SECURITY AGREEMENT Dated March 15, 2005 From MAGUIRE PROPERTIES, L.P., and MAGUIRE PROPERTIES HOLDINGS I, LLC as Grantors to CREDIT SUISSE FIRST BOSTON as Collateral Agent
Exhibit
99.25
EXECUTION
COPY
Dated
March 15, 2005
From
▇▇▇▇▇▇▇
PROPERTIES, L.P.,
and
▇▇▇▇▇▇▇
PROPERTIES HOLDINGS I, LLC
as
Grantors
to
CREDIT
SUISSE FIRST BOSTON
as
Collateral Agent
T
A B L E O F C O N T E N T S
|
Section |
Page | |
|
Section
1. |
Grant
of Security |
2 |
|
Section
2. |
Security
for Obligations |
3 |
|
Section
3. |
Grantors
Remain Liable |
3 |
|
Section
4. |
Delivery
and Control of Security Collateral |
4 |
|
Section
5. |
Maintaining
the Account Collateral |
4 |
|
Section
6. |
Investing
of Amounts in the Collateral Account |
4 |
|
Section
7. |
Release
of Amounts |
5 |
|
Section
8. |
Representations
and Warranties |
5 |
|
Section
9. |
Further
Assurances |
6 |
|
Section
10. |
Post-Closing
Changes |
6 |
|
Section
11. |
Voting
Rights; Dividends; Etc. |
7 |
|
Section
12. |
Transfers
and Other Liens; Additional Shares |
8 |
|
Section
13. |
Collateral
Agent Appointed Attorney-in-Fact |
8 |
|
Section
14. |
Collateral
Agent May Perform |
8 |
|
Section
15. |
The
Collateral Agent’s Duties |
8 |
|
Section
16. |
Remedies |
9 |
|
Section
17. |
Indemnity
and Expenses |
11 |
|
Section
18. |
Amendments;
Waivers. |
12 |
|
Section
19. |
Notices,
Etc. |
12 |
|
Section
20. |
Continuing
Security Interest; Assignments under the Credit Agreement |
12 |
|
Section
21. |
Release;
Termination |
12 |
|
Section
22. |
Execution
in Counterparts |
13 |
|
Section
23. |
Governing
Law |
1 |
SECURITY
AGREEMENT dated March 15, 2005 made by ▇▇▇▇▇▇▇ Properties, L.P., a Maryland
limited partnership (the “Revolving
Credit Borrower”),
▇▇▇▇▇▇▇ Properties Holdings I, LLC, a Delaware limited liability company (the
“Term
B Borrower”; and
together with the Revolving Credit Borrower, the “Grantors”), to
Credit Suisse First Boston, as collateral agent (in such capacity, together with
any successor collateral agent appointed pursuant to Article VII of the Credit
Agreement (as hereinafter defined), the “Collateral
Agent”) for
the Secured Parties (as defined in the Credit Agreement).
PRELIMINARY
STATEMENTS.
(1) The
Grantors have entered into a Credit Agreement dated as of the date hereof (said
Agreement, as it may hereafter be amended, amended and restated, supplemented or
otherwise modified from time to time, being the “Credit
Agreement”) with
▇▇▇▇▇▇▇ Properties, Inc., a Maryland corporation, the Lender Parties and the
Agents (each as defined therein).
(2) Pursuant
to the Credit Agreement, the Grantors are entering into this Agreement in order
to grant to the Collateral Agent for the ratable benefit of the Secured Parties
a security interest in the Collateral (as hereinafter defined).
(3) Each
Grantor is the owner of the Equity Interests (the “Initial
Pledged Equity”) set
forth opposite such Grantor’s name on and as otherwise described in
Schedule II hereto and issued by the Persons named therein and of the
indebtedness constituting Pledged Debt (as defined herein) outstanding on the
date hereof.
(4) The
Grantors have opened a collateral deposit account (the “Collateral
Account”), with
The Bank of New York at the address and bearing the account number identified to
the Collateral Agent, in the name of the Collateral Agent and under the sole
control and dominion of the Collateral Agent and subject to the terms of this
Agreement.
(5) It is a
condition precedent to the making of Advances and the issuance of Letters of
Credit by the Lender Parties under the Credit Agreement and the entry into
Secured Hedge Agreements by the Hedge Banks from time to time that the Grantors
shall have granted the assignment and security interest and made the pledge and
assignment contemplated by this Agreement.
(6) Each
Grantor will derive substantial direct and indirect benefit from the
transactions contemplated by the Loan Documents.
(7) Terms
defined in the Credit Agreement and not otherwise defined in this Agreement are
used in this Agreement as defined in the Credit Agreement. Further, unless
otherwise defined in this Agreement or in the Credit Agreement, terms defined in
Article 8 or 9 of the UCC (as defined below) are used in this Agreement as such
terms are defined in such Article 8 or 9. “UCC” means
the Uniform Commercial Code as in effect, from time to time, in the State of New
York; provided that, if
perfection or the effect of perfection or non-perfection or the priority of any
security interest in any Collateral is governed by the Uniform Commercial Code
as in effect in a jurisdiction other than the State of New York, “UCC” means
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.
