DISBURSEMENT COLLATERAL ACCOUNT AGREEMENT
This DISBURSEMENT COLLATERAL ACCOUNT AGREEMENT (this "Agreement") is
dated as of November 14, 1997 and entered into by and among LAS VEGAS SANDS,
INC., a Nevada corporation ("LVSI"), VENETIAN CASINO RESORT, LLC, a Nevada
limited liability company ("VCR"), GRAND CANAL SHOPS MALLS CONSTRUCTION, LLC, a
Delaware limited liability company ("GCCLLC", and jointly and severally with
LVSI and VCR, "Pledgor"), THE BANK OF NOVA SCOTIA, a Canadian chartered bank
through its New York agency, as Disbursement Agent under the Disbursement
Agreement (in such capacity herein called "Secured Party"), and THE BANK OF NOVA
SCOTIA, through its New York agency, as custodian and securities intermediary
for the Pledgor and Secured Party (in such capacity, "Securities Intermediary").
PRELIMINARY STATEMENTS
A. The Project. LVSI, VCR and GCCLLC, propose to develop, construct and
operate the Venetian Casino Resort, a large scale Venetian-themed hotel, casino,
retail, meeting and entertainment complex, with related heating, ventilation and
air conditioning and power station facilities, as part of the redevelopment of
the site of the former Las Vegas Sands Hotel and Casino.
B. Bank Credit Agreement. Concurrently herewith, LVSI, VCR, GCCLLC, the
Bank Agent and the Bank Lenders have entered into the Bank Credit Agreement
pursuant to which the Bank Lenders have agreed, subject to the terms thereof, to
provide certain loans to LVSI and VCR, jointly and severally, in an aggregate
amount and for purposes specified therein.
C. Interim Mall Credit Agreement. Concurrently herewith, LVSI, VCR,
GCCLLC, and the Interim Mall Lender have entered into the Interim Mall Credit
Agreement pursuant to which the Interim Mall Lender has agreed to provide loans
to LVSI, VCR and GCCLLC, jointly and severally, in an aggregate amount and for
purposes specified therein.
D. Mortgage Notes Indenture. Concurrently herewith, LVSI, VCR, certain
guarantors named therein, and the Mortgage Notes Indenture Trustee have entered
into the Mortgage Notes Indenture pursuant to which LVSI and VCR will issue
Mortgage Notes in an aggregate principal amount and for purposes specified
therein.
E. Subordinated Notes Indenture. Concurrently herewith, LVSI, VCR and the
Subordinated Notes Indenture Trustee have entered into the Subordinated Notes
Indenture pursuant to which LVSI and VCR will issue Subordinated Notes in an
aggregate principal amount and for purposes specified therein.
F. HVAC Services Agreement. Concurrently herewith, VCR and the HVAC
Provider have
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entered into the HVAC Services Agreement pursuant to which the HVAC Provider has
agreed to advance, for the acquisition, construction, testing and installation
of that certain HVAC Component of the Project, an aggregate amount specified
therein.
G. Intercreditor Agreement. Concurrently herewith, the Bank Agent (acting
on behalf of itself and the Bank Lenders), the Interim Mall Lender, the Mortgage
Notes Indenture Trustee (acting on behalf of itself and the Mortgage Note
Holders) and the Subordinated Notes Indenture Trustee (acting on behalf of
itself and the Subordinated Note Holders) have entered into that certain
Intercreditor Agreement pursuant to which the parties thereto have set forth
certain intercreditor provisions, including the method of voting and decision
making among the Bank Lenders, the Interim Mall Lender, the Mortgage Note
Holders and the Subordinated Note Holders, the arrangements applicable to joint
consultation and actions in respect of approval rights and waivers, the
limitations on rights of enforcement upon default and the application of
proceeds upon enforcement.
H. Funding Agents' Disbursement and Administration Agreement. Concurrently
herewith, the Pledgor, GCCLLC, the Bank Agent (acting on behalf of itself and
the Bank Lenders), the Interim Mall Lender, the Mortgage Notes Indenture Trustee
(acting on behalf of itself and the Mortgage Note Holders), the HVAC Provider
and The Bank of Nova Scotia, New York agency, as "Disbursement Agent" have
entered into that certain Funding Agents' Disbursement and Administration
Agreement ("Disbursement Agreement") for the purpose of setting forth, among
other things, (a) the mechanics for and allocation of the Company's requests for
Advances under the Facilities and from the Company's Funds Account, (b) the
conditions precedent to the initial Advance and conditions precedent to
subsequent Advances, (c) certain common representations, warranties and
covenants of the Company in favor of the Funding Agents, (d) the establishment
of the Collateral Accounts, (e) the pledge and management of the Collateral
Accounts, and (f) the common events of default and remedies.
I. Capacity and Obligations of Secured Party. The Secured Party has
entered into this Agreement pursuant to the Disbursement Agreement and is
obligated to exercise its rights and perform its duties hereunder in accordance
with the Disbursement Agreement and the Intercreditor Agreement.
J. Condition. It is a condition precedent to the extensions or purchase of
the Secured Facilities by the Lenders that Pledgor shall have established the
Collateral Accounts, grant control to the Disbursement Agent (as Secured Party)
of such accounts, and undertaken the obligations contemplated by this Agreement.
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NOW, THEREFORE, in consideration of the premises and in order to
induce the Lenders to extend or purchase the Secured Facilities under the
Secured Facilities Agreements and for other good and valuable consideration, the
receipt and adequacy of which are hereby acknowledged, Pledgor hereby agrees
with Secured Party as follows:
SECTION 1. Certain Definitions.
(a) Specific Definitions. The following terms used in this Agreement
shall have the following meanings:
"Broker-Dealer" means a person registered as a broker or dealer
under the Securities Exchange Act of 1934, as amended.
"Business Day" means any day other than a Saturday, Sunday or any
other day which is a legal holiday or a day on which banking institutions are
permitted to be closed in New York or Nevada.
"Code" shall mean the Uniform Commercial Code as in effect in New
York.
"Collateral" means (i) the Collateral Accounts, (ii) all amounts
held from time to time in the Collateral Accounts, (iii) all Investments,
including all Financial Assets, security entitlements, securities (whether
certificated or uncertificated), instruments, accounts, general intangibles and
deposits representing or evidencing any Investments, (iv) all interest,
dividends, cash, instruments, securities and other property from time to time
received, receivable or otherwise distributed in respect of or in exchange for
any or all of the Collateral, and (v) to the extent not covered by clauses (i)
through (iv) above, all proceeds of any or all of the foregoing Collateral.
"Collateral Accounts" means the Restricted Securities Accounts and
the Restricted Deposit Accounts and any other accounts or subaccounts in which
Investments may be held or registered.
"Disbursement Secured Parties" shall have the same meaning as
"Secured Parties" under the Disbursement Agreement.
"Investments" means any Financial Assets credited to the Restricted
Securities Account or the Restricted Deposit Accounts, and any other property
acquired by Securities Intermediary as securities intermediary hereunder in
exchange for, with proceeds from or distributions on, or otherwise in respect of
any Investments.
"Overnight Investments" means an interest bearing overnight deposit
account
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with The Bank of Nova Scotia, [Vancouver branch.]
