EXHIBIT 10.70
GUARANTOR PLEDGE AND SECURITY AGREEMENT
THIS GUARANTOR PLEDGE AND SECURITY AGREEMENT (this "AGREEMENT"), is made as
of July ___, 2002, by ▇▇▇▇▇▇▇▇ HOLDINGS LLC, a Delaware limited liability
company, having its principal place of business at c/o Horizon Group Properties,
Inc., ▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (together with
its successors and assigns, "PLEDGOR") for the benefit of UBS WARBURG REAL
ESTATE INVESTMENTS INC., a Delaware corporation, having an address at 1285
Avenue of the ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (together with its
successors and assigns, collectively, "LENDER").
RECITALS
A. Pledgor is the sole equity member in ▇▇▇▇▇▇▇▇ Outlet Center LLC, a
Delaware limited liability company (the "Company").
B. Pledgor, Medford Holdings LLC ("Medford Holdings") and Warrenton
Holdings LLC ("Warrenton Holdings"; and Warrenton Holdings, together with
Medford Holdings, each an "Affiliate Pledgor" and collectively, the "Affiliate
Pledgors") and Lender have entered into a Mezzanine Loan Agreement of even date
herewith (as the same may be amended, restated, replaced, supplemented or
otherwise modified from time to time, the "Mezzanine Loan Agreement").
Capitalized terms not otherwise defined herein shall have the meaning set forth
in the Mezzanine Loan Agreement.
C. Under the provisions of the Mezzanine Loan Agreement, Lender agreed,
subject to the terms and conditions contained therein, to make a loan ("▇▇▇▇▇▇▇▇
Loan") to Pledgor as evidenced by that certain Promissory Note of even date
herewith made by Pledgor to Lender in the original maximum principal amount of
One Million Seven Hundred Fifty Thousand and No/100 Dollars ($1,750,000.00) (as
the same may be amended, restated, replaced, supplemented or otherwise modified
from time to time, the "▇▇▇▇▇▇▇▇ Note") and secured by a certain Pledge and
Security Agreement dated of even date herewith made by Pledgor in favor of
Lender (the "First Pledge").
D. Simultaneously with the execution of this Agreement, Lender made the
following additional loans to Medford Holdings and Warrenton Holdings:
(a) MEDFORD. Lender made a loan in the principal amount of $1,000,000.00
(the "MEDFORD LOAN") to Medford Holdings, evidenced by a certain Promissory
Note dated of even date herewith made by Medford Holdings to Lender (the
"MEDFORD NOTE") and secured by a certain Pledge and Security Agreement
dated of even date herewith made by Medford Holdings in favor of Lender
(the "MEDFORD PLEDGE") and any and all of the Mezzanine Loan Documents
executed in connection with the Medford Loan (collectively, the "MEDFORD
LOAN DOCUMENTS").
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(b) WARRENTON. Lender made a loan in the principal amount of $750,000.00
(the "WARRENTON LOAN") to Warrenton Holdings, evidenced by a certain
Promissory Note dated of even date herewith made by Warrenton Holdings to
Lender (the "WARRENTON NOTE"; and the Warrenton Note, together with the
Medford Note, each, an "AFFILIATE NOTE" and collectively, the "AFFILIATE
NOTES") and secured by a certain Pledge and Security Agreement dated of
even date herewith made by Warrenton Holdings in favor of Lender (the
"WARRENTON PLEDGE"; and the Warrenton Pledge, together with the Medford
Pledge, each an "AFFILIATE PLEDGE" and collectively, the "AFFILIATE
PLEDGES") and any and all of the Loan Documents executed in connection with
the Warrenton Loan (collectively, the "WARRENTON LOAN DOCUMENTS"; and the
Warrenton Loan Documents, together with the Medford Loan Documents,
collectively, the "AFFILIATE LOAN DOCUMENTS").
E. Each of Pledgor and Affiliate Pledgors are Affiliates.
F. Lender has requested that Pledgor guaranty each Affiliate Pledgor's
respective obligations under each of the Affiliate Notes and the Affiliate Loan
Documents and the performance and observance of all of the provisions of the
Affiliate Loan Documents (collectively, the "DEBT"), which guaranty shall be
evidenced by the Guaranty contained in SECTION 10 herein and secured by, among
other things, this Agreement (the "GUARANTY").
G. Pledgor acknowledges that, by reason of the foregoing, it will receive
substantial economic and other benefits from Lender making the Affiliate Loans
to the Affiliate Pledgors, and acknowledges that without this Agreement and the
Guaranty contained herein, Lender would be unwilling to make the Affiliate Loans
to the Affiliate Pledgors.
NOW THEREFORE, to secure that Pledgor shall pay when due and fully and
promptly perform all of the indebtedness, obligations, covenants, agreements and
liabilities of Pledgor for the benefit of Lender under this Agreement,
including, without limitation, the Guaranty contained in SECTION 10 hereof,
together with all interest and other charges thereon, whether direct or
indirect, existing, future, contingent or otherwise, due or to become due under
or arising out of or in connection with the Affiliate Notes, this Agreement or
any of the Affiliate Loan Documents, any and all modifications, extensions and
renewals of any of the foregoing; and any and all expenses and costs of
collection or enforcement, including, without limitation, reasonable attorneys'
fees incurred by Lender in the collection or enforcement of any of the
foregoing, or in the exercise of any of the rights or remedies under this
Agreement or applicable law, Pledgor agrees as follows:
1. DEFINED TERMS. Unless otherwise provided herein, all capitalized
terms used but not defined in this Agreement shall have the respective meanings
ascribed thereto in the Mezzanine Loan Agreement and, for the purposes of this
Agreement, the following capitalized terms shall have the following meanings:
(a) "ASSIGNMENT OF INTEREST" shall have the meaning ascribed
thereto in SECTION 2 hereof.
(b) "CHARTER DOCUMENTS" shall mean the agreements and
instruments
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listed on EXHIBIT A hereto, as each of the same may hereafter be amended,
restated, replaced, supplemented or otherwise modified from time to time.
(c) "COLLATERAL" shall have the meaning ascribed thereto in
SECTION 2 hereof.
(d) "OBLIGATIONS" shall mean all of the obligations of (i)
Pledgor under the Guaranty and this Agreement and (ii) Affiliate Pledgors under
the Affiliate Notes, the other Affiliate Loan Documents and the Mezzanine Loan
Agreement.
(e) "OTHER COLLATERAL" shall have the meaning ascribed thereto
in SECTION 4.7 hereof.
(f) "OTHER SECURITY DOCUMENTS" shall have the meaning ascribed
thereto in SECTION 4.7 hereof.
(g) "PLEDGED INTERESTS" shall have the meaning ascribed thereto
in SECTION 2 hereof.
(h) "UNIFORM COMMERCIAL CODE" shall mean the Uniform Commercial
Code as in effect from time to time in the state of New York.
