PLEDGE AND SECURITY AGREEMENT
Dated as of June 15, 2025
by
HUDSON YARDS WEST MEZZANINE LLC, a Delaware limited liability company, as Pledgor
in favor of
GRANITE PEAK CAPITAL PARTNERS, LP, a Delaware limited partnership, as Secured Party
Membership Interests in Hudson Yards West Mortgage LLC, a Delaware limited liability company
Mezzanine Loan: $200,000,000
Location of Mortgaged Property: 450 West 34th Street, New York, New York 10001
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RECITALS
WHEREAS, reference is made to that certain Mezzanine Loan Agreement dated as of even date herewith (as the same may be amended, restated, supplemented, or otherwise modified from time to time, the "Loan Agreement"), by and between Hudson Yards West Mezzanine LLC, a Delaware limited liability company ("Pledgor" or "Mezzanine Borrower"), and Granite Peak Capital Partners, LP, a Delaware limited partnership ("Secured Party" or "Lender"), pursuant to which Lender has agreed to make a mezzanine loan to Pledgor in the original principal amount of Two Hundred Million and 00/100 Dollars ($200,000,000.00) (the "Loan"), subject to the terms and conditions set forth in the Loan Agreement;
WHEREAS, Pledgor is the sole member and holder of one hundred percent (100%) of all issued and outstanding limited liability company membership interests (the "Pledged Interests") in Hudson Yards West Mortgage LLC, a Delaware limited liability company (the "Pledged Entity" or "Mortgage Borrower"), and Pledgor has no other equity holders, partners, or co-members in the Pledged Entity;
WHEREAS, the Pledged Entity is the borrower under that certain Senior Mortgage Loan Agreement dated as of even date herewith (the "Senior Loan Agreement"), by and among the Pledged Entity, as borrower, and Ironclad National Bank, N.A., as administrative agent for the benefit of itself and the other lenders party thereto (in such capacity, the "Senior Lender"), in the original principal amount of Four Hundred Seventy-Five Million and 00/100 Dollars ($475,000,000.00) (the "Senior Loan" or "Mortgage Loan"), which Senior Loan is secured by, among other things, a first priority mortgage lien and security interest on the real property and improvements located at 450 West 34th Street, New York, New York 10001 (Block 729, Lots 1, 5, 12, and 15, Borough of Manhattan, City, County, and State of New York) (the "Property");
WHEREAS, as a condition precedent to making the Loan, Secured Party has required Pledgor to execute and deliver this Pledge and Security Agreement (as the same may be amended, restated, supplemented, or otherwise modified from time to time, this "Agreement") to grant to Secured Party a first priority security interest in and lien on the Pledged Collateral (as hereinafter defined) to secure the prompt and complete payment, performance, and observance of all Secured Obligations (as hereinafter defined);
WHEREAS, reference is made to that certain Intercreditor Agreement dated as of even date herewith (the "Intercreditor Agreement"), by and between Ironclad National Bank, N.A., in its capacity as administrative agent under the Senior Loan, and Granite Peak Capital Partners, LP, in its capacity as the holder of the Mezzanine Note, which Intercreditor Agreement governs the respective rights, priorities, and remedies of the Senior Lender and the Secured Party with respect to the Property and the Pledged Collateral; and
WHEREAS, Pledgor acknowledges that Pledgor will derive substantial direct and indirect benefits from the making of the Loan by Secured Party and that the execution and delivery of this Agreement is a material inducement to Secured Party to make the Loan.
NOW, THEREFORE, in consideration of the premises, the mutual covenants and agreements set forth herein, the making of the Loan, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Pledgor agrees as follows:
GRANTING CLAUSE
Pledgor hereby pledges, assigns, hypothecates, and grants to Secured Party a continuing first priority security interest in and lien upon all of Pledgor's right, title, and interest in, to, and under the Pledged Collateral (as defined in Section 2.1 hereof), to secure the prompt and complete payment, performance, and observance of all Secured Obligations (as defined in Section 1.1 hereof). This grant is made pursuant to and in accordance with Articles 8 and 9 of the Uniform Commercial Code as in effect in the State of New York and the State of Delaware, and all other applicable law.
ARTICLE 1 — DEFINITIONS
Section 1.1 — Defined Terms
As used in this Agreement, the following terms shall have the meanings set forth below:
"Agreement" means this Pledge and Security Agreement, including all exhibits, schedules, and annexes attached hereto, as the same may be amended, restated, supplemented, or otherwise modified from time to time in accordance with the terms hereof.
"Cash Management Account" means the mezzanine cash management account established and maintained in accordance with the provisions of the Loan Agreement for the collection, holding, and disbursement of certain funds and revenues attributable to the Pledged Entity and the Property.
"Collateral Assignment" means any assignment, transfer, or hypothecation of the Pledged Collateral, or any portion thereof, to Secured Party as additional security for the Secured Obligations, whether made contemporaneously with or subsequent to the execution of this Agreement.
"Constituent Documents" means, with respect to the Pledged Entity, the Certificate of Formation of the Pledged Entity as filed with the Secretary of State of the State of Delaware, and the Amended and Restated Limited Liability Company Agreement of the Pledged Entity (the "LLC Agreement"), each as in effect on the date hereof and as may be amended, restated, supplemented, or otherwise modified from time to time with the prior written consent of Secured Party.
"Control" means, (a) with respect to a security entitlement, "control" as defined in Section 8-106 of the UCC, and (b) with respect to a securities account, "control" as defined in Section 9-106 of the UCC, and in each case includes all analogous concepts under the UCC as in effect in the State of Delaware to the extent applicable.
"Default" means any event or condition that, with the giving of notice, the passage of time, or both, would constitute an Event of Default under the Loan Agreement.
"Default Rate" has the meaning ascribed to such term in the Loan Agreement.
"Distributions" means all dividends, distributions, cash, instruments, and other property or proceeds received, receivable, or otherwise distributed in respect of or in exchange for any or all of the Pledged Interests, whether in cash, property, securities, or other form, including without limitation all returns of capital, liquidating distributions, redemption proceeds, and all other amounts and property of whatever kind or nature that may at any time be paid or payable to, or received or receivable by, Pledgor in respect of the Pledged Interests.