"Permitted Investments" means (a) (i) direct obligations of the
United States of America (including obligations issued or held in book-entry
form on the books of the Department of the Treasury of the United States of
America) or obligations fully guaranteed by the United States of America, (ii)
obligations, debentures, notes or other evidence of indebtedness issued or
guaranteed by any other agency or instrumentality of the United States, (iii)
interest-bearing demand or time deposits (which may be represented by
certificates of deposit) issued by banks having general obligations rated (on
the date of acquisition thereof) at least "A" or the equivalent by any Rating
Agency or, if not so rated, secured at all times, in the manner and to the
extent provided by law, by collateral security in clause (i) or (ii) of this
definition, of a market value of no less than the amount of monies so invested,
(iv) commercial paper rated (on the date of acquisition thereof) at least "A-1"
or "P-1" or the equivalent by any Rating Agency issued by any Person, (v)
repurchase obligations for underlying securities of the types described in
clause (i) or (ii) above, entered into with any commercial bank or any other
financial institution having long-term unsecured debt securities rated (on the
date of acquisition thereof) at least "A" or "A2" or the equivalent by any
Rating Agency in connection with which such underlying securities are held in
trust or by a third-part custodian, (vi) guaranteed investment contracts of any
financial institution which has a long-term debt rated (on the date of
acquisition thereof) at least "A" or "A2" or the equivalent by any Rating
Agency, (vii) obligations (including both taxable and nontaxable municipal
securities) issued or guaranteed by, and any other obligations the interest on
which is excluded from income for Federal income tax purposes issued by, any
state of the United States of America or the District of Columbia or the
Commonwealth of Puerto Rico or any political subdivision, agency, authority or
instrumentality thereof, which issuer or guarantor has (A) a short-term debt
rated (on the date of acquisition thereof) at least "A-1" or "P-1" or the
equivalent by any Rating Agency and (B) a long-term debt rated (on the date of
acquisition thereof) at least "A" or "A2" or the equivalent by any Rating
Agency, (viii) investment contracts of any financial institution either (A)
fully secured by (1) direct obligations of the United States, (2) obligations of
a Person controlled or supervised by and acting as an agency or instrumentality
of the United States or (3) securities or receipts evidencing ownership interest
in obligations or specified portions thereof described in clause (1) or (2), in
each case guaranteed as full faith and credit obligations of the United States
of America, having a market value at least equal to 102% of the amount deposited
thereunder, or (B) with long-term debt rated at least "A" or "A2" or the
equivalent by any Rating Agency and short-term debt rated at least "A-1" or
"P-1" or the equivalent by any Rating Agency, (ix) a contract or investment
agreement with a provider or guarantor (A) which provider or guarantor is rated
(on the date of acquisition thereof) at least "A" or "A2" or the equivalent by
any Rating Agency (provided that if a guarantor is party to the rating, the
guaranty must be unconditional and must be confirmed in writing prior to any
assignment by the provider to another subsidiary of such guarantor,) (B)
providing that monies invested shall be payable without condition (other than
notice) and without brokerage fee or other penalty, upon not more than two
Business Days' notice for application when and as required or permitted under
the Collateral
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Documents, and (C) stating that such contract or agreement is unconditional,
expressly disclaiming any right of setoff and providing for immediate
termination in the event of insolvency of the provider and termination upon
demand of the Disbursement Agent if prior to Completion (which demand shall only
be made at the direction of the Pledgor) after payment or other covenant default
by the provider, or (x) any debt instruments of any Person which instruments are
rated (on the date of acquisition thereof) at least "X," "X0," "A-1" or "P-1" or
the equivalent by any Rating Agency; provided that in each case of clauses (i)
through (x), such investments are denominated in United States dollars and
maturing not more than 13 months from the date of acquisition thereof; (b)
investments in any money market fund which is rated (on the date of acquisition
thereof) at least "A" or "A2" or the equivalent by any Rating Agency; (c)
investments in mutual funds sponsored by any securities broker-dealer of
recognized national standing having an investment policy that requires
substantially all the invested assets of such fund to be invested in investments
described in any one or more of the foregoing clauses and having a rating of at
least "A" or "A2" or the equivalent by any Rating Agency or (d) investments in
both taxable and nontaxable (i) periodic auction reset securities ("PARS") which
have final maturities between one and 30 years from the date of issuance and are
repriced through a dutch auction or other similar method every 35 days or (ii)
auction preferred shares ("APS") which are senior securities of leveraged closed
end municipal bond funds and are repriced pursuant to a variety of rate reset
periods, in each case having rating of at least "A" or "A2" or the equivalent by
any Rating Agency.
"Restricted Credit Balance Accounts" means the restricted credit
balance accounts established and maintained by Pledgor and Secured Party with
Securities Intermediary pursuant to Section 2, including the Collection Account
and the Disbursement Account.
"Restricted Deposit Accounts" means the restricted deposit accounts
established and maintained by Pledgor and Secured Party with Securities
Intermediary pursuant to Section 2, including the HC/Mall Component Cash
Management Account, the HVAC Component Cash Management Account and the
Pre-Completion Revenues Account.
"Restricted Securities Accounts" means the restricted securities
accounts established and maintained with Securities Intermediary pursuant to
Section 2, including the Banks' Proceeds Account, the Company's Funds Account
and the Interest Payment Account.
"Secured Facilities" means all of the Facilities other than the HVAC
Commitments Facility.
"Secured Facilities Agreements" means all of the Facilities
Agreements other than the HVAC Services Agreement.
["Secured Obligations" shall have the meaning given to such term in
the Borrower Security Agreement of date even herewith among Pledgor and
Intercreditor Agent.]
"Securities Intermediary" means The Bank of Nova Scotia.
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"Suspension Period" means each period beginning on the occurrence of
a Potential Event of Default or Event of Default and continuing so long as any
Potential Event of Default or Event of Default shall continue.
(b) General Provisions. Capitalized terms used but not defined
herein shall have the meaning given to such terms in Exhibit A [As attached to
Disbursement Agreement]. Unless otherwise defined herein or in Exhibit A, terms
used in Articles 8 and 9 of the Code are used herein as therein defined. Words
used herein, regardless of the number and gender specifically used, shall be
deemed and construed to include any other number, singular or plural, and any
other gender, masculine, feminine or neuter, as the context indicates is
appropriate. When a reference is made in this Agreement to an Appendix, Exhibit,
Introduction, Recital, Section or Schedule, such reference shall be to an
Appendix, an Exhibit, the Introduction, a Recital or a Section of, or a Schedule
to, this Agreement unless otherwise indicated. The headings contained in this
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement. Whenever the words "include,"
"includes" or "including" are used in this Agreement, they shall be deemed to be
followed by the words "without limitation."
SECTION 2. Establishment and Operation of the Collateral Accounts.
[(a) Establishment of Banks' Proceeds Account. Pledgor and Secured
Party hereby authorize and direct Securities Intermediary to establish and
maintain at its office at Xxx Xxxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, a
securities account in the name of Secured Party and under the sole dominion and
control of Secured Party, designated as "The Bank of Nova Scotia, as
Disbursement Agent under agreement dated [], Banks' Proceeds Account fbo the
Bank Lenders". Securities Intermediary hereby undertakes to treat Secured Party
as the person entitled to exercise the rights that comprise any Financial Asset
credited to the Banks' Proceeds Account. The Secured Party and the Pledgor agree
that this account shall be the "Banks' Proceeds Account."]
[(b) Establishment of Collection Account. Pledgor and Secured Party
hereby authorize and direct Securities Intermediary to establish and maintain at
its office at Xxx Xxxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, as an account in the
name of Secured Party and under the sole dominion and control of Secured Party,
a restricted credit balance account designated as "The Bank of Nova Scotia, as
Disbursement Agent under the agreement dated November 14, 1997, Collection
Account". The Secured Party and the Pledgor agree that this account shall be the
"Collection Account."]
