Exhibit 10.5
PLEDGE AND SECURITY AGREEMENT
THIS PLEDGE AND SECURITY AGREEMENT, dated as of April 30, 2002 (as amended,
restated, extended, consolidated, supplemented, replaced or otherwise modified
from time to time, this "Agreement"), by EACH OF THE PARTIES SET FORTH ON
SCHEDULE I (each a "Pledgor", and collectively, jointly and severally as the
"Pledgors"), to and for the benefit of BAYERISCHE HYPO- UND VEREINSBANK AG, NEW
YORK BRANCH, a banking corporation organized under the laws of the Federal
Republic of Germany, as agent ("Agent") for itself and the other Lenders (as
defined below).
W I T N E S S E T H:
WHEREAS, pursuant to that certain Revolving Credit Agreement, dated as of
the date hereof, by and among the Pledgors and the other borrowers party thereto
(the "Borrowers"), the lenders from time to time party thereto (the "Lenders")
and Agent, as agent for itself and the other Lenders (as amended, restated,
extended, consolidated, supplemented, replaced or otherwise modified from time
to time, the "Credit Agreement"), the Lenders have agreed to make a loan to the
Borrowers, subject to the terms and conditions therein set forth, in the maximum
principal amount of $75,000,000 (the "Loan");
WHEREAS, each Pledgor owns the legal and beneficial membership interests
and general partnership interests in the respective Pledged Borrowers (as
defined below) set forth opposite such Pledgor's name on Schedule A;
WHEREAS, each Pledged Borrower owns (directly or indirectly) the respective
Properties (the "Properties") set forth opposite such Pledged Borrower's name on
Schedule B;
WHEREAS, it is a condition precedent to the obligations of the Lenders to
make the Loan to the Borrowers pursuant to the Credit Agreement, that the
Pledgors execute and deliver this Agreement to Agent; and
WHEREAS, the Pledgors will derive substantial direct and indirect benefit
from the transactions contemplated by the Credit Agreement and the other Loan
Documents.
NOW, THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged by the parties hereto, and to induce Agent and the Lenders to
execute and deliver the Credit Agreement and the other Loan Documents and to
make the Loan thereunder, the Pledgors hereby represent, warrant, covenant and
agree for the benefit of Agent and the Lenders as follows:
1. Defined Terms. Capitalized terms used herein without definition shall
have the respective meanings ascribed to such terms in the Credit Agreement. The
words "hereof", "herein" and "hereunder" and words of similar import when used
in this Agreement shall refer to this Agreement as a whole and not to any
particular provision of this Agreement, and section, subsection, schedule and
exhibit references are to this Agreement unless otherwise specified. The word
"including" when used in this Agreement shall be deemed to be followed by the
words "without limitation". As used in this Agreement, the following terms shall
have the meanings set forth below:
"Agent" has the meaning ascribed to such term in the preamble to this
Agreement.
"Agreement" has the meaning ascribed to such term in the preamble to this
Agreement.
"Borrowers" has the meaning ascribed to such term in the preamble to this
Agreement.
"Cash Management Agreement" means the Cash Management Agreement, dated as
of the date hereof, among the Borrowers, Agent and Deposit Bank, as the same may
be amended, restated, extended, consolidated, supplemented, replaced or
otherwise modified from time to time.
"Code" means the Uniform Commercial Code from time to time in effect in the
applicable state.
"Collateral" has the meaning ascribed to such term in Section 2.
"Credit Agreement" has the meaning ascribed to such term in the recitals to
this Agreement.
"Deposit Bank" means Fleet National Bank, and its successors and any
replacement thereof in accordance with the Credit Agreement.
"Distributions" has the meaning ascribed to such term in Section 2.
"Issuer" has the meaning ascribed to such term in Section 5(b).
"Lenders" has the meaning ascribed to such term in the recitals to this
Agreement.
"Loan" has the meaning ascribed to such term in the recitals to this
Agreement.
"Pledged Borrowers" means, collectively, Shelbourne I Century Park Company
LLC, a Delaware limited liability company, Shelbourne II Century Park Company
LLC, a Delaware limited liability company, Shelbourne I Seattle Landmark Company
LLC, a Delaware limited liability company, Shelbourne II Seattle Landmark
Company LLC, a Delaware limited liability company, Shelbourne II Tri-Columbus
Company LLC, a Delaware limited liability company, Shelbourne III Tri-Columbus
Company LLC, a Delaware limited liability company, Shelbourne I ▇▇▇ ▇▇▇▇▇▇▇▇
Company LLC, a Delaware limited liability company, Shelbourne II ▇▇▇ ▇▇▇▇▇▇▇▇
Company LLC, a Delaware limited liability company, Shelbourne III ▇▇▇ ▇▇▇▇▇▇▇▇
Company LLC, a Delaware limited liability company, Shelbourne Richmond Company
LLC, a Delaware limited liability company, Shelbourne ▇▇▇▇▇▇▇▇ Company LLC, a
2
Delaware limited liability company, Shelbourne Melrose Crossing I Company LLC, a
Delaware limited liability company, Shelbourne Melrose Crossing II Company LLC,
a Delaware limited liability company, Shelbourne Raleigh Company LLC, a Delaware
limited liability company, Shelbourne Las Vegas Company LLC, a Delaware limited
liability company, Shelbourne Livonia Company LLC, a Delaware limited liability
company, Century Park I Joint Venture, a Delaware general partnership, Seattle
Landmark Joint Venture, a Delaware general partnership, ▇▇▇ ▇▇▇▇▇▇▇▇ Joint
Venture, a Delaware general partnership and Tri-Columbus Associates, a Delaware
general partnership.
"Pledged Equity Interests" has the meaning ascribed to such term in Section
2.
"Pledged Interests" means the membership interests and general partnership
interests of Pledgors in the Pledged Borrowers listed on Schedule A, together
with all membership and partnership interest certificates, options or rights of
any nature whatsoever which may be issued or granted by such Pledged Borrowers
to Pledgors while this Agreement is in effect, exclusive of Pledgors' voting and
management rights in the Pledged Borrowers prior to an Event of Default.
"Pledgor" or "Pledgors" has the meaning ascribed to such term in the
preamble to this Agreement.
"Proceeds" means all "proceeds" as such term is defined in the Code and, in
any event, shall include, without limitation, all dividends or other income from
the Collateral, collections thereon or distributions with respect thereto.
"Properties" has the meaning ascribed to such term in the recitals to this
Agreement.
"Special Damages" has the meaning ascribed to such term in Section 17(j).
2. Pledge; Grant of Security Interest. Each of the Pledgors hereby pledges
and grants to Agent for the ratable benefit of the Lenders, as collateral
security for the prompt and complete payment and performance when due (whether
at the stated maturity, by acceleration or otherwise) of the Debt, a first
priority security interest in all of each Pledgor's right, title and interest to
the following:
(i) all Pledged Interests; and
(ii) all right, title, interest, claims or rights of each Pledgor now
or hereafter in, to or against the Pledged Borrowers (including, without
limitation, each Pledgor's ownership interest in the Pledged Borrowers, the
interest of each Pledgor in and to the Organizational Documents, any and
all certificates evidencing such ownership interest, the capital of the
Pledged Borrowers, and the property and assets of the Pledged Borrowers and
any rights pertaining thereto), together with any and all other securities,
cash, certificates or other property, option or right in respect of, in
addition to or substitution or exchange for any of the foregoing, or other
property at any time and from time to time receivable or otherwise
distributed in respect of or in exchange for all or any thereof; and
3
(iii) all securities, moneys or property representing dividends or
interest on any of the Collateral, or representing a distribution in
respect of the Collateral, or resulting from a split-up, revision,
reclassification or other like change of the Collateral or otherwise
received in exchange therefor, and any subscription warrants, rights or
options issued to the holders of, or otherwise in respect of, the
Collateral; and
(iv) any and all profits, proceeds, accounts, income, distributions,
payments upon dissolution or liquidation of the Pledged Borrowers, or the
sale, financing or refinancing of any of the property or assets of any of
the Pledged Borrowers, proceeds of a casualty or condemnation, return of
capital, repayment of loans, and payments of any kind or nature whatsoever,
now or hereafter distributable or payable by any of the Pledged Borrowers
or any partner, member or shareholder of any of the Pledged Borrowers to
any Pledgor, by reason of any Pledgor's interest in any of the Pledged
Borrowers or otherwise, or now or hereafter distributable or payable to any
Pledgor from any other source by reason of any Pledgor being a partner,
member or shareholder in any of the Pledged Borrowers, or on account of any
interest in or claim or rights against any of the Pledged Borrowers held by
any Pledgor, or by reason of services performed by any Pledgor for or on
behalf of any of the Pledged Borrowers or with respect to the assets of any
of the Pledged Borrowers and any and all proceeds from any Transfer,
assignment or pledge of any interest of any Pledgor in, or claim or right
against, any of the Pledged Borrowers (regardless of whether such Transfer,
assignment or pledge is permitted under the terms hereof or the other Loan
Documents), and any and all claims, choses in action or things in action
now or hereafter arising against any of the Pledged Borrowers; and
(v) all "accounts" and "general intangibles" (as such terms are
defined in the Code) now or hereafter arising from any of the foregoing;
and
(vi) all promissory notes or other documents or instruments now or
hereafter evidencing or securing any of the foregoing; and
(vii) all right of any Pledgor to collect and enforce payments
distributable or payable by any of the Pledged Borrowers or any member,
partner or shareholder of any of the Pledged Borrowers to any Pledgor
pursuant to the terms of the Organizational Documents; and
(viii) all right, title and interest of each of the Pledgors in, to
and under any policy of insurance payable by reason of loss or damage to
the Collateral; and
(ix) all documents, writings, leases, books, files, records, computer
tapes, programs, ledger books and ledger pages arising from or used in
connection with any of the foregoing; and
(x) all renewals, extensions, additions, substitutions or replacements
of any of the foregoing; and
(xi) all powers, options, rights, privileges and immunities pertaining
to any of the foregoing; and
4
(xii) all Proceeds of any of the foregoing and all cash, security or
other property distributed on account of any of the foregoing (including,
without limitation, any proceeds of insurance thereon).