"Event of Default" has the meaning ascribed to such term in the Loan Agreement, and shall also include any additional events of default set forth in Section 7.1 of this Agreement.
"Guarantor" means Metropolitan Transit Development Corp., a Delaware corporation ("MTDC").
"Guaranty" means that certain Guaranty of Recourse Obligations dated as of even date herewith, executed by the Guarantor in favor of Secured Party in connection with the Loan, as the same may be amended, restated, supplemented, or otherwise modified from time to time.
"Intercreditor Agreement" means that certain Intercreditor Agreement dated as of even date herewith, by and between Ironclad National Bank, N.A., in its capacity as administrative agent under the Senior Loan, and Granite Peak Capital Partners, LP, in its capacity as the holder of the Mezzanine Note, as the same may be amended, restated, supplemented, or otherwise modified from time to time.
"LLC Agreement" means the Amended and Restated Limited Liability Company Agreement of Hudson Yards West Mortgage LLC dated as of even date herewith, a true, correct, and complete copy of which is attached hereto as Exhibit A and incorporated herein by this reference, as the same may be amended, restated, supplemented, or otherwise modified from time to time with the prior written consent of Secured Party.
"Loan" means the mezzanine loan in the original principal amount of Two Hundred Million and 00/100 Dollars ($200,000,000.00) made by Secured Party to Pledgor pursuant to the Loan Agreement.
"Loan Agreement" means that certain Mezzanine Loan Agreement dated as of even date herewith, by and between Pledgor and Secured Party, as the same may be amended, restated, supplemented, or otherwise modified from time to time in accordance with its terms.
"Loan Documents" has the meaning ascribed to such term in the Loan Agreement, and collectively refers to the Loan Agreement, this Agreement, the Mezzanine Note, the Guaranty, the Environmental Indemnity Agreement, and all other documents, instruments, certificates, and agreements executed and delivered by Pledgor, the Guarantor, or any other party in connection with the Loan, as each may be amended, restated, supplemented, or otherwise modified from time to time.
"Mezzanine Note" means the promissory note in the original principal amount of Two Hundred Million and 00/100 Dollars ($200,000,000.00) dated as of even date herewith, executed by Pledgor and payable to the order of Secured Party, as the same may be amended, restated, supplemented, or otherwise modified from time to time, and including any note or notes issued in exchange therefor or in substitution or replacement thereof.
"Mortgage Borrower" means Hudson Yards West Mortgage LLC, a Delaware limited liability company, being the same entity as the Pledged Entity.
"Mortgage Loan" means the senior mortgage loan in the original principal amount of Four Hundred Seventy-Five Million and 00/100 Dollars ($475,000,000.00) made by Ironclad National Bank, N.A., as administrative agent, and the other senior lenders party to the Senior Loan Agreement, to the Pledged Entity pursuant to the Senior Loan Agreement.
"Mortgage Loan Documents" has the meaning ascribed to such term in the Intercreditor Agreement.
"Permitted Encumbrances" has the meaning ascribed to such term in the Loan Agreement.
"Permitted Transfer" has the meaning ascribed to such term in the Loan Agreement.
"Pledged Collateral" has the meaning ascribed to such term in Section 2.1 hereof.
"Pledged Entity" means Hudson Yards West Mortgage LLC, a Delaware limited liability company.
"Pledged Interests" means one hundred percent (100%) of all membership interests of Pledgor in the Pledged Entity, including all economic and non-economic interests, voting and management rights, and all certificates, if any, representing such interests, whether now owned or hereafter acquired by Pledgor.
"Proceeds" has the meaning ascribed to such term in Section 9-102(a)(64) of the UCC, and includes all cash, securities, instruments, rights, and other property at any time constituting or receivable as proceeds of, or otherwise payable or distributable with respect to, the Pledged Collateral.
"Property" means the real property and improvements located at 450 West 34th Street, New York, New York 10001 (Block 729, Lots 1, 5, 12, and 15, Borough of Manhattan, City, County, and State of New York), together with all appurtenances, fixtures, and other property described in the Senior Loan Documents.
"Secured Obligations" means all present and future indebtedness, obligations, and liabilities of Pledgor to Secured Party arising under or in connection with any of the Loan Documents, whether direct or indirect, absolute or contingent, due or to become due, now existing or hereafter arising, including without limitation: (a) all principal of, and interest (including interest accruing at the Default Rate) on, the Loan; (b) all late charges, prepayment premiums, and yield maintenance amounts; (c) the exit fee equal to one-half of one percent (0.50%) of the then-outstanding principal amount of the Loan; (d) all fees, costs, and expenses (including reasonable attorneys' fees and disbursements) payable under the Loan Documents; and (e) all indemnification obligations of Pledgor under the Loan Documents.
"Senior Lender" means Ironclad National Bank, N.A., a national banking association, in its capacity as administrative agent under the Senior Loan Agreement and the other Mortgage Loan Documents, together with its successors and assigns in such capacity.
"Termination Date" means the date on which all Secured Obligations have been indefeasibly paid and satisfied in full in cash, no commitments to extend credit under the Loan Agreement remain outstanding, and the Loan Documents have been terminated in accordance with their respective terms.
"UCC" means the Uniform Commercial Code as in effect from time to time in the State of New York; provided, however, that if by reason of mandatory provisions of law, the perfection, the effect of perfection or non-perfection, or the priority of the security interest in any item or portion of the Pledged Collateral is governed by the Uniform Commercial Code as in effect in the State of Delaware or any other jurisdiction, "UCC" shall mean the Uniform Commercial Code as in effect from time to time in such other jurisdiction for purposes of the provisions hereof relating to such perfection, effect of perfection or non-perfection, or priority.
"UCC Financing Statements" means the UCC-1 financing statements, UCC-3 amendments, and UCC-3 continuation statements to be filed with the Secretary of State of the State of Delaware and in any other applicable jurisdictions as Secured Party may determine, in each case covering the Pledged Collateral and naming Pledgor as debtor and Secured Party as secured party.