2. PLEDGE AND DELIVERY OF COLLATERAL.
(a) THE PLEDGE. As collateral security for the prompt payment in
full when due (whether at stated maturity, by acceleration or otherwise) of the
Obligations, Pledgor hereby pledges and grants to Lender as hereinafter
provided, a second priority security interest in all of Pledgor's right, title
and interest in the following property, whether now owned by Pledgor or
hereafter acquired and whether now existing or hereafter coming into existence
(all being collectively referred to herein as "COLLATERAL"):
(i) its ownership, partnership or membership interests
in the Company held by Pledgor, together with the certificates (if any)
evidencing the same (the "PLEDGED INTERESTS");
(ii) all ownership interests, membership interests,
shares, securities, moneys, instruments or property representing a dividend, a
distribution or return of capital upon or in respect of the Pledged Interests,
or otherwise received in exchange therefor, and any warrants, rights or options
issued to the holders of, or otherwise in respect of, the Pledged Interests;
(iii) all rights of Pledgor under the Charter Documents or
any other agreement or instrument relating to the Pledged Interests, including,
without limitation, (i) all rights of Pledgor to receive moneys or distributions
with respect to the Pledged Interests due and to become due under or pursuant to
the Charter Documents, (ii) all rights of Pledgor to receive proceeds of any
insurance, indemnity, warranty or guaranty with respect to the Pledged
Interests, (iii) all claims of
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Pledgor for damages arising out of or for breach of or default under a Charter
Document, and (iv) any right of Pledgor to perform thereunder and to compel
performance and otherwise exercise all rights and remedies thereunder; and
(iv) all proceeds of and to any of the property of
Pledgor described in clauses (i) through (iii) above and, to the extent related
to any property described in said clauses or such proceeds, all books,
correspondence, credit files, records, invoices and other papers.
(b) DELIVERY OF THE COLLATERAL. All certificates or instruments,
if any, representing or evidencing the Collateral shall be delivered to and held
by or on behalf of Lender pursuant hereto and shall be in suitable form for
transfer by delivery, or shall be accompanied by duly executed instruments of
transfer, stock powers endorsed by Pledgor in blank, or assignments in blank,
all in form and substance satisfactory to Lender. Upon the occurrence and during
the continuance of an Event of Default, Lender shall have the right, at any
time, in its discretion upon notice to Pledgor, to transfer to or to register in
the name of Lender or its nominee any or all of the Collateral. Prior to or
concurrently with the execution and delivery of this Agreement, Pledgor shall
deliver to Lender an assignment of membership interest endorsed by Pledgor in
blank (an "ASSIGNMENT OF INTEREST"), in the form set forth on EXHIBIT B hereto,
for the ▇▇▇▇▇▇▇▇ Owner for the Pledged Interests, transferring all of such
Pledged Interests in blank, duly executed by Pledgor and undated. Lender shall
have the right, at any time in its discretion upon the occurrence and during the
continuance of an Event of Default and without notice to Pledgor, to transfer
to, and to designate on such Pledgor's Assignment of Interest, any Person to
whom the Pledged Interests are sold in accordance with the provisions hereof. In
addition, Lender shall have the right at any time to exchange any Assignment of
Interest representing or evidencing the Pledged Interests or any portion thereof
for one or more additional or substitute Assignments of Interest representing or
evidencing smaller or larger percentages of the Pledged Interests represented or
evidenced thereby, subject to the terms thereof.
(c) OBLIGATIONS UNCONDITIONAL. The obligations of Pledgor
hereunder are absolute and unconditional, irrespective of the value,
genuineness, validity, regularity or enforceability of the Mezzanine Loan
Agreement, the Guaranty, the Affiliate Notes, any other Affiliate Loan
Documents, or any other agreement or instrument referred to herein or therein,
or any substitution, release or exchange of any guarantee of or security for any
of the Obligations, and, to the fullest extent permitted by applicable law,
irrespective of any other circumstance whatsoever which might otherwise
constitute a legal or equitable discharge or defense of a surety or Pledgor, it
being the intent of this SECTION 2(c) that the obligations of Pledgor hereunder
shall be absolute and unconditional under any and all circumstances. Without
limiting the generality of the foregoing, it is agreed that the occurrence of
any one or more of the following shall not affect the liability of Pledgor
hereunder:
(i) at any time or from time to time, without notice to
Pledgor, the time for any performance of or compliance with any of the
Obligations shall be extended, or such performance or compliance shall be
waived;
(ii) any of the acts mentioned in any of the provisions
of the
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Mezzanine Loan Agreement, the Guaranty, the Affiliate Notes, any other
Affiliate Loan Documents, or any other agreement or instrument referred to
herein or therein shall be done or omitted;
(iii) the maturity of any of the Obligations shall be
accelerated, or any of the Obligations shall be modified, supplemented or
amended in any respect, or any right under the Mezzanine Loan Agreement, the
Guaranty, the Affiliate Notes, any other Affiliate Loan Documents, or any other
agreement or instrument referred to herein or therein shall be waived or any
other guarantee of any of the Obligations or any security or collateral therefor
shall be terminated, released or exchanged in whole or in part or otherwise
dealt with; or
(iv) any lien or security interest granted to, or in
favor of Lender as security for any of the Obligations shall fail to be
perfected or shall be released.
3. REINSTATEMENT. The obligations of Pledgor under this Agreement
shall be automatically reinstated if and to the extent that for any reason any
payment by or on behalf of Pledgor in respect of the Obligations is rescinded or
must be otherwise restored by any holder of any of the Obligations, whether as a
result of any proceedings in bankruptcy or reorganization or otherwise and
Pledgor agree that they will indemnify Lender on demand for all reasonable costs
and expenses (including, without limitation, fees of counsel) incurred by Lender
in connection with such rescission or restoration.
4. REPRESENTATIONS, WARRANTIES OF PLEDGOR. Pledgor represents,
warrants and covenants that:
(a) EXISTENCE. Pledgor: (a) is a limited liability company duly
organized and validly existing under the laws of Delaware; (b) has all requisite
power, and has all governmental licenses, authorizations, consents and approvals
necessary, to own its assets and carry on its business as now being or as
proposed to be conducted; and (c) is qualified to do business in all
jurisdictions in which the nature of the business conducted by it makes such
qualification necessary.
(b) LITIGATION. Except as disclosed to Lender in writing prior
to the date of this Agreement, there are no legal or arbitral proceedings or any
proceedings by or before any Governmental Authority or agency, now pending or
(to the knowledge of Pledgor) threatened against Pledgor, the Collateral and/or
the Company.
(c) NO BREACH. None of the execution and delivery of this Pledge
or any other Mezzanine Loan Document (including, without limitation, the
Affiliate Loan Documents) to which Pledgor is a party, the consummation of the
transactions herein or therein contemplated and compliance with the terms and
provisions hereof or thereof will conflict with or result in a breach of, or
require any consent (except such consents as have been obtained) under the
organizational documents of Pledgor or the Company, or any applicable law or
regulation, or any order, writ, injunction or decree of any court or
Governmental Authority, or any agreement or instrument to which Pledgor is a
party or by which it is bound or to which it is subject, or constitute a default
under any such agreement or instrument, or (except for the lien arising pursuant
to this Agreement) result in the creation or imposition of any lien upon any of
the revenues or assets of Pledgor pursuant to the
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terms of any such agreement or instrument.
