GUARANTY AND PLEDGE AGREEMENT
GUARANTY AND PLEDGE AGREEMENT dated as of September 15, 1998 between XXX
XXXXX, XXXXX XXXXX and THE SOL AND XXXXX XXXXX TRUST (the "Trust")
(individually, a "Guarantor" and collectively, the "Guarantors"), and XXXXXX
GUARANTY TRUST COMPANY OF NEW YORK (the "Bank").
WHEREAS, in order to induce the Bank to extend credit pursuant to the
provisions of a letter agreement (the "Letter Agreement") dated as of September
15, 1998, between the Bank and Price Enterprises, Inc. (the "Borrower"), and for
other consideration, the receipt and adequacy of which are acknowledged, the
Guarantors have jointly and severally agreed to guaranty the obligations of the
Borrower under the Letter Agreement and to grant a continuing security interest
in the Collateral (as hereinafter defined) to secure their obligations
hereunder;
NOW THEREFORE, in consideration of the premises and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:
1. The Guarantors, as primary obligors and not as sureties only, hereby
unconditionally guarantee the due and punctual payment (whether at stated
maturity, upon acceleration or otherwise) of any amounts arising out of or in
connection with the Letter Agreement and the note delivered thereunder (the
"Note"), including without limitation the obligation of the Borrower to pay all
fees, principal and interest payments due thereunder and under the Note and all
expenses of collection, counsel fees and other expenses incurred by the Bank in
connection with the enforcement of its rights under the Letter Agreement and the
Note (collectively, the "Guaranteed Obligations"). Upon any failure by the
Borrower to pay any of the Guaranteed Obligations, the Guarantors agree that
they will pay within 10 days of notice thereof, at the place and in the manner
specified in the Letter Agreement and the Note, such amounts which the Borrower
has failed to pay. This Guaranty is a guaranty of payment and not merely a
guaranty of collection.
2. The obligations of the Guarantors hereunder shall be unconditional and
absolute and, without limiting the generality of the foregoing, shall not be
released, discharged or otherwise affected by:
(i) any extension, renewal, settlement, compromise, waiver or
release in respect of any obligation of the
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Borrower or any other guarantor of any of the Guaranteed Obligations;
(ii) any release, exchange, non-perfection or invalidity of any
direct or indirect security for any of the Guaranteed Obligations;
(iii) any modification or amendment of or supplement to the Letter
Agreement or the Note;
(iv) any change in the existence (including its constitution, laws,
rules, regulations or powers), structure or ownership of the Borrower or
The Sol and Xxxxx Xxxxx Trust, or any insolvency, bankruptcy,
reorganization or other similar proceeding affecting the Borrower or its
assets, a Guarantor or any other guarantor of any of the Guaranteed
Obligations;
(v) the existence of any claim, set-off or other rights which any
Guarantor may have at any time against any of the Borrower, the Bank or any
other corporation or person, whether in connection herewith or in
connection with any unrelated transaction; provided that nothing herein
shall prevent the assertion of any such claim by separate suit or
compulsory counterclaim;
(vi) any invalidity or unenforceability relating to or against the
Borrower or any other guarantor for any reason of the Letter Agreement, the
Note or any other guaranty agreement, or any provision of applicable law or
regulation purporting to prohibit payment by the Borrower of amounts to be
paid by it under the Letter Agreement, the Note or any of the Guaranteed
Obligations or under any such guaranty agreement; or
(vii) any other act or omission to act or delay of any kind by the
Borrower, any other guarantor, the Bank or any other corporation or person
or any other circumstance whatsoever which might, but for the provisions of
this paragraph, constitute a legal or equitable discharge of the
Guarantors' obligations hereunder;
provided, however, the Bank shall not extend the Commitment (as defined in the
Letter Agreement) without the prior written consent of the Guarantors.
3. The Guarantors' obligations hereunder constitute a guarantee of
payment and not of collection merely and shall remain in full force and effect
until the Guaranteed Obligations shall have been paid in full in accordance with
the terms hereof and of the Letter Agreement and the Note. If at any time any
payment of any of the Guaranteed Obligations is rescinded or must be otherwise
restored or returned upon the insolvency, bankruptcy or reorganization of the
Borrower or otherwise, the Guarantors'
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obligations hereunder with respect to such payment shall be reinstated at such
time as though such payment had not been made.