1
NOW,
THEREFORE, in consideration of the premises and in order to induce the Lender
Parties to make Advances and issue Letters of Credit under the Credit Agreement
and to induce the Hedge Banks to enter into Secured Hedge Agreements from time
to time, each Grantor hereby agrees with the Collateral Agent for the ratable
benefit of the Secured Parties as follows:
Section
1. Grant of
Security
. Each
Grantor hereby grants to the Collateral Agent, for the ratable benefit of the
Secured Parties, a security interest in, such Grantor’s right, title and
interest in and to the following, in each case, as to each type of property
described below, whether now owned or hereafter acquired by such Grantor,
wherever located, and whether now or hereafter existing or arising
(collectively, the “Collateral”):
(a) the
following (the “Security
Collateral”):
(i) the
Initial Pledged Equity and the certificates, if any, representing the Initial
Pledged Equity, and all dividends, distributions, return of capital, cash,
instruments and other property from time to time received, receivable or
otherwise distributed in respect of or in exchange for any or all of the Initial
Pledged Equity and all subscription warrants, rights or options issued thereon
or with respect thereto;
(ii) all
additional shares of stock and other Equity Interests of or in any issuer of the
Initial Pledged Equity or any successor entity or in any other direct
Property-Level Subsidiary of the Revolving Credit Borrower or Term B Borrower
from time to time hereafter acquired by such Grantor in any manner (such shares
and other Equity Interests, together with the Initial Pledged Equity, being the
“Pledged
Equity”), and
the certificates, if any, representing such additional shares or other Equity
Interests, and all dividends, distributions, return of capital, cash,
instruments and other property from time to time received, receivable or
otherwise distributed in respect of or in exchange for any or all of such shares
or other Equity Interests and all subscription warrants, rights or options
issued thereon or with respect thereto; provided,
however, that
none of the Grantors shall be required to pledge (and the Grantors shall be
deemed not to have pledged, and such capital stock and other Equity Interests
shall not be deemed to constitute “Security Collateral” or “Pledged Equity”) (A)
any capital stock or other equity interest in any Subsidiary of such Grantor
that is a not organized under the laws of any state of the United States of
America or the District of Columbia that constitutes a “controlled foreign
corporation” under Section 957 of the Internal Revenue Code of 1986, as amended
from time to time, (a “CFC”) owned
or otherwise held thereby which, when aggregated with all of the other capital
stock or other equity interests in such CFC pledged by such Grantor and the
other Grantors, would result in more than 66% of the capital stock or other
equity interests in such CFC entitled to vote (within the meaning of Treasury
Regulation Section 1.956-2(c)(2) promulgated under the Internal Revenue Code)
(the “Voting
Equity Interests”) being
pledged to the Collateral Agent, on behalf of the Secured Parties, under this
Agreement (although all of the capital stock or other equity interests in such
CFC not entitled to vote (within the meaning of Treasury Regulation Section
1.956-2(c)(2) promulgated under the Internal Revenue Code) (the “Non-Voting
Equity Interests”) shall
be pledged by each of the Grantors that owns or otherwise holds any such
Non-Voting Equity Interest therein), provided that, if
such CFC ceases to constitute a “controlled foreign corporation” under Section
957 of the Internal Revenue Code, as amended from time to time, or if, as a
result of any change in the tax laws of the United States of America after the
date of this Agreement, the pledge by such
2
Grantor
of any additional capital stock or other equity interests in any such CFC to the
Collateral Agent, on behalf of the Secured Parties, under this Agreement would
not result in an increase in the aggregate net consolidated tax liabilities of
such Grantor, then, promptly after the change in such laws, all such additional
capital stock or other equity interests shall be so pledged forthwith under this
Agreement or (B) the
Equity Interests in any Subsidiary of a Grantor to the extent that the pledge of
such Subsidiary’s Equity Interests is prohibited by the terms of any Mortgage
Financing or other financing permitted by the terms of the Credit Agreement,
provided
that such
Grantor agrees to, or to cause the applicable Subsidiary to, use commercially
reasonable efforts to obtain the consent of the providers of such Mortgage
Financing to the pledge and security interest created hereunder, which
commercially reasonable efforts shall not (x) require the payment of any
transfer fees, but would include payment of administrative fees, third-party
expenses and similar costs and a nominal consent fee or (y) require the Grantor
or such Subsidiary to exercise its sole right of transfer under such Mortgage
Financing);
and
(iii) all
indebtedness from time to time owed to such Grantor by the Revolving Credit
Borrower or any of its Subsidiaries (such indebtedness being the “Pledged
Debt”) and
the instruments, if any, evidencing such indebtedness, and all interest, cash,
instruments and other property from time to time received, receivable or
otherwise distributed in respect of or in exchange for any or all of such
indebtedness;
(b) the
Collateral Account and all funds and financial assets from time to time credited
thereto (including, without limitation, all Cash Equivalents), all interest,
dividends, distributions, cash, instruments and other property from time to time
received, receivable or otherwise distributed in respect of or in exchange for
any or all of such funds and financial assets, and all certificates and
instruments, if any, from time to time representing or evidencing the Collateral
Account (collectively, the “Account
Collateral”);
(c) all books
and records of such Grantor pertaining to any of the Collateral;
and
(d) all
proceeds of, collateral for, income and other payments now or hereafter due and
payable with respect to, and supporting obligations relating to, any and all of
the Collateral (including, without limitation, proceeds, collateral and
supporting obligations that constitute property of the types described in
clauses (a) through (c) of this Section 1 and this clause (d)).
