EXHIBIT 10.110
PLEDGE AGREEMENT
THIS PLEDGE AGREEMENT (this "Pledge Agreement") is made and entered
into as of this 8th day of September, 2000, between APPLE SUITES, INC., a
Virginia corporation (hereinafter referred to as the "Pledgor") and FIRST UNION
NATIONAL BANK, a national banking association (hereinafter referred to as the
"Pledgee");
WITNESSETH:
WHEREAS, Pledgor and Pledgee have entered into that certain Credit
Agreement dated as of September 8, 2000 (the "Credit Agreement" with capitalized
terms not otherwise defined herein used with the same meanings as in the Credit
Agreement); and
WHEREAS, as a condition precedent to the effectiveness of the Credit
Agreement the Pledgor is required to execute and deliver this Pledge Agreement.
NOW, THEREFORE, in consideration of the foregoing and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged by the parties hereto, each to the other, the parties hereto do
hereby agree as follows:
1. CREATION OF PLEDGE INTEREST. As collateral pledge for the due and
punctual payment and performance of the Obligations, Pledgor hereby sets over,
transfers, hypothecates, grants, assigns, pledges and conveys to Pledgee, its
successors and assigns, a pledge and continuing Pledge interest in and to one
hundred percent (100%) of Pledgor's ownership interest in Apple Suites General,
Inc.; Apple Suites, L.P., Inc.; Apple Suites SPE I, Inc.; Apple Suites SPE II,
Inc. and Apple Suites Pennsylvania Business Trust (the "Subsidiary Interest")
and its interest in all Equity Proceeds (the "Equity Interest") and all proceeds
thereof (the "Collateral").
2. PROTECTION OF PLEDGE INTEREST.
a. Pledgor will, upon request of Pledgee, execute such financing
statements, notices of lien, notices of assignment and continuations or
amendments to any of the foregoing, and other documents (and pay the costs of
filing or recording the same in all public offices deemed necessary by the
Pledgee) and do such other acts and things, all as Pledgee may from time to time
request to establish and maintain a valid Pledge interest in the Collateral to
secure the payment and performance of the Obligations. Pledgor hereby
constitutes and appoints the President and any Vice President of the general
partner of Pledgee as its attorney-in-fact with full power and authority to
execute all documents necessary to perfect and keep perfected the Pledge
interest created hereby. This power of attorney is a special power of attorney
coupled with an interest and shall be irrevocable by Pledgor.
b. Pledgor will furnish the Pledgee such information concerning the
Pledgor and the Collateral as Pledgee may from time to time reasonably request.
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c. To the extent that Pledgor's Subsidiary Interest is represented
by stock certificates, Pledgor shall deliver such stock certificates to Pledgee
along with either an appropriate endorsement on each certificate or
properly-executed stock powers in form and substance satisfactory to Lender.
d. Pledgor will, concurrently with the granting of this Pledge
interest in the Collateral, place notations on its books and records disclosing
the Pledge interest of Pledgee in such Collateral and will cause its
Subsidiaries to make such notations on the books and records of the
Subsidiaries.
e. Pledgor will reimburse Pledgee for all expenses, including
reasonable attorneys' fees and disbursements, incurred by Pledgee, in seeking to
collect or enforce any rights hereunder, and, in case of Default, incurred by
Pledgee in seeking to collect the obligations and liabilities of Pledgor secured
hereby and to enforce its rights hereunder.
3. VOTING AND SALE.
a. At all times prior to Default, Pledgor shall have the right, in
its discretion, to cast all votes required with respect to the Subsidiary
Interest. Pledgor agrees that from and after any Default, then any votes or
consents which may be sought from the Pledgor as an owner of the Subsidiary
Interest will be made by the Pledgee.
b. At all times prior to a Default, the Pledgee acknowledges that
the Pledgor is entitled to all dividends or distributions which may be made to
Pledgor as a result of Pledgor's ownership of the Subsidiary Interest (each such
payment, a "Collateral Payment"). Upon the request of the Lender following the
occurrence and during the continuance of an Event of Default (and subject to the
requirements of applicable law), the Pledgor will notify and direct any party
who is or might become obligated to make any Collateral Payment, to make payment
thereof to the Lender (or to the Pledgor in care of the Lender) at such address
as the Lender may designate. The Pledgor will reimburse the Lender promptly upon
demand for all out-of-pocket costs and expenses, including reasonable attorneys'
fees and litigation expenses, incurred by the Lender in seeking to collect any
Collateral Payment.
4. PLEDGEE RIGHTS AND REMEDIES UPON DEFAULT. Upon the occurrence of a
Default, Pledgee shall then have all of the rights and remedies of a Pledgee
under the Uniform Commercial Code as it is enacted in the State of North
Carolina, and under any other applicable law.
The proceeds realized from any sale or disposition of the Collateral
shall be used to satisfy the following items, and in the order herein listed:
i. expenses of preparing for sale and selling of the Collateral,
specifically including Pledgee's reasonable attorneys' fees and both legal
and collection expenses next, to
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ii. the expense of liquidating any liens, Pledge interests,
attachments or encumbrances superior to the Pledge interest herein created
and finally, to
iii. payment of and cost of performance of all Obligations.
Any surplus which shall remain shall be paid to Pledgor or as otherwise provided
by law or as a court of competent jurisdiction shall direct.
5. MISCELLANEOUS.
a. Pledgee shall have the right at all times to enforce the
provisions of this Pledge Agreement in strict accordance with the terms hereof,
notwithstanding any conduct or custom on its part in refraining from so doing at
any time. No waiver of any other default or of the same default at a future
time, and no single or partial exercise by Pledgee of any right or remedy shall
preclude any other or future exercise of that or of any other right or remedy.
The provisions, rights and remedies hereof are cumulative and concurrent to and
with those of all other agreements and documents held by Pledgee in connection
with the indebtedness herein described. Time is of the essence of this Pledge
Agreement.
b. Use of the neuter pronoun herein shall include the feminine and
masculine, and use of the singular pronoun shall include the plural. All rights
of the Pledgee shall inure to the benefit of its successors and assigns and such
assignee shall have all privileges, rights, and remedies afforded Pledgee
hereunder or as otherwise provided by law; and all obligations of the Pledgor
shall bind its respective successors and assigns.
c. This Pledge Agreement has been delivered in the State of North
Carolina and shall be construed in accordance with the laws of this State.
Wherever possible each provision of this Pledge Agreement shall be interpreted
in such manner as to be effective and valid under applicable law, but if any
provision of this Pledge Agreement shall be prohibited by or invalid under
applicable law, such provision shall be ineffective to the extent of such
prohibited by or invalid under applicable law, such provision shall be
ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provisions or the remaining provisions of
this Pledge Agreement.
d. All notices herein required shall be in writing and shall be
transmitted by hand delivery or by certified mail, return receipt requested, to
the last known address of the Pledgor and Pledgee.
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IN WITNESS WHEREOF, Pledgor and Pledgee have caused this Pledge
Agreement to be executed all as of the day and year first above written.
PLEDGOR
APPLE SUITES, INC., a Virginia corporation
By: /s/ Glade M. Knight
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Name: Glade M. Knight
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Title: Chief Executive Officer
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PLEDGEE
FIRST UNION NATIONAL BANK, a national
banking association
By: /s/ John A. Schissal
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Name: John A. Schissal
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Title: Director
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