All of the foregoing described in this Section 2 are hereinafter referred to
collectively as the "Collateral". The items described in (i) through (iii),
above (together with subsequent items in Section 2 above pertaining thereto),
are sometimes hereinafter referred to as the "Pledged Equity Interests"; and the
items described in (iv) and (v) above (together with the subsequent items in
Section 2 above pertaining thereto), are sometimes hereinafter referred to
collectively as the "Distributions".
3. Representations and Warranties. The Pledgors represent and warrant as of
the date hereof that:
(a) no authorization, consent of or notice to any other Person (including,
without limitation, any member, partner, shareholder or creditor of any Pledgor
or any of the Pledged Borrowers) that has not been obtained, is required in
connection with the execution, delivery, performance, validity or enforceability
of this Agreement, including, without limitation, the assignment and Transfer by
the Pledgors of any of the Collateral to Agent or the subsequent assignment and
Transfer thereof by Agent pursuant to the terms hereof;
(b) all the Pledged Equity Interests have been duly and validly issued and
are fully paid and nonassessable;
(c) the Pledged Interests listed on Schedule A constitute all of the
outstanding membership and partnership interests (limited or general) in the
respective Pledged Borrowers;
(d) Pledgors are the record and beneficial owners of, and have good and
marketable title to, the Pledged Interests listed on Schedule A free of any and
all Liens, options or other interests or any offset, whether legal, equitable or
beneficial, in favor of, or claims of, any other Person, except the Lien created
by this Agreement;
(e) upon the filing of the UCC-1 financing statements referred to in
Section 11, the Lien granted pursuant to this Agreement will constitute a valid,
perfected first priority Lien on the Collateral in such jurisdictions,
enforceable as such against all creditors of the Pledgors and any Persons
purporting to purchase any Collateral from any of the Pledgors;
(f) the principal place of business of each Pledgor is as set forth
opposite such Pledgor's name on Schedule I hereto;
(g) the exact legal name of each Pledgor as indicated on the public record,
which shows such Pledgor to be organized in its respective state of
organization, is, and at all times has been, as set forth opposite such
Pledgor's name on Schedule I hereto;
(h) Each Pledgor is, and at all times has been, a limited partnership or a
limited liability company, as the case may be, as indicated on Schedule I
hereto, organized exclusively under the laws of the State of Delaware;
5
(i) none of the Pledgors has merged with or into, or acquired all or
substantially all of the assets of, any other entity;
(j) none of the Pledgors has used any trade name or assumed name;
(k) there are now and shall hereafter be no certificates, instruments or
writings representing any of the Pledged Interests; and
(l) the Pledgors have delivered or caused to be delivered to Agent true and
accurate copies of the Organizational Documents of each Pledged Borrower and
such Organizational Documents have not been amended or modified as of the date
hereof.
4. Covenants. Each Pledgor covenants and agrees with Agent that, from and
after the date of this Agreement until the Debt is paid in full:
(a) Acknowledgements of Parties. If the Pledgors shall, as a result of
their ownership of the Collateral, become entitled to receive or shall receive
any regular, preferred or any other membership or partnership certificate, as
applicable (including, without limitation, any certificate representing a
dividend or a distribution in connection with any reclassification, increase or
reduction of capital or any certificate issued in connection with any
reorganization), option or rights, whether in addition to, in substitution of,
as a conversion of, or in exchange for any shares, units, interest or other
beneficial ownership interest of the Pledged Interests, or otherwise in respect
thereof, Pledgors shall accept the same as Agent's agent, hold the same in trust
for Agent and deliver the same forthwith to Agent in the exact form received,
duly endorsed by Pledgors to Agent, if required, together with an undated
regular, preferred or any other membership or general partnership interest, as
applicable, power covering such certificate duly executed in blank and with, if
Agent so requests, signature guaranteed, to be held by Agent hereunder as
additional security for the Debt. Any sums paid upon or in respect of the
Collateral upon the liquidation or dissolution of any of the Pledged Borrowers
shall be paid over to Agent to be held by it hereunder as additional security
for the Loan, and in case any distribution of capital shall be made on or in
respect of the Collateral or any property shall be distributed upon or with
respect to the Collateral pursuant to the recapitalization or reclassification
of the capital of any of the Pledged Borrowers or pursuant to the reorganization
thereof, the property so distributed shall be delivered to Agent to be held by
it, subject to the terms hereof, as additional security for the Loan. If any
sums of money or property so paid or distributed in respect of the Collateral
shall be received by any Pledgor, such Pledgor shall, until such money or
property is paid or delivered to Agent, hold such money or property in trust for
Agent, segregated from other funds of such Pledgor, as additional security for
the Loan.
(b) Certain Prohibited Actions. Without the prior written consent of Agent,
Pledgors shall not, directly or indirectly do any of the following and shall
prevent the occurrence of all of the following through the actions of any
Pledged Borrower or otherwise: (i) vote to enable, or take any other action to
permit, any Pledged Borrower to issue any corporate, general or limited
partnership or membership interests or shares, as applicable, or to issue any
other securities convertible into or granting the right to purchase or exchange
for any corporate shares, general or limited partnership interests or membership
interests, as applicable, in any Pledged Borrower, or (ii) except as expressly
permitted by the Credit Agreement, Transfer or grant any
6
option with respect to, the Collateral, or (iii) create, incur, authorize or
permit to exist any Lien or option in favor of, or any claim of any Person with
respect to, any of the Collateral, or any interest therein, except for the Lien
provided for by this Agreement. Pledgors shall, and shall cause the Pledged
Borrowers to, defend the right, title and interest of Agent in and to the
Collateral against the claims and demands of all Persons whomsoever.
(c) Further Assurances. At any time and from time to time, upon the written
request of Agent, and at the sole expense of the Pledgors, the Pledgors shall
promptly and duly give, execute, deliver file and/or record such further
instruments and documents and take such further actions as Agent may request
from time to time for the purposes of obtaining, creating, perfecting,
validating or preserving the full benefits of this Agreement and of the rights
and powers herein granted, including, without limitation, filing UCC financing
or continuation statements. The Pledgors hereby authorize Agent to file any such
financing statement or continuation statement without the signature of the
Pledgors to the extent permitted by applicable law. If any amount payable under
or in connection with any of the Collateral shall be or become evidenced by any
promissory note, other instrument or chattel paper, such note, instrument or
chattel paper shall be promptly delivered to Agent, duly endorsed in a manner
satisfactory to Agent, to be held as Collateral pursuant to this Agreement.
(d) Limitation on Liens. The Pledgors will not, and will not permit any
Pledged Borrower to, create, incur or permit to exist, will, and will cause the
Pledged Borrowers to, defend the Collateral against, and will, and will cause
the Pledged Borrowers to, take all such other action as is necessary to remove,
any Lien or claim on or to the Collateral, other than the Liens created hereby,
and will, and will cause the Pledged Borrowers to, defend the right, title and
interest of Agent and the Lenders in, to and under the Collateral against the
claims and demands of all Persons whomsoever.
