Exhibit 10.5

 

PLEDGE AGREEMENT

 

THIS PLEDGE AGREEMENT (this “Agreement”) is made as of July 6, 2017 by and
between New England Realty Associates Limited Partnership, a Massachusetts
limited partnership (“Pledgor”), and HBC Holdings, LLC, a Massachusetts limited
liability company (“Pledgee”).

 

WHEREAS, Pledgor is the owner of 100% of the limited liability company interests
(the “Pledged Interest”) in Woodland Park Partners, LLC, a Delaware limited
liability company (the “Company”);

 

WHEREAS, Pledgor has entered into and accepted a loan (the “Loan”) from Pledgee
in the amount of up to $16,000,000.00, which Loan is evidenced by a promissory
note of even date herewith (the “Note”); and

 

WHEREAS, as collateral security for the payment of the Note, Pledgor desires to
assign certain payments and the Pledged Interest to Pledgee.

 

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, Pledgor and Pledgee agree as follows:

 

1.                                      Pledge.

 

(a)                                 Pledgor hereby assigns to Pledgee as partial
payments under the Note all periodic payments/distributions that Pledgor
receives from the Company as the sole Member of the Company (the “Periodic
Distributions”).  The Periodic Distributions shall be delivered to Pledgee by
the Company and applied to the outstanding balance of the Note.

 

(b)                                 Pledgor hereby pledges, assigns and grants a
security interest to Pledgee of 100% of the Pledged Interest as security for the
full and faithful performance of all of the Obligations (as defined below).

 

(c)                                  Upon the occurrence of an Event of Default
(as defined below), Pledgee shall have the rights and remedies provided under
the Uniform Commercial Code in force in the Commonwealth of Massachusetts as of
the date of this Pledge Agreement and, in connection therewith, Pledgee may,
upon no less than ten (10) days’ written notice to Pledgor, sent by certified
mail, return receipt requested, with all fees prepaid, sell any of the Pledged
Interest in a commercially reasonable manner and for such price as Pledgee may
determine in a commercially reasonable manner, subject to applicable law at a
commercially reasonable public sale.  Pledgee shall be free to purchase all or
any part of the Pledged Interest in Pledgee’s sole discretion.  To the extent of
available sale proceeds, Pledgee may retain an amount equal to that owed to
Pledgee by Pledgor pursuant to this Pledge Agreement, and any and all other
instruments evidencing and securing the Obligations, plus the reasonable
expenses of the sale, and shall promptly pay any balance of the sale proceeds,
if any, to Pledgor.

 

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(d)                                 Expenses of enforcing Pledgee’s rights
hereunder including, but not limited to, preparation for sale, selling or the
like and Pledgee’s reasonable attorneys’ fees and other expenses, shall be
payable by Pledgor and shall be secured hereby.

 

(e)                                  All of the agreements, obligations,
undertakings, representations and warranties herein made by Pledgor shall inure
to the benefit of Pledgee and its respective successors and assigns, and shall
bind Pledgor and his successors and assigns.

 

(f)                                   Pledgor agrees to execute any other
instrument that Pledgee may deem necessary  or desirable to effectuate the
purposes of this Pledge Agreement, in Pledgee’s reasonable discretion,
including, without limitation, UCC financing and continuation statements.

 

2.                                      Obligations.  The Pledge hereby granted
shall secure the following:

 

(a)                                 All Payments due under the Note;

 

(b)                                 the full and faithful performance,
observance, fulfillment and compliance with all agreements, obligations and
representations of Pledgor to the Pledgee, whether now existing or hereafter
arising under this Agreement; and

 

(c)                                  all costs, expenses, losses, claims,
damages, liabilities, penalties, suits, judgments or disbursements of any nature
(including without limitation attorneys’ fees and disbursements) which may be
incurred by, imposed on or asserted against Pledgee in connection with the
exercise of any of Pledgee’s rights or remedies with respect to the Pledged
Interest under this Pledge Agreement, or in connection with any enforcement,
collection or other proceedings or any negotiations or other measure to pursue,
interpret, enforce or exercise Pledgee’s rights or remedies hereunder.

 

The obligations set forth in this Section 2 are collectively referred to herein
as the “Obligations.”

 

3.                                      Events of Default.   For purposes of
this Pledge Agreement, the term “Event of Default” shall mean any of the
following events or conditions:

 

(a)                                 Pledgor fails to pay the Note or to perform
or observe any provision of this Agreement and such default is not remedied
within ten (10) days after written notice of such default given to Pledgor by
Pledgee.