Section
2. Security
for Obligations
. This
Agreement secures, in the case of each Grantor, the payment of all Obligations
of such Grantor now or hereafter existing under the Loan Documents, whether
direct or indirect, absolute or contingent, and whether for principal,
reimbursement obligations, interest, fees, premiums, penalties,
indemnifications, contract causes of action, costs, expenses or otherwise (all
such Obligations being the “Secured
Obligations”).
Section
3. Grantors
Remain Liable
.
Anything herein to the contrary notwithstanding, (a) each Grantor shall
remain liable under the contracts and agreements included in such Grantor’s
Collateral to the extent set forth therein to perform all of its duties and
obligations thereunder to the same extent as if this Agreement had not been
executed, (b) the exercise by the Collateral Agent of any of the rights
hereunder shall not release any Grantor from any of its duties or obligations
under the contracts and agreements included in the Collateral and (c) no
Secured Party shall have any obligation or liability under the contracts and
agreements
3
included
in the Collateral by reason of this Agreement or any other Loan Document, nor
shall any Secured Party be obligated to perform any of the obligations or duties
of any Grantor thereunder or to take any action to collect or enforce any claim
for payment assigned hereunder.
Section
4. Delivery
and Control of Security Collateral
.
(a) All certificates or instruments, if any, representing or
evidencing Security Collateral shall be delivered to and held by or on behalf of
the Collateral Agent pursuant hereto and shall be in suitable form for transfer
by delivery, or shall be accompanied by duly executed instruments of transfer or
assignment in blank, all in form and substance satisfactory to the Collateral
Agent. Upon the occurrence and during the continuance of an Event of Default,
the Collateral Agent shall have the right, at any time in its discretion and
without notice to any Grantor, to transfer to or to register in the name of the
Collateral Agent or any of its nominees any or all of the Security Collateral,
subject only to the revocable rights specified in Section 15(a). In
addition, upon the occurrence and during the continuance of an Event of Default,
the Collateral Agent shall have the right at any time to exchange certificates
or instruments representing or evidencing Security Collateral for certificates
or instruments of smaller or larger denominations.
(b) With
respect to any Security Collateral in which any Grantor has any right, title or
interest and that is not an uncertificated security, upon the request of the
Collateral Agent, such Grantor will notify each such issuer of Pledged Equity
that such Pledged Equity is subject to the security interest granted hereunder.
(c) Upon the
request of the Collateral Agent, such Grantor will notify each such issuer of
Pledged Debt that such Pledged Debt is subject to the security interest granted
hereunder.
Section
5. Maintaining
the Account Collateral
. So long
as any Advance or any other Obligation of any Loan Party under any Loan Document
shall remain unpaid, any Letter of Credit shall be outstanding, any Secured
Hedge Agreement shall be in effect or any Lender Party shall have any
Commitment:
(a) The
Collateral Agent shall have sole right to direct the disposition of funds with
respect to the Collateral Account; and it shall be a term and condition of the
Collateral Account, notwithstanding any term or condition to the contrary in any
other agreement relating to the Collateral Account that no amount (including,
without limitation, interest on Cash Equivalents credited thereto) will be paid
or released to or for the account of, or withdrawn by or for the account of,
either Borrower or any other Person from the Collateral Account.
(b) The
Collateral Agent may, at any time and without notice to, or consent from, the
Grantor, transfer, or direct the transfer of, funds from the Account Collateral
to satisfy the Grantor’s obligations under the Loan Documents if an Event of
Default shall have occurred and be continuing.
Section
6. Investing
of Amounts in the Collateral Account
. The
Collateral Agent will, subject to the provisions of Sections 5, 7 and 16,
from time to time (a) invest amounts received with respect to the
Collateral Account in such Cash Equivalents credited to (A) the Collateral
Account, as the Borrower may select and the Collateral Agent may approve or (B)
in the case of Cash Equivalents consisting of Securities Collateral, a
securities account in which the Collateral Agent is the securities intermediary
or a securities account subject to a control agreement in
4
favor of,
and in form and substance satisfactory to, the Collateral Agent, and
(b) invest interest paid on the Cash Equivalents referred to in
clause (a) above, and reinvest other proceeds of any such Cash Equivalents
that may mature or be sold, in each case in such Cash Equivalents credited in
the same manner. Interest and proceeds that are not invested or reinvested in
Cash Equivalents as provided above shall be deposited and held in the Collateral
Account. In addition, the Collateral Agent shall have the right at any time to
exchange such Cash Equivalents for similar Cash Equivalents of smaller or larger
determinations, or for other Cash Equivalents, credited to the Collateral
Account.
Section
7. Release
of Amounts
. So long
as no Event of Default shall have occurred and be continuing, the Collateral
Agent will pay and release to the Applicable Borrower or at its order or, at the
request of the Applicable Borrower, to the Administrative Agent to be applied to
the Obligations of the Grantors under the Loan Documents, such amount, if any,
as is then on deposit in the Collateral Account to the extent permitted to be
released under the terms of the Credit Agreement.
Section
8. Representations
and Warranties
. Each
Grantor represents and warrants as follows:
(a) Such
Grantor’s exact legal name, as defined in Section 9-503(a) of the UCC, is
correctly set forth in Schedule I hereto. Such Grantor is located (within the
meaning of Section 9-307 of the UCC) and has its chief executive office in
the state or jurisdiction set forth in Schedule I hereto. The information set
forth in Schedule I hereto with respect to such Grantor is true and accurate in
all respects. Such Grantor has not previously changed its name, location, chief
executive office, type of organization, jurisdiction of organization or
organizational identification number from those set forth in Schedule I hereto
except as disclosed in Schedule III hereto.