(e) Further Identification of Collateral. Pledgors will furnish to Agent
from time to time statements and schedules further identifying and describing
the Collateral and such other reports in connection with the Collateral as Agent
may reasonably request, all in reasonable detail.
(f) Changes in Name, etc. No Pledgor will, unless (i) it shall have given
thirty (30) days' prior written notice to such effect to Agent and (ii) all
action necessary or advisable, in Agent's opinion, to protect and perfect the
Liens and security interests intended to be created hereunder with respect to
the Collateral shall have been taken, (a) change its name, identity or
structure, or (b) reorganize or reincorporate under the laws of another
jurisdiction, or (c) merge with or into, Transfer all or substantially of its
assets to, or acquire all or substantially all of the assets of, any other
entity.
(g) Indemnification as to Taxes. The Pledgors shall, and shall cause the
Pledged Borrowers to, pay, indemnify, defend and save and hold Agent and the
Lenders harmless from and against, any and all Losses, with respect to, or
resulting from any delay in paying, any and all stamp, excise, sales or other
taxes (other than federal income taxes of Agent or any Lender) which may be
payable or determined to be payable with respect to any of the Collateral or in
connection with any of the transactions contemplated by this Agreement.
7
(h) No Modification of Organizational Documents. So long as this Agreement
remains in effect, Pledgors shall not modify, amend, cancel, release, surrender,
terminate or permit the modification, amendment, cancellation, release,
surrender or termination of, the Organizational Documents of any Pledged
Borrower, or dissolve, liquidate or permit the dissolution, liquidation or
expiration of any Pledged Borrower or the Organizational Documents of any
Pledged Borrower, nor seek the partition of any of the assets of any Pledged
Borrower, without in each instance the prior written consent of Agent, which
consent may be withheld by Agent in its sole discretion.
(i) Performance of Organizational Documents. The Pledgors shall perform or
cause to be performed all duties, responsibilities and obligations under the
Organizational Documents of each Pledged Borrower and with respect to the
Collateral, and shall diligently and in good faith protect the value of the
Collateral. The Pledgors shall not, without the prior written consent of Agent,
which consent may be withheld by Agent in its sole discretion, take any action
which could result in the sale, reduction, cancellation, dilution, diminution,
conversion or withdrawal of any interest of the Pledgors in any Pledged
Borrower, or omit to take any action necessary to prevent any such sale,
reduction, cancellation, dilution, diminution, conversion or withdrawal, or
otherwise take any action or omit to take any action that would, in the exercise
of Agent's reasonable judgment, jeopardize or diminish the security afforded to
Agent by the Collateral. Without limiting the foregoing, the Pledgors shall not
consent to or permit to occur the admission of any new partner, member or
shareholder interest in any Pledged Borrower, the creation of any new class of
interest in any Pledged Borrower or the issuance, directly or indirectly, of any
other equity interest in any Pledged Borrower.
(j) Payment of Taxes. The Pledgors shall pay all taxes and other charges
against the Collateral, shall not use the Collateral illegally, and shall not
suffer to exist any loss, damage or destruction of the Collateral or any levy,
seizure or attachment thereof.
(k) Enforcement of Organizational Documents. The Pledgors, at the request
of Agent, shall take such actions as Agent may reasonably require to enforce the
terms of the Organizational Documents of any Pledged Borrower or any other
contract, agreement or instrument included in, giving rise to, creating,
establishing, evidencing or relating to the Collateral or to collect or enforce
any claim for payment or other right or privilege assigned to Agent hereunder.
5. Certain Understandings of Parties; Registration of Pledge; Control of
Collateral, Etc.
(a) Pledged Interests. (i) The Pledgors acknowledge and agree that the
Pledged Interests constitute "general intangibles" (as defined in the Code); and
(ii) the Pledgors therefore covenant and agree that (A) the Pledged Interests
are not and will not be traded, dealt in or traded on securities exchanges or
securities markets, (B) the terms of the Pledged Interests do not and will not
provide that they are securities governed by the Code and (C) the Pledged
Interests are not and will not be investment company securities within the
meaning of Section 8 103 of the Code, as in effect as of the date hereof.
8
(b) Registration of Pledge; Control of Collateral. Notwithstanding the
foregoing, to better assure the perfection of the security interest of Agent in
the Pledged Interests, concurrently with the execution and delivery of this
Agreement, the Pledgors shall send written instructions in the form of Exhibit A
to each issuer thereof (an "Issuer"), and shall cause such Issuer to, and such
Issuer shall, deliver to Agent the Confirmation Statement and Instruction
Agreement in the form of Exhibit B pursuant to which such Issuer will confirm
that it has registered the pledge of the Pledged Interests effected by this
Agreement on its books and agrees to comply with the instructions of Agent in
respect of the Pledged Interests without further consent of the Pledgors or any
other Person. Notwithstanding anything in this paragraph to the contrary,
neither the written instructions nor the Confirmation Statement and Instruction
Agreement shall be construed as expanding the rights of Agent to give
instructions with respect to the Collateral beyond such rights otherwise set
forth in this Agreement or as provided by law.
(c) Reports. The Pledgors will provide such documents and reports
respecting the Collateral in such form and detail as Agent reasonably may
request from time to time.
(d) Organizational Documents. Anything herein to the contrary
notwithstanding, (i) the Pledgors shall remain liable under the Organizational
Documents of the Pledged Borrowers and all other contracts, agreements and
instruments included in, giving rise to, creating, establishing, evidencing or
relating to the Collateral to the extent set forth therein to perform all of its
duties and obligations (including, without limitation, the making of any
contributions to the capital of any Pledged Borrower or the payment of any other
sum to or on behalf of any Pledged Borrower to the same extent as if this
Agreement had not been executed, (ii) the exercise by Agent of any of its rights
hereunder shall not release any Pledgor from any of their duties or obligations
under the Organizational Documents of any Pledged Borrower or any such
contracts, agreements and instruments, and (iii) neither Agent nor any Lender
shall have any obligation or liability under the Organizational Documents of any
Pledged Borrower or any such contract, agreement or instrument by reason of this
Agreement, nor shall Agent or any Lender be obligated to perform any of the
obligations or duties of the Pledgors thereunder or to take any action to
collect or enforce any claim for payment or other right or privilege assigned to
Agent hereunder.
6. Cash Dividends; Voting Rights. Subject to the provisions of the Credit
Agreement, the Cash Management Agreement and the other Loan Documents, and
unless an Event of Default shall have occurred and be continuing, the Pledgors
shall be permitted to receive all general partnership, limited partnership
and/or regular, preferred or any other membership interest distributions or cash
dividends paid in the normal course of business of any Pledged Borrower, as
applicable, and to exercise all voting and general partnership, limited
partnership and/or regular, preferred or any other membership interests or
corporate rights with respect to the Collateral, provided that no vote shall be
cast or right exercised or other action taken which, in Agent's judgment, would
impair the Collateral or which would be inconsistent with or result in any
violation of any provision of the Credit Agreement, this Agreement or any other
Loan Document.
9
7. Rights of Agent.
(a) If an Event of Default (as defined in the Credit Agreement) shall occur
and be continuing, Agent shall have the right to receive any and all
Distributions received or paid in respect of the Collateral and to make
application thereof to the Debt, in such order as Agent, in its sole discretion,
may elect, in accordance with the Loan Documents. If an Event of Default shall
occur and be continuing, then all such Collateral, at Agent's option, shall be
registered in the name of Agent or its nominee (if not already so registered),
and Agent or its nominee may thereafter exercise (i) all voting, and all
corporate, regular membership or general or limited partnership, as applicable,
and other rights pertaining to the Collateral and (ii) any and all rights of
conversion, exchange, and subscription and any other rights, privileges or
options pertaining to the Collateral as if it were the absolute owner thereof
(including, without limitation, the right to exchange at its discretion any and
all of the Collateral upon the merger, consolidation, reorganization,
recapitalization or other fundamental change in the organizational structure of
any Pledged Borrower, as applicable, or upon the exercise by the Pledgors or
Agent of any right, privilege or option pertaining to the Collateral, and in
connection therewith, the right to deposit and deliver any and all of the
Collateral with any committee, depositary, transfer agent, registrar or other
designated agency upon such terms and conditions as it may determine), all
without liability except to account for property actually received by it, but
Agent shall have no duty to exercise any such right, privilege or option and
shall not be responsible for any failure to do so or delay in so doing.