4. The Guarantors irrevocably waive acceptance hereof, diligence,
presentment, demand, protest, notice of dishonor and any notice not provided for
herein, as well as any requirement that at any time any person exhaust any right
or take any action against the Borrower or its assets or any other guarantor or
person.
5. In the event that acceleration of the time for payment of any amount
payable by the Borrower under the Letter Agreement or the Note is stayed upon
the insolvency, bankruptcy or reorganization of the Borrower, all such amounts
otherwise subject to acceleration or required to be paid upon an early
termination pursuant to the terms of the Letter Agreement or the Note shall
nonetheless be payable by the Guarantors hereunder forthwith on demand by the
Bank.
6. The Trust has delivered to the Bank and hereby pledges to the Bank and
grants to the Bank a security interest in the property of the Trust described in
Rider A attached hereto and made a part hereof and any other property of the
Trust from time to time held by the Bank pursuant to this Agreement and all
proceeds thereof (collectively, the "Collateral") as security for its
obligations hereunder (collectively, the "Secured Obligations"); provided
however, that so long as no default hereunder or with regard to the Secured
Obligations shall exist, interest payments made on the Collateral shall not be
included within the definition of "Collateral".
7. The Trust relinquishes any right to be given notice of any kind to
which it might otherwise be entitled except for any notice required to be given
pursuant to the New York Uniform Commercial Code or as otherwise provided
herein. The Trust agrees that until the Guaranteed Obligations shall have been
paid and satisfied in full no portion of the Collateral will be withdrawn from
the Bank's custody without the Bank's consent unless the fair market value of
the remaining Collateral, as determined by the Bank in its sole discretion, (the
"Aggregate Collateral Value"), shall at least equal 105.2632% of the dollar
amount of the Guaranteed Obligations then existing. In the event that the
Aggregate Collateral Value shall at any time be less than 105.2632% the dollar
amount of the Guaranteed Obligations the Trust agrees to either (i) furnish to
the Bank additional United States Treasury Notes acceptable to the Bank as
Collateral, such Collateral to be held subject to a perfected first lien in
favor of the Bank and subject to the provisions hereof, (ii) repay a portion of
the Guaranteed Obligations so that such Collateral coverage percentage is once
again maintained or (iii) furnish to the Bank additional Collateral of a type
acceptable to the Bank together with such executed documentation as the Bank
shall require to evidence and perfect a first lien in favor of the Bank therein.
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8. The Guarantors represent and warrant as follows:
A. The Trust has good and marketable title to the Collateral and has
not created any lien against or other security interest in the Collateral
except pursuant to this Agreement;
B. Upon the execution of this Agreement by the Guarantors and the
delivery of the Collateral to the Bank the Collateral will be duly and
validly pledged to the Bank and the pledging thereof and Guaranty provided
for herein do not contravene or constitute a default under any provision of
applicable law or regulation or of any judgment, order, decree, agreement
or instrument binding on any Guarantor or result in the creation of any
lien upon any of the property or assets of any Guarantor other than the
security interest granted pursuant to this Agreement;
C. The Collateral is the property of the Trust and is not subject to
a proprietary interest or lien of any other person or entity;
D. This Agreement constitutes a valid and binding obligation of the
Guarantors that is enforceable in accordance with its terms except to the
extent such enforcement may be limited by applicable bankruptcy, insolvency
and other similar laws affecting creditors' rights generally and the
security interest in the Collateral created hereunder is valid under the
Uniform Commercial Code as in effect in the State of New York; and
E. No approval, consent or authorization of or filing or
registration with any governmental authority or body that has not been
obtained is necessary for the execution, delivery or performance by the
Guarantors of this Agreement or for the performance by the Guarantors of
any of the terms or conditions hereof.
9. The Guarantors agree to defend the Bank's right, title, lien and
security interest in and to the Collateral against the claims and demands of all
persons.
10. At any time and from time to time the Bank may cause all or any of the
Collateral to be transferred to or registered in its name or the name of its
nominee or nominees.
11. Until such time as a demand for payment of any amount due in
connection with the Secured Obligations has been made and remains unsatisfied,
the Trust shall have the right, from time to time, to vote and to give consents,
ratifications and waivers with respect to the Collateral, and the Bank shall,
upon receiving a written request from the Trust, deliver to the Trust such
proxies, powers of attorney, consents, ratifications and
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waivers in respect of any of such Collateral which is registered in the Bank's
name or that of its nominee as shall be specified in the request of the Trust
and in form and substance reasonably satisfactory to the Trust.