(c) Establishment of Company's Funds Account. Pledgor and Secured
Party hereby authorize and direct Securities Intermediary to establish and
maintain at its office at Xxx Xxxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, a
securities account in the name of Secured Party and under the sole dominion and
control of Secured Party, designated as "The Bank of Nova Scotia, as
Disbursement Agent under agreement dated [], Company's Funds Account fbo Secured
Lenders". Securities Intermediary
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hereby undertakes to treat Secured Party as the person entitled to exercise the
rights that comprise any Financial Asset credited to the Company's Funds
Account. The Secured Party and the Pledgor agree that this account shall be the
"Company's Funds Account."
[(d) Establishment of Disbursement Account. Pledgor and Secured
Party hereby authorize and direct Securities Intermediary to establish and
maintain at its office at Xxx Xxxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, as an
account in the name of Secured Party and under the sole dominion and control of
Secured Party, a restricted credit balance account designated as "The Bank of
Nova Scotia, as Disbursement Agent under the agreement dated [], Disbursement
Account". The Secured Party and the Pledgor agree that this account shall be the
"Disbursement Account."
[(e) Establishment of HC/Mall Component Cash Management Account.
Pledgor and Secured Party hereby authorize and direct Securities Intermediary to
establish and maintain at The Nova Scotia Bank, Portland branch, 000 X.X. 0xx
Xxx., Xxxxx 000, Xxxxxxxx, Xxxxxx, as an account in the name of Secured Party
and under the sole dominion and control of Secured Party, a restricted deposit
account designated as "The Bank of Nova Scotia, as Disbursement Agent under the
agreement dated [], HC/Mall Component Cash Management Account". The Secured
Party and the Pledgor agree that this account shall be the "HC/Mall Component
Cash Management Account."][Right of setoff]
[(f) Establishment of HVAC Component Cash Management Account.
Pledgor and Secured Party hereby authorize and direct Securities Intermediary to
establish and maintain at The Nova Scotia Bank, Portland branch, 000 X.X. 0xx
Xxx., Xxxxx 000, Xxxxxxxx, Xxxxxx, an account in the name of Secured Party and
under the sole dominion and control of Secured Party, a restricted deposit
account designated as "The Bank of Nova Scotia, as Disbursement Agent under the
agreement dated November 14, 1997, HVAC Component Cash Management Account". The
Secured Party and the Pledgor agree that this account shall be the "HVAC
Component Cash Management Account."][Right of setoff]
(g) Establishment of Interest Payment Account. Pledgor and Secured
Party hereby authorize and direct Securities Intermediary to establish and
maintain at its office at Xxx Xxxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, a
securities account in the name of Secured Party and under the sole dominion and
control of Secured Party, designated as "The Bank of Nova Scotia, as
Disbursement Agent under agreement dated [], Interest Payment Account fbo
Disbursement Secured Parties". Securities Intermediary hereby undertakes to
treat Secured Party as the
person entitled to exercise the rights that comprise any Financial Asset
credited to the Interest Payment Account. The Secured Party and the Pledgor
agree that this account shall be the "Interest Payment Account."
[(h) Establishment of Pre-Completion Revenues Account. Pledgor and
Secured Party hereby authorize and direct Securities Intermediary to establish
and maintain at The Nova Scotia Bank, Portland branch, 000 X.X. 0xx Xxx., Xxxxx
000, Xxxxxxxx, Xxxxxx, as an account in the
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name of Secured Party and under the sole dominion and control of Secured Party,
a restricted deposit account designated as "The Bank of Nova Scotia, as
Disbursement Agent under the agreement dated November 14, 1997, Pre-Completion
Revenues Account". The Secured Party and the Pledgor agree that this account
shall be the "Pre-Completion Revenues Account."]
(i) Operations of the Collateral Accounts. The Collateral Accounts
shall be operated, and all Investments shall be acquired and registered or held
(as applicable), in accordance with the terms of this Agreement and the
directions of Secured Party.
(j) Account Statements. Securities Intermediary shall send Secured
Party and Pledgor written account statements with respect to the Collateral
Accounts not less frequently than monthly. Reports or confirmation of the
execution of orders and statements of account shall be conclusive if not
objected to in writing within 30 days after delivery pursuant to Section 21.
SECTION 3. Mechanics of Deposits of Funds in and between Collateral
Accounts.
(a) Transfers to Banks' Proceeds Account. All transfers of funds to
the Banks' Proceeds Account shall be made by wire transfer (or, if applicable,
intra-bank transfer from another account of Pledgor with Securities
Intermediary) of immediately available funds, in each case addressed as follows:
Account No.: #02256-14
ABA No.: #000000000
Reference: Venetian Project - Banks' Proceeds Account
Attention: Xxxxxxxx Xxxxxx
[(b) Transfers to Collection Account. All transfers of funds to the
Collection Account shall be made by wire transfer (or, if applicable, intra-bank
transfer from another account of Pledgor with Securities Intermediary) of
immediately available funds, in each case addressed as follows:
Account No.: #02239-13
ABA No.: #000000000
Reference: Venetian Project - Collection Account
Attention: Xxxxxxxx Xxxxxx
(c) Transfers to Company's Funds Account. All transfers of funds to
the Company's Funds Account shall be made by wire transfer (or, if applicable,
intra-bank transfer from another account of Pledgor with Securities
Intermediary) of immediately available funds, in each case addressed as follows:
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Account No.: #02235-14
ABA No.: #000000000
Reference: Venetian Project - Copmpany's Funds Account
Attention: Xxxxxxxx Xxxxxx
[(d) Acknowledgement of Deposit. Securities Intermediary and Secured
Party acknowledge the deposit of $[5,000,000] in the Company's Funds Account on
the date hereof.]
(e) Transfers to HC/Mall Component Cash Management Account.
Transfers of funds to the HC/Mall Component Cash Management Account shall be
made by wire transfer (or, if applicable, intra-bank transfer from another
account of Pledgor with Securities Intermediary) of immediately available funds,
in each case addressed as follows:
Account No.: Credit with advise The Bank of Nova Scotia
Portland Branch IBA #6028-33
ABA No.: #000000000
Reference: Venetian Project - HC/Mall Component Cash
Management Account #7460011435
Attention: Xxxxx Xxxxxx
[(f) Acknowledgement of Deposit. Securities Intermediary and Secured
Party acknowledge the deposit by Pledgor of $[5,500,000] in the HC/Mall
Component Cash Management Account on the date hereof.]
(g) Transfers to HVAC Component Cash Management Account. Transfers
of funds to the HVAC Component Cash Management Account shall be made by wire
transfer (or, if applicable, intra-bank transfer from another account of Pledgor
with Securities Intermediary) of immediately available funds, in each case
addressed as follows:
Account No.: Credit with advise The Bank of Nova Scotia
Portland Branch IBA #6028-33
ABA No.: #000000000
Reference: Venetian Project - HVAC Component Cash
Management Account #7460011443
Attention: Xxxxx Xxxxxx
(h) Acknowledgement of Deposit. Securities Intermediary and Secured
Party acknowledge the deposit by Pledgor of $[1,000,000] in the HVAC Component
Cash Management Account on the date hereof.
(i) Transfers to Pre-Completion Revenues Account. All transfers of
funds to the Pre-Completion Revenues Account shall be made by wire transfer (or,
if applicable, intra-bank transfer from another account of Pledgor with
Securities Intermediary) of immediately available funds, in each case addressed
as follows:
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Account No.: #02257-11
ABA No.:
Reference: Pre-Completion Revenues Account
Attention: Xxxxxxxx Xxxxxx
(j) Notice of Transfers. In the event of any transfer of funds to or
from the Collateral Accounts pursuant to any provision of Section 3, Pledgor,
Secured Party or Securities Intermediary, as the case may be, shall promptly
after initiating or sending out written instructions with respect to such
transfer, give notice to the other such party by facsimile of the date and
amount of such transfer.