(b) The rights of Agent or the Lenders under this Agreement shall not be
conditioned or contingent upon the pursuit by Agent of any right or remedy
against any of the Pledgors or against any other Person which may be or become
liable in respect of all or any part of the Debt or against any other security
therefor, guarantee thereof or right of offset with respect thereto. Neither
Agent nor any Lender shall be liable for any failure to demand, collect or
realize upon all or any part of the Collateral or for any delay in doing so, nor
shall Agent or any Lender be under any obligation to sell or otherwise dispose
of any Collateral upon the request of the Pledgors or any other Person or to
take any other action whatsoever with regard to the Collateral or any part
thereof.
(c) The Pledgors also authorize Agent, at any time and from time to time,
to execute, in connection with the sale provided for in Section 8 or 9, any
endorsements, assignments or other instruments of conveyance or transfer with
respect to the Collateral.
(d) The powers conferred on Agent hereunder are solely to protect Agent's
interest in the Collateral and shall not impose any duty upon Agent or any
Lender to exercise any such powers. Agent shall be accountable only for amounts
that it actually receives as a result of the exercise of such powers, and
neither Agent nor any Lender or any of their respective officers, directors,
employees shall be responsible to the Pledgors for any act or failure to act
hereunder.
(e) If any Pledgor fails to perform or comply with any of its agreements
contained herein and Agent, as provided for by the terms of this Agreement,
shall itself perform or comply, or otherwise cause performance or compliance,
with such agreement, the expenses of Agent incurred in connection with such
performance or compliance, together with interest at the
10
Default Rate if such expenses are not paid within ten (10) days of demand, shall
be payable by the Pledgors to Agent on demand and shall constitute obligations
secured hereby.
8. Remedies. If an Event of Default shall occur and be continuing, Agent
may exercise, in addition to all other rights and remedies granted in this
Agreement and in any other instrument or agreement securing, evidencing or
relating to the Loan:
(a) all rights and remedies of a secured party under the Code (whether or
not said Code is in effect in the jurisdiction where the rights and remedies are
asserted) and such additional rights and remedies to which a secured party is
entitled under the laws in effect in any jurisdiction where any rights and
remedies hereunder may be asserted, including, without limitation, the right to
exercise all voting, consensual and other powers of ownership pertaining to the
Collateral as if Agent were the sole and absolute owner thereof (and each of the
Pledgors agrees to take all such action as may be appropriate to give effect to
such right);
(b) Agent may make any reasonable compromise or settlement deemed desirable
with respect to any of the Collateral and may extend the time of payment,
arrange for payment in installments, or otherwise modify the terms of, any of
the Collateral;
(c) Agent in its discretion may, in its name or in the name of any of the
Pledgors or otherwise, demand, ▇▇▇ for, collect, direct payment of or receive
any money or property at any time payable or receivable on account of or in
exchange for any of the Collateral, but shall be under no obligation to do so.
If an Event of Default shall occur and be continuing, Agent may exercise,
in addition to all other rights and remedies granted in this Agreement and in
any other instrument or agreement securing, evidencing or relating to the Loan,
all rights and remedies of a secured party under the Code. Without limiting the
generality of the foregoing, Agent, without demand of performance or other
demand, presentment, protest, advertisement or notice of any kind (except any
notice required hereby or by the Code) to or upon any Pledgor, any Pledged
Borrower or any other Person (all and each of which demands, presentments,
protests, advertisements and notices, or other defenses, are hereby waived to
the extent permitted under applicable Legal Requirements), may in such
circumstances forthwith collect, receive, appropriate and realize upon the
Collateral, or any part thereof, and/or may forthwith sell, assign, give option
or options to purchase or otherwise dispose of and deliver the Collateral or any
part thereof (or contract to do any of the foregoing), in one or more parcels at
public or private sale or sales, in the over-the-counter market, at any
exchange, broker's board or office of Agent or elsewhere upon such terms and
conditions as it may deem advisable and at such prices as it may deem best in
its sole discretion, for cash or on credit or for future delivery without
assumption of any credit risk. Agent shall have the right, without notice or
publication, to adjourn any public or private sale or cause the same to be
adjourned from time to time by announcement at the time and place fixed for such
sale, and any such sale may be made at any time or place to which the same may
be adjourned without further notice. Agent shall have the right upon any such
public sale or sales, and, to the extent permitted by the Code, upon any such
private sale or sales, to purchase the whole or any part of the Collateral so
sold, free of any right or equity of redemption of the Pledgors, which right or
equity of redemption is hereby waived or released. Agent may take title to any
such Collateral itself or in any nominee or designee. Agent shall apply the
proceeds of
11
any such collection, recovery, receipt, appropriation, realization or sale,
after deducting all reasonable costs and expenses of every kind incurred therein
or incidental to the care or safekeeping of any of the Collateral or in any way
relating to the Collateral or the rights of Agent hereunder, including, without
limitation, reasonable attorneys' fees and disbursements, to the payment in
whole or in part of the Debt, in such order as Agent may elect, and only after
such application and after the payment by Agent of any other amount required by
any applicable Legal Requirement, including, without limitation, any applicable
provision of the Code, need Agent account for the surplus, if any, to the
Pledgors. To the extent permitted by applicable law, the Pledgors each waive all
claims, damages and demands it may acquire against Agent or any Lender arising
out of the exercise by Agent of any of its rights hereunder, except for any
claims, damages and demands it may have against Agent arising from the willful
misconduct or gross negligence of Agent or its Affiliates, or any agents or
employees of the foregoing. If any notice of a proposed sale or other
disposition of Collateral shall be required by applicable Legal Requirements,
such notice shall be deemed reasonable and proper if given at least ten (10)
days before such sale or other disposition.
(d) The rights, powers, privileges and remedies of Agent and the Lenders
under this Agreement are cumulative and shall be in addition to all rights,
powers, privileges and remedies available to Agent and the Lenders at law, in
equity or otherwise. All such rights, powers and remedies shall be cumulative
and may be exercised successively or concurrently without impairing the rights
of Agent or any Lender hereunder.
9. Private Sales. The Pledgors recognize that Agent may be unable to effect
a public sale of any or all of the Collateral, by reason of certain prohibitions
contained in the Securities Act, and applicable state securities laws or
otherwise, and it may be advisable to resort to one or more private sales
thereof to a restricted group of purchasers which will be obliged to agree,
among other things, to acquire such securities for their own account for
investment and not with a view to the distribution or resale thereof. The
Pledgors acknowledge and agree that any such private sale may result in prices
and other terms less favorable to Agent than if such sale were a public sale
and, notwithstanding such circumstances, agree that any such private sale shall
not be deemed to have been made in a commercially unreasonable manner solely by
virtue of being a private sale. Agent shall be under no obligation to delay a
sale of any of the Collateral for the period of time necessary to permit any of
the Pledgors or any Pledged Borrower to register such securities for public sale
under the Securities Act, or under applicable state securities laws, even if
such Pledgors or Pledged Borrowers would agree to do so.
(a) The Pledgors further shall use their best efforts to do or cause to be
done all such other acts as may be reasonably necessary to make any sale or
sales of all or any portion of the Collateral pursuant to this Section 9 valid
and binding and in compliance with any and all applicable Legal Requirements.
The Pledgors further agree that a breach of any of the covenants contained in
this Section 9 will cause irreparable injury to Agent, that Agent has no
adequate remedy at law in respect of such breach and, as a consequence, that
each and every covenant contained in this Section 9 shall be specifically
enforceable against the Pledgors, and the Pledgors each hereby waive and agree
not to assert any defenses against an action for specific performance of such
covenants except for a defense that no Event of Default has occurred under the
Credit Agreement.
12
(b) Neither Agent nor any Lender shall incur any liability as a result of
the sale of any Collateral, or any part thereof, at any private sale conducted
in a commercially reasonable manner, it being agreed that some or all of the
Collateral is or may be of one or more types that threaten to decline speedily
in value and that are not customarily sold in a recognized market. The Pledgors
each hereby waive any claims against Agent or any Lender arising by reason of
the fact that the price at which any of the Collateral may have been sold at
such a private sale was less than the price which might have been obtained at a
public sale or was less than the aggregate amount of the Debt, even if Agent
accepts the first offer received and does not offer any Collateral to more than
one offeree, provided that Agent has acted in a commercially reasonable manner
in conducting such private sale.
10. Limitation on Duties Regarding Collateral. Agent's sole duty with
respect to the custody, safekeeping and physical preservation of the Collateral
in its possession, under the Code or otherwise, shall be, to deal with it in the
same manner as Agent deals with similar securities and property for its own
account, which shall not include any steps necessary to preserve rights against
prior parties. Neither Agent nor any Lender or any of their respective
directors, officers, employees or agents shall be liable for failure to demand,
collect or realize upon any of the Collateral or for any delay in doing so or
shall be under any obligation to sell or otherwise dispose of any Collateral
upon the request of the Pledgors or otherwise.