 

4.                                      Waivers.    Pledgor hereby waives
presentment, demand, notice, protest and, except as is otherwise provided
herein, all other demands and notices in connection with this Pledge Agreement
or the enforcement of the rights of Pledgee hereunder of in connection with any
of the Obligations or the Pledged Interest; consents to and waives notice of the
granting of renewals, extensions of time for payment or other indulgences to
Pledgor or to any account debtor in respect of any account receivable or the
substitution, release  or surrender of any portion of the Pledged Interest, the
addition or release of persons primarily or secondarily liable on any Obligation
or on any account receivable or other pledged interest, the acceptance of

 

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partial payments on any Obligation or on any account receivable or other pledged
interest and/or the settlement or compromise thereof.  No delay or omission on
the part of Pledgee in exercising any right hereunder shall operate as a waiver
of such right or of any other right hereunder.  Any waiver of any such right on
any one occasion shall not be construed as a bar to or waiver of any such right
on any such future occasion.  Pledgor further waives any right he may have to
notice (other than any requirement of notice provided herein) prior to the
exercise of any right or remedy provided by this Pledge Agreement to Pledgee and
waives his rights, if any, to set aside or invalidate any sale duly consummated
in accordance with the foregoing provisions hereof on the grounds (if such be
the case) that the sale was consummated without a prior judicial hearing. 
Pledgor’s waivers under this Section have been made voluntarily, intelligently
knowingly and after Pledgor has been apprised and counseled by his attorneys as
to the nature thereof and its possible alternative rights.

 

5.                                      Termination of
Agreement.                                             This Pledge Agreement and
the Pledge created herein shall terminate when the Loan has been paid and
finally discharged in full.  No waiver by Pledgee or by any other holder of
Obligations of any default shall be effective unless in writing, nor shall such
waiver operate as a waiver of any other default or of the same default on a
future occasion in the event of a sale or assignment by Pledgee of all or any of
the Obligations held by Pledgee.

 

6.                                     
Transfer/Assignment.                            Pledgor agrees that until this
Pledge Agreement terminates, it shall not, without the express prior written
consent of Pledgee, transfer, sell, pledge, exchange, or assign the Pledged
Interest or any part thereof or interest therein or enter into any agreement for
the transfer, sale, pledge or assignment of the Pledged Interest, or permit or
suffer any other liens on the Pledged Interest, whether or not junior to the
lien created hereby, to be created or to exist with respect to the Pledged
Interest.

 

7.                                      Notices.   Except as otherwise provided
herein, notice to Pledgor or to Pledgee shall be in writing and deemed to have
been sufficiently given or served for all purposes hereof if delivered in hand
by constable or other objective third party or mailed by first class certified
or registered mail, return receipt requested, postage prepaid, at the respective
addresses set forth in the opening paragraph hereof, or at such other address as
the party to whom such notice is directed may have designated by like notice in
writing to the other parties hereto.  A notice shall be deemed to have been
given when delivered in hand or if mailed, on the earlier of (i) three (3) days
after the date on which it is deposited in the mails, or (ii) the date on which
it is received.

 

8.                                      Miscellaneous.  This Agreement shall
inure to the benefit of and be binding upon the parties hereto and their
respective successors and assigns, and the term “Pledgee” shall be deemed to
include any other holder or holders of any of the Obligations.  In case a court
of competent jurisdiction shall hold any provision in this Pledge Agreement to
be invalid, illegal or unenforceable, the validity, legality and enforceability
of the remaining provisions shall not in any way be affected or impaired
thereby.  This Agreement may be executed in any number of counterparts, each of
which when so executed and delivered shall be an original, but all of which
together shall constitute one instrument.

 

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9.                                      Governing Law; Jurisdiction.  This
Agreement, including the validity hereof and the rights and obligations of the
parties hereunder, shall be construed in accordance with and governed by the
laws of the Commonwealth of Massachusetts.  Pledgor, to the extent that it may
lawfully do so, hereby consents to the jurisdiction of the courts of the
Commonwealth of Massachusetts and the United States District Court for the
District of Massachusetts, as well as to the jurisdiction of all courts to which
an appeal may be taken from such courts, for the purpose of any suit, action or
other proceeding arising out of any of its obligations hereunder or with respect
to the financing contemplated hereby, and expressly waives any and all
objections it may have as to venue in any such courts.  Pledgor further agrees,
to the extent that it may lawfully do so, that a summons and complaint
commencing an action or proceeding in any of such courts shall be properly
served and shall confer personal jurisdiction if served personally or by
certified mail to it or him at the address provided in Section 9 of this Pledge
Agreement or as otherwise provided under the laws of the Commonwealth of
Massachusetts.

 

[PAGE ENDS HERE; SIGNATURE PAGE FOLLOWS]

 

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IN WITNESS WHEREOF, the undersigned have executed this Pledge Agreement as of
the date first set forth above.

 

 

PLEDGOR:

 

 

 

NEW ENGLAND REALTY ASSOCIATES

 

LIMITED PARTNERSHIP, a Massachusetts

 

limited partnership

 

 

 

By: NewReal, Inc., a Massachusetts corporation, its

 

General Partner

 

 

 

By:

 

 

 

Ronald Brown, President

 

 

 

 

 

PLEDGEE:

 

 

 

HBC HOLDINGS, LLC, a Massachusetts limited liability company

 

 

 

 

 

 

By:

 

 

 

Harold Brown, Manager

 

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