(d) NECESSARY ACTION. Pledgor has all necessary power and
authority to execute, deliver and perform its obligations under this Agreement;
the execution, delivery and performance by Pledgor of this Agreement has been
duly authorized by all necessary action on its part; and this Agreement has been
duly and validly executed and delivered by Pledgor and constitutes its legal,
valid and binding obligation, enforceable in accordance with its terms, subject
to bankruptcy, insolvency, moratorium or other similar laws affecting the
enforcement of creditors' rights in general and to general principles of equity.
(e) APPROVALS. No authorizations, approvals and consents of, and
no filings and registrations with, any governmental or regulatory authority or
agency are necessary for (a) the execution, delivery or performance by Pledgor
of this Agreement or for the validity or enforceability thereof; (b) the grant
by Pledgor of the assignments and security interests granted hereby, or the
pledge by Pledgor of the Collateral pursuant hereto; (c) the perfection or
maintenance of the pledge, assignment and security interest created hereby
(including the first priority nature of such pledge, assignment and security
interest) except for the filing of financing statements under the Uniform
Commercial Code; or (d) the exercise by Lender of all rights and remedies in
respect of the Collateral pursuant to this Agreement.
(f) OWNERSHIP. Pledgor owns a 100% interest in the Company.
Pledgor has good and indefeasible title to, the Collateral, free and clear of
all pledges, liens, mortgages, hypothecations, security interests, charges,
options or other encumbrances whatsoever, except the lien and security interest
created by this Agreement. The Pledged Interests are not and will not be subject
to any contractual restriction upon the transfer thereof (except for any such
restrictions contained herein).
(g) PRINCIPAL PLACE OF BUSINESS AND STATE OF ORGANIZATION.
Pledgor will not change Pledgor's principal place of business or state of
organization unless Pledgor has previously notified Lender thereof and taken
such action as is necessary or reasonably requested by Lender to cause the
security interest of Lender in the Collateral to continue to be perfected.
(h) VALID SECURITY INTEREST. This Agreement creates a valid
security interest in the Collateral, securing the payment of the Obligations,
and upon the filing in the appropriate filing offices of the financing
statements to be delivered pursuant to this Agreement, such security interests
will be perfected, first priority security interests, and all filings and other
actions necessary to perfect such security interests will have been duly taken.
5. COVENANTS OF PLEDGOR.
(a) NO TRANSFER. Unless expressly permitted under the Mezzanine
Loan Agreement, Pledgor will not sell, assign, transfer, exchange, or otherwise
dispose of, or grant any option with respect to, the Collateral, nor will it
create, incur or permit to exist any pledge, lien, mortgage, hypothecation,
security interest, charge, option or any other encumbrance with respect to any
Collateral, or any interest therein, or any proceeds thereof, except for the
lien and security
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interest provided for by this Agreement.
(b) NO WAIVER, AMENDMENT, ETC. Pledgor shall not directly or
indirectly, without the prior written consent of Lender, attempt to waive,
alter, amend, modify, supplement or change in any way, or release, subordinate,
terminate or cancel in whole or in part, or give any consent under, any of the
instruments, documents, policies or agreements constituting the Collateral or
any of the rights or interests of Pledgor as party, holder, mortgagee or
beneficiary thereunder. Pledgor agrees that all rights to do any and all of the
foregoing have been assigned to Lender, but Pledgor agrees that, upon request
from Lender from time to time, Pledgor shall do any of the foregoing or shall
join Lender in doing so or shall confirm the right of Lender to do so and shall
execute such instruments and undertake such actions as Lender may reasonably
request in connection therewith.
(c) SETTLEMENT AND RELEASE. Pledgor shall not make any election,
compromise, adjustment or settlement in respect of any of the Collateral.
(d) PRESERVATION OF COLLATERAL. Lender may, in its discretion,
for the account and expense of Pledgor pay any amount or do any act required of
Pledgor hereunder or requested by Lender to preserve, protect, maintain or
enforce the Obligations, the Collateral or the security interests granted
herein, provided Pledgor has failed to pay such amount or take such action
within ten (10) days after written demand by Lender. Any such payment shall be
deemed an advance by Lender to Pledgor and shall be payable by such Pledgor
within ten (10) days after written demand together with interest thereon at the
Default Rate from the date expended by Lender until paid.
(e) WARRANTY OF TITLE. Pledgor shall warrant and defend the
right, title and interest of Lender in and to the Collateral and the proceeds
thereof against the claims and demands of all persons whomsoever.
(f) FILES AND RECORDS. Pledgor shall maintain, at their
principal office, and, upon request, make available to Lender the originals, or
copies in any case where the originals have been delivered to Lender of the
instruments, documents, policies and agreements constituting the Collateral (to
the extent not held by Lender) and related documents and instruments, and all
files, surveys, certificates, correspondence, appraisals, computer programs,
tapes, discs, cards, accounting records and other information and data relating
to the Collateral.
(g) LITIGATION. Pledgor shall promptly give to Lender notice of
all pending legal or arbitration proceedings, and of all proceedings pending by
or before any governmental or regulatory authority or agency, affecting Pledgor
or any Owner.
(h) EXISTENCE, ETC. Pledgor shall and shall cause the ▇▇▇▇▇▇▇▇
Owner to preserve and maintain its existence and all of its material rights,
privileges and franchises. Pledgor shall comply and cause the ▇▇▇▇▇▇▇▇ Owner to
comply with the requirements of all applicable laws, rules, regulations and
orders of governmental or regulatory authorities; and pay and discharge or cause
the ▇▇▇▇▇▇▇▇ Owner to pay or discharge all taxes, assessments and governmental
charges or levies imposed on them or on their income or profits or on any of
their property prior to the date on
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which penalties attach thereto, except for any such tax, assessment, charge or
levy the payment of which is being contested in good faith and by proper
proceedings.
(i) CHARTER DOCUMENTS. Pledgor shall, at its expense:
(i) perform and observe all the terms and provisions of
the Charter Documents to be performed or observed by it, maintain the Charter
Documents in full force and effect, enforce the Charter Documents in accordance
with their respective terms, and to take all such action to such end as may be
from time to time reasonably requested by Lender; and
(ii) furnish to Lender promptly upon receipt thereof
copies of all notices, requests and other documents received by Pledgor under or
pursuant to the Charter Documents, and from time to time furnish to Lender such
information and reports regarding the Collateral as Lender may reasonably
request.
(j) FINANCING STATEMENTS. Pledgor hereby (a) authorizes Lender
to execute and file at any time or times, one or more UCC-1 financing statements
covering the Collateral and UCC assignment financing statements assigning the
UCC-1 financing statements which constitute part of the Collateral; and (b)
appoint Lender as their agent and attorney-in-fact to execute in the name of
Pledgor any UCC financing statement or amendment, or collateral assignment of
any instrument, document, policy or agreement constituting the Collateral or
other instrument or filing or recordation to perfect or continue the perfection
of the security interest so long as any Obligation remains unpaid.