Section 1.2 — Loan Agreement Definitions
Capitalized terms used but not otherwise defined herein shall have the respective meanings ascribed to such terms in the Loan Agreement. In the event of any conflict or inconsistency between the definitions contained in this Agreement and the definitions contained in the Loan Agreement, the definitions contained in the Loan Agreement shall control and govern; provided, however, that with respect to matters relating specifically to the grant, perfection, priority, and enforcement of the security interest created hereunder, the provisions of this Agreement shall control to the extent of such conflict or inconsistency.
Section 1.3 — UCC Terms
Terms defined in Article 8 or Article 9 of the UCC, including without limitation the terms "authenticate," "certificated security," "entitlement holder," "financial asset," "security," "security entitlement," "securities account," "securities intermediary," and "uncertificated security," and not otherwise defined herein, are used herein with the meanings ascribed to such terms in such articles of the UCC.
Section 1.4 — Rules of Construction
The following rules of construction shall apply to this Agreement:
(a) The headings and captions used in this Agreement are for convenience of reference only and shall not affect the construction or interpretation of any provision hereof.
(b) Words importing the singular number shall include the plural number and vice versa. Words importing any gender shall include all genders. References to "persons" shall include individuals, corporations, partnerships, limited liability companies, trusts, unincorporated associations, joint ventures, governmental entities, and other entities of any kind.
(c) The word "including" (and with correlative meaning, "include" and "includes") means "including without limitation" and shall not be construed to limit any general statement to the specific or similar items or matters immediately following it.
(d) The words "herein," "hereof," "hereunder," and words of similar import refer to this Agreement as a whole and not to any particular article, section, subsection, clause, exhibit, or schedule hereof. References to "Articles," "Sections," "Exhibits," and "Schedules" are to articles, sections, exhibits, and schedules of this Agreement unless otherwise specified.
(e) References to any agreement, instrument, or document shall mean such agreement, instrument, or document as amended, supplemented, restated, or otherwise modified from time to time in accordance with its terms and the terms of the Loan Documents.
(f) References to any statute, law, regulation, or rule shall include all statutory and regulatory provisions consolidating, amending, replacing, supplementing, or interpreting such statute, law, regulation, or rule.
(g) The terms "shall" and "will" have equal force and effect and are mandatory in nature.
(h) The parties hereto have participated jointly in the negotiation and drafting of this Agreement. In the event of any ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by all parties, and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any provision hereof.
ARTICLE 2 — PLEDGE AND GRANT OF SECURITY INTEREST
Section 2.1 — Pledged Collateral
As security for the payment, performance, and observance of all Secured Obligations, Pledgor hereby pledges, assigns, hypothecates, and grants to Secured Party a continuing first priority security interest in and lien upon all of Pledgor's right, title, and interest in, to, and under the following property, whether now owned or hereafter acquired, whether now existing or hereafter arising, and wherever located (all of the following being collectively referred to herein as the "Pledged Collateral"):
(a) The Pledged Interests. All of Pledgor's membership interests in Hudson Yards West Mortgage LLC (constituting one hundred percent (100%) of all issued and outstanding membership interests therein), including without limitation all economic interests (including the right to receive allocations of profits, losses, and other items and the right to receive Distributions), all non-economic interests, and all other rights, privileges, and interests of a member under the LLC Agreement, whether now owned or hereafter acquired by Pledgor by way of additional capital contribution, conversion, exchange, or otherwise.
(b) Rights Under Constituent Documents. All rights of Pledgor under, and interest in, the Constituent Documents and the LLC Agreement of the Pledged Entity, including without limitation all rights to receive notices, attend meetings, consent to actions, inspect books and records, and exercise any other right or privilege of a member under the LLC Agreement or under the Delaware Limited Liability Company Act.
(c) Distributions. All Distributions, including without limitation all dividends, distributions (whether in cash, property, or securities), returns of capital, liquidating distributions, redemption proceeds, and all other amounts and property of whatever kind or nature receivable or received in respect of or in exchange for any or all of the Pledged Interests.
(d) Additional Interests. Any and all additional membership interests, partnership interests, equity interests, securities, or other ownership interests hereafter acquired by Pledgor in the Pledged Entity, whether by way of additional capital contribution, conversion, dividend, distribution, stock split, reclassification, merger, consolidation, exchange, or otherwise, and all certificates, instruments, and documents representing or evidencing the same.
(e) Accounts and Deposits. All accounts, deposit accounts, and securities accounts of Pledgor into which any Distributions are or may be deposited, and all amounts on deposit therein, including without limitation the Cash Management Account.
(f) Proceeds. All Proceeds of the foregoing, including without limitation all cash, securities, instruments, rights, and other property at any time constituting or receivable as proceeds (as defined in Section 9-102(a)(64) of the UCC) of any of the foregoing.
(g) Voting and Governance Rights. All voting rights, consent rights, approval rights, management rights, and governance rights of every kind and nature appurtenant to or arising from the Pledged Interests, subject to Section 6.1 hereof.
(h) Books and Records. All books, records, ledgers, correspondence, files, and documents relating to the Pledged Interests and the Pledged Entity, including without limitation financial statements, tax returns, corporate records, organizational documents, and all other records and information of whatever kind or nature.
(i) Claims and Causes of Action. All claims, causes of action, choses in action, rights of recovery, and rights of set-off of every kind and nature relating to any of the foregoing, whether arising by way of counterclaim or otherwise.
(j) Products and Proceeds. All products and proceeds (including without limitation insurance proceeds and condemnation awards) of any and all of the foregoing Pledged Collateral.
Section 2.2 — Security for Obligations
The Pledged Collateral secures the prompt, complete, and indefeasible payment, performance, and observance of all Secured Obligations, including without limitation the payment of the principal amount of Two Hundred Million and 00/100 Dollars ($200,000,000.00), together with interest thereon at the rate of eleven and one-half percent (11.50%) per annum fixed (or at the Default Rate, as applicable, during the continuance of an Event of Default), the exit fee of one-half of one percent (0.50%) of the then-outstanding principal amount of the Loan, all late charges, prepayment premiums, yield maintenance amounts, fees, costs, expenses, indemnification obligations, and all other sums and amounts now or hereafter payable by Pledgor under any of the Loan Documents.