SECTION 4. Permitted Investments and Transfers of Amounts in the
Collateral Accounts.
(a) Strict Compliance. Cash held by Securities Intermediary in the
Collateral Accounts shall not be (i) invested or reinvested, (ii) sold or
redeemed, or (iii) transferred from or among the Collateral Accounts, except as
provided in this Section 4.
(b) Pledgor's Right to Direct Investment. Except during any
Suspension Period, Securities Intermediary shall, in accordance with Pledgor's
written Entitlement Orders given to Securities Intermediary from time to time,
sell or redeem Investments, and apply amounts transferred to or held for the
credit of the respective Restricted Securities Accounts to make investments for
credit to the Restricted Securities Accounts, in Securities Intermediary's name
and as custodian under this Agreement, in Permitted Investments. During any
Suspension Period, (i) Pledgor's right to direct such investments under this
Section 4(b) shall be suspended, and Securities Intermediary shall not accept
Entitlement Orders with respect to the Restricted Securities Account from any
person other than Secured Party; and (ii) any credit balances shall be invested
and reinvested only as provided in Section 4(c).
(c) Overnight Investments. To the extent that, as of [2:00 p.m., New
York time] on any Business Day, there are credit balances expected to remain
after settlement of all pending transactions in any of the [Restricted
Securities Accounts], [Restricted Deposit Accounts] or the [Restricted Credit
Balance Accounts], unless otherwise instructed by Secured Party, Securities
Intermediary shall apply the expected credit balances to acquire Overnight
Investments. Any Overnight Investments shall be held for the credit of the
Collateral Account from which the proceeds for acquisition was derived. [Pledgor
hereby acknowledges that, as foreign deposit accounts, "Overnight Investments"
may not benefit from any protections afforded to domestic depositors by state or
Federal law, may have a lesser preference in a liquidation than a domestic
deposit, and are subject to cross-border risks. Neither The Bank of Nova Scotia,
New York agency, nor The Bank of Nova Scotia, Portland branch, separately
guarantee or promise the repayment of
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any Overnight Investment.]
(d) Actions of Securities Intermediary on Purchase of Investments.
Promptly upon the purchase, acquisition or transfer for credit of any Collateral
Account of any Investment, Securities Intermediary shall take all steps that it
customarily takes in the ordinary course of its business to ensure that such
Investment is credited on its books to the Collateral Account for which the
Investment was acquired. Without limiting the generality of the foregoing,
Securities Intermediary shall promptly (i) send to Pledgor and Secured Party a
written confirmation of the acquisition of such Investment, and (ii) indicate by
book entry in its records that such Investment has been credited to, and is held
for the credit of, the specified Collateral Account. Securities Intermediary
agrees with Pledgor and Secured Party that any cash or property credited to, or
held for the credit of, the Collateral Accounts shall be treated as "Financial
Assets" as that term is defined in Section 8-103(a)(9)(iii) of the Code.
(e) Interest on Collateral Accounts. Amounts held on deposit or as
credit balances, whether in a Restricted Deposit Account, a Restricted Credit
Balance Account or a Restricted Securities Account shall not bear interest,
although to the extent invested in Investments (including Overnight
Investments), deposit or credit balances may realize interest income.
(f) Control Agreement. Anything contained herein to the contrary
notwithstanding, including the actual or alleged absence of a Potential Event of
Default or Event of Default, Securities Intermediary shall, if and as directed
in writing by Secured Party, without the consent of Pledgor, (i) comply with
Entitlement Orders originated by Secured Party with respect to the Collateral
Accounts and any Security Entitlements therein, (ii) transfer, sell or redeem
any of the Collateral, (iii) transfer any or all of the Collateral to any
account or accounts designated by Secured Party, including any Collateral
Account or an account established in Secured Party's name (whether at Secured
Party or Securities Intermediary or otherwise), (iv) register title to any
Collateral in any name specified by Secured Party, including the name of Secured
Party or any of its nominees or agents, without reference to any interest of
Pledgor, or (v) otherwise deal with the Collateral as directed by Secured Party.
Securities Intermediary shall act on any instruction of Secured Party
notwithstanding assertions or proof that (1) Secured Party has no right under
Sections 14 or 15 to originate the instruction or take the underlying action;
(2) such instruction or action constitutes a breach of this Agreement or any
other agreement; or (3) this Agreement has terminated, unless notified in
writing by Secured Party that this Agreement has terminated and such notice has
not been withdrawn. Nothing contained in this paragraph shall constitute a
waiver of by Pledgor of any rights or remedies it may have against Secured Party
under this Agreement or any other agreement.
(g) Deposit of Proceeds. [Any interest earned on any of the
Restricted Deposit Balance Accounts in accordance with Section 4(e),] any
interest, cash dividends or other cash distributions received in respect of any
Investments and the net proceeds of any sale or payment of
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any Investments shall be promptly credited to, and held for the credit of, the
Collateral Account to which such Investment was credited. Any distribution of
property other than cash in respect of any Investment shall be credited to and
held for the credit of the Collateral Account to which the related Investment
was credited; provided that, unless otherwise instructed in writing by Secured
Party, Securities Intermediary shall, for credit to the Collateral Accounts,
promptly sell, redeem or otherwise liquidate any such property that, as of the
date of receipt, is not a] Permitted Investment.
(h) Segregation of Accounts. Except to the extent otherwise
instructed by Secured Party or as provided in Section 2(a), 2(b), 2(c), 2(d),
2(e), 2(f), 2(g), or 2(h)Securities Intermediary shall separately maintain each
of the Collateral Accounts and shall not transfer property or proceeds among the
Collateral Accounts.
SECTION 5. Pledge of Security for Secured Obligations. Pledgor
hereby pledges and assigns to Secured Party, and hereby grants to Secured Party
a security interest in, all of Pledgor's right, title and interest in and to the
Collateral as collateral security for the prompt payment or performance in full
when due, whether at stated maturity, by required prepayment, declaration,
acceleration, demand or otherwise (including the payment of amounts that would
become due but for the operation of the automatic stay under Section 362(a) of
the United States Bankruptcy Code, 11 U.S.C. 362(a)), of all Secured
Obligations.
SECTION 6. Acknowledgement of Security Interest in Favor of Secured
Party; Covenant Against Creation of other Interests.
(a) Acknowledgement of Security Interest. Securities Intermediary
acknowledges the security interest granted by Pledgor in favor of Secured Party
in the Collateral.
(b) Acknowledgement of Securities Intermediary's Role. Securities
Intermediary hereby further acknowledges that it holds the Collateral Accounts,
and all Security Entitlements therein, as custodian for, for the benefit of, and
subject to the control of, Secured Party. Securities Intermediary shall, by book
entry or otherwise, indicate that the Collateral Accounts, and all Security
Entitlements registered to or held therein, are subject to the control of
Secured Party as provided in Section 4(f).
(c) Securities Intermediary Has No Notice of Adverse Claims.
Securities Intermediary represents and warrants that (i) it has no notice of any
Adverse Claim against any of the Collateral other than the claim of Secured
Party under this Agreement; and (ii) it is not, in its capacity as securities
intermediary, party to any agreement other than this Agreement that governs its
rights or duties, or limits or conflicts with the rights of Secured Party,
including the exclusive right of Secured Party to control as provided in Section
4(f), with respect to the Collateral Accounts.
(d) Securities Intermediary Shall Not Acknowledge Other Claims.