6. FURTHER ASSURANCES; REMEDIES. In furtherance of the grant of the
pledge and security interest pursuant to SECTION 2 hereof, Pledgor hereby agrees
with Lender as follows:
(a) DELIVERY AND OTHER PERFECTION. Pledgor shall:
(i) f any of the above-described Collateral required to
be pledged by Pledgor under SECTION 2(a) hereof are received by Pledgor,
forthwith either (x) transfer and deliver to Lender such Collateral so received
by Pledgor (together with the certificates (if any) for any such Collateral,
including assignments duly endorsed in blank and accompanied in the case of
shares by undated stock powers duly executed in blank) all of which thereafter
shall be held by Lender, pursuant to the terms of this Agreement, as part of the
Collateral or (y) take such other action as Lender shall deem reasonably
necessary or appropriate to duly record the lien created hereunder in such
Collateral referred to in said SECTION 2(a);
(ii) give, execute, deliver, file and/or record any
financing statement, notice, instrument, document, agreement or other papers
that may be necessary or desirable (in the reasonable judgment of Lender) to
create, preserve, perfect or validate the security interest granted pursuant
hereto or to enable Lender to exercise and enforce its rights hereunder with
respect to such pledge and security interest, including, without limitation,
causing any or all of the Collateral to be transferred of record into the name
of Lender or its nominee (and Lender agrees that if any Collateral is
transferred into its name or the name of its nominee, Lender will thereafter
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promptly give to Pledgor copies of any notices and communications received by it
with respect to the Collateral); and
(iii) permit representatives of Lender, upon reasonable
notice, at any time during normal business hours to inspect and make abstracts
from its books and records pertaining to the Collateral, and permit
representatives of Lender to be present at Pledgor's place of business to
receive copies of all communications and remittances relating to the Collateral,
and forward copies of any notices or communications received by Pledgor with
respect to the Collateral, all in such manner as Lender may reasonably require.
(b) PRESERVATION OF RIGHTS. Except in accordance with applicable
law, Lender shall not be required to take steps necessary to preserve any rights
against prior parties to any of the Collateral.
(c) PLEDGED COLLATERAL.
(i) Pledgor shall not and shall not have the right to
directly or indirectly, without the prior written consent of Lender, attempt to
waive, alter, amend, modify, supplement or change in any way, or release,
subordinate, terminate or cancel in whole or in part, or give any consent under,
any of the instruments, documents, policies or agreements constituting the
Collateral or exercise any of the rights, options or interests of Pledgor as
party, holder, mortgagee or beneficiary thereunder except as otherwise expressly
permitted under the Mezzanine Loan Agreement. Pledgor agrees that all rights to
do any and all of the foregoing have been assigned to and may be exercised by
Lender but Pledgor agrees that, upon request from Lender from time to time,
Pledgor shall do any of the foregoing or shall join Lender in doing so or shall
confirm the right of Lender to do so and shall execute such instruments and
undertake such actions as Lender may request in connection therewith. Pledgor
shall not make any election, compromise, adjustment or settlement in respect of
any of the Collateral. Notwithstanding anything herein to the contrary, so long
as no Event of Default shall have occurred and be continuing, Pledgor shall have
the right to exercise all of Pledgor's rights under the Charter Documents to
which it is a party for all purposes not inconsistent with any of the terms of
this Agreement, the Mezzanine Loan Agreement or any other Mezzanine Loan
Document (including, without limitation, the Affiliate Loan Documents) or any
other instrument or agreement referred to herein or therein, provided that
Pledgor agrees that it will not take any action in any manner that is
inconsistent with the terms of this Agreement, the Mezzanine Loan Agreement or
any other Mezzanine Loan Document (including, without limitation, the Affiliate
Loan Documents) or any such other instrument or agreement. Lender shall execute
and deliver to Pledgor or cause to be executed and delivered to Pledgor all such
proxies, powers of attorney, distribution and other orders, and all such
instruments, without representation, recourse or warranty, as Pledgor may
reasonably request for the purpose of enabling Pledgor to exercise the rights
and powers which it is entitled to exercise pursuant to this SECTION 6(c).
(ii) Anything to the contrary notwithstanding, (i)
Pledgor shall remain liable under the Charter Documents to perform all of their
duties and obligations thereunder to the same extent as if this Agreement had
not been executed, (ii) the exercise by Lender of any of the rights hereunder
shall not release Pledgor from any of their duties or obligations under the
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Charter Documents, and (iii) Lender shall have no obligation or liability under
the Charter Documents by reason of this Agreement, nor shall Lender be obligated
to perform any of the obligations or duties of Pledgor thereunder or to take any
action to collect or enforce any claim for payment assigned hereunder.
(d) EVENTS OF DEFAULT, ETC. During the period during which an
Event of Default shall have occurred and be continuing:
(i) Lender shall have all of the rights and remedies
with respect to the Collateral of a secured party under the Uniform Commercial
Code (whether or not said Code is in effect in the jurisdiction where the rights
and remedies are asserted) and such additional rights and remedies to which a
secured party is entitled under the laws in effect in any jurisdiction where any
rights and remedies hereunder may be asserted, including, without limitation,
the right, to the maximum extent permitted by law, to exercise all voting,
consensual and other powers of ownership pertaining to the Collateral as if
Lender were the sole and absolute owner thereof (and Pledgor agrees to take all
such action as may be appropriate to give effect to such right);
(ii) Lender in its discretion may, in its name or in the
name of Pledgor or otherwise, demand, ▇▇▇ for, collect 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;
(iii) Lender may, at its option, apply all or any part of
the Collateral to the Obligations in such order and priority as shall be
selected by Lender;
(iv) Lender may, upon ten (10) days' prior written notice
to Pledgor of the time and place, with respect to the Collateral or any part
thereof which shall then be or shall thereafter come into the possession,
custody or control of Lender or any of its agents, sell, assign or otherwise
dispose of all or any part of such Collateral, at such place or places as Lender
deems best, and for cash or on credit or for future delivery (without thereby
assuming any credit risk), at public or private sale, without demand of
performance or notice of intention to effect any such disposition or of time or
place thereof (except such notice as is required above or by applicable statute
and cannot be waived) and Lender or anyone else may be the purchaser, assignee
or recipient of any or all of the Collateral so disposed of at any public sale
(or, to the extent permitted by law, at any private sale), and thereafter hold
the same absolutely, free from any claim or right of whatsoever kind, including
any right or equity of redemption (statutory or otherwise), of Pledgor, any such
demand, notice or right and equity being hereby expressly waived and released.