(b) Such
Grantor is the legal and beneficial owner of the Collateral of such Grantor free
and clear of any Lien, claim, option or right of others, except for the security
interest created under this Agreement. No effective financing statement or other
instrument similar in effect covering all or any part of such Collateral or
listing such Grantor or any trade name of such Grantor as debtor is on file in
any recording office, except such as may have been filed in favor of the
Collateral Agent relating to the Loan Documents or as otherwise permitted under
the Credit Agreement.
(c) The
Pledged Equity pledged by such Grantor hereunder has been duly authorized and
validly issued and is fully paid and non-assessable. If such Grantor is an
issuer of Pledged Equity, such Grantor confirms that it has received notice of
such security interest. The Pledged Debt pledged by such Grantor hereunder has
been duly authorized, authenticated or issued and delivered, is the legal, valid
and binding obligation of the issuers thereof, is not in default and, to the
extent evidenced by one or more promissory notes, such notes have been delivered
to the Collateral Agent.
(d) The
Initial Pledged Equity pledged by such Grantor constitutes the percentage of the
issued and outstanding Equity Interests of the issuers thereof indicated on
Schedule II hereto.
(e) All
filings and other actions necessary to perfect the security interest in the
Collateral of such Grantor created under this Agreement have been duly made or
taken and are in full force and effect, and this Agreement creates in favor of
the Collateral Agent for the benefit of the Secured Parties a valid and,
together with such filings and other actions, perfected first priority
5
security
interest in the Collateral of such Grantor, securing the payment of the Secured
Obligations.
Section
9. Further
Assurances
. (a)
Each Grantor agrees that from time to time, at the expense of such Grantor, such
Grantor will promptly execute and deliver, or otherwise authenticate, all
further instruments and documents, and take all further action that may be
necessary or desirable, or that the Collateral Agent may request, in order to
perfect and protect the perfected nature against competing claims of any pledge
or security interest granted or purported to be granted by such Grantor
hereunder or to enable the Collateral Agent to exercise and enforce its rights
and remedies hereunder with respect to any Collateral of such Grantor. Without
limiting the generality of the foregoing, each Grantor will promptly with
respect to Collateral of such Grantor: (i) if any such Collateral shall be
evidenced by a promissory note or other instrument, deliver and pledge to the
Collateral Agent hereunder such note or instrument duly indorsed and accompanied
by duly executed instruments of transfer or assignment, all in form and
substance satisfactory to the Collateral Agent; (ii) execute or
authenticate and file such financing or continuation statements, or amendments
thereto, and such other instruments or notices, as may be necessary or
desirable, or as the Collateral Agent may request, in order to perfect and
preserve the security interest granted or purported to be granted by such
Grantor hereunder; (iii) deliver and pledge to the Collateral Agent for
benefit of the Secured Parties certificates representing Security Collateral
that constitutes certificated securities, accompanied by undated stock or bond
powers executed in blank; and (iv) deliver to the Collateral Agent evidence that
all other action that the Collateral Agent may deem reasonably necessary or
desirable in order to perfect and protect the security interest created by such
Grantor under this Agreement has been taken.
(b) Each
Grantor hereby authorizes the Collateral Agent to file one or more financing or
continuation statements, and amendments thereto, in each case in respect of the
Collateral without the signature of such Grantor, and regardless of whether any
particular asset described in such financing statements falls within the scope
of the UCC or the granting clause of this Agreement. A photocopy or other
reproduction of this Agreement or any financing statement covering the
Collateral or any part thereof shall be sufficient as a financing statement
where permitted by law. Each Grantor ratifies its authorization for the
Collateral Agent to have filed such financing statements, continuation
statements or amendments filed prior to the date hereof.
(c) Each
Grantor will furnish to the Collateral Agent from time to time statements and
schedules further identifying and describing the Collateral of such Grantor and
such other reports in connection with such Collateral as the Collateral Agent
may reasonably request, all in reasonable detail.
Section
10. Post-Closing
Changes
. No
Grantor will change its name, type of organization, jurisdiction of
organization, organizational identification number or location from those set
forth in Section 9(a) of this Agreement without first giving at least 10 days’
prior written notice to the Collateral Agent and taking all action required by
the Collateral Agent for the purpose of perfecting or protecting the security
interest granted by this Agreement. No Grantor will become bound by a security
agreement authenticated by another Person (determined as provided in Section
9-203(d) of the UCC) without giving the Collateral Agent 30 days’ prior written
notice thereof and taking all action required by the Collateral Agent to ensure
that the perfection and first priority nature of the Collateral Agent’s security
interest in the Collateral will be maintained. If the Grantor does not have an
organizational identification number and later obtains one, it will forthwith
notify the Collateral Agent of such organizational identification number.
6
Section
11. Voting
Rights; Dividends; Etc.
(a) So
long as no Event of Default shall have occurred and be continuing:
(i) Each
Grantor shall be entitled to exercise any and all voting and other consensual
rights pertaining to the Security Collateral of such Grantor or any part thereof
for any purpose; provided however, that,
except as permitted by Section 5.01(e) of the Credit Agreement with respect to
the dissolution of Non-Guarantor Subsidiaries, such Grantor will not exercise or
refrain from exercising any such right if such action would have a material
adverse effect on the value of the Security Collateral or any part
thereof.