Securities
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Intermediary agrees that, except as expressly provided in this Agreement or with
the written consent of Secured Party, it shall not agree to or acknowledge (i)
any right by any Person other than Secured Party to originate Entitlement Orders
or control with respect to the Collateral Accounts; or (ii) any limitation on
the right of Secured Party to originate Entitlement Orders with respect to or
direct the transfer of any Investments or cash credited to the Collateral
Accounts.
SECTION 7. Securities Intermediary Maintenance of the Collateral
Accounts.
(a) Transactions Shall Comply With Rules. The parties acknowledge
that all transactions in Financial Assets under this Agreement shall be in
accordance with the rules and customs of the exchange, market or clearing
organization, if any, in which the transactions are executed or settled and in
conformity with applicable law and regulations of governmental authorities and
future amendments or supplements thereto.
(b) Fees and Charges of Securities Intermediary. Pledgor shall pay
to Securities Intermediary, in accordance with Securities Intermediary's usual
schedule of charges or any written agreement between Securities Intermediary and
Pledgor, any fees or charges reasonably imposed by Securities Intermediary with
respect to the establishment, maintenance and transactions in or affecting the
Collateral Accounts.
(c) Securities Intermediary Shall Not Permit Leverage of
Investments. Securities Intermediary shall not execute any transaction to
acquire a Financial Asset under Section 4(b) unless there are sufficient funds
in a specific Collateral Account or reasonably expected with respect to pending
transactions in such Collateral Account to settle such transaction for the
account of such Collateral Account. Notwithstanding the foregoing sentence, in
the event that Securities Intermediary executes a transaction without adequate
funds to settle the transaction, Pledgor shall be liable to Securities
Intermediary for any deficiency and shall promptly reimburse Securities
Intermediary for any loss or expense incurred thereby, including losses
sustained by reason of Securities Intermediary's inability to borrow any
securities or other property sold for the Collateral Account. Pledgor agrees to
pay interest charges which may be imposed by Securities Intermediary in
accordance with its usual custom, with respect to late payments for Financial
Assets purchased for any Collateral Account and prepayments to any Collateral
Account (i.e., the crediting of the proceeds of sale before the settlement date
or receipt by Securities Intermediary of the items sold in good deliverable
form). Pledgor agrees to pay promptly any amount which may become due in order
to satisfy demands for additional margin or marks to market with respect to any
security purchased or sold on instruction from Pledgor.
(d) Risk of Investments and Transactions. It is not the intention of
the parties that Securities Intermediary should bear any investment risk
associated with Permitted Investments or Overnight Investments acquired for the
credit of the Collateral Accounts in accordance with Section 4. Any losses or
gains realized on such Investments shall be charged or credited to the
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Collateral Accounts, as appropriate. On committing to a transaction for the
credit of the Collateral Accounts pursuant to an instruction permitted in
accordance with Section 4, Securities Intermediary may, (i) pending settlement,
block (A) the Investments to be sold or (B) credit balances sufficient to settle
any acquisition and, (ii) at the time of settlement, deliver such Investments or
funds in accordance with the rules, custom or practice of the particular market.
(e) Use of Intermediaries and Nominees. Securities Intermediary is
authorized, subject to Secured Party's written instructions, to register any
Financial Assets acquired by Securities Intermediary pursuant to this Agreement
in the name of Securities Intermediary or in the name of its nominee, or to
cause such securities to be registered in the name of a Federal reserve bank, a
recognized securities intermediary or clearing corporation, or a nominee of any
of them. Securities Intermediary may at any time and from time to time appoint,
and may at any time remove, any bank, trust company, clearing corporation, or
Broker-Dealer as its agent to carry out such of the provisions of this
Agreement. The appointment or use of any intermediary, or the appointment of any
such agent, shall not relieve Securities Intermediary of any responsibility or
liability under this Agreement.
(f) Corporate Actions. Except as otherwise set forth herein, the
parties agree that neither Secured Party nor Securities Intermediary shall have
any responsibility for ascertaining or acting upon any calls, conversions,
exchange offers, tenders, interest rate changes or similar matters relating to
any Financial Assets credited to or held for the credit of the Restricted
Securities Account (except based on written instructions originated by Pledgor
or Secured Party), or for informing Pledgor or Secured Party with respect
thereto, whether or not Securities Intermediary or Secured Party has, or is
deemed to have, knowledge of any of the aforesaid. Securities Intermediary is
authorized to withdraw securities sold or otherwise disposed of, and to credit
the appropriate Collateral Account with the proceeds thereof or make such other
disposition thereof as may be directed in accordance with this Agreement.
Securities Intermediary is further authorized to collect all income and other
payments which may become due on Financial Assets credited to the Collateral
Accounts, to surrender for payment maturing obligations and those called for
redemption and to exchange certificates in temporary form for like certificates
in definitive form, or, if the par value of any shares is changed, to effect the
exchange for new certificates. It is understood and agreed by Pledgor and
Secured Party that, although Securities Intermediary will use reasonable efforts
to effect the transactions set forth in the preceding sentence, Securities
Intermediary shall incur no liability for its failure to effect the same unless
its failure is the result of wilful misconduct.
(g) Disclosure of Account Relationships. Pledgor and Secured Party
acknowledge that Securities Intermediary may be required to disclose to
securities issuers the name, address and securities positions with respect to
Financial Assets credited to the Collateral Accounts, and hereby consent to such
disclosures.
(h) Forwarding of Documents. Securities Intermediary shall forward
to Pledgor
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and Secured Party, or notify Pledgor and Secured Party by telephone of, all
communications received by Securities Intermediary as owner of any Financial
Assets credited to the Collateral Accounts and which are intended to be
transmitted to the beneficial owner thereof.
(i) Direction of Secured Party Controls in Disputes. Pledgor,
Securities Intermediary and Secured Party hereby agree that in the event any
dispute arises with respect to the payment, ownership or right to possession of
the Collateral Accounts or any other Collateral credited to or held therein,
Securities Intermediary shall take such actions and shall refrain from taking
such actions with respect thereto as may be directed by Secured Party.
(j) No Setoff, etc. Securities Intermediary shall not exercise on
its own behalf any claim, right of set-off, banker's lien, clearing lien,
counterclaim or similar right against any of the Collateral[; provided that
Securities Intermediary may deduct, from any credit balances, any usual and
ordinary transaction and administration fees payable in connection with the
administration and operation of the Collateral Accounts. Except for claims for
deductions permitted in the preceding sentence, Securities Intermediary agrees
that any security interest it may have in the Collateral Accounts or any
security entitlement carried therein shall be subordinate and junior to the
interest of Secured Party.
(k) Only Agreement. This Agreement shall govern the actions, rights
and obligations of Securities Intermediary, and shall determine the governing
law, with respect to the Collateral Accounts and the Collateral notwithstanding
any term or condition in any agreement other than this Agreement as it may be
amended, supplemented or otherwise modified in writing.
(l) Care of Financial Assets. Securities Intermediary shall maintain
possession or control of all Financial Assets credited to the Collateral
Accounts by segregating such Financial Assets from its proprietary assets and
keeping them free of any lien, charge or claim of any third party granted or
created by Securities Intermediary. Securities Intermediary shall take such
other steps to ensure that Financial Assets credited to the Collateral Accounts
are identified as being held for customers of Securities Intermediary as may
required under applicable law, including 17 CFR Part 450, or in accordance with
custom and practice in the industry.
SECTION 8. Transactions in Collateral Accounts.
(a) Power of Secured Party to Sell or Transfer. Pledgor agrees that
Secured Party may sell or cause the sale or redemption of any Investment and
instruct Securities Intermediary to transfer the proceeds of such sale or any
other credit or balance in any of the Collateral Accounts Account to any of the
Collateral Accounts or any third party or account, in either case (i) if such
sale or redemption is necessary to permit Secured Party to perform its duties
under this Agreement, the Disbursement Agreement or the Intercreditor Agreement,
or (ii) as provided in Section 14.