11. Financing Statements; Other Documents. On the date hereof, the Pledgors
shall deliver to Agent (a) UCC-1 financing statements with respect to the
Collateral, suitable for filing in such jurisdictions as Agent shall request and
(b) any other document or instrument which Agent may request with respect to the
Collateral for the purpose of obtaining or preserving the full benefit of this
Agreement and of the rights and powers herein granted.
12. Attorney-in-Fact. Without limiting any rights or powers granted by this
Agreement to Agent, Agent is hereby appointed, which appointment as
attorney-in-fact is irrevocable and coupled with an interest, the
attorney-in-fact of each of the Pledgors for the purpose of carrying out the
provisions of this Agreement and taking any action and executing any instruments
which Agent may deem necessary or advisable to accomplish the purposes hereof
including, without limitation:
(a) to ask, demand, collect, ▇▇▇ for, recover, compromise, receive and give
acquittance and receipts for moneys due and to become due under or in respect of
any of the Collateral;
(b) to receive, endorse and collect any drafts or other instruments,
documents and chattel paper in connection with clause (a) above;
(c) to file any claims or take any action or institute any proceedings that
the Agent may deem necessary or desirable for the collection of any of the
Collateral or otherwise to enforce the rights and remedies of Agent with respect
to any of the Collateral;
(d) to execute, in connection with the sale provided for in Section 8 or 9,
any endorsement, assignments, or other instruments of conveyance or transfer
with respect to the Collateral; and
13
(e) executing and filing such amendments or modifications to the
Organizational Documents as Agent deems necessary or desirable in connection
with enforcement of any rights or remedies of Agent under this Agreement in
respect of the Collateral following the occurrence of an Event of Default.
If so requested by Agent, each of the Pledgors shall ratify and confirm any
such sale or transfer by executing and delivering to Agent at the Pledgors'
expense all proper deeds, bills of sale, instruments of assignment, conveyance
of transfer and releases as may be designated in any such request.
13. Non-Recourse. The provisions of Article XI of the Credit Agreement are
hereby incorporated by reference into this Agreement.
14. Indemnity. Pledgors each agree to indemnify Agent, the Lenders and
their respective directors, officers, shareholders, employees and agents
(collectively, the "Indemnified Parties") from and against any and all Losses
arising out of or resulting from enforcement of this Agreement that are incurred
thereby (including without limitation enforcement of this Agreement), except to
the extent any such Losses arise by reason of the gross negligence or willful
misconduct of any Indemnified Party.
15. Security Interest Absolute. All rights of Agent, and the security
interests hereunder, and all of the obligations secured hereby, shall be
absolute and unconditional, irrespective of:
(a) to the extent permitted by applicable Legal Requirements, any lack of
validity or enforceability of the Loan Documents or any other agreement or
instrument relating thereto;
(b) any change in the time (including the extension of the Maturity Date),
manner or place of payment of, or in any other term of, all or any of the
obligations of Pledgor under the Loan and the Loan Documents or any other
amendment or waiver of any consent to any departure from the Loan Documents;
(c) any exchange, release or nonperfection of any other collateral for the
Loan, or any release or amendment or waiver of or consent to departure from any
of the Loan Documents with respect to all or any part of the Loan; or
(d) any other circumstances (other than payment of the Debt in full) that
might otherwise constitute a defense available to, or a discharge of, any
Pledgor or any third party for the Loan or any part thereof.
16. Continuing Security Interest; Release of Collateral. This Agreement
shall create a continuing security interest in the Collateral and shall (a)
remain in full force and effect until the payment in full of the Debt, (b) be
binding upon the Pledgors and their respective successors and permitted assigns,
and (c) inure, together with the rights and remedies of Agent hereunder, to the
benefit of Agent and its successors, transferees and assigns. Upon the full and
indefeasible payment of the Loan and subject to Section 12.27 of the Credit
Agreement, the security interest granted hereby shall terminate and all rights
to the Collateral shall revert to the
13
Pledgors, provided, however, if at any time all or any part of any payment made
by any Pledgor or received by Agent from any Pledgor with respect to the Loan is
or must be rescinded or returned for any reason whatsoever (including, without
limitation, the insolvency, bankruptcy or reorganization of any Pledgor), then
the security interest granted to Agent hereunder and the indemnities and other
obligations of the Pledgors hereunder shall, to the extent of the payment made
by the Pledgors, be deemed to have continued in existence, notwithstanding such
previous payment by the Pledgors, or receipt of payment by Agent, and the
security interest granted to Agent hereunder and the obligations of the Pledgors
hereunder shall continue to be effective or be reinstated, as the case may be,
as to such payment, all as though such previous payment had never been made.
17. Miscellaneous.
(a) Severability. Wherever possible, each provision of this Agreement shall
be interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Agreement shall be prohibited by or invalid under
applicable law, such provision shall be ineffective to the extent of such
prohibition or invalidity, without invalidating the remainder of such provision
or the remaining provisions of this Agreement.
(b) Headings. The headings used in this Agreement are included herein for
convenience of reference only and shall not constitute a part of this Agreement
for any other purpose.
(c) No Waiver; Cumulative Remedies. Agent shall not by any act (except by a
written instrument pursuant to Section 17(d)), delay, indulgence, omission or
otherwise be deemed to have waived any right or remedy hereunder or to have
acquiesced in any default or in any breach of any of the terms and conditions
hereof. No failure to exercise, nor any delay in exercising, on the part of
Agent, any right, power or privilege hereunder shall operate as a waiver
thereof. No single or partial exercise of any right, power or privilege
hereunder shall preclude any other or further exercise thereof or the exercise
of any other right, power or privilege. A waiver by Agent of any right or remedy
hereunder on any one occasion shall not be construed as a bar to any right or
remedy which Agent would otherwise have on any future occasion. The rights,
remedies, powers and privileges herein provided are cumulative, may be exercised
singly or concurrently and are not exclusive of any rights, remedies, powers or
privileges provided by applicable Legal Requirements.
(d) Waivers and Amendments; Successors and Assigns. None of the terms or
provisions of this Agreement may be waived, amended, or otherwise modified
except by a written instrument executed by the party against which enforcement
of such waiver, amendment, or modification is sought. This Agreement shall be
binding upon and shall inure to the benefit of the Pledgors and their respective
successors and permitted assigns and shall inure to the benefit of Agent and its
successors and assigns; provided no Pledgor shall have any right to Transfer any
of its rights hereunder. The rights of Agent under this Agreement shall
automatically be transferred to any transferee to which Agent transfers the
Notes and Credit Agreement.
15
(e) Notices. All notices or other written communications hereunder shall be
delivered in accordance with Section 12.5 of the Credit Agreement.
(f) Agents. Agent may employ agents and attorneys-in-fact in connection
herewith and shall not be responsible for their actions except for the gross
negligence or willful misconduct of any such agents or attorneys-in-fact
selected by it in good faith.
(g) Counterparts. This Agreement may be executed in any number of
counterparts and all the counterparts taken together shall be deemed to
constitute one and the same instrument.
(h) Governing Law, Submission to Jurisdiction.
(A) THIS AGREEMENT WAS NEGOTIATED IN THE STATE OF NEW YORK, THE LOAN WAS
MADE BY AGENT AND ACCEPTED BY PLEDGORS IN THE STATE OF NEW YORK, AND THE
PROCEEDS OF THE NOTES DELIVERED PURSUANT HERETO WERE DISBURSED FROM THE STATE OF
NEW YORK, WHICH STATE THE PARTIES AGREE HAS A SUBSTANTIAL RELATIONSHIP TO THE
PARTIES AND TO THE UNDERLYING TRANSACTION EMBODIED HEREBY, AND IN ALL MATERIAL
RESPECTS, INCLUDING, WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, MATTERS
OF CONSTRUCTION, VALIDITY AND PERFORMANCE, THIS AGREEMENT AND THE OBLIGATIONS
ARISING HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND PERFORMED IN SUCH
STATE (WITHOUT REGARD TO PRINCIPLES OF CONFLICT OF LAWS OTHER THAN SECTION
5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAWS) AND ANY APPLICABLE LAW OF THE
UNITED STATES OF AMERICA, EXCEPT THAT AT ALL TIMES THE PROVISIONS FOR THE
CREATION, PERFECTION AND ENFORCEMENT OF THE LIENS AND SECURITY INTERESTS CREATED
PURSUANT HERETO SHALL BE GOVERNED BY AND CONSTRUED ACCORDING TO THE LAWS OF THE
APPLICABLE STATE IT BEING UNDERSTOOD THAT, TO THE FULLEST EXTENT PERMITTED BY
THE LAWS OF SUCH APPLICABLE STATE, THE LAWS OF THE STATE OF NEW YORK SHALL
GOVERN THE VALIDITY AND ENFORCEABILITY OF THIS AGREEMENT AND ALL OF THE
OBLIGATIONS ARISING HEREUNDER. TO THE FULLEST EXTENT PERMITTED BY LAW, PLEDGORS
HEREBY UNCONDITIONALLY AND IRREVOCABLY WAIVE ANY CLAIM TO ASSERT THAT THE LAW OF
ANY OTHER JURISDICTION GOVERNS THIS AGREEMENT AND THE NOTES, AND THIS AGREEMENT
AND THE NOTES SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF NEW YORK PURSUANT TO SECTION 5-1401 OF THE NEW YORK GENERAL
OBLIGATIONS LAW.