Unless prohibited by applicable law, Lender may, without notice or publication,
adjourn any public or private sale or cause the same to be adjourned from time
to time by announcement at the time and place fixed for the sale, and such sale
may be made at any time or place to which the same may be so adjourned;
(v) Lender may exercise all membership rights, powers
and privileges to the same extent as Pledgor is entitled to exercise such
rights, powers and privileges;
(vi) Lender may accelerate the indebtedness secured
hereby;
474
(vii) Lender may, in connection with a sale of the Pledged
Interests, cause each purchaser of all or any part of any Pledged Interests to
be admitted as a new member or owner of the Company to the extent of such
Pledged Interests, and cause Pledgor to withdraw as a member or owner of such
Company to the extent such Pledged Interests are sold, and complete by inserting
the Effective Date (as defined therein) and the name of the assignee thereunder
and deliver to such assignee each Assignment of Interest executed and delivered
by Pledgor and, if appropriate, cause one or more amended or restated
certificates of limited partnership, certificates of limited liability company
or articles of incorporation to be filed with respect to the Company;
(viii) Lender may exercise any and all rights and remedies
of Pledgor under or in connection with the Charter Documents or otherwise in
respect of the Collateral, including, without limitation, any and all rights of
Pledgor to demand or otherwise require payment of any amount under, or
performance of any provisions of, the Charter Documents; and
(ix) all payments received, directly or indirectly, by
Pledgor under or in connection with the Charter Documents or otherwise in
respect of the Collateral shall be received in trust for the benefit of Lender,
shall be segregated from other funds of Pledgor and shall be forthwith paid over
to Lender in the same form as so received (with any necessary endorsement).
The proceeds of each collection, sale or other disposition under this SECTION
6(d) shall be applied by Lender to the Obligations pursuant to SECTION 6(f)
hereof.
Pledgor recognizes that, by reason of certain prohibitions contained in the
Securities Act of 1933, as amended, and applicable state securities laws, Lender
may be compelled, with respect to any sale of all or any part of the Collateral,
to limit purchasers to those who will agree, among other things, to acquire the
Collateral for their own account, for investment and not with a view to the
distribution or resale thereof. Pledgor acknowledges that any such private sales
may be at prices and on terms less favorable to Lender than those obtainable
through a public sale without such restrictions, and, notwithstanding such
circumstances, agrees that any such private sale shall be deemed to have been
made in a commercially reasonable manner and that Lender shall have no
obligation to engage in public sales and no obligation to delay the sale of any
Collateral for the period of time necessary to permit the issuer thereof to
register it for public sale.
(e) PRIVATE SALE. Lender shall not incur any liability as a
result of the sale of the Collateral, or any part thereof, at any private sale
pursuant to SECTION 6(d) hereof conducted in a commercially reasonable manner.
Pledgor hereby waives any claims against Lender arising by reason of the fact
that the price at which the Collateral may have been sold at such a private sale
was less than the price which might have been obtained at a public sale or was
less than the aggregate amount of the Obligations, even if Lender accepts the
first offer received and does not offer the Collateral to more than one offeree.
(f) APPLICATION OF PROCEEDS. Except as otherwise herein
expressly provided, the proceeds of any collection, sale or other realization of
all or any part of the Collateral pursuant hereto, and any other cash at the
time held by Lender under this SECTION 6, shall be applied
475
by Lender:
FIRST, to the payment of the costs and expenses of such
collection, sale or other realization, including reasonable
out-of-pocket costs and expenses of Lender and the fees and
expenses of their respective agents and counsel, and all
expenses, and advances made or incurred by Lender in connection
therewith;
NEXT, to the payment in full of the Obligations; and
FINALLY, to the payment to Pledgor, or its successors or
assigns, or as a court of competent jurisdiction may direct, of
any surplus then remaining.
As used in this SECTION 6, "PROCEEDS" of Collateral shall mean cash, securities
and other property realized in respect of, and distributions in kind of,
Collateral, including any thereof received under any reorganization, liquidation
or adjustment of debt of Pledgor or any issuer of or obligor on any of the
Collateral.
(g) ATTORNEY-IN-FACT. Without limiting any rights or powers
granted by this Agreement to Lender while no Event of Default has occurred and
is continuing, upon the occurrence and during the continuance of any Event of
Default Lender is hereby appointed the attorney-in-fact of Pledgor for the
purpose of carrying out the provisions of this SECTION 6 and taking any action
and executing any instruments which Lender may deem necessary or advisable to
accomplish the purposes hereof, which appointment as attorney-in-fact is
irrevocable and coupled with an interest. Without limiting the generality of the
foregoing, so long as Lender shall be entitled under this SECTION 6 to make
collections in respect of the Collateral, Lender shall have the right and power
to receive, endorse and collect all checks made payable to the order of Pledgor
representing any payment or other distribution in respect of the Collateral or
any part thereof and to give full discharge for the same.
(h) ENFORCEMENT EXPENSES. Pledgor agrees to pay to Lender all
out-of-pocket expenses (including reasonable expenses for legal services of
every kind) of, or incident to, the enforcement of any of the provisions of this
SECTION 6, or performance by Lender of any obligations of Pledgor in respect of
the Collateral which Pledgor has failed or refused to perform, or any actual or
attempted sale, or any exchange, enforcement, collection, compromise or
settlement in respect of any of the Collateral, and for the care of the
Collateral and defending or asserting rights and claims of Lender in respect
thereof, by litigation or otherwise and all such expenses shall be Obligations
to Lender secured under SECTION 2 hereof.
7. TERMINATION. Upon the payment and performance in full of all
Obligations, this Agreement shall terminate and Lender shall forthwith cause to
be assigned, transferred and delivered, against receipt but without any
recourse, warranty or representation whatsoever, any remaining Collateral and
money received in respect thereof, to or on the order of Pledgor.
8. MISCELLANEOUS.
476
(a) NO WAIVER. No failure on the part of Lender or any of its
agents to exercise, and no course of dealing with respect to, and no delay in
exercising, any right, power or remedy hereunder shall operate as a waiver
thereof; nor shall any single or partial exercise by Lender or any of its agents
of any right, power or remedy hereunder preclude any other or further exercise
thereof or the exercise of any other right, power or remedy. The remedies
provided herein are cumulative and are not exclusive of any remedies provided by
law.
(b) GOVERNING LAW.
(i) THIS AGREEMENT WAS NEGOTIATED IN THE STATE OF NEW
YORK, AND MADE BY PLEDGOR AND ACCEPTED BY LENDER IN THE STATE OF NEW YORK, AND
THE PROCEEDS OF THE AFFILIATE NOTES SECURED HEREBY WERE DISBURSED FROM THE STATE
OF NEW YORK, WHICH STATE THE PARTIES AGREE HAS A SUBSTANTIAL RELATIONSHIP TO THE
PARTIES AND TO THE UNDERLYING TRANSACTION EMBODIED HEREBY, AND IN ALL RESPECTS,
INCLUDING, WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, MATTERS OF
CONSTRUCTION, VALIDITY AND PERFORMANCE, THIS AGREEMENT AND THE OBLIGATIONS
ARISING HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND PERFORMED IN SUCH
STATE (WITHOUT REGARD TO PRINCIPLES OF CONFLICT LAWS) AND ANY APPLICABLE LAW OF
THE UNITED STATES OF AMERICA. TO THE FULLEST EXTENT PERMITTED BY LAW, PLEDGOR
HEREBY UNCONDITIONALLY AND IRREVOCABLY WAIVES ANY CLAIM TO ASSERT THAT THE LAW
OF ANY OTHER JURISDICTION GOVERNS THIS AGREEMENT OR THE OTHER MEZZANINE LOAN
DOCUMENTS (INCLUDING, WITHOUT LIMITATION, THE AFFILIATE LOAN DOCUMENTS), AND
THIS AGREEMENT AND THE OTHER MEZZANINE LOAN DOCUMENTS (INCLUDING, WITHOUT
LIMITATION, THE AFFILIATE LOAN DOCUMENTS) SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK PURSUANT TO SECTION 5-1401 OF
THE NEW YORK GENERAL OBLIGATIONS LAW.