12. The Trust will, at its expense and in such manner and form as the Bank
may require, execute, deliver, file and record any specific assignment or other
paper and take any other action that may be reasonably necessary or desirable,
or that the Bank may request, in order to create, preserve, perfect or validate
any security interest or to enable the Bank to exercise and enforce its rights
hereunder with respect to any of the Collateral.
13. Upon the demand and nonpayment of any amount owed to the Bank in
connection with the Secured Obligations when due the Bank shall have the rights
and remedies provided in the Uniform Commercial Code in force in New York at the
date of execution of this Agreement and in addition to, or in modification of,
those rights and remedies, the Bank or its agents may, in its discretion, sell,
assign and deliver all or any part of the Collateral at any broker's board or
public or private sale without notice or advertisement, and bid and become
purchasers (free from any equity or right of redemption) at any public sale or
at any broker's board. The Trust agrees that the proceeds of the disposition of
the Collateral may be applied by the Bank to the satisfaction of the Guaranteed
Obligations in any order of preference which the Bank in its sole discretion
chooses and that the surplus, if any, shall be returned to the Trust.
14. The Bank shall have no duty with reference to the Collateral except to
use reasonable care in its custody and preservation, which shall not include any
steps necessary to preserve rights against prior parties nor the duty to send
notices, perform services, or take any action in connection with the management
of the Collateral. The Trust releases the Bank from any claims or causes of
action at any time arising out of or with respect to the Collateral or in
connection with any actions taken or omitted to be taken by the Bank with
respect thereto and the Trust hereby agrees to hold the Bank harmless from any
and all such claims and causes of action, except for claims and causes of action
arising out of the failure of the Bank to use reasonable care in the custody and
preservation of the Collateral.
15. Without limiting any rights or powers granted hereunder to the Bank
while no Event of Default has occurred and is continuing, upon the occurrence
and during the continuance of any Event of Default, the Bank is hereby appointed
the attorney-in-fact of the Trust for the purpose of carrying out the provisions
of this Agreement and taking any action and executing any instrument which any
party hereto may deem necessary or advisable to accomplish the purposes hereof.
Without limiting the generality of the foregoing, upon the occurrence and during
the
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continuance of an Event of Default the Bank shall have the right and power to
receive, endorse and collect all checks and other orders for the payment of
money made payable to the Trust representing any interest or dividends or other
distribution payable in respect of the Collateral or any part thereof and to
give full discharge for the same and to execute endorsements, assignments or
other instruments of conveyance or transfer with respect to all or any of the
Collateral. The powers of attorney granted pursuant hereto and all authority
hereby conferred are granted and conferred solely to protect the Bank's
interests in the Collateral and shall not impose any duty upon the
attorney-in-fact to exercise such powers. Such powers of attorney are coupled
with an interest, shall be irrevocable prior to the payment in full of the
Guaranteed Obligations and shall not be terminated prior thereto or affected by
any act of the Trust or by operation of law, including, but not limited to, the
dissolution, death, disability or incompetency of any person, the termination of
any trust, or the occurrence of any other event, and if the Trust or any other
person or entity should be dissolved or any other event should occur before the
payment in full of the Guaranteed Obligations, such attorney-in-fact shall
nevertheless be fully authorized to act under such powers of attorney as if such
dissolution, death, disability or incompetency or other event had not occurred
and regardless of notice thereof. The Bank agrees not to exercise such powers
of attorney except upon the demand and nonpayment when due or within any
applicable grace period of any amount owed in connection with the Guaranteed
Obligations.
16. The Guarantors shall pay all the reasonable expenses of the Bank,
including reasonable attorney's fees, incurred by the Bank in enforcing or
obtaining, or endeavoring to enforce or obtain, its rights and remedies
hereunder and the performance of the Guarantors' obligations hereunder.
17. The obligations created by this Agreement are for the benefit of the
Bank and its successors and assigns, and in the event of any assignment by a
Bank of any of the Guaranteed Obligations, the rights hereunder, to the extent
applicable to the Guaranteed Obligations so assigned, may be transferred with
the Guaranteed Obligations. This Agreement is binding on the Guarantors and
their successors, assigns, heirs and legal representatives.