Section 2.3 — Continuing Security Interest
The security interest granted hereunder is a continuing security interest and shall remain in full force and effect until the Termination Date. The security interest shall not be affected, impaired, or diminished by any amendment, modification, supplement, extension, renewal, or restatement of any of the Loan Documents or the Secured Obligations, or by any failure to enforce any term or provision of any of the Loan Documents, or by any waiver, forbearance, release, or other action or inaction of Secured Party with respect to any of the Secured Obligations or any other collateral therefor.
Upon the Termination Date, the security interest and lien created hereunder shall automatically terminate, and Secured Party shall, at Pledgor's sole cost and expense, promptly (and in any event within ten (10) business days following Pledgor's written request therefor) execute, acknowledge, and deliver to Pledgor such instruments, releases, termination statements, and other documents as may be reasonably necessary or appropriate to release and discharge the Pledged Collateral from the security interest granted hereunder, including without limitation UCC-3 termination statements in proper form for filing in each jurisdiction in which UCC financing statements have been filed with respect to the Pledged Collateral.
Section 2.4 — Collateral Not Constituting "Securities" — Opt-In Election
Pledgor acknowledges and confirms that the Pledged Interests are membership interests in Hudson Yards West Mortgage LLC, a Delaware limited liability company, and that, in the absence of an opt-in election under Section 8-103(c) of the UCC and Section 18-702(c) of the Delaware Limited Liability Company Act ("DLLCA"), such membership interests would not constitute "securities" within the meaning of Article 8 of the UCC. Pledgor represents, warrants, and confirms that:
(a) The LLC Agreement of the Pledged Entity (attached hereto as Exhibit A) contains an express opt-in election under DLLCA Section 18-702(c) and UCC Section 8-103(c) providing that all membership interests in the Pledged Entity shall constitute "securities" governed by Article 8 of the UCC, and such election is in full force and effect as of the date hereof.
(b) Pursuant to the certificated-interest provisions of the LLC Agreement, all membership interests in the Pledged Entity are evidenced by one or more certificates (each, a "Membership Interest Certificate"), and such certificates have been duly issued, are in proper form, and are in Secured Party's possession.
(c) As a result of the foregoing opt-in election and the issuance of certificates, the Pledged Interests constitute "certificated securities" within the meaning of UCC Section 8-102(a)(4), and the security interest of Secured Party therein may be perfected by delivery of such certificates to Secured Party, duly endorsed or accompanied by duly executed membership interest transfer powers, in accordance with UCC Sections 8-301 and 9-313.
ARTICLE 3 — DELIVERY OF PLEDGED COLLATERAL; PERFECTION
Section 3.1 — Delivery of Certificates
Simultaneously with the execution and delivery of this Agreement, Pledgor shall deliver to Secured Party, and Pledgor represents and warrants that Pledgor has on the date hereof delivered to Secured Party, the following:
(a) The original certificate(s) representing one hundred percent (100%) of all issued and outstanding membership interests in the Pledged Entity, including without limitation Certificate No. 1, substantially in the form attached hereto as Exhibit B, registered in the name of Pledgor and duly endorsed in blank by Pledgor (or, in the alternative, accompanied by an undated Irrevocable Membership Interest Transfer Power duly executed in blank by Pledgor in the form attached hereto as Exhibit C), in form and substance satisfactory to Secured Party.
(b) A true, correct, and complete copy of the LLC Agreement of the Pledged Entity, certified by an authorized representative of Pledgor as being true, correct, and complete as of the date hereof.
(c) A certificate of good standing (or equivalent) of the Pledged Entity issued by the Secretary of State of the State of Delaware, dated not more than thirty (30) days prior to the date hereof.
If, at any time after the date hereof, Pledgor acquires any additional membership interests or other equity interests in the Pledged Entity, or if any additional certificates representing Pledged Interests are issued, Pledgor shall promptly (and in any event within two (2) business days after acquisition or issuance) deliver to Secured Party the original certificates representing such additional interests, duly endorsed in blank or accompanied by duly executed, undated membership interest transfer powers in blank, in form and substance satisfactory to Secured Party.
Section 3.2 — UCC Financing Statements
Pledgor hereby authorizes Secured Party to prepare, execute (to the extent Pledgor's signature is not required), and file initial UCC-1 financing statements, and any and all amendments, continuations, and supplements thereto, in the following jurisdictions and with the following filing offices:
(a) The Office of the Secretary of State of the State of Delaware (being the jurisdiction of organization of Pledgor).
(b) Any other jurisdiction or filing office as Secured Party may from time to time reasonably determine to be necessary or advisable to perfect, protect, or continue the perfection of the security interest granted hereunder.
The UCC-1 financing statements shall identify the debtor and secured party as follows:
Debtor: Hudson Yards West Mezzanine LLC, a Delaware limited liability company, with an address at c/o Metropolitan Transit Development Corp., 200 South Michigan Avenue, Suite 3100, Chicago, Illinois 60604.
Secured Party: Granite Peak Capital Partners, LP, a Delaware limited partnership, with an address at 9 West 57th Street, Suite 4200, New York, New York 10019.
The collateral description in such UCC-1 financing statements shall be substantially as follows (or such broader description as Secured Party may reasonably determine): "All of debtor's right, title, and interest in and to the membership interests in Hudson Yards West Mortgage LLC, a Delaware limited liability company, whether now owned or hereafter acquired, together with all distributions, proceeds, and products thereof, and all voting, consent, management, and governance rights appurtenant thereto." A form of UCC-1 financing statement is attached hereto as Exhibit D.
Section 3.3 — Further Perfection Actions
Pledgor shall, from time to time, upon the reasonable request of Secured Party, promptly execute, acknowledge, and deliver, or cause to be executed, acknowledged, and delivered, such additional documents, instruments, agreements, and certificates as Secured Party may reasonably request to create, perfect, maintain, continue, and protect the first priority perfected security interest in the Pledged Collateral, including without limitation:
(a) Control agreements or account control agreements with respect to any securities accounts, deposit accounts, or securities entitlements constituting Pledged Collateral, in form and substance satisfactory to Secured Party.