(ii) ANY LEGAL SUIT, ACTION OR PROCEEDING AGAINST LENDER
OR PLEDGOR ARISING OUT OF OR RELATING TO THIS AGREEMENT MAY AT LENDER'S OPTION
BE INSTITUTED IN ANY FEDERAL OR STATE COURT IN ▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇ ▇▇
▇▇▇ ▇▇▇▇, PURSUANT TO SECTION 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW,
AND PLEDGOR WAIVES ANY OBJECTIONS WHICH IT MAY NOW OR HEREAFTER HAVE BASED ON
VENUE AND/OR FORUM NON CONVENIENS OF ANY SUCH SUIT, ACTION OR PROCEEDING, AND
PLEDGOR HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY SUCH COURT IN ANY
SUIT, ACTION OR PROCEEDING. PLEDGOR DOES HEREBY DESIGNATE AND APPOINT:
▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇
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▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
ATTENTION: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, ESQ. (CHICAGO OFFICE)
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 PLEDGOR IN THE MANNER PROVIDED HEREIN SHALL BE DEEMED IN
EVERY RESPECT EFFECTIVE SERVICE OF PROCESS UPON PLEDGOR IN ANY SUCH SUIT, ACTION
OR PROCEEDING IN THE STATE OF NEW YORK. PLEDGOR (I) SHALL GIVE PROMPT NOTICE TO
LENDER OF ANY CHANGED ADDRESS OF ITS AUTHORIZED AGENT HEREUNDER, (II) MAY AT ANY
TIME AND FROM TIME TO TIME DESIGNATE A SUBSTITUTE AUTHORIZED AGENT WITH AN
OFFICE IN NEW YORK, NEW YORK (WHICH SUBSTITUTE AGENT AND OFFICE SHALL BE
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.
(c) NOTICES. All notices, consents, approvals and requests
required or permitted hereunder shall be given in the manner and to the
addresses set forth in the Mezzanine Loan Agreement.
(d) WAIVERS, ETC. The terms of this Agreement may be waived,
altered or amended only by an instrument in writing duly executed by Pledgor and
Lender. Any such amendment or waiver shall be binding upon Lender and Pledgor.
(e) SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon
the successors and assigns of Pledgor and inure to the benefit of the successors
and assigns of Lender (PROVIDED, HOWEVER, that Pledgor shall not assign or
transfer its rights hereunder without the prior written consent of Lender).
Without limiting the foregoing, Lender may at any time and from time to time
without the consent of Pledgor, assign or otherwise transfer all or any portion
of its rights and remedies under this Agreement to any other person or entity,
either separately or together with other property of Pledgor for such purposes
in connection with a transfer of Lender's interest in the other Mezzanine Loan
Documents (including, without limitation, the Affiliate Loan Documents) and on
such terms as Lender shall elect, and such other person or entity shall
thereupon become vested with all of the rights and obligations in respect
thereof granted to Lender herein or otherwise. Without limiting the foregoing,
in connection with any assignment of the Loan, Lender may assign or otherwise
transfer all of its rights and remedies under this Agreement to the assignee and
such assignee shall thereupon become vested with all of the rights and
obligations in respect thereof granted to Lender herein or otherwise. Each
representation and agreement made by Pledgor in this Agreement shall be deemed
to run to, and each reference in this Agreement to Lender shall be
478
deemed to refer to, Lender and each of its successors and assigns.
(f) EXPENSES, INDEMNIFICATION.
(i) Pledgor agrees to pay or reimburse Lender for
paying: (1) all reasonable out-of-pocket expenses of Lender (including, without
limitation, the reasonable fees and expenses of counsel to Lender), in
connection with (A) the negotiation, preparation, execution and delivery of this
Agreement and (B) any amendment, modification or waiver of any of the terms of
this Agreement requested or initiated by Pledgor; (2) all costs and expenses of
Lender (including reasonable counsel's fees) in connection with any Event of
Default and any enforcement or collection proceedings resulting therefrom; and
(3) all transfer, stamp, documentary or other similar taxes, assessments or
charges levied by any governmental or revenue authority in respect of this
Agreement, or any other document referred to herein and all costs, expenses,
taxes, assessments and other charges incurred in connection with any filing,
registration, recording or perfection of any security interest contemplated by
this Agreement or any document referred to herein.
(ii) Pledgor hereby agrees to indemnify Lender and its
directors, officers, employees and agents from, and hold each of them harmless
against, any and all losses, liabilities, claims, damages or expenses incurred
by any of them arising out of or by reason of any claim of any Person (1)
relating to or arising out of the acts or omissions of Pledgor under this
Agreement or the Charter Documents (but excluding any such losses, liabilities,
claims, damages or expenses incurred by reason of the gross negligence or
willful misconduct of the Person to be indemnified), or (2) resulting from the
ownership of or lien on any Collateral, including, without limitation, the
reasonable fees and disbursements of counsel incurred in connection with any
such investigation or litigation or other proceedings (but excluding any such
losses, liabilities, claims, damages or expenses incurred by reason of the gross
negligence or willful misconduct of the Person to be indemnified).
(g) NO LIABILITY ON PART OF LENDER. Lender, by its acceptance of
this Agreement, the Collateral and any payments on account thereof, shall not be
deemed to have assumed or to have become liable for any of the obligations or
liabilities of Pledgor. Lender shall have no duty to collect any sums due in
respect of any of the Collateral in its possession or control, or to enforce,
protect or preserve any rights pertaining thereto, and Lender shall not be
liable for failure to collect or realize upon the Collateral, or any part
thereof, or for any delay in so doing, nor shall Lender be under any obligation
to take any action whatsoever with regard thereto. Lender shall, if requested by
the payor of any revenue payment, give receipts for any payments received by
Lender on account of the Collateral.
(h) FURTHER ASSURANCES. Pledgor agrees that, from time to time
upon the written request of Lender, Pledgor will execute and deliver such
further documents and do such other acts and things as Lender may reasonably
request in order fully to effect the purposes of this Agreement and the Guaranty
contained herein.
(i) DELAY NOT A WAIVER. Neither any failure nor any delay on the
part of Lender in insisting upon strict performance of any term, condition,
covenant or agreement, or
479
exercising any right, power, remedy or privilege hereunder, shall operate as or
constitute a waiver thereof, nor shall a single or partial exercise thereof
preclude any other future exercise, or the exercise of any other right, power,
remedy or privilege.
(j) COUNTERPARTS. This Agreement may be executed in any number
of counterparts, all of which taken together shall constitute one and the same
instrument and any of the parties hereto may execute this Agreement by signing
any such counterpart.