18. Upon final payment in full of all of the Guaranteed Obligations to
the Bank the Trust shall be entitled to the return of all of the Collateral and
of all other property and cash which have not been used or applied toward the
payment of the Secured Obligations and will execute and deliver all termination
statements, certificates and other such documentation as shall be reasonably
requested by the Trust to effect the termination and release of the security
interest in the Collateral. Subject to Section 14 hereof, the assignment by the
Bank to the Trust of the Collateral and such other property shall be without
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representation or warranty of any nature whatsoever and wholly without recourse.
19. 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 favor of the Bank 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
provisions in any other jurisdiction.
20. No failure or delay on the part of the Bank in exercising any of its
options, powers or rights, nor the partial or single exercise thereof shall
constitute a waiver thereof or shall preclude any other or further exercise of
any other option, power or right.
21. Subject to Section 2 hereof, the Guarantors authorize the Bank,
without notice or demand and without affecting its liability hereunder, from
time to time to (a) renew, compromise, extend, accelerate or otherwise change
the time for payment of, or otherwise change the terms of the Guaranteed
Obligations or any part thereof, including to increase or decrease the rate of
interest thereon; (b) take and hold additional security for the Guaranteed
Obligations and exchange, enforce, waive and release any such security; and (c)
apply such security and the Collateral and direct the order or manner of sale
thereof as the Bank in its discretion may determine. The Bank may without
notice assign this Agreement and the benefits hereof in whole or in part.
22. The Guarantors waive any right to require the Bank to (a) proceed
against the Borrower; (b) proceed against or exhaust any other security for the
Secured Obligations; or (c) pursue any other remedy in the Bank's power
whatsoever. The Guarantors waive any defense arising by reason of any
disability or other defense of the Borrower or by reason of the cessation from
any cause whatsoever of the liability of the Borrower with regard to the
Guaranteed Obligations. Until all Guaranteed Obligations shall have been paid
in full the Guarantors shall have no right of subrogation and waive any right to
enforce any remedy which the Bank now has or may hereafter have against
Borrower, and waive any benefit of, and any right to participate in any security
now or hereafter held by the Bank.
23. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY
THE LAW OF THE STATE OF NEW YORK.
24. This Guaranty and Pledge Agreement may be executed in any number of
counterparts, each of which shall be deemed an original and all of which taken
together shall constitute but one and the same instrument.
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25. THE OBLIGATIONS OF THE GUARANTORS HEREUNDER ARE JOINT AND SEVERAL.
26. So long as the Commitment under the Letter Agreement shall be in effect
or any Guaranteed Obligations shall remain unpaid, unless compliance shall have
been waived in writing by the Bank, the Guarantors agree that:
(i) they will furnish to the Bank (a) copies of their respective
financial statements in form satisfactory to the Bank on an annual basis
within 90 days after their year-end as determined for tax purposes, (b)
copies of all federal tax returns filed by them within 30 days of their
filing, (c) from time to time such additional information concerning their
financial position as the Bank may reasonably request and (d) notice of any
Default under the Letter Agreement or hereunder forthwith upon their
becoming aware thereof; and
(ii) the Trust will keep in full force and effect its existence as a
trust organized under the laws of the State of California.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
THE SOL AND XXXXX XXXXX TRUST
By: /s/ XXX XXXXX
--------------------------------------
XXX XXXXX, SOLE TRUSTEE
Address:
0000 Xxxxxxx Xxxxxx
Xxxxx 000
Xx Xxxxx, Xxxxxxxxxx 00000
/s/ XXX XXXXX
------------------------------------------
XXX XXXXX, individually
Address:
0000 Xxxxxxx Xxxxxx
Xxxxx 000
Xx Xxxxx, Xxxxxxxxxx 00000
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/S/ XXXXX XXXXX
------------------------------------------
XXXXX XXXXX, individually
Address:
0000 Xxxxxxx Xxxxxx
Xxxxx 000
Xx Xxxxx, Xxxxxxxxxx 00000
XXXXXX GUARANTY TRUST COMPANY
OF NEW YORK
By: /s/ XXXX X. XXXXXXXX
--------------------------------------
Title: Vice President
Address:
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attn: Xxxx Xxxxxx
with a copy to:
000 Xxxxx Xxxx Xxxxxx
00xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Telecopier: 000-000-0000
Attn: Xxxxx Xxxxxx
EXHIBIT A
U.S. Treasury Notes selected by the Bank now and hereafter held in Custody
Account No. C88247 maintained by the Trust at the Bank and all Proceeds and
Products thereof (excluding interest payments on the foregoing so long as
no Event of Default under the Guaranty and Pledge Agreement, Letter
Agreement or Note shall exist)
