to:
__________________
c/o Hospitality Properties Trust
000 Xxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attn: Xx. Xxxx X. Xxxxxx
[Telecopier No. (000) 000-0000]
with a copy to:
Xxxxxxxx & Worcester LLP
Xxx Xxxx Xxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attn: Xxxxxxxx X. Xxxxx, Esq.
[Telecopier No. (000) 000-0000]
if to the Pledgor to:
______________________________
c/o ShoLodge, Inc.
000 Xxxxx Xxxxx Xxxxx
Xxxxxxxxxxxxxx, Xxxxxxxxx 00000
Attn: Xx. Xxxx X. Xxxxx
[Telecopier No. (000)000-0000]
with a copy to:
Boult Xxxxxxxx Xxxxxxx & Xxxxx, PLC
000 Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxx, Xxxxxxxxx 00000
Attn: Xxxxxxx X. Xxxxxxxxx, Esq.
[Telecopier No. (000) 000-0000]
(d) By notice given as herein provided, the parties hereto and
their respective successor and assigns shall have the right from time to
time and at any time during the term of this Agreement to change their
respective addresses effective upon receipt by the other parties of such
notice and each shall have the right to specify as its address any other
address within the United States of America or to such other address as the
party to whom such notice is directed may have designated in writing to the
other parties hereto.
SECTION 15. SUCCESSORS AND ASSIGNS. This Agreement shall be
binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns, and the term "Secured Party" shall be
deemed to include any other holder or holders of any of the Secured
Obligations. Where the context so permits or requires, terms defined
herein in the singular number shall include the plural, and in the plural
number, the singular. This Agreement may be executed in any number of
counterparts and by the different parties on separate counterparts, each of
which, when so executed and delivered, shall be an original and all of
which shall together constitute one and the same agreement.
SECTION 16. REINSTATEMENT. This Agreement shall continue to be
effective, or be reinstated, as the case may be, if at any time any amount
received by the Secured Party in respect of the Pledged Collateral is
rescinded or must otherwise be restored or returned by the Secured Party
upon the insolvency, bankruptcy, dissolution, liquidation or reorganization
of the Pledgor or upon the appointment of any intervenor or conservator of,
or trustee or similar official for the Pledgor or any substantial part of
its or property, or otherwise, all as though such payments had not been
made.
SECTION 17. RESTRICTIONS ON TRANSFER. To the extent that any
restrictions imposed by any shareholders agreement, the Articles of
Incorporation or charter of the Tenant or any other document or instrument
would in any way affect or impair the pledge of the Pledged Collateral
hereunder or the exercise by the Secured Party of any right granted
hereunder including, without limitation, the right of the Secured Party to
dispose of the Pledged Collateral upon the occurrence of any Event of
Default, the Pledgor hereby waives such restrictions, and hereby agree that
they will take any action which the Secured Party may reasonably request in
order that the Secured Party may obtain and enjoy the full rights and
benefits granted to the Secured Party by this Agreement free of any such
restrictions.
SECTION 18. APPLICABLE LAW. This Agreement and any other
instruments executed and delivered to evidence, complete or perfect the
transactions contemplated hereby and thereby shall be interpreted,
construed, applied and enforced in accordance with the laws of The
Commonwealth of Massachusetts applicable to contracts between residents of
Massachusetts which are to be performed entirely within Massachusetts
regardless of (i) where any such instrument is executed or delivered; or
(ii) where any payment or other performance required by any such instrument
is made or required to be made; or (iii) where any breach of any provision
of any such instrument occurs, or any cause of action otherwise accrues; or
(iv) where any action or other proceeding is instituted or pending; or (v)
the nationality, citizenship, domicile, principal place of business, or
jurisdiction of organization or domestication of any party; or (vi) whether
the laws of the forum jurisdiction otherwise would apply the laws of a
jurisdiction other than The Commonwealth of Massachusetts; or (vii) any
combination of the foregoing. Notwithstanding the foregoing, the laws of
the jurisdiction where any of the Pledged Collateral is situated or
otherwise has a situs will apply to the perfection, disposition and
realization upon such Pledged Collateral.
To the maximum extent permitted by applicable law, any action to
enforce, arising out of, or relating in any way to, any of the provisions
of this Agreement may be brought and prosecuted in such court or courts
located in The Commonwealth of Massachusetts as may be provided by law; and
the parties consent to the jurisdiction of said court or courts located in
The Commonwealth of Massachusetts and to service of process by registered
mail, return receipt requested, or by any other manner provided by law.
SECTION 19. SEVERABILITY. In case any one or more of the
provisions contained in this Agreement should be invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of
the remaining provisions contained herein shall not in any way be affected
or impaired thereby, but this Agreement shall be reformed and construed and
enforced to the maximum extent permitted by applicable law.
SECTION 20. ENTIRE CONTRACT. This Agreement constitutes the
entire agreement between the parties hereto with respect to the subject
matter hereof and shall supersede and take the place of any other
instruments purporting to be an agreement of the parties hereto relating to
the subject matter hereof.
SECTION 21. HEADINGS; COUNTERPARTS. Headings in this Agreement
are for purposes of reference only and shall not limit or otherwise affect
the meaning hereof. This Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument, and in pleading or proving any provision
of this Agreement, it shall not be necessary to produce more than one of
such counterparts.
SECTION 22. NONLIABILITY OF TRUSTEES. THE DECLARATION OF TRUST
ESTABLISHING THE SECURED PARTY, A COPY OF WHICH, TOGETHER WITH ALL
AMENDMENTS THERETO (THE "DECLARATION"), IS DULY FILED WITH THE DEPARTMENT
OF ASSESSMENTS AND TAXATION OF THE STATE OF MARYLAND, PROVIDES THAT THE
NAME "_______________________" REFERS TO THE TRUSTEES UNDER THE DECLARATION
COLLECTIVELY AS TRUSTEES, BUT NOT INDIVIDUALLY OR PERSONALLY, AND THAT NO
TRUSTEE, OFFICER, SHAREHOLDER, EMPLOYEE OR AGENT OF THE SECURED PARTY SHALL
BE HELD TO ANY PERSONAL LIABILITY, JOINTLY OR SEVERALLY, FOR ANY OBLIGATION
OF OR CLAIM AGAINST, THE SECURED PARTY. ALL PERSONS DEALING WITH THE
SECURED PARTY, IN ANY WAY, SHALL LOOK ONLY TO THE ASSETS OF THE SECURED
PARTY FOR THE PAYMENT OF ANY SUM OR THE PERFORMANCE OF ANY OBLIGATION.
WITNESS the execution hereof under seal as of the date above
first written.
By:
Its (Vice) President
EXHIBIT A
PLEDGED STOCK
[See attached photocopy.]