16
(B) ANY LEGAL SUIT, ACTION OR PROCEEDING AGAINST AGENT OR PLEDGORS ARISING
OUT OF OR RELATING TO THIS AGREEMENT MAY AT AGENT'S OPTION BE INSTITUTED IN ANY
FEDERAL OR STATE COURT IN ▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇, PURSUANT TO
SECTION 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW AND PLEDGORS WAIVE ANY
OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE BASED ON VENUE AND/OR FORUM NON
CONVENIENS OF ANY SUCH SUIT, ACTION OR PROCEEDING, AND PLEDGORS HEREBY
IRREVOCABLY SUBMIT TO THE JURISDICTION OF ANY SUCH COURT IN ANY SUIT, ACTION OR
PROCEEDING. PLEDGORS DO HEREBY DESIGNATE AND APPOINT:
Corporation Service Company
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
AS ITS AUTHORIZED AGENT TO ACCEPT AND ACKNOWLEDGE ON ITS BEHALF SERVICE OF ANY
AND ALL PROCESS WHICH MAY BE SERVED IN ANY SUCH SUIT, ACTION OR PROCEEDING IN
ANY FEDERAL OR STATE COURT IN NEW YORK, NEW YORK, AND AGREES THAT SERVICE OF
PROCESS UPON SAID AGENT AT SAID ADDRESS AND WRITTEN NOTICE OF SAID SERVICE
MAILED OR DELIVERED TO PLEDGORS IN THE MANNER PROVIDED HEREIN SHALL BE DEEMED IN
EVERY RESPECT EFFECTIVE SERVICE OF PROCESS UPON PLEDGORS IN ANY SUCH SUIT,
ACTION OR PROCEEDING IN THE STATE OF NEW YORK. PLEDGORS (I) SHALL GIVE PROMPT
NOTICE TO AGENT OF ANY CHANGED ADDRESS OF ITS AUTHORIZED AGENT HEREUNDER, (II)
MAY AT ANY TIME AND FROM TIME TO TIME DESIGNATE A SUBSTITUTE AUTHORIZED AGENT
WITH AN OFFICE IN NEW YORK, NEW YORK (WHICH SUBSTITUTE AGENT AND OFFICE SHALL BE
DESIGNATED AS THE PERSON AND ADDRESS FOR SERVICE OF PROCESS), AND (III) SHALL
PROMPTLY DESIGNATE SUCH A SUBSTITUTE IF ITS AUTHORIZED AGENT CEASES TO HAVE AN
OFFICE IN NEW YORK, NEW YORK OR IS DISSOLVED WITHOUT LEAVING A SUCCESSOR.
(i) WAIVER OF JURY TRIAL. EACH OF THE PLEDGORS AND AGENT HEREBY AGREES NOT
TO ELECT A TRIAL BY JURY OF ANY ISSUE TRIABLE OF RIGHT BY JURY, AND WAIVES ANY
RIGHT TO TRIAL BY JURY FULLY TO THE EXTENT THAT ANY SUCH RIGHT SHALL NOW OR
HEREAFTER EXIST WITH REGARD TO THIS AGREEMENT, OR ANY CLAIM, COUNTERCLAIM OR
OTHER ACTION ARISING IN CONNECTION THEREWITH. THIS WAIVER OF RIGHT TO TRIAL BY
JURY IS GIVEN KNOWINGLY AND VOLUNTARILY BY EACH OF THE PLEDGORS AND AGENT, AND
IS INTENDED TO ENCOMPASS INDIVIDUALLY EACH INSTANCE AND EACH ISSUE AS TO WHICH
THE RIGHT TO A TRIAL BY JURY WOULD OTHERWISE ACCRUE. EACH OF THE PLEDGORS AND
AGENT ARE HEREBY AUTHORIZED TO FILE A COPY OF THIS PARAGRAPH IN ANY PROCEEDING
AS CONCLUSIVE EVIDENCE OF THIS WAIVER.
17
(j) Damages. No claim may be made by any Pledgor against Agent or any
Lender, or their respective Affiliates, directors, officers, employees, or
attorneys for any special, indirect or consequential damages ("Special Damages")
in respect of any breach or wrongful conduct (whether the claim therefor is
based on contract, tort or duty imposed by law or otherwise) in connection with,
arising out of, or in any way related to the transactions contemplated or
relationship established by this Agreement, or any act, omission or event
occurring in connection herewith or therewith; and to the fullest extent
permitted by law, each Pledgor hereby waives, releases and agrees not to ▇▇▇
upon any such claim for Special Damages, whether or not accrued and whether or
not known or suspected to exist in its favor.
[SIGNATURE PAGE FOLLOWS]
18
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed and delivered as of the date first above written.
PLEDGORS:
SHELBOURNE PROPERTIES I L.P., a Delaware
limited partnership
By: Shelbourne Properties I GP, LLC, a
Delaware limited liability company
By: Shelbourne Properties I, Inc,
a Delaware corporation
By:/s/ ▇▇▇▇▇▇ ▇▇▇▇▇
--------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇
Title: Treasurer
SHELBOURNE PROPERTIES II L.P.,
a Delaware limited partnership
By: Shelbourne Properties II GP, LLC, a
Delaware limited liability company
By: Shelbourne Properties II, Inc,
a Delaware corporation
By:/s/ ▇▇▇▇▇▇ ▇▇▇▇▇
--------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇
Title: Treasurer
SHELBOURNE PROPERTIES III L.P.,
a Delaware limited partnership
By: Shelbourne Properties III GP, Inc.,
a Delaware corporation
By:/s/ ▇▇▇▇▇▇ ▇▇▇▇▇
--------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇
Title: Treasurer
SHELBOURNE I CENTURY PARK
COMPANY, LLC, a Delaware limited
liability company
By: Shelbourne Properties I L.P., a
Delaware limited partnership
By: Shelbourne Properties I GP, LLC,
a Delaware limited liability
company
By: Shelbourne Properties I, Inc.,
a Delaware corporation
By:/s/ ▇▇▇▇▇▇ ▇▇▇▇▇
--------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇
Title: Treasurer
SHELBOURNE I SEATTLE LANDMARK
COMPANY, LLC, a Delaware limited liability company
By: Shelbourne Properties I L.P., a
Delaware limited partnership
By: Shelbourne Properties I GP, LLC,
a Delaware limited liability
company
By: Shelbourne Properties I, Inc.,
a Delaware corporation
By:/s/ ▇▇▇▇▇▇ ▇▇▇▇▇
--------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇
Title: Treasurer
SHELBOURNE I ▇▇▇ ▇▇▇▇▇▇▇▇
COMPANY, LLC, a Delaware limited
liability company
By: Shelbourne Properties I L.P., a
Delaware limited partnership
By: Shelbourne Properties I GP, LLC,
a Delaware limited liability
company
By: Shelbourne Properties I, Inc.,
a Delaware corporation
By:/s/ ▇▇▇▇▇▇ ▇▇▇▇▇
--------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇
Title: Treasurer
SHELBOURNE II SEATTLE LANDMARK
COMPANY, LLC, a Delaware limited
liability company
By: Shelbourne Properties II L.P., a
Delaware limited partnership
By: Shelbourne Properties II GP, LLC,
a Delaware limited liability
company
By: Shelbourne Properties II, Inc.,
a Delaware corporation
By:/s/ ▇▇▇▇▇▇ ▇▇▇▇▇
--------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇
Title: Treasurer
SHELBOURNE II CENTURY PARK
COMPANY, LLC, a Delaware limited liability company
By: Shelbourne Properties II L.P., a
Delaware limited partnership
By: Shelbourne Properties II GP, LLC,
a Delaware limited liability
company
By: Shelbourne Properties II, Inc.,
a Delaware corporation
By:/s/ ▇▇▇▇▇▇ ▇▇▇▇▇
--------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇
Title: Treasurer
SHELBOURNE II ▇▇▇ ▇▇▇▇▇▇▇▇
COMPANY, LLC, a Delaware limited
liability company
By: Shelbourne Properties II L.P., a
Delaware limited partnership
By: Shelbourne Properties II GP, LLC,
a Delaware limited liability
company
By: Shelbourne Properties II, Inc.,
a Delaware corporation
By:/s/ ▇▇▇▇▇▇ ▇▇▇▇▇
--------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇
Title: Treasurer
SHELBOURNE II TRI-COLUMBUS
COMPANY, LLC, a Delaware limited
liability company
By: Shelbourne Properties II L.P., a
Delaware limited partnership
By: Shelbourne Properties II GP, LLC,
a Delaware limited liability
company
By: Shelbourne Properties II, Inc.,
a Delaware corporation
By:/s/ ▇▇▇▇▇▇ ▇▇▇▇▇
--------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇
Title: Treasurer
SHELBOURNE III ▇▇▇ ▇▇▇▇▇▇▇▇
COMPANY, LLC, a Delaware limited
liability company
By: Shelbourne Properties III L.P., a
Delaware limited partnership
By: Shelbourne Properties III GP, Inc.,
a Delaware corporation
By:/s/ ▇▇▇▇▇▇ ▇▇▇▇▇
--------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇
Title: Treasurer
SHELBOURNE III TRI-COLUMBUS
COMPANY, LLC, a Delaware limited
liability company
By: Shelbourne Properties III L.P., a