(b) Additional UCC financing statements, amendments, and continuations, in each case in proper form for filing in the applicable jurisdictions.
(c) Amendments to the LLC Agreement of the Pledged Entity as may be necessary or advisable to ensure that the Article 8 opt-in election remains in full force and effect and that the provisions of the LLC Agreement are consistent with the terms of this Agreement and the other Loan Documents.
(d) Such other documents, instruments, and agreements as may be necessary or advisable to ensure that Secured Party has "control" (as defined in UCC Section 8-106) over all certificated securities, uncertificated securities, security entitlements, and securities accounts constituting Pledged Collateral.
Pledgor hereby consents to and authorizes Secured Party to file UCC financing statements (and amendments and continuations thereof) without Pledgor's signature, to the extent permitted by Section 9-509 of the UCC and other applicable law.
Section 3.4 — No Other Liens
The security interest granted hereunder shall at all times constitute a first priority security interest in and lien upon the Pledged Collateral, subject to no other liens, encumbrances, security interests, charges, claims, or restrictions of any kind, other than Permitted Encumbrances as expressly permitted under the Loan Agreement. Pledgor shall at all times defend the title to and the security interest of Secured Party in the Pledged Collateral against the claims and demands of all persons whomsoever.
ARTICLE 4 — REPRESENTATIONS AND WARRANTIES
Pledgor hereby represents and warrants to Secured Party as of the date hereof and as of the date of each advance under the Loan Agreement (to the extent applicable) as follows:
Section 4.1 — Ownership
Pledgor is the sole legal and beneficial owner of one hundred percent (100%) of all issued and outstanding membership interests in the Pledged Entity. The Pledged Interests are fully paid and non-assessable (or the limited liability company equivalent thereof under the DLLCA and the LLC Agreement). No other membership interests, equity interests, partnership interests, options, warrants, conversion rights, exchange rights, preemptive rights, rights of first refusal, rights of first offer, or other rights to acquire any equity or ownership interest in the Pledged Entity are authorized, issued, reserved, outstanding, or otherwise committed. There are no outstanding contracts, agreements, or understandings relating to the issuance, sale, or transfer of any membership interests or other equity interests in the Pledged Entity, other than this Agreement and the LLC Agreement.
Section 4.2 — Authority; Enforceability
Pledgor is a limited liability company duly organized, validly existing, and in good standing under the laws of the State of Delaware. Pledgor has full power, authority, and legal right to execute, deliver, and perform this Agreement and each other Loan Document to which it is a party, and to grant the security interest herein created. The execution, delivery, and performance of this Agreement and the granting of the security interest herein have been duly authorized by all necessary action on the part of Pledgor, including without limitation all requisite action by its members, managers, and any other persons whose authorization is required under the Constituent Documents of Pledgor or applicable law.
This Agreement has been duly executed and delivered by Pledgor and constitutes the valid and legally binding obligation of Pledgor, enforceable against Pledgor in accordance with its terms, subject only to applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance, and other similar laws affecting creditors' rights generally from time to time in effect, and subject to general principles of equity (regardless of whether enforcement is sought in a proceeding at law or in equity).
Section 4.3 — No Conflicts
The execution, delivery, and performance of this Agreement by Pledgor, and the granting of the security interest herein, do not and will not: (i) violate or conflict with, or result in a breach of, or require any consent not already obtained under, the Constituent Documents of Pledgor or the Pledged Entity, including without limitation the certificate of formation, limited liability company agreement, or any other organizational document of either entity; (ii) violate or conflict with any law, statute, regulation, rule, ordinance, order, judgment, writ, injunction, decree, or award of any governmental authority applicable to Pledgor, the Pledged Entity, or the Pledged Collateral; (iii) violate or conflict with, or constitute a default under, or result in the creation or imposition of any lien (other than the security interest created hereunder) upon any of the Pledged Collateral under, any agreement, indenture, mortgage, deed of trust, lease, or other instrument binding upon Pledgor or the Pledged Entity or to which any of their respective properties are subject; or (iv) violate or conflict with the Intercreditor Agreement.
Section 4.4 — Organizational Information
The following information with respect to Pledgor is true, correct, and complete as of the date hereof:
(a) Full legal name: Hudson Yards West Mezzanine LLC.
(b) Jurisdiction of organization: the State of Delaware.
(c) Organizational identification number: as assigned by the Delaware Secretary of State upon formation (to be confirmed upon receipt of the Certificate of Formation).
(d) Chief executive office and principal place of business: 200 South Michigan Avenue, Suite 3100, Chicago, Illinois 60604 (c/o Metropolitan Transit Development Corp.).
(e) Federal Employer Identification Number (EIN): to be obtained upon formation and promptly furnished to Secured Party.
Pledgor has no other trade names, assumed names, or "doing business as" names in any jurisdiction.
Section 4.5 — Pledged Entity Information
The following information with respect to the Pledged Entity is true, correct, and complete as of the date hereof:
(a) Full legal name: Hudson Yards West Mortgage LLC.
(b) Jurisdiction of organization: the State of Delaware.
(c) The Pledged Entity is a single-purpose entity organized and existing solely for the purpose of owning, operating, and managing the Property, entering into the Senior Loan Agreement and the Mortgage Loan Documents, and engaging in activities incidental thereto. The sole asset of the Pledged Entity is its fee interest in the Property located at 450 West 34th Street, New York, New York 10001 (Block 729, Lots 1, 5, 12, and 15, Borough of Manhattan, City, County, and State of New York), subject to a ground lease recorded at CRFN 2020000198762 in the Office of the City Register of the City of New York (NYC ACRIS), the Mortgage Loan Documents, and related project agreements.
(d) Capital structure: One hundred percent (100%) of all issued and outstanding membership interests in the Pledged Entity are owned by Pledgor. There are no other equity holders, and no other membership interests, options, warrants, or convertible securities of any kind are authorized, issued, reserved, or outstanding.