(ii) Each
Grantor shall be entitled to receive and retain any and all dividends, interest
and other distributions paid in respect of the Security Collateral of such
Grantor if and to the extent that the payment thereof is not otherwise
prohibited by the terms of the Loan Documents; provided,
however, that
any and all
(A) dividends,
interest and other distributions paid or payable other than in cash in respect
of, and instruments and other property received, receivable or otherwise
distributed in respect of, or in exchange for, any Security
Collateral,
(B) dividends
and other distributions paid or payable in cash in respect of any Security
Collateral in connection with a partial or total liquidation or dissolution or
in connection with a reduction of capital, capital surplus or paid-in-surplus
and
(C) cash
paid, payable or otherwise distributed in respect of principal of, or in
redemption of, or in exchange for, any Security Collateral
shall be,
and shall be forthwith delivered to the Collateral Agent to hold as, Security
Collateral and shall, if received by such Grantor, be received in trust for the
benefit of the Collateral Agent, be segregated from the other property or funds
of such Grantor and be forthwith delivered to the Collateral Agent as Security
Collateral in the same form as so received (with any necessary
indorsement).
(iii) The
Collateral Agent will execute and deliver (or cause to be executed and
delivered) to each Grantor all such proxies and other instruments as such
Grantor may reasonably request for the purpose of enabling such Grantor to
exercise the voting and other rights that it is entitled to exercise pursuant to
paragraph (i) above and to receive the dividends or interest payments that
it is authorized to receive and retain pursuant to paragraph (ii)
above.
(b) Upon the
occurrence and during the continuance of an Event of Default:
(i) All
rights of each Grantor (x) to exercise or refrain from exercising the
voting and other consensual rights that it would otherwise be entitled to
exercise pursuant to Section 11(a)(i) shall, upon notice to such Grantor by
the Collateral Agent, cease and (y) to receive the dividends, interest and
other distributions that it would otherwise be authorized to receive and retain
pursuant to Section 11(a)(ii) shall automatically cease, and all such
rights shall thereupon become vested in the Collateral Agent, which shall
thereupon have the sole right to exercise or refrain from exercising such voting
and other consensual rights and to receive and hold as Security Collateral such
dividends, interest and other distributions.
7
(ii) All
dividends, interest and other distributions that are received by any Grantor
contrary to the provisions of paragraph (i) of this Section 11(b)
shall be received in trust for the benefit of the Collateral Agent, shall be
segregated from other funds of such Grantor and shall be forthwith paid over to
the Collateral Agent as Security Collateral in the same form as so received
(with any necessary indorsement).
Section
12. Transfers
and Other Liens; Additional Shares
. (a)
Each Grantor agrees that it will not (i) sell, assign or otherwise dispose
of, or grant any option with respect to, any of the Collateral, other than
sales, assignments and other dispositions of Collateral, and options relating to
Collateral, permitted under the terms of the Credit Agreement, or
(ii) create or suffer to exist any Lien upon or with respect to any of the
Collateral of such Grantor except for the pledge, assignment and security
interest created under this Agreement.
(b) Each
Grantor agrees that it will (i) cause each issuer of the Pledged Equity
pledged by such Grantor not to issue any Equity Interests or other securities in
addition to or in substitution for the Pledged Equity issued by such issuer,
except to such Grantor, and (ii) pledge hereunder, immediately upon its
acquisition (directly or indirectly) thereof, any and all additional Equity
Interests or other securities of each issuer of the Pledged Equity.
Section
13. Collateral
Agent Appointed Attorney-in-Fact
. Each
Grantor hereby irrevocably appoints the Collateral Agent such Grantor’s
attorney-in-fact, with full authority in the place and stead of such Grantor and
in the name of such Grantor or otherwise, from time to time, upon the occurrence
and during the continuance of an Event of Default, in the Collateral Agent’s
discretion, to take any action and to execute any instrument that the Collateral
Agent may deem necessary or advisable to accomplish the purposes of this
Agreement, including, without limitation:
(a) to ask
for, demand, collect, ▇▇▇ for, recover, compromise, receive and give acquittance
and receipts for moneys due and to become due under or in respect of any of the
Collateral,
(b) to
receive, indorse and collect any drafts or other instruments and documents, in
connection with clause (a) above, and
(c) to file
any claims or take any action or institute any proceedings that the Collateral
Agent may deem necessary or desirable for the collection of any of the
Collateral or otherwise to enforce compliance with the rights of the Collateral
Agent with respect to any of the Collateral.
Section
14. Collateral
Agent May Perform
. If any
Grantor fails to perform any agreement contained herein, the Collateral Agent
may, as the Collateral Agent deems necessary to protect the security interest
granted hereunder in the Collateral or to protect the value thereof, but without
any obligation to do so and without notice, itself perform, or cause performance
of, such agreement, and the expenses of the Collateral Agent incurred in
connection therewith shall be payable by such Grantor under
Section 17.
