PLEDGE AND SECURITY AGREEMENT
EXHIBIT
10.4.6
THIS AGREEMENT made as of the
31st
day of October 2006, by and between Xxxxxx X. Xxxxxxxx, Xx., having an address
at 00 Xxxxxxxxxx
Xxxx X (hereinafter the “Pledgor”), and FIRST REAL ESTATE INVESTMENT TRUST of
NEW JERSEY, its successors and/or assigns, having an office located at
000 Xxxx Xxxxxx, Xxxxxxxxxx, Xxx Xxxxxx 00000 (hereinafter the “FREIT” or
“Pledgee”).
W
I T N E S S E T H :
WHEREAS, Pledgor is indebted
to FREIT in the principal amount of $429,883.77 together with all interest
thereon, represented by a Promissory Note of even date herewith (the “Note”);
and
WHEREAS, FREIT is the Managing
Member (the “Managing Member”) with a 70% ownership interest in Damascus Centre,
LLC, a New Jersey limited liability company pursuant to an
Operating Agreement dated June 1, 2003(the “Operating Agreement”);
and
WHEREAS, Xxxxxxxx 000, LLC a
Limited Member (the “Limited Member”) with a 30% ownership interest in Damascus
Centre, LLC; and
WHEREAS, Pledgor is a Member
of Damascus 100, LLC; and
WHEREAS, as a condition
precedent to making the loan evidenced by the Note and in order to secure
payment of the Obligations, as hereinafter defined, FREIT requires that the
Pledgor enter into and execute this Pledge and Security Agreement upon the terms
and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the
mutual promises set forth herein and other good and valuable consideration, the
parties hereto agree as follows:
1.
As security for (i) the prompt and complete payment when due of the Note,
and for any and all liabilities that Pledgor now or in the future may have to
FREIT pursuant to the Note, and (ii) the prompt and complete payment when due of
all obligations contained in this Agreement (the obligations described in
subparagraphs (i) and (ii) herein are referred to collectively as the
“Obligations”), the Pledgor hereby pledges, assigns, transfers and grants
to
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FREIT a
security interest in all of Pledgor’s Membership Interest in the Damascus 100,
LLC, including, but not limited to, Pledgor’s and his successor’s assignee’s,
legal representative’s, heir’s and legatee’s rights to receive refinancing
proceeds, distributions and other cash flow, from Damascus 100, LLC
(collectively, the “Collateral”). The assignment hereunder is
intended to be and shall constitute an unconditional, absolute and present
assignment to FREIT of all of Pledgor’s right, title and interest in and to the
Collateral (subject to the terms and conditions hereof). FREIT agrees
that any proceeds from Collateral shall be applied first to the Obligations
outstanding and after payment in full of such Obligations outstanding under the
Note, the balance shall be paid to Pledgor.
2.
The Pledgor hereby agrees that none of the following events,
either alone or together, shall affect FREIT's interest in the
Collateral:
(a) if
the terms of any liability which Pledgor may have to FREIT, arising out of the
Note or any one or more of the Obligations is amended or Lender otherwise
permits any renewals or substitutions of the Note or any of the Obligations;
or
(b) if
FREIT releases or accepts substitutions for any other collateral that may serve
as security for the Obligations.
Pledgor shall also be liable to FREIT
for any guarantee for Pledgor’s pro rata share of Damascus 100, LLC’s
obligations to FREIT for any guaranty whether by way of the personal guaranty of
FREIT or through a bond a letter of credit or any other surety which FREIT is
required to make with respect to Damascus 100, LLC, all of which are deemed to
be obligations as defined in this Agreement.
3.
Upon occurrence of a Default, as defined in the Note or this Agreement,
the Collateral and all rights arising thereunder shall be transferred and paid
over to FREIT. Prior to a Default, Pledgor may exercise any voting
rights Pledgor may have as a Member of Damascus 100, LLC, provided any such
exercise shall not impair or diminish the Collateral or the pledge made hereby.
Additionally, FREIT may exercise any and all other rights that it has as a
secured party pursuant to the applicable provisions of the Uniform Commercial
Code, N.J.S.A. 12A:1-101, et seq. (the “Code”)
and this Agreement shall constitute a security agreement in accordance with the
terms of the Code. FREIT does not have to exercise any rights, which
it may have
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against
Pledgor before exercising its rights against the
Collateral. Additionally, the Pledgor agrees that if the law requires
FREIT to give notice of the sale of the Collateral or any interest therein
(which sale need not be a public sale), ten (10) days shall be sufficient
notice.
4.
The Pledgor hereby waives the right to be treated as a
“Debtor” under the terms of Article 9 of the Code in connection with FREIT’s
exercise of its remedies, to the extent such a waiver is permitted by the
Code.
5.
The Pledgor hereby appoints FREIT as attorney in fact to arrange for the
transfer of the Collateral to FREIT upon the occurrence of a Default, as defined
in the Note.
6.
The Pledgor represents that Pledgor’s principal residence is the address
set forth in the first paragraph of this Agreement.
7.
Any transfer or further pledge of the Collateral without the express prior
written consent of FREIT shall constitute a default under the Note and the
Obligations.
8.
The Pledgor will, at Pledgor’s expense and in such manner and form as FREIT may
require, execute, deliver, file and record any financing statement, specific
assignment or other paper, in order to create, preserve, perfect or validate any
security interest or to enable FREIT to exercise and enforce its rights
hereunder with respect to any of the Collateral. To the extent permitted by
applicable law, the Pledgor hereby authorizes FREIT to execute and file, in the
name of the Pledgor financing statements which FREIT in its sole discretion may
deem necessary or appropriate to further perfect the security interests provided
for herein. Pledgor shall also deliver to FREIT contemporaneously
herewith, the Membership certificate or certificates, if any, evidencing his
ownership in the Damascus 100, LLC, together with a duly executed stock
power.
9.
FREIT may delay enforcement of any of its rights pursuant to the
terms of this Pledge and Security Agreement without losing such
rights.
10. If
any part of this Pledge and Security Agreement is deemed by a court of law to be
invalid, such other provisions as have not been declared to be invalid shall
remain in effect.
11. This
Pledge and Security Agreement shall be governed in accordance with the laws of
the State of New Jersey without regard to conflict of law principles, and the
Pledgor does hereby agree to be subject to the jurisdiction of the Courts of the
State of New Jersey.
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12. Any
terms not defined shall have the meanings ascribed to them in the
Note.
13. This
Pledge and Security Agreement may be executed in two or more counterparts, each
of which shall be deemed an original.
IN WITNESS WHEREOF, the parties have
executed this Agreement as of the day and year first above written.
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WITNESS:
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PLEDGOR:
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/s/
Xxxxxxx Xxxxx
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/s/
Xxxxxx X. Xxxxxxxx, Xx.
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| ____________________________________________ | _____________________________________________________ | ||
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Xxxxxx
X. Xxxxxxxx, Xx.
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/s/
Xxxxx Xxxxx
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Xxxxxx
Xxxxxx
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| ____________________________________________ |
By:
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__________________________________________________
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Xxxxxx
Xxxxxx, President
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