Section 4.6 — Article 8 Opt-In; Certificated Interests
Pledgor represents and warrants as follows with respect to the characterization of the Pledged Interests:
(a) The LLC Agreement of the Pledged Entity provides, pursuant to Section 18-702(c) of the DLLCA and Section 8-103(c) of the UCC, that all membership interests in the Pledged Entity shall constitute "securities" governed by Article 8 of the UCC. Such election is in full force and effect and has not been revoked, amended, or modified.
(b) The membership interests in the Pledged Entity are evidenced by one or more certificates (including Certificate No. 1), and all such certificates have been duly issued, are in proper form, bear the restrictive legend required by the LLC Agreement and this Agreement, and have been delivered to Secured Party simultaneously with the execution of this Agreement.
(c) No "uncertificated security" (as defined in UCC Section 8-102(a)(18)) representing any Pledged Interest is outstanding or has been authorized for issuance. All membership interests in the Pledged Entity are represented solely by the certificates delivered to Secured Party hereunder.
Section 4.7 — Security Interest Perfection
Upon delivery of the certificates representing the Pledged Interests, duly endorsed in blank (or accompanied by duly executed, undated membership interest transfer powers in blank), and upon the filing of the UCC-1 financing statements authorized hereunder, Secured Party will have a first priority perfected security interest in the Pledged Collateral under Articles 8 and 9 of the UCC. No other UCC financing statement, fixture filing, or other public filing or recording covering any of the Pledged Collateral, or any portion thereof, is on file or of record in any filing office or recording office in any jurisdiction, other than the UCC financing statements filed or to be filed in favor of Secured Party in connection with this Agreement.
Section 4.8 — No Consents Required
No consent, approval, authorization, order, registration, qualification, license, or filing with or of any governmental authority, self-regulatory organization, securities exchange, or any other person is required in connection with the execution, delivery, or performance of this Agreement by Pledgor, or the creation, perfection, or enforcement of the security interest granted hereunder, other than: (i) UCC financing statements to be filed with the Secretary of State of the State of Delaware and in such other jurisdictions as may be required; (ii) consents and approvals that have been duly obtained and are in full force and effect on the date hereof; and (iii) any consent, notice, or waiver required under the Intercreditor Agreement, all of which have been duly obtained or waived as of the date hereof.
Section 4.9 — Litigation
No action, suit, proceeding, investigation, arbitration, or claim is pending or, to Pledgor's actual knowledge after due inquiry, threatened against Pledgor or the Pledged Entity before any court, arbitrator, governmental authority, or other tribunal that: (a) could reasonably be expected to adversely affect the Pledged Collateral, the value thereof, or the ability of Pledgor to perform its obligations hereunder; (b) challenges or seeks to prevent, enjoin, or delay the transactions contemplated by this Agreement or the other Loan Documents; or (c) could reasonably be expected to have a material adverse effect on the enforceability of this Agreement, the security interest created hereunder, or the priority thereof.
Section 4.10 — Compliance with Intercreditor Agreement
The execution and delivery of this Agreement and the grant of the security interest herein are expressly permitted under, and in compliance with, the terms and conditions of the Intercreditor Agreement. The Intercreditor Agreement is in full force and effect on the date hereof, has been duly executed and delivered by each of the parties thereto, and has not been amended, modified, supplemented, waived, or terminated. No default or event of default exists under the Intercreditor Agreement.
Section 4.11 — Solvency
Pledgor is solvent on the date hereof and will not be rendered insolvent by the granting of the security interest herein or the performance of any of Pledgor's obligations hereunder. As of the date hereof, and giving effect to the transactions contemplated hereby: (a) the fair value and present fair salable value of Pledgor's assets exceeds Pledgor's total liabilities (including contingent and unliquidated liabilities); (b) Pledgor is able to pay its debts as they become due; and (c) Pledgor does not have unreasonably small capital with which to conduct its business as presently contemplated. Pledgor has not entered into this Agreement or any of the other Loan Documents with actual intent to hinder, delay, or defraud any present or future creditors of Pledgor.
Section 4.12 — No Prior Assignment
Pledgor has not previously sold, assigned, transferred, pledged, hypothecated, or encumbered, and has not previously granted any security interest in or lien upon, any of the Pledged Collateral, and the Pledged Collateral is free and clear of all liens, claims, charges, encumbrances, security interests, and restrictions of every kind and nature, other than (a) Permitted Encumbrances as defined in the Loan Agreement, and (b) the first priority security interest granted to Secured Party herein.
ARTICLE 5 — COVENANTS
Pledgor hereby covenants and agrees with Secured Party as follows:
Section 5.1 — Protection of Security Interest
Pledgor shall not, without the prior written consent of Secured Party, create, incur, assume, or permit to exist any lien, security interest, charge, encumbrance, claim, or restriction of any kind on or with respect to any of the Pledged Collateral, other than the first priority security interest in favor of Secured Party granted hereunder and Permitted Encumbrances. Pledgor shall not sell, assign, transfer, exchange, convey, or otherwise dispose of, or agree to sell, assign, transfer, exchange, convey, or otherwise dispose of, any of the Pledged Collateral, or any interest therein, except (a) as expressly permitted under the Loan Agreement as a Permitted Transfer, and (b) with the prior written consent of Secured Party. Any purported sale, assignment, transfer, exchange, conveyance, or other disposition of the Pledged Collateral in violation of this Section 5.1 shall be void and of no force or effect.
Section 5.2 — Maintenance of Existence
Pledgor shall maintain the Pledged Entity in good standing under the laws of the State of Delaware and in each other jurisdiction where the nature of its business, the character of its properties, or the conduct of its activities requires such qualification, and shall promptly provide evidence thereof to Secured Party upon request. Pledgor shall not permit or consent to any amendment, modification, restatement, supplement, or other change to the Constituent Documents of the Pledged Entity, including without limitation the LLC Agreement, without the prior written consent of Secured Party, which consent may be withheld in Secured Party's sole and absolute discretion with respect to any amendment that could reasonably be expected to impair the Pledged Collateral, the security interest granted hereunder, or the rights or remedies of Secured Party.