Section
15. The
Collateral Agent’s Duties
8
. (a) The
powers conferred on the Collateral Agent hereunder are solely to protect the
Secured Parties’ interest in the Collateral and shall not impose any duty upon
it to exercise any such powers. Except for the safe custody of any Collateral in
its possession and the accounting for moneys actually received by it hereunder,
the Collateral Agent shall have no duty as to any Collateral, as to ascertaining
or taking action with respect to calls, conversions, exchanges, maturities,
tenders or other matters relative to any Collateral, whether or not any Secured
Party has or is deemed to have knowledge of such matters, or as to the taking of
any necessary steps to preserve rights against any parties or any other rights
pertaining to any Collateral. The Collateral Agent shall be deemed to have
exercised reasonable care in the custody and preservation of any Collateral in
its possession if such Collateral is accorded treatment substantially equal to
that which it accords its own property.
(b) Anything
contained herein to the contrary notwithstanding, the Collateral Agent may from
time to time, when the Collateral Agent deems it to be necessary, appoint one or
more subagents (each a “Subagent”) for
the Collateral Agent hereunder with respect to all or any part of the
Collateral. In the event that the Collateral Agent so appoints any Subagent with
respect to any Collateral, (i) the assignment and pledge of such Collateral and
the security interest granted in such Collateral by each Grantor hereunder shall
be deemed for purposes of this Security Agreement to have been made to such
Subagent, in addition to the Collateral Agent, for the ratable benefit of the
Secured Parties, as security for the Secured Obligations of such Grantor, (ii)
such Subagent shall automatically be vested, in addition to the Collateral
Agent, with all rights, powers, privileges, interests and remedies of the
Collateral Agent hereunder with respect to such Collateral, and (iii) the term
“Collateral Agent,” when used herein in relation to any rights, powers,
privileges, interests and remedies of the Collateral Agent with respect to such
Collateral, shall include such Subagent; provided,
however, that no
such Subagent shall be authorized to take any action with respect to any such
Collateral unless and except to the extent expressly authorized in writing by
the Collateral Agent.
Section
16. Remedies
. If any
Event of Default shall have occurred and be continuing:
(a) The
Collateral Agent may exercise in respect of the Collateral, in addition to other
rights and remedies provided for herein or otherwise available to it, all the
rights and remedies of a secured party upon default under the UCC (whether or
not the UCC applies to the affected Collateral) and also may: (i) without
notice except as specified below, sell the Collateral or any part thereof in one
or more parcels at public or private sale, at any of the Collateral Agent’s
offices or elsewhere, for cash, on credit or for future delivery, and upon such
other terms as the Collateral Agent may deem commercially reasonable; and (ii)
exercise any and all rights and remedies of any of the Grantors under or in
connection with the Collateral, or otherwise in respect of the Collateral,
including, without limitation, (A) any and all rights of such Grantor to demand
or otherwise require payment of any amount under, or performance of any
provision of the Collateral, (B) withdraw all funds with respect to the Account
Collateral and (C) exercise all other rights and remedies with respect to the
Collateral, including, without limitation, those set forth in Section 9-607 of
the UCC. Each Grantor agrees that, to the extent notice of sale shall be
required by law, at least ten days’ notice to such Grantor of the time and place
of any public sale or the time after which any private sale is to be made shall
constitute reasonable notification. The Collateral Agent shall not be obligated
to make any sale of Collateral regardless of notice of sale having been given.
The Collateral Agent may adjourn any public or private sale from time to time by
announcement at the time and place fixed therefor, and such sale may, without
further notice, be made at the time and place to which it was so
adjourned.
9
(b) Any cash
held by or on behalf of the Collateral Agent and all cash proceeds received by
or on behalf of the Collateral Agent in respect of any sale of, collection from,
or other realization upon all or any part of the Collateral may, in the
discretion of the Collateral Agent, be held by the Collateral Agent as
collateral for, and/or then or at any time thereafter applied (after payment of
any amounts payable to the Collateral Agent pursuant to Section 17) in
whole or in part by the Collateral Agent for the ratable benefit of the Secured
Parties against, all or any part of the Secured Obligations, in the following
manner:
(i) first, to the
payment of all of the fees, indemnification payments, costs and expenses that
are due and payable to the Agents (solely in their respective capacities as
Agents) under or in respect of the Loan Documents on such date, ratably based
upon the respective aggregate amounts of all such fees, indemnification
payments, costs and expenses owing to the Agents on such date;
(ii) second, to the
payment of all of the fees, indemnification payments, costs and expenses that
are due and payable to the Issuing Bank and the Swing Line Bank (solely in their
respective capacities as such) under or in respect of the Loan Documents on such
date, ratably based upon the respective aggregate amounts of all such fees,
indemnification payments, costs and expenses owing to the Issuing Bank and the
Swing Line Bank on such date;
(iii) third, to the
payment of all of the indemnification payments, costs and expenses that are due
and payable to the Lenders under Sections 9.04 of the Credit Agreement, Section
17 of this Agreement and any similar section of any of the other Loan Documents
on such date, ratably based upon the respective aggregate amounts of all such
indemnification payments, costs and expenses owing to the Lenders on such
date;
(iv) fourth, to the
payment of all of the amounts that are due and payable to the Administrative
Agent and the Lender Parties under Sections 2.10 and 2.12 of the Credit
Agreement on such date, ratably based upon the respective aggregate amounts
thereof owing to the Administrative Agent and the Lender Parties on such
date;
(v) fifth, to the
payment of all of the fees that are due and payable to the Lenders under Section
2.08(a) of the Credit Agreement on such date, ratably based upon the respective
aggregate Commitments of the Lenders under the Facilities on such date;
and
(vi) sixth, ratably
(A) paid to the Lender Parties and the Hedge Banks, respectively, for any
amounts then owing to them, in their capacities as such, under the Loan
Documents and the Secured Hedge Agreement ratably in accordance with such
respective amounts then owing to such Lender Parties and the Hedge Banks,
provided
that, for
purposes of this Section 16, the amount owing to any such Hedge Bank pursuant to
any Secured Hedge Agreement to which it is a party (other than any amount
therefore accrued and unpaid) shall be deemed to be equal to the Agreement Value
therefor and (B) deposited as Collateral in the Collateral Account up to an
amount equal to 102% of the aggregate Available Amount of all outstanding
Letters of Credit, provided that in
the event that any such Letter of Credit is drawn, the Collateral Agent shall
pay to the Issuing Bank the amount held in the Collateral Account in respect of
such Letter of Credit, provided further that, to
the extent that any such Letter of Credit shall expire or terminate undrawn and
as a result thereof the amount of the Collateral in the Collateral Account
10
shall
exceed 102% of the aggregate Available Amount of all then outstanding Letters of
Credit, such excess amount of such Collateral shall be applied in accordance
with the remaining order of priority set out in this Section 16(b).