(k) SEVERABILITY. If any provision hereof is invalid and
unenforceable in any jurisdiction, then, to the fullest extent permitted by law,
(i) the other provisions hereof shall remain in full force and effect in such
jurisdiction and shall be liberally construed in favor of Lender in order to
carry out the intentions of the parties hereto as nearly as may be possible and
(ii) the invalidity or unenforceability of any provision hereof in any
jurisdiction shall not affect the validity or enforceability of such provision
in any other jurisdiction.
(l) LIMITATION OF LIABILITY. The liability of Pledgor hereunder
shall be subject to the provisions of SECTION 11.22 of the Mezzanine Loan
Agreement.
9. SUBORDINATION TO FIRST PLEDGE. This Agreement is, to the extent
set forth herein, subject and subordinate to the First Pledge securing the
▇▇▇▇▇▇▇▇ Note. The present beneficiary of the First Pledge is Lender. To the
extent that the claims of the present or any future beneficiary of the First
Pledge are legally prior in right to the rights of Lender hereunder, the rights
of Lender hereunder are subject and subordinate to the rights of such
beneficiary or beneficiaries of the First Pledge. Pledgor further agrees that
the First Pledge will not be amended, extended, increased, readvanced or
refinanced without the prior written consent of Lender and will continue to be
paid in accordance with the terms set forth in the copy of the First Pledge
which was furnished to Lender immediately prior to the execution of this
Agreement.
10. GUARANTY.
(a) UNCONDITIONAL GUARANTY. Pledgor unconditionally guarantees (i)
payment and performance of the Obligations, (ii) payment of any additional
amounts advanced by Lender pursuant to the provisions of this Agreement,
together with interest thereon at the rate provided therein, (iii) payment of
all expenses incurred by Lender and, to the extent reasonable, its counsel, in
connection with the administration or enforcement of each of the Affiliate
Loans, and (iv) any and all costs (including reasonable attorneys' fees)
incurred in enforcing the guaranty of the Obligations of Pledgor hereunder.
(b) JOINT AND SEVERAL OBLIGATIONS. Pledgor's obligations hereunder
are joint and several with any other guarantor now or hereafter guaranteeing the
Obligations under the documents evidencing and/or securing each of the Affiliate
Loans and are independent of the obligations of each Affiliate Pledgor under the
documents evidencing and/or securing each of the Affiliate Loans. A separate
action or actions may be brought and prosecuted against Pledgor, whether or not
action is brought against each Affiliate Pledgor under each of the Affiliate
Notes, respectively, or any other guarantor or whether or not the Pledgor
thereunder or any other guarantor are joined in such action or
480
actions.
(c) NOT A COLLECTION GUARANTY. This Guaranty is a guaranty of payment
and not of collection. Pledgor waives any right to require Lender at any time to
(a) proceed against each Affiliate Pledgor or any other guarantors under each of
the Affiliate Loans, (b) proceed against or exhaust any security held from each
of the Affiliate Pledgors under the Affiliate Loans, or (c) pursue any other
remedy in Lender's power whatsoever.
(d) CHANGE IN TERMS OF LOAN. Pledgor authorizes Lender, without
notice or demand and without affecting Pledgor's liability hereunder, from time
to time to renew, compromise, extend, accelerate or otherwise change the time
for payment or the terms of each of the Affiliate Loans or any part thereof,
including an increase or decrease of the rate of interest thereon.
(e) CONSENT TO RELEASES. Pledgor consents, without notice to Pledgor,
(i) to the release of all or any part of the security for each of the Affiliate
Loans, (ii) to the release of any party liable for each of the Affiliate Loans,
and (iii) to the release of any other guarantor from the obligations, or
portions thereof, guaranteed hereby.
(f) BANKRUPTCY OF AN AFFILIATE PLEDGOR. Neither Pledgor's obligation
to make payment in accordance with the terms of this guaranty nor any remedy for
the enforcement hereof shall be impaired, modified, changed, released or limited
in any manner whatsoever by the bankruptcy of an Affiliate Pledgor under each of
the Affiliate Loans or by any impairment, modification, change, release or
limitation of (i) the liability of an Affiliate Pledgor, any party assuming the
obligations of such Pledgor under each of the Affiliate Loans, or such Pledgor's
estate in bankruptcy, or (ii) any remedy for the enforcement of each of the
Affiliate Loans, either of which result from the operation of any present or
future provision of the Bankruptcy Reform Act of 1978 or other statute, or from
the decision of any court.
(g) VALID AND BINDING GUARANTY. Pledgor's execution, delivery,
observance and performance of this guaranty do not and will not conflict with or
result in a breach of the terms or provisions of any existing rule, regulation
or order of any court or governmental body or of any indenture, agreement or
instrument to which Pledgor is a party, or by which Pledgor is bound, or to
which Pledgor is subject, or constitute a default thereunder. This guaranty has
been duly executed and delivered by Pledgor and constitutes a valid and binding
guaranty enforceable in accordance with its terms.
(h) WAIVER OF PLEDGOR'S DEFENSES. Pledgor waives any defense arising
by reason of any disability or other defense whatsoever of the liability of an
Affiliate Pledgor under each of the Affiliate Loans. Until all indebtedness of
each of the Affiliate Pledgors under each of the Affiliate Loans to Lender shall
have been paid in full, even though such indebtedness is in excess of Pledgor's
liability hereunder, Pledgor waives (a) any right of subrogation, (b) any right
to enforce any remedy which Lender now has or may hereafter have against any
Affiliate Pledgor under each of the Affiliate Loans, and (c) any benefit of, and
any right to participate in, any security now or hereafter held by Lender.
Pledgor also waives and renounces any and all homestead exemption rights against
the obligations hereunder and also waives all presentments, demands for
performance, notices of
481
nonperformance, protests, notices of protest, notices of dishonor, and notices
of acceptance of this guaranty.
(i) SUBORDINATION OF EACH AFFILIATE PLEDGOR'S INDEBTEDNESS. Any
indebtedness of each of the Affiliate Pledgors now or hereafter owed to or held
by Pledgor is hereby subordinated to the indebtedness of such Affiliate Pledgor
to Lender. Such indebtedness of each of the Affiliate Pledgors under each of the
Affiliate Loans, respectively, to Pledgor shall, if Lender so requests, be
collected, enforced and received by Pledgor as trustee for Lender and be paid
over to Lender on account of the indebtedness of such Affiliate Pledgor to
Lender, but without reducing or affecting in any manner the liability of Pledgor
under the other provisions of this guaranty.
(j) ACCELERATION UPON EVENT OF DEFAULT. At the option of Lender and
with or without demand or notice, all or any part of Pledgor's Obligations
hereunder shall become due and payable immediately upon the occurrence and
during the continuance of an Event of Default, as such term is defined in this
Pledge or any of the Affiliate Loan Documents.