Section 5.3 — Single-Purpose Entity Covenants
Pledgor shall cause the Pledged Entity to at all times comply with each of the single-purpose entity ("SPE") covenants set forth in the Loan Agreement, including without limitation the following requirements: (a) the Pledged Entity shall maintain its separate existence and shall not commingle its assets, funds, or accounts with those of any other person; (b) the Pledged Entity shall maintain separate books of account, financial statements, records, and bank accounts; (c) the Pledged Entity shall conduct all transactions with affiliates on an arm's-length basis; (d) the Pledged Entity shall not assume, guarantee, or become obligated for the liabilities or obligations of any other person; (e) the Pledged Entity shall maintain adequate capitalization for its business operations; (f) the Pledged Entity shall hold itself out to the public as a legal entity separate and distinct from any other person; (g) the Pledged Entity shall comply with all organizational formalities required by its Constituent Documents and applicable law; and (h) the Pledged Entity shall not acquire or hold any assets other than the Property and assets incidental to its ownership and operation of the Property.
Section 5.4 — Notices of Changes
Pledgor shall give Secured Party not less than thirty (30) days' prior written notice of any change in: (a) Pledgor's legal name; (b) Pledgor's jurisdiction of organization; (c) Pledgor's organizational identification number as assigned by the Delaware Secretary of State; (d) the location of Pledgor's chief executive office or principal place of business; or (e) the legal name or jurisdiction of organization of the Pledged Entity. Pledgor shall not effect any such change unless (i) Pledgor shall have delivered such prior written notice to Secured Party, and (ii) Pledgor shall have taken all actions reasonably necessary or advisable (including without limitation the filing of UCC amendments, continuations, or new UCC financing statements, and the delivery of additional certificates or endorsements) to maintain the perfection and first priority status of Secured Party's security interest in the Pledged Collateral following such change, all at Pledgor's sole cost and expense.
Section 5.5 — Payment of Taxes and Claims
Pledgor shall pay and discharge, or cause to be paid and discharged, all taxes, assessments, levies, and governmental charges assessed or imposed upon the Pledged Collateral, or upon the income or profits derived therefrom, before the same shall become delinquent or in default; provided, however, that Pledgor shall not be required to pay any such tax, assessment, levy, or charge that is being contested in good faith by appropriate proceedings diligently conducted and with respect to which adequate reserves have been established on Pledgor's books in accordance with generally accepted accounting principles.
Section 5.6 — Compliance with LLC Agreement
Pledgor shall duly and punctually perform, comply with, and observe all material terms, covenants, conditions, and obligations of the LLC Agreement of the Pledged Entity applicable to Pledgor as a member thereof. Pledgor shall not consent to the admission of any additional members or interest holders to the Pledged Entity, or to the creation, issuance, sale, or other disposition of any additional membership interests, equity interests, options, warrants, convertible securities, or other securities of the Pledged Entity, in each case without the prior written consent of Secured Party.
Section 5.7 — Distributions
(a) Prior to Event of Default. Prior to the occurrence and continuance of an Event of Default, Pledgor shall be entitled to receive and retain cash Distributions from the Pledged Entity only to the extent such Distributions are expressly permitted under the Loan Agreement and are made in compliance with the cash management provisions thereof. Pledgor shall not accept or receive any Distribution that is not so permitted.
(b) After Event of Default. Upon the occurrence and during the continuance of an Event of Default, all rights to receive Distributions on or with respect to the Pledged Interests shall be exercised solely by Secured Party (or its designee), subject in all events to the terms and conditions of the Intercreditor Agreement. All Distributions received by Pledgor after the occurrence and during the continuance of an Event of Default shall be received and held by Pledgor in trust for the benefit of Secured Party, segregated from other property of Pledgor, and promptly delivered to Secured Party in the exact form received, duly endorsed or accompanied by such instruments of transfer as Secured Party may require.
Section 5.8 — Further Assurances
Pledgor shall, from time to time, at the sole cost and expense of Pledgor, promptly execute, acknowledge, and deliver, or cause to be executed, acknowledged, and delivered, such further instruments, agreements, certificates, and documents, and take such further actions, as Secured Party may from time to time reasonably request to carry out the purposes and intent of this Agreement and to preserve, protect, perfect, and enforce the first priority security interest of Secured Party in the Pledged Collateral, including without limitation: (a) UCC continuation statements required to maintain the effectiveness of UCC financing statements previously filed; (b) amendments to the LLC Agreement of the Pledged Entity; (c) additional pledges, endorsements, assignments, and security agreements; and (d) any and all actions necessary or advisable to ensure that Secured Party has "control" (as defined in UCC Section 8-106) over all certificated securities, uncertificated securities, security entitlements, and securities accounts constituting or relating to the Pledged Collateral.
Section 5.9 — No Dissolution or Winding-Up
Pledgor shall not, without the prior written consent of Secured Party, dissolve, wind up, liquidate, or terminate the Pledged Entity, or consent to, approve, or take any action leading to, or that could result in, the dissolution, winding-up, liquidation, or termination of the Pledged Entity. Pledgor shall take all reasonable actions necessary to prevent the occurrence of any event that would result in the dissolution of the Pledged Entity under the DLLCA or the LLC Agreement.
Section 5.10 — Books and Records; Inspection
Pledgor shall maintain, and shall cause the Pledged Entity to maintain, complete, accurate, and up-to-date books and records relating to the Pledged Collateral, the Pledged Entity, and the Property, in form and substance satisfactory to Secured Party. Pledgor shall permit Secured Party and its authorized representatives, agents, and advisors (including outside counsel and independent accountants) to inspect, audit, examine, and copy such books and records at any reasonable time and from time to time during normal business hours upon reasonable prior notice (which shall be not less than two (2) business days' notice, except that no prior notice shall be required during the continuance of an Event of Default), at Pledgor's sole cost and expense.