Any
surplus of such cash or cash proceeds held by or on the behalf of the Collateral
Agent and remaining after payment in full of all the Secured Obligations shall
be paid over to the applicable Grantor or to whomsoever may be lawfully entitled
to receive such surplus.
(c) All
payments received by any Grantor under or in respect of the Collateral shall be
received in trust for the benefit of the Collateral Agent, shall be segregated
from other funds of such Grantor and shall be forthwith paid over to the
Collateral Agent in the same form as so received (with any necessary
indorsement).
(d) The
Collateral Agent may, without notice to any Grantor except as required by law
and at any time or from time to time, charge, set-off and otherwise apply all or
any part of the Secured Obligations against any funds held with respect to the
Account Collateral or in any other deposit account.
(e) Each of
the Collateral Agent and, by its acceptance hereof, each other Secured Party,
hereby expressly acknowledges and agrees that (i) the pledges of the Pledged
Equity pursuant to this Security Agreement are subject to (A) the applicable
limitations contained in the documents listed on Schedule 4.01(d) to the Credit
Agreement and any future consent from, or agreement that the Collateral Agent
may enter into with, any third party in order to obtain the pledge of the Equity
Interests in any Subsidiary of the Revolving Credit Borrower pursuant to the
terms hereof and (B) the applicable restrictions on transfers of the Pledged
Equity contained in any Mortgage Financing, Permitted Construction Financing or
other financing permitted under Section 5.02(b) of the Credit Agreement to which
any issuer of such Pledged Equity is a party or is subject and (ii) neither the
Collateral Agent nor any other Secured Party will seek to transfer or otherwise
foreclose on or take any other action in respect of any Pledged Equity (unless
any such action is expressly consented to by the parties required to give such
consent) in violation of (A) the limitations set forth in any consent or
agreement referred to in clause (i)(A) above applicable to such Pledged Equity
or (B) the restrictions referred to in clause (i)(B) above applicable to such
Pledged Equity.
Section
17. Indemnity
and Expenses
. (a)
Each Grantor agrees to indemnify, defend and save and hold harmless each Secured
Party and each of their Affiliates and their respective officers, directors,
employees, agents and advisors (each, an “Indemnified
Party”) from
and against, and shall pay on demand, any and all claims, damages, losses,
liabilities and expenses (including, without limitation, reasonable fees and
expenses of counsel) that may be incurred by or asserted or awarded against any
Indemnified Party, in each case arising out of or in connection with or
resulting from this Agreement (including, without limitation, enforcement of
this Agreement), except to the extent such claim, damage, loss, liability or
expense is found in a final, non-appealable judgment by a court of competent
jurisdiction to have resulted from such Indemnified Party’s gross negligence or
willful misconduct. Notwithstanding the foregoing, no Indemnified Party shall be
entitled to recover from any Loan Party under this Section 17(a) the amount of
any damages awarded to such Loan Party against such Indemnified Party by a court
of competent jurisdiction as a result of a breach by such Indemnified Party of
its agreements under Section 16(e).
(b) Each
Grantor will upon demand pay to the Collateral Agent the amount of any and all
reasonable expenses, including, without limitation, the reasonable fees and
expenses of its counsel
11
and of
any experts and agents, that the Collateral Agent may incur in connection with
(i) the administration of this Agreement, (ii) the custody,
preservation, use of, or the sale of, collection from or other realization upon,
any of the Collateral of such Grantor, (iii) the exercise or enforcement of
any of the rights of the Collateral Agent or the other Secured Parties hereunder
or (iv) the failure by such Grantor to perform or observe any of the
provisions hereof.
Section
18. Amendments;
Waivers.
No
amendment or waiver of any provision of this Agreement, and no consent to any
departure by any Grantor herefrom, shall in any event be effective unless the
same shall be in writing and signed by the Collateral Agent, and then such
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which given. No failure on the part of the Collateral Agent
or any other Secured Party to exercise, and no delay in exercising any right
hereunder, shall operate as a waiver thereof; nor shall any single or partial
exercise of any such right preclude any other or further exercise thereof or the
exercise of any other right.
Section
19. Notices,
Etc.