(k) LENDER'S RIGHT TO ASSIGN. Lender may, without notice whatsoever
to anyone, sell, assign or transfer all of any Pledgor's or any Affiliate
Pledgor's indebtedness, obligations and liabilities or any part thereof. In such
event, each and every successive assignee, transferee or Lender of all or any
part of said indebtedness, obligation and liability shall have the right to
enforce this guaranty by suit or otherwise for the benefit of such assignee,
transferee or Lender as fully as if such assignee, transferee or Lender were
herein by name specifically given such rights, powers, and benefits; provided,
however, that Lender, shall have an unimpaired right to enforce this guaranty
for its benefit as to so much of said indebtedness, obligations and liabilities
that it has not sold, assigned or transferred.
(l) LIABILITY OF PLEDGOR. Pledgor's liability under this Agreement,
including this SECTION 10, shall be non-recourse.
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482
IN WITNESS WHEREOF, Pledgor has caused this Agreement to be duly executed
as of the day and year first above written.
▇▇▇▇▇▇▇▇ HOLDINGS LLC, a Delaware
limited liability company
By:
-------------------------------
Name:
Title:
483
EXHIBIT A
CHARTER DOCUMENTS
1. Certificate of Formation filed on July 5, 2002.
2. Limited Liability Company Agreement dated as of July 5, 2002.
484
EXHIBIT B
FORM OF ASSIGNMENT OF MEMBERSHIP INTEREST
ASSIGNMENT OF MEMBERSHIP INTEREST (this "ASSIGNMENT") dated as of
__________, made by ▇▇▇▇▇▇▇▇ HOLDINGS LLC, a Delaware limited liability company
(together with its successors and assigns, the "ASSIGNOR") to
_____________________ (the "ASSIGNEE").
RECITALS
The undersigned has entered into the Guarantor Pledge and Security
Agreement dated as of July ___, 2002 (such Agreement, as it may be amended or
otherwise modified from time to time, the "PLEDGE AGREEMENT") with UBS WARBURG
REAL ESTATE INVESTMENTS INC., a Delaware corporation (together with its
successors and assigns, the "LENDER"). Unless otherwise noted, terms defined in
the Pledge Agreement are used herein as defined therein.
The Assignor is the sole equity member of ▇▇▇▇▇▇▇▇ Outlet Center LLC
(the "COMPANY") existing under and evidenced by the Limited Liability Company
Agreement of the Company dated as of July 5, 2002 (such agreement, as it may be
amended, supplemented or otherwise modified from time to time, the "OPERATING
AGREEMENT"). Under the Operating Agreement, the Assignor has certain rights,
title and interest in and to the Company and the property and assets of the
Company (collectively, the "INTEREST").
Lender has required that the Assignor shall have executed and
delivered this Assignment.
NOW THEREFORE, in consideration of the premises and of the mutual
covenants and agreements contained herein, the parties hereto agree as follows:
SECTION 1. ASSIGNMENT AND ACCEPTANCE OF ASSIGNED INTEREST. As of the
Effective Date (as defined in SECTION 9), the Assignor hereby sells, transfers,
conveys and assigns (without recourse and, except as set forth herein,
representation or warranty) (collectively, the "ASSIGNMENT") to the Assignee all
of the Assignor's right, title and interest in and to the Interest and of its
rights under the Operating Agreement, including, without limitation, all its (a)
rights to receive moneys due and to become due under or pursuant to the
Operating Agreement, (b) rights to receive proceeds of any insurance, indemnity,
warranty or guaranty with respect to the Operating Agreement, (c) claims for
damages arising out of or for breach of or default under the Operating
Agreement, and (d) rights to perform thereunder and to compel performance, and
otherwise exercise all rights and remedies thereunder. The percentage interest
of the Assignor's right, title and interest in the Interest and of the
Assignor's rights under the Operating Agreement that are being assigned to the
Assignee pursuant to this Agreement are hereinafter referred to as the "ASSIGNED
INTEREST". The Assignee, upon the execution of this Assignment, hereby accepts
from the Assignor the Assigned Interest and agrees to become a successor member
of the Company in the place and stead of the Assignor to the extent of
485
the Assigned Interest and to be bound by the terms and provisions of the
Operating Agreement.
SECTION 2. CAPITAL ACCOUNT. On or prior to the Effective Date, the
Assignee shall notify each of the other members in the Company required to be so
notified under the terms of the Operating Agreement and thereafter, the portion
of all profits and losses, and all other items of income, gain, loss, deduction
or credit, allocable to the Assigned Interest shall be credited or charged, as
the case may be, to the Assignee and the Assignee shall be entitled to the
portion of all distributions, payments or other allocations payable in respect
of the Assigned Interest, regardless of the source of such distributions,
payments or other allocations or the date on which they were earned.
SECTION 3. REPRESENTATIONS AND WARRANTIES OF THE ASSIGNOR. The Assignor
represents to Lender, as of the date of this Assignment, and to Lender and the
Assignee as of the Effective Date, that:
(a) This Assignment has been duly executed and delivered by the
Assignor and is a valid and binding obligation of the Assignor, enforceable in
accordance with its terms, subject to applicable bankruptcy, insolvency and
similar laws affecting rights of creditors generally, and general principles of
equity; and
(b) The Assignor is the sole owner of the Assigned Interest free
and clear of any liens, except for the liens created by the Pledge Agreement.
SECTION 4. FILINGS. On or as soon as practicable after the Effective Date,
the Assignee shall file and record or cause to be filed and recorded with all
proper offices or agencies all documents and instruments required to effect the
terms herein, if any, including, without limitation, (a) this Assignment and (b)
any limited liability company and assumed or fictitious name certificate or
certificates and any amendments thereto.
SECTION 5. FUTURE ASSURANCES. Each of the Assignor and the Assignee
mutually agrees to cooperate at all times from and after the date hereof with
respect to any of the matters described herein, and to execute such further
deeds, bills of sale, assignments, releases, assumptions, notifications or other
documents as may be reasonably requested for the purpose of giving effect to,
evidencing or giving notice of the assignment evidenced hereby.
SECTION 6. SUCCESSORS AND ASSIGNS. This Assignment shall be binding upon,
and shall inure to the benefit of, the parties hereto and their respective
successors and assigns.
SECTION 7. MODIFICATION AND WAIVER. No supplement, modification, waiver or
termination of this Assignment or any provisions hereof shall be binding unless
executed in writing by all parties hereto and the original of such writing has
been delivered to Assignee.
SECTION 8. COUNTERPARTS. Any number of counterparts of this Assignment may
be executed. Each counterpart will be deemed to be an original instrument and
all counterparts taken together will constitute one agreement. Delivery of an
executed counterpart of a signature page to this Assignment by telecopier shall
be as effective as delivery of a manually executed counterpart of
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this Assignment.
SECTION 9. EXECUTION; EFFECTIVE DATE. This Assignment will be binding and
effective and will result in the assignment of the Assigned Interest on the date
first written above (the "EFFECTIVE DATE").
SECTION 10. GOVERNING LAW. This Assignment will be governed by the laws of
the State of New York.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties hereto have caused this Assignment to be
executed and delivered.
ASSIGNOR
▇▇▇▇▇▇▇▇ HOLDINGS LLC, a
Delaware limited liability company
By:
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Name:
Title:
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ASSIGNEE
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By:
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Name:
Title:
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