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(b) Drawings Permitted from Certain Accounts. Except as provided in
subdivision 8(b)(ii), Pledgor has no right to draw Checks against the Collateral
Accounts.
(i) By Negotiable Instruments Delivered to Pledgor. Secured
Party may, in accordance with the Disbursement Agreement, periodically
deliver to Pledgor preauthorized "Checks" (as defined in Section
3-103(2)(b) of the Code) drawn against the Disbursement Account in
specific amounts to the order of specific vendors or other third party
payees of Pledgor and appropriately executed by or for Secured Party. On
delivery of Checks to Pledgor, Secured Party shall cause funds in the
affected accounts to be blocked to the extent necessary to pay such items
and shall not otherwise disburse or apply such related funds (including to
make Investments pursuant to Section 4(b)) unless it has withdrawn the
authorization to deliver such items to the payees in advance of delivery
to the payee as set forth in the following sentence. If any Event of
Default has occurred and is continuing, Secured Party may notify Pledgor
that it has withdrawn Pledgor's right to deliver specified Checks or
similar items, or unblocked the related funds, by written notice. Unless
so notified by Secured Party in advance of delivery to the payee, Pledgor
is authorized to deliver such Checks to the appropriate payees. If so
notified by Secured Party in advance of delivery of any Check to the payee
thereof, Pledgor shall promptly return the Check or similar items to
Secured Party.
(ii) By Pledgor. Except during any Suspension Period, Pledgor
may by Check or other means draw funds from the HC/Mall Component Cash
Management Account and the HVAC Component Cash Management Account for the
purposes set forth in the Disbursement Agreement. During any Suspension
Period, the HC/Mall Component Cash Management Account and the HVAC
Component Cash Management Account shall be blocked, and Pledgor shall have
no right to draw any amounts therefrom.
SECTION 9. Representations and Warranties By Securities
Intermediary. Securities Intermediary hereby represents and warrants to Pledgor
and Secured Party as follows:
(a) Corporate Power. Securities Intermediary has all necessary
corporate power and authority to enter into and perform this Agreement.
(b) Execution Authorized. The execution, delivery and performance of
this Agreement by Securities Intermediary have been duly authorized by all
necessary corporate action on the part of Securities Intermediary.
(c) Securities Intermediary. Securities Intermediary is a
"securities intermediary" (as that term is defined in Section 8-102(a)(14) of
the Code) and is acting in such capacity with respect to the Collateral
Accounts. Securities Intermediary is not a "clearing corporation" (as that term
is defined in Section 8-102(a)(5) of the Code).
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SECTION 10. Representations and Warranties. Pledgor represents and
warrants as follows:
(a) Ownership of Collateral; Security Interest; Perfection and
Priority. [Except as specifically set forth in Section [] of the Disbursement
Agreement, ]Pledgor is (or at the time of transfer thereof to Securities
Intermediary will be) the legal and beneficial owner of the Collateral from time
to time transferred by Pledgor to Securities Intermediary, as agent for Secured
Party, free and clear of any Lien except for the security interest created by
this Agreement. The pledge and assignment of the Collateral pursuant to this
Agreement creates a valid security interest in the Collateral securing the
Payment of the Secured Obligations. Assuming compliance by Securities
Intermediary with this Agreement, Secured Party will have a perfected security
interest in the Collateral senior in priority to any other security interest
created by Pledgor.
(b) Governmental Authorizations. Except as may be required under
Nevada gaming laws, no authorization, approval or other action by, and no notice
to or filing with, any governmental authority or regulatory body is required for
either (i) the grant by Pledgor of the security interest granted hereby, (ii)
the execution, delivery or performance of this Agreement by Pledgor, or (iii)
the perfection of or the exercise by Secured Party or Securities Intermediary of
its rights and remedies hereunder (except as may have been taken by or at the
direction of Pledgor).
(c) Other Information. All information heretofore, herein or
hereafter supplied to Secured Party or Securities Intermediary by or on behalf
of Pledgor with respect to the Collateral, the establishment of the Collateral
Accounts or otherwise is accurate and complete in all material respects.
SECTION 11. Further Assurances.
(a) Pledgor. Pledgor agrees that from time to time, at the expense
of Pledgor, Pledgor shall promptly execute and deliver all further instruments
and documents, and take all further action, that may be necessary or reasonably
desirable, or that Secured Party may reasonably request, in order to perfect and
protect any security interest granted or purported to be granted hereby or to
enable Secured Party or Securities Intermediary to exercise and enforce its
rights and remedies hereunder with respect to any Collateral. Without limiting
the generality of the foregoing, Pledgor shall: (a) execute and file such
financing or continuation statements, or amendments thereto, and such other
instruments or notices, as may be necessary or reasonably desirable, or as
Secured Party may reasonably request, in order to perfect and preserve the
security interests granted or purported to be granted hereby, and (b) at Secured
Party's request, appear in and defend any action or proceeding that may affect
Pledgor's title to or Secured Party's security interest in all or any part of
the Collateral.
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(b) Securities Intermediary. Securities Intermediary shall take such
further actions as Secured Party shall reasonably request as being necessary or
desirable to maintain or achieve perfection or priority of Secured Party's
security interest with respect to the Collateral and to permit Secured Party to
exercise its rights with respect to the Collateral.
SECTION 12. Transfers and other Liens. Pledgor agrees that, except
as permitted in Section 4(b) and for the security interest created by this
Agreement, it shall not (a) sell, assign (by operation of law or otherwise),
redeem or otherwise dispose of any of the Collateral or (b) create or suffer to
exist any Lien upon or with respect to any of the Collateral.
SECTION 13. Secured Party Appointed Attorney-in-Fact; Secured Party
Performance.
(a) Secured Party Appointed Attorney-in-Fact. Pledgor hereby
irrevocably appoints Secured Party as Pledgor's attorney-in-fact, with full
authority in the place and stead of Pledgor and in the name of Pledgor, Secured
Party or otherwise, from time to time in Secured Party's discretion to take any
action and to execute any instrument that Secured Party may deem necessary or
advisable to accomplish the purposes of this Agreement, including (a) to file
one or more financing or continuation statements, or amendments thereto,
relative to all or any part of the Collateral without the signature of Pledgor
and (b) to receive, endorse and collect any instruments or other Investments
made payable to Pledgor representing any dividend, principal or interest payment
or other distribution in respect of the Collateral or any part thereof and to
give full discharge for the same.
(b) Performance by Secured Party. If Pledgor fails to perform any
agreement contained herein, Secured Party may itself perform, or cause
performance of, such agreement, and the expenses of Secured Party incurred in
connection therewith shall be payable by Pledgor under Section 16.
SECTION 14. Remedies.
(a) Transfer or Sequestration of Collateral after Potential Event of
Default or Event of Default. If any Potential Event of Default or Event of
Default shall have occurred and be continuing, Secured Party may instruct
Securities Intermediary to (i) sell or redeem any Investments, (ii) transfer any
or all of the Collateral constituting cash to the [Restricted Deposit] Account
or transfer any or all of the Collateral to any account designated by Secured
Party, including account or accounts established in Secured Party's name
(whether at Secured Party or Securities Intermediary or otherwise), (iii)
register title to any Collateral in any name specified by Secured Party,
including the name of Secured Party or any of its nominees or agents, without
reference to any interest of Pledgor, or (iv) otherwise deal with the Collateral
as directed by Secured Party.