Section 5.11 — Compliance with Intercreditor Agreement
Pledgor shall not take any action or fail to take any action that would cause or permit a violation, breach, or default under the Intercreditor Agreement. Pledgor hereby acknowledges and agrees that the rights and remedies of Secured Party hereunder are expressly subject to and qualified by the terms and conditions of the Intercreditor Agreement, and Pledgor shall not assert any claim or defense based upon any limitation on Secured Party's rights or remedies imposed by the Intercreditor Agreement.
Section 5.12 — Financing Statement Amendments
Pledgor shall not, and shall not authorize any other person to, file, or cause or permit to be filed, any UCC financing statement, amendment, continuation, assignment, or termination statement with respect to the Pledged Collateral, or any portion thereof, without the prior written consent of Secured Party, except as expressly contemplated by this Agreement or the other Loan Documents.
ARTICLE 6 — VOTING RIGHTS; DIVIDENDS
Section 6.1 — Voting Rights Prior to Event of Default
So long as no Event of Default has occurred and is continuing, Pledgor shall be entitled to exercise any and all voting rights, consent rights, approval rights, and management rights pertaining to the Pledged Interests for any purpose not inconsistent with the terms of this Agreement, the other Loan Documents, or the Intercreditor Agreement; provided, however, that no vote shall be cast, consent or approval given, or action taken by Pledgor in its capacity as a member of the Pledged Entity that would: (a) impair or diminish the Pledged Collateral or the value thereof, or impair or adversely affect the security interest of Secured Party therein; (b) violate or be inconsistent with any term, condition, covenant, or provision of any of the Loan Documents or the Intercreditor Agreement; or (c) otherwise be inconsistent with the terms and conditions of this Agreement. Pledgor shall promptly notify Secured Party of any material vote, consent, approval, or action taken or proposed to be taken by Pledgor in its capacity as a member of the Pledged Entity.
Section 6.2 — Voting Rights After Event of Default
Upon the occurrence and during the continuance of an Event of Default, all voting rights, consent rights, approval rights, management rights, and all other rights of Pledgor pertaining to the Pledged Interests shall, at the sole election of Secured Party upon written notice to Pledgor, be exercised exclusively by Secured Party (or its designee), subject in all events to the terms and conditions of the Intercreditor Agreement. Without limiting the generality of the foregoing, upon the occurrence and during the continuance of an Event of Default, Pledgor hereby grants to Secured Party an irrevocable proxy (coupled with an interest) to exercise all such voting, consent, approval, and management rights pertaining to the Pledged Interests as Secured Party may determine in its sole and absolute discretion, including without limitation the right to vote on, consent to, and approve all matters submitted to a vote or requiring the consent or approval of the members of the Pledged Entity. Such proxy shall be effective automatically upon the occurrence of an Event of Default and shall remain in effect for so long as such Event of Default shall be continuing.
Section 6.3 — Distributions Prior to Event of Default
Prior to the occurrence and continuance of an Event of Default, Pledgor may receive and retain cash Distributions from the Pledged Entity only to the extent such cash Distributions are expressly permitted under the Loan Agreement and are made in compliance with the cash management provisions thereof. All non-cash Distributions (including without limitation any membership interests, equity interests, partnership interests, securities, instruments, or other property received in respect of or in exchange for the Pledged Interests) shall be promptly delivered to Secured Party, endorsed or assigned in blank or accompanied by such instruments of transfer as Secured Party may reasonably require, and shall constitute additional Pledged Collateral hereunder, subject to the first priority security interest of Secured Party.
Section 6.4 — Distributions After Event of Default
Upon the occurrence and during the continuance of an Event of Default, (a) all Distributions on or with respect to the Pledged Interests (whether cash or non-cash) shall be paid, delivered, and remitted directly to Secured Party (or as Secured Party may direct), (b) Secured Party shall be entitled to apply all such Distributions against the Secured Obligations in such order and manner as Secured Party may determine in its sole and absolute discretion (subject in all events to the terms and conditions of the Intercreditor Agreement), and (c) Pledgor shall not accept, receive, or retain any Distribution without the prior written consent of Secured Party. If, notwithstanding the foregoing, any Distribution is received by Pledgor during the continuance of an Event of Default, Pledgor shall receive and hold such Distribution in trust for the benefit of Secured Party, segregated from other property of Pledgor, and shall immediately deliver such Distribution to Secured Party in the exact form received, duly endorsed or accompanied by such instruments of transfer as Secured Party may require, for application against the Secured Obligations.
ARTICLE 7 — EVENTS OF DEFAULT; REMEDIES
Section 7.1 — Events of Default
Each of the following events shall constitute an "Event of Default" under this Agreement:
(a) The occurrence and continuance of any "Event of Default" as defined in, and under, the Loan Agreement.
(b) Any representation or warranty made by Pledgor in this Agreement or in any certificate, financial statement, or other document delivered by Pledgor in connection herewith proves to have been untrue or misleading in any material respect when made or when deemed to have been made.
(c) Pledgor fails to observe, perform, or comply with any material covenant, agreement, or obligation of Pledgor contained in this Agreement (other than a covenant, agreement, or obligation whose breach is separately addressed in another clause of this Section 7.1), and such failure continues for a period of ten (10) business days after written notice thereof from Secured Party to Pledgor; provided, however, that with respect to any non-monetary default that is susceptible to cure but cannot be cured within such ten (10) business day period, such cure period shall be extended for up to an additional twenty (20) business days (for an aggregate cure period of not more than thirty (30) calendar days from the date of Secured Party's written notice), so long as Pledgor commences such cure within the initial ten (10) business day period and diligently and continuously pursues the same to completion.
(d) This Agreement ceases to be in full force and effect, or ceases to create a valid, first priority perfected security interest in the Pledged Collateral (or any material portion thereof), for any reason other than the action or inaction of Secured Party.
(e) Pledgor contests, challenges, or repudiates the validity, enforceability, or priority of this Agreement, the security interest created hereunder, or any of Secured Party's rights or remedies hereunder, or asserts any claim, defense, or counterclaim against Secured Party based upon the invalidity or unenforceability of this Agreement or the security interest created herein.