Delaware limited partnership
By: Shelbourne Properties III GP, Inc.,
a Delaware corporation
By:/s/ ▇▇▇▇▇▇ ▇▇▇▇▇
--------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇
Title: Treasurer
AGENT:
BAYERISCHE HYPO-UND VEREINSBANK AG, NEW YORK BRANCH
By:
-------------------------
Name:
Title:
By:
-------------------------
Name:
Title:
SCHEDULE I
PLEDGORS
Pledgor Principal Place of Business
Shelbourne Properties I L.P.,
a Delaware limited partnership Delaware
Shelbourne Properties II L.P.,
a Delaware limited partnership Delaware
Shelbourne Properties III L.P.,
a Delaware limited partnership Delaware
Shelbourne I Century Park Company LLC,
a Delaware limited liability company Delaware
Shelbourne II Century Park Company LLC,
a Delaware limited liability company Delaware
Shelbourne I Seattle Landmark Company LLC,
a Delaware limited liability company Delaware
Shelbourne II Seattle Landmark Company LLC,
a Delaware limited liability company Delaware
Shelbourne II Tri-Columbus Company LLC,
a Delaware limited liability company Delaware
Shelbourne III Tri-Columbus Company LLC,
a Delaware limited liability company Delaware
Shelbourne I ▇▇▇ ▇▇▇▇▇▇▇▇ Company LLC,
a Delaware limited liability company Delaware
Shelbourne II ▇▇▇ ▇▇▇▇▇▇▇▇ Company LLC,
a Delaware limited liability company Delaware
Shelbourne III ▇▇▇ ▇▇▇▇▇▇▇▇ Company LLC,
a Delaware limited liability company Delaware
Sch. I-1
SCHEDULE A
to Pledge Agreement
DESCRIPTION OF PLEDGED INTERESTS
Class of Percentage
Owner Issuer Interest of Interests
---------------------------- ------------------------ ---------- ------------
Shelbourne Properties I ▇.▇. ▇▇▇▇▇▇▇▇▇▇ I Century Membership 100%
Park Company LLC
Shelbourne Properties I ▇.▇. ▇▇▇▇▇▇▇▇▇▇ I Membership 100%
Seattle Landmark
Company LLC
Shelbourne Properties I ▇.▇. ▇▇▇▇▇▇▇▇▇▇ I 568 Membership 100%
Broadway Company LLC
Shelbourne Properties II ▇.▇. ▇▇▇▇▇▇▇▇▇▇ Richmond Membership 100%
Company LLC
Shelbourne Properties II ▇.▇. ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Membership 100%
Company LLC
Shelbourne Properties II ▇.▇. ▇▇▇▇▇▇▇▇▇▇ Melrose Membership 100%
Crossing I Company LLC
Shelbourne Properties II ▇.▇. ▇▇▇▇▇▇▇▇▇▇ Raleigh Membership 100%
Company LLC
Shelbourne Properties II ▇.▇. ▇▇▇▇▇▇▇▇▇▇ ▇▇ Century Membership 100%
Park Company LLC
Shelbourne Properties II ▇.▇. ▇▇▇▇▇▇▇▇▇▇ ▇▇ Seattle Membership 100%
Landmark Company LLC
Shelbourne Properties II ▇.▇. ▇▇▇▇▇▇▇▇▇▇ ▇▇ 568 Membership 100%
Broadway Company LLC
Shelbourne Properties II ▇.▇. ▇▇▇▇▇▇▇▇▇▇ ▇▇ Tri Membership 100%
Columbus Company LLC
Shelbourne Properties Shelbourne Melrose Membership 100%
III L.P. Crossing II Company LLC
Sch. A-1
Shelbourne Properties Shelbourne Las Vegas Membership 100%
III L.P. Company LLC
Shelbourne Properties Shelbourne Livonia Membership 100%
III L.P. Company LLC
Shelbourne Properties Shelbourne III 568 Membership 100%
III L.P. Broadway Company LLC
Shelbourne Properties Shelbourne III Tri Membership 100%
III L.P. Columbus Company LLC
Shelbourne I Century Century Park I Partnership 50%
Park Company LLC Joint Venture General
Shelbourne II Century Century Park I Partnership 50%
Park Company LLC Joint Venture General
Shelbourne I Seattle Seattle Landmark Partnership 50%
Landmark Company LLC Joint Venture General
Shelbourne II Seattle Seattle Landmark General 50%
Landmark Company LLC Joint Venture Partnership
Shelbourne II Tri-Columbus Tri Columbus Associates General 20.66%
Company LLC Partnership
Shelbourne III Tri-Columbus Tri Columbus Associates General 79.34%
Company LLC Partnership
Shelbourne I ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇ General 38.925%
Company LLC Joint Venture Partnership
Shelbourne II ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇ General 38.925%
Company LLC Joint Venture Partnership
Shelbourne III ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇ General 22.15%
Company LLC Joint Venture Partnership
Sch. A-2
SCHEDULE B
to Pledge Agreement
OWNERSHIP OF PROPERTIES
Pledged Borrower Property
------------------------------------------- ------------------------
Shelbourne I Century Park Company LLC Century Park, CA
Shelbourne II Century Park Company LLC Century Park, CA
Shelbourne I Seattle Landmark Company LLC Seattle Tower, WA
Shelbourne II Seattle Landmark Company LLC Seattle Tower, WA
Shelbourne II Tri-Columbus Company LLC Leap Road, OH; ▇▇▇▇▇▇▇,
OH; Volvo, OH
Shelbourne III Tri-Columbus Company LLC Leap Road, OH; ▇▇▇▇▇▇▇,
OH; Volvo, OH
Shelbourne I ▇▇▇ ▇▇▇▇▇▇▇▇ Company LLC ▇▇▇-▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇
Shelbourne II ▇▇▇ ▇▇▇▇▇▇▇▇ Company LLC ▇▇▇-▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇
Shelbourne III ▇▇▇ ▇▇▇▇▇▇▇▇ Company LLC ▇▇▇-▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇
Shelbourne Richmond Company LLC Commerce Plaza, VA
Shelbourne Matthews Company LLC ▇▇▇▇▇▇▇▇ Festival, NC
Shelbourne Melrose Crossing I Company LLC None
Shelbourne Melrose Crossing II Company LLC None
Shelbourne Raleigh Company LLC ▇▇▇▇▇▇ Square, NC
Shelbourne Las Vegas Company LLC Sunrise Marketplace, NV
Shelbourne Livonia Company LLC Livonia Plaza, MI
Century Park I Joint Venture Century Park, CA
Seattle Landmark Joint Venture ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇
▇▇▇ Broadway Joint Venture ▇▇▇-▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇
Tri-Columbus Associates Leap Road, OH; ▇▇▇▇▇▇▇,
OH; Volvo, OH
Sch. B-1
EXHIBIT A
to Pledge Agreement
[Form of Instruction to Register Pledge]
April ___, 2002
To: [Insert Name of Issuer]
In accordance with the requirements of that certain Pledge and Security
Agreement, dated as of April ___, 2002 (as amended, restated, extended,
consolidated, supplemented, replaced or otherwise modified from time to time,
the "Pledge Agreement"), by Shelbourne Properties I L.P., a Delaware limited
partnership, Shelbourne Properties II L.P., a Delaware limited partnership,
Shelbourne Properties III L.P., a Delaware limited partnership, Shelbourne I
Century Park Company LLC, a Delaware limited liability company, Shelbourne II
Century Park Company LLC, a Delaware limited liability company, Shelbourne I
Seattle Landmark Company LLC, a Delaware limited liability company, Shelbourne
II Seattle Landmark Company LLC, a Delaware limited liability company,
Shelbourne II Tri-Columbus Company LLC, a Delaware limited liability company,
Shelbourne III Tri-Columbus Company LLC, a Delaware limited liability company,
Shelbourne I ▇▇▇ ▇▇▇▇▇▇▇▇ Company LLC, a Delaware limited liability company,
Shelbourne II ▇▇▇ ▇▇▇▇▇▇▇▇ Company LLC, a Delaware limited liability company and
Shelbourne III ▇▇▇ ▇▇▇▇▇▇▇▇ Company LLC, a Delaware limited liability company
(collectively, the "Pledgors"), in favor of Bayerische Hypo- Und Vereinsbank AG,
New York Branch, a banking corporation organized under the laws of the Federal
Republic of Germany, as agent ("Agent") for itself and the other lenders from
time to time a party thereto, you are hereby instructed, notwithstanding your
and our understanding that the [membership] [general partnership] interest
described below is not a security under the Uniform Commercial Code, as a
precaution in the event that such interest was nevertheless held to be a
security, to register the pledge of the following interests as follows