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(b) Rights of Secured Party after Event of Default. If any Event of
Default shall have occurred and be continuing, Secured Party may exercise in
respect of the Collateral, in addition to all other rights and remedies provided
for herein or otherwise available to it, all the rights and remedies of a
secured party on default under the Uniform Commercial Code as in effect in any
relevant jurisdiction (the "UCC") (whether or not the UCC applies to the
affected Collateral), and Secured Party may also in its sole discretion sell the
Collateral or any part thereof in one or more parcels at public or private sale,
at any exchange or broker's board or at any of Secured Party's offices or
elsewhere, for cash, on credit or for future delivery, at such time or times and
at such price or prices and upon such other terms as Secured Party may deem
commercially reasonable, irrespective of the impact of any such sales on the
market price of the Collateral. Each purchaser at any such sale shall hold the
property sold absolutely free from any claim or right on the part of Pledgor,
and Pledgor hereby waives (to the extent permitted by applicable law) all rights
of redemption, stay or appraisal which it now has or may at any time in the
future have under any rule of law or statute now existing or hereafter enacted.
Secured Party shall not be obligated to make any sale of Collateral regardless
of notice of sale having been given. Secured Party 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.
(c) Agreement as to Manner of Sale. Pledgor hereby agrees that the
Collateral is of a type customarily sold on recognized markets and, accordingly,
that no notice to any Person is required before any sale of any of the
Collateral pursuant to the terms of this Agreement; provided that, without
prejudice to the foregoing, Pledgor agrees that, to the extent notice of any
such sale shall be required by law, at least ten days' notice to Pledgor 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.
(d) Deficiency. If the proceeds of any sale or other disposition of
the Collateral are insufficient to pay all the Secured Obligations, Pledgor
shall be liable for the deficiency and the fees of any attorneys employed by
Secured Party to collect such deficiency.
(e) Set-off. Anything contained herein to the contrary
notwithstanding, in the case of the NC/Mall Component Cash Management Account
and the HVAC Component Cash Management Account, whether credited to the
Restricted Securities Account or otherwise, shall be subject to secured Party's
or any Secured Lender's rights of set-off.
SECTION 15. Application of Proceeds. If any Event of Default shall
have occurred and be continuing, all cash included as Collateral and all
proceeds received by Secured Party in respect of any sale or redemption of,
collection from, or other realization upon all or any part of the Collateral
may, in the discretion of Secured Party, be held by or for Secured Party as
Collateral for, or then, or at any other time thereafter, applied in full or in
part by Secured Party against, the Secured Obligations in the following order of
priority:
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FIRST: To the payment of all costs and expenses of such sale,
collection or other realization, including reasonable compensation to
Secured Party and its agents and counsel, and all other expenses,
liabilities and advances made or reasonably incurred by Secured Party in
connection therewith, and all amounts for which Secured Party is entitled
to indemnification hereunder and all advances made by Secured Party
hereunder for the account of Pledgor, and to the payment of all costs and
expenses paid or incurred by Secured Party in connection with the exercise
of any right or remedy hereunder, all in accordance with Section 16;
SECOND: To the payment of all other Secured Obligations in
accordance with the Disbursement Agreement and the Intercreditor
Agreement; and
THIRD: To the payment to or upon the order of Pledgor, or to
whomsoever may be lawfully entitled to receive the same or as a court of
competent jurisdiction may direct, of any surplus then remaining from such
proceeds.
SECTION 16. Limitations on Duties; Exculpation; Indemnity; Expenses.
(a) Securities Intermediary.
(i) Limitation on Duties. Securities Intermediary's duties
hereunder are only those specifically provided herein, and Securities
Intermediary shall incur no liability whatsoever for any actions or
omissions hereunder except for any such liability arising out of or in
connection with Securities Intermediary's gross negligence or wilful
misconduct. Securities Intermediary has no obligation to inquire into, or
to ensure, the sufficiency of this Agreement or the arrangements described
hereunder to satisfy any objectives of Secured Party or Pledgor.
Securities Intermediary shall have no duty to supervise or to provide
investment counseling or advice to Pledgor or Secured Party with respect
to the purchase, sale, retention or other disposition of any Financial
Assets held hereunder. Except as specifically otherwise provided in this
Agreement, Securities Intermediary shall not be responsible for enforcing
compliance by the other parties to this Agreement with their respective
duties and obligations to each other under this or any other Agreement.
(ii) Consultation with Counsel. Securities Intermediary may
consult with, and obtain advice from, legal counsel as to the construction
of any of the provisions of this Agreement, and shall incur no liability
in acting in good faith in accordance with the reasonable advice and
opinion of such counsel.
(iii) Indemnification. Pledgor agrees to indemnify Securities
Intermediary from and against any and all claims, losses, liabilities and
expenses (including reasonable
20
attorneys' fees and expenses) in any way relating to, growing out of or
resulting from this Agreement or the performance of its obligations
hereunder, except to the extent arising out of or in connection with
Securities Intermediary's gross negligence or wilful misconduct.
(iv) Reasonable Reliance. Securities Intermediary shall be
fully protected and shall suffer no liability in acting in accordance with
any written instructions reasonably believed by it to have been given (A)
by Secured Party with respect to any aspect of the operation of the
Collateral Accounts (including any such instructions relating to any
investment or transfer of any amounts held therein or (B) by Pledgor, to
the extent provided in Section 4(b), with respect to the Collateral
Accounts.
(b) Secured Party.
(i) Exculpation. The powers conferred on Secured Party
hereunder are solely to protect its interest in the Collateral and shall
not impose any duty upon it to exercise any such powers. Except for the
exercise of reasonable care in the custody of any Collateral in its
possession and the accounting for moneys actually received by it
hereunder, Secured Party shall have no duty as to any Collateral, it being
understood that Secured Party shall have no responsibility for (a)
ascertaining or taking action with respect to calls, conversions,
exchanges, maturities, tenders or other matters relating to any
Collateral, whether or not Secured Party has or is deemed to have
knowledge of such matters, (b) taking any necessary steps (other than
steps taken in accordance with the standard of care set forth above to
maintain possession of the Collateral) to preserve rights against any
parties with respect to any Collateral, (c) taking any necessary steps to
collect or realize upon the Secured Obligations or any guarantee therefor,
or any part thereof, or any of the Collateral, (d) initiating any action
to protect the Collateral against the possibility of a decline in market
value, (e) any loss resulting from Investments made, held or sold pursuant
to Section 4, except for a loss resulting from Secured Party's gross
negligence or wilful misconduct in complying with Section 4, or (f)
determining (i) the correctness of any statement or calculation made by
Pledgor in any written or telex (tested or otherwise) instructions or (ii)
whether any transfer to the Collateral Accounts is proper. Secured Party
shall be deemed to have exercised reasonable care in the custody and
preservation of Collateral in its possession if such Collateral is
accorded treatment substantially equal to that which Secured Party accords
its own property of like kind. In addition to the foregoing and without
limiting the generality thereof, Secured Party shall not be responsible
for any actions or omissions of Securities Intermediary.
(ii) Indemnification. Pledgor agrees to indemnify Secured
Party and each Lender from and against any and all claims, losses and
liabilities in any way relating to, growing out of or resulting from this
Agreement and the transactions contemplated hereby (including enforcement
of this Agreement), except to the extent such claims, losses or
21
liabilities result solely from Secured Party's gross negligence or wilful
misconduct as finally determined by a court of competent jurisdiction.
(iii) Reasonable Reliance. Secured Party shall be fully
protected and shall suffer no liability in acting in accordance with any
written instructions reasonably believed by it to have been given by
Pledgor, to the extent provided in Section 4(b), with respect to any
investments of any amounts held for the credit of the Collateral Accounts.