All
notices and other communications provided for hereunder shall be either (i) in
writing (including telegraphic or telecopier) and mailed, telegraphed,
telecopied or otherwise delivered or (ii) by electronic mail (on such terms as
may be agreed between the Collateral Agent and the Grantors) confirmed
immediately in writing addressed to it at its address specified in the Credit
Agreement; or, as to any party, at such other address as shall be designated by
such party in a written notice to the other parties. All such notices and other
communications shall, when mailed, telegraphed, telecopied, sent by electronic
mail or otherwise, be effective when deposited in the mails, delivered to the
telegraph company, telecopied, sent by electronic mail and confirmed in writing,
or otherwise delivered (or confirmed by a signed receipt), respectively,
addressed as aforesaid; except that notices and other communications to the
Collateral Agent shall not be effective until received by the Collateral Agent.
Delivery by telecopier of an executed counterpart of any amendment or waiver of
any provision of this Agreement or of any Security Agreement Supplement or
Schedule hereto shall be effective as delivery of an original executed
counterpart thereof.
Section
20. Continuing
Security Interest; Assignments under the Credit Agreement
. This
Agreement shall create a continuing security interest in the Collateral and
shall (a) remain in full force and effect until the latest of (i) the
payment in full in cash of the Secured Obligations and (ii) the termination or
expiration of all Letters of Credit and all Secured Hedge Agreements,
(b) be binding upon each Grantor, its successors and assigns and
(c) inure, together with the rights and remedies of the Collateral Agent
hereunder, to the benefit of the Secured Parties and their respective
successors, transferees and assigns. Without limiting the generality of the
foregoing clause (c), any Lender Party may assign or otherwise transfer all
or any portion of its rights and obligations under the Credit Agreement
(including, without limitation, all or any portion of its Commitments, the
Advances owing to it and the Note or Notes, if any, held by it) to any other
Person, and such other Person shall thereupon become vested with all the
benefits in respect thereof granted to such Lender Party herein or otherwise, in
each case as provided in Section 9.07 of the Credit Agreement.
Section
21. Release;
Termination
. (a)
Upon any sale, lease, transfer or other disposition of any item of Collateral of
any Grantor in accordance with the terms of the Loan Documents or to the extent
authorized in Section 9.11 of the Credit Agreement, the Collateral Agent will,
at such Grantor’s expense, execute and deliver to such
12
Grantor
such documents as such Grantor shall reasonably request to evidence the release
of such item of Collateral from the assignment and security interest granted
hereby; provided,
however, that
(i) at the time of such request and such release no Event of Default shall
have occurred and be continuing, (ii) such Grantor shall have delivered to
the Collateral Agent, at least three Business Days prior to the date of the
proposed release, a written request for release describing the item of
Collateral and the material terms of the sale, transfer or other disposition in
reasonable detail, including, without limitation, the Applicable Release Price
for such Collateral (if applicable) and any expenses in connection therewith,
together with a form of release for execution by the Collateral Agent and a
certificate of such Grantor to the effect that the transaction is in compliance
with the Loan Documents and as to such other matters as the Collateral Agent may
reasonably request and (iii) the proceeds of any such sale, transfer or
other disposition required to be applied, or any payment to be made in
connection therewith, in accordance with Section 2.06 of the Credit
Agreement shall, to the extent so required, be paid or made to, or in accordance
with the instructions of, the Collateral Agent when and as required under
Section 2.06 of the Credit Agreement.
(b) Upon the
latest of (i) the payment in full in cash of the Secured Obligations (other
than any contingent indemnity obligations for which no claim has been made on
the date of such payment in full), (ii) the Termination Date and (iii) the
termination or expiration of all Letters of Credit and all Secured Hedge
Agreements, the pledge and security interest granted hereby shall terminate and
all rights to the Collateral shall revert to the applicable Grantor. Upon any
such termination, the Collateral Agent will, at the applicable Grantor’s
expense, execute and deliver to such Grantor such documents as such Grantor
shall reasonably request to evidence such termination.
Section
22. Execution
in Counterparts
. This
Agreement may be executed in any number of counterparts, each of which when so
executed shall be deemed to be an original and all of which taken together shall
constitute one and the same agreement. Delivery of an executed counterpart of a
signature page to this Agreement by telecopier shall be effective as delivery of
an original executed counterpart of this Agreement.
Section
1.
13
Section
23. Governing
Law
. This
Agreement shall be governed by, and construed in accordance with, the laws of
the State of New York.
IN
WITNESS WHEREOF, each Grantor has caused this Agreement to be duly executed and
delivered by its officer thereunto duly authorized as of the date first above
written.
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▇▇▇▇▇▇▇
PROPERTIES, L.P., | ||
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a
Maryland limited partnership | ||
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By: |
▇▇▇▇▇▇▇
Properties, Inc., its General Partner | |
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By: |
/s/
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ | |
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Name:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ | ||
|
Title:
Executive Vice President and CFO | ||
|
▇▇▇▇▇▇▇
PROPERTIES, L.P., | ||
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a
Maryland limited partnership | ||
|
By: |
▇▇▇▇▇▇▇
Properties, L.P., its Member | |
|
By: |
▇▇▇▇▇▇▇
Properties, Inc., its General Partner | |
|
By: |
/s/
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ | |
|
Name:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ | ||
|
Title:
Executive Vice President and CFO | ||