(capitalized terms used herein without definition shall have the meanings
ascribed to such terms in the Pledge Agreement):
_____% [membership] [general partnership] interest in the undersigned in
[__________] (the "Issuer"), which is a __________ [limited liability company]
[general partnership], including without limitation all of the following
property now owned or at any time hereafter acquired by Pledgors or in which
Pledgors now have or at any time in the future may acquire any right, title or
interest:
(a) the [membership] [general partnership] interests of the Issuer listed
on Schedule A to the Pledge Agreement, together with all additional [membership
interests] [general partnership interests] of, or other equity interests in, the
Issuer and options, warrants, and other rights hereafter acquired by Pledgors in
respect of such [membership] [general partnership] interests or other equity
interests (whether in connection with any capital increase, recapitalization,
reclassification, or reorganization of the Issuer or otherwise) (all such
[membership] [general partnership] interests and other equity interests,
including those described
Exh. A-1
on Schedule A to the Pledge Agreement, and all such options, warrants and other
rights being hereinafter collectively referred to as the "Pledged Interests");
(b) all certificates, instruments, or other writings representing or
evidencing the Pledged Interests, and all accounts and general intangibles
arising out of, or in connection with, the Pledged Interests;
(c) any and all moneys or property due and to become due to Pledgors now or
in the future in respect of the Pledged Interests, or to which Pledgors may now
or in the future be entitled to in its capacity as a member of the Issuer,
whether by way of a dividend, distribution, return of capital, or otherwise;
(d) all other claims which any of the Pledgors now has or may in the future
acquire in its capacity as a shareholder of the Issuer against the Issuer and
its property;
(e) all rights of Pledgors under the [Limited Liability Company Agreement]
[Partnership Agreement] (and all other agreements, if any, to which any Pledgor
is a party from time to time which relate to its ownership of the Pledged
Interests), including, without limitation, all voting and consent rights of
Pledgors arising thereunder or otherwise in connection with Pledgors' ownership
of the Pledged Interests; and
(f) to the extent not otherwise included, all Proceeds of any or all of the
foregoing.
You are hereby further authorized and instructed to execute and deliver to
Agent a Confirmation Statement and Instruction Agreement, substantially in the
form of Exhibit B to the Pledge Agreement and, to the extent provided more fully
therein, to comply with the instructions of Agent in respect of the Collateral
without further consent of, or notice to, the undersigned. Notwithstanding
anything in this paragraph, this instruction shall not be construed as expanding
the rights of Agent to give instructions with respect to the Collateral beyond
such rights set forth in the Pledge Agreement.
Very truly yours,
AGENT:
BAYERISCHE HYPO- UND VEREINSBANK AG,
NEW YORK BRANCH
By:
-------------------------
Name:
Title:
By:
-------------------------
Name:
Title:
Exh. A-2
PLEDGORS:
[PLEDGORS]
Exh. A-3
(page>
EXHIBIT B
to Pledge Agreement
[Form of Confirmation Statement and Instruction Agreement]
April ___, 2002
To: ______________________
Pursuant to the requirements of that certain Pledge and Security Agreement
dated as of April ___, 2002 (as amended, restated, extended, consolidated,
supplemented, replaced or otherwise modified from time to time, the "Pledge
Agreement"), by Shelbourne Properties I L.P., a Delaware limited partnership,
Shelbourne Properties II L.P., a Delaware limited partnership, Shelbourne
Properties III L.P., a Delaware limited partnership, Shelbourne I Century Park
Company LLC, a Delaware limited liability company, Shelbourne II Century Park
Company LLC, a Delaware limited liability company, Shelbourne I Seattle Landmark
Company LLC, a Delaware limited liability company, Shelbourne II Seattle
Landmark Company LLC, a Delaware limited liability company, Shelbourne II
Tri-Columbus Company LLC, a Delaware limited liability company, Shelbourne III
Tri-Columbus Company LLC, a Delaware limited liability company, Shelbourne I ▇▇▇
▇▇▇▇▇▇▇▇ Company LLC, a Delaware limited liability company, Shelbourne II ▇▇▇
▇▇▇▇▇▇▇▇ Company LLC, a Delaware limited liability company and Shelbourne III
▇▇▇ ▇▇▇▇▇▇▇▇ Company LLC, a Delaware limited liability company (collectively,
the "Pledgors"), in favor of Bayerische Hypo- Und Vereinsbank AG, New York
Branch, a banking corporation organized under the laws of the Federal Republic
of Germany, as agent ("Agent") for itself and the other lenders from time to
time a party thereto (the "Lenders"), this Confirmation Statement and
Instruction Agreement relates to those [membership] [general partnership]
interests (the "Pledged Interests"), as further described on Schedule I hereto,
issued by _______________, a _______________ [limited liability company]
[general partnership]. Capitalized terms used herein without definition shall
have the meanings ascribed to such terms in the Pledge Agreement.
The Pledged Interests are not (i) "investment company securities" (within
the meaning of Section 8-103 of the Uniform Commercial Code (the "Code")) or
(ii) dealt in or traded on securities exchanges or in securities markets. None
of the terms of any Pledged Interest provides that it is a "security" (within
the meaning of Sections 8-102(a)(15) and 8-103 of the Code).
Nevertheless, in the event that the Pledged Interests should be determined
to be "securities" (within the meaning of Sections 8-102(a)(15) and 8-103 of the
Code), for purposes of perfecting the security interest of Agent therein, the
Issuer agrees as follows:
On the date hereof, the registered owner of [___]% of [__________] is:
Exh. B-1
The registered pledgee of the Pledged Interests is:
Bayerische Hypo- Und Vereinsbank AG,
as Agent for itself and the Lenders
Taxpayer I.D. Number: [__________]
There are no Liens of the Issuer on the Pledged Interests or any adverse
claims thereto for which the Issuer has a duty under Section 8-403 of the Code.
The Issuer has by book entry registered the Pledged Interests in the name of the
registered pledgee on or before __________, 2002. No other pledge is currently
registered on the books and records of the Issuer with respect to the Pledged
Interests.
Until the Debt is paid in full (exclusive of provisions which shall survive
full payment), the Issuer agrees to: (i) comply with the instructions of Agent,
without any further consent from the Pledgors or any other Person, in respect of
the Pledged Collateral; and (ii) disregard any request made by the Pledgors or
any other Person which contravenes the instructions of Agent with respect to the
Pledged Collateral.
Dated: April ___, 2002
Very truly yours,
[ISSUER]
By:
-------------------------
Name:
Title:
ACKNOWLEDGED AND AGREED:
AGENT:
BAYERISCHE HYPO- UND
VEREINSBANK AG, NEW YORK
BRANCH
By:
-------------------------
Name:
Title:
By:
-------------------------
Name:
Title:
PLEDGORS:
[PLEDGORS]
Exh. B-2
SCHEDULE I
[Description of Pledged Interests]
Sch. I-1