(iv) Expenses. Pledgor shall pay to Secured Party upon demand
the amount of any and all costs and expenses, including the reasonable
fees and expenses of its counsel and of any experts and agents, that
Secured Party may reasonably incur in connection with (i) the
administration of this Agreement, (ii) the custody, preservation, use or
operation of, or the sale of, collection from, or other realization upon,
any of the Collateral, (iii) the exercise or enforcement of any of the
rights of Secured Party hereunder, or (iv) the failure by Pledgor to
perform or observe any of the provisions hereof.
SECTION 17. Resignation and Removal of Securities Intermediary.
(a) Removal. Securities Intermediary may be removed at any time by
written notice given by Secured Party to Securities Intermediary and Pledgor,
but such removal shall not become effective until a successor Securities
Intermediary shall have been appointed by Secured Party and shall have accepted
such appointment in writing.
(b) Resignation. Securities Intermediary may resign at any time by
giving not less than thirty days' written notice to Secured Party and Pledgor,
but such removal shall not become effective until a successor Securities
Intermediary shall have been appointed by Secured Party and shall have accepted
such appointment in writing. If an instrument of acceptance by a successor
Securities Intermediary shall not have been delivered to the resigning
Securities Intermediary within thirty days after the giving of any such notice
of resignation, the resigning Securities Intermediary may, at the expense of
Pledgor, petition any court of competent jurisdiction for the appointment of a
successor Securities Intermediary.
(c) Successor Securities Intermediary. Any successor Securities
Intermediary shall be a corporation qualified to, and located in, New York,
which (i) is subject to supervision or examination by the applicable
Governmental Authority, (ii) has a combined capital and surplus of at least
[Five Hundred Million Dollars (US$500,000,000)], (iii) has a long-term credit
rating of not less than ["A-" or "A3"], respectively, by any Rating Agency; and
provided, that any such bank with a long-term credit rating of ["A-" or "A3"]
shall not cease to be eligible to act as Securities Intermediary upon a downward
change in either such rating of no more than one category or grade of such
minimum rating, as the case may be. If any successor Securities Intermediary
does not accept deposits for non-fiduciary customers it may establish, in its
name as custodian under this
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agreement, appropriate deposit accounts ("Substitute Deposit Accounts") to hold
any cash balances which would otherwise have been held for the credit of the
[Restricted Deposit] Accounts on terms comparable to those required of the
[Restricted Deposit] Accounts. The Substitute Deposit Accounts may be
established with any depository institution, including a depository institution
affiliated with the successor Securities Intermediary, that (1) [is "Well
Capitalized" (as defined in the regulations of its primary Federal banking
regulator) to the extent determinable based on publicly available
information][has one of the three highest deposit rating available from any
Rating Agency or, if the institution is not rated, is a subsidiary of a holding
company that has one of the three highest long term credit ratings available
from any Rating Agency], (2) is a member of the Federal Deposit Insurance
Corporation, and (3) has Tier 1 capital (as defined in such regulations of its
primary Federal banking regulator) of not less than $500,000,000. In such
circumstances, the successor Securities Intermediary shall credit the Substitute
Deposit Account to the Collateral Accounts.
(d) Process of Succession. Upon the appointment of a successor
Securities Intermediary and its acceptance of such appointment, the resigning or
removed Securities Intermediary shall transfer all items of Collateral held by
it to such successor (which items of Collateral shall be transferred to
appropriate new Collateral Accounts established and maintained by such
successor). Following such appointment all references herein to Securities
Intermediary shall be deemed a reference to such successor; provided that the
provisions of Section 16(a) hereof shall continue to inure to the benefit of the
resigning or removed Securities Intermediary with respect to any actions taken
or omitted to be taken by it under this Agreement while it was Securities
Intermediary hereunder.
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SECTION 18. Continuing Security Interest; Termination of Obligations
of Securities Intermediary. This Agreement shall create a continuing security
interest in the Collateral and shall (a) remain in full force and effect until
the indefeasible payment in full of the Secured Obligations, the cancellation or
termination of the commitments under the Financing Agreements and the
cancellation or expiration of all letters of credit outstanding thereunder, (b)
be binding upon Pledgor, its successors and assigns, and (c) inure, together
with the rights and remedies of Secured Party hereunder, to the benefit of
Secured Party and Lenders and their respective successors, transferees and
assigns. Upon the indefeasible payment in full of all Secured Obligations and
the cancellation or termination of the commitments under the Financing
Agreements and the cancellation or expiration of all letters of credit
outstanding thereunder, the security interest granted hereby shall terminate and
all rights to the Collateral shall revert to Pledgor. Upon any such termination
Secured Party shall, at Pledgor's expense, execute and deliver to Pledgor such
documents as Pledgor shall reasonably request to evidence such termination and
Pledgor shall be entitled to the return, upon its request and at its expense,
against receipt and without recourse to Secured Party, of such of the Collateral
as shall not have been sold or otherwise applied pursuant to the terms hereof.
Securities Intermediary shall not be released from its obligations hereunder,
and shall continue to maintain any Collateral in accordance with this Agreement,
until notified in writing by Secured Party that this Agreement has terminated
and so long as Secured Party has not withdrawn such notification.
SECTION 19. Secured Party as Disbursement Agent.
(a) Agency. Secured Party has been appointed to act as Secured Party
hereunder by Lenders pursuant to the Disbursement Agreement. Secured Party shall
be obligated, and shall have the right hereunder, to make demands, to give
notices, to exercise or refrain from exercising any rights, and to take or
refrain from taking any action (including, without limitation, the release or
substitution of Collateral), solely in accordance with this Agreement, the
Disbursement Agreement and the Intercreditor Agreement.
(b) Identity of Agent. Secured Party shall at all times be the same
Person that is Disbursement Agent under the Disbursement Agreement. Written
notice of resignation by Disbursement Agent pursuant to subsection 9.7 of the
Disbursement Agreement shall also constitute notice of resignation as Secured
Party under this Agreement; removal of Disbursement Agent pursuant to subsection
9.7 of the Disbursement Agreement shall also constitute removal as Secured Party
under this Agreement; and substitution of a successor disbursement agent
pursuant to subsection 9.7 of the Disbursement Agreement shall also constitute
substitution of a successor Secured Party under this Agreement. Upon the
acceptance of any appointment as Disbursement Agent under subsection 9.7 of the
Disbursement Agreement by a successor Disbursement Agent, that successor
Disbursement Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the retiring or removed Secured Party
under this Agreement,
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and the retiring or removed Secured Party under this Agreement shall promptly
(i) transfer to such successor Secured Party all items of Collateral held by
Secured Party (which as appropriate shall be credited to, and held for the
credit of, any new Restricted Collateral Accounts established and maintained by
such successor Secured Party), together with all records and other documents
necessary or appropriate in connection with the performance of the duties of the
successor Secured Party under this Agreement, and (ii) execute and deliver to
such successor Secured Party such amendments to financing statements, and take
such other actions, as may be necessary or appropriate in connection with the
assignment to such successor Secured Party of the security interests created
hereunder, whereupon such retiring or removed Secured Party shall be discharged
from its duties and obligations under this Agreement. After any retiring or
removed Disbursement Agent's resignation or removal hereunder as Secured Party,
the provisions of this Agreement shall inure to its benefit as to any actions
taken or omitted to be taken by it under this Agreement while it was Secured
Party hereunder.
SECTION 20. Amendments; Etc. No amendment or waiver of any provision
of this Agreement, or consent to any departure by any party herefrom, shall in
any event be effective unless the same shall be in writing and signed by the
other parties, and then such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which it was given.
SECTION 21. Notices. Any communications between the parties hereto
or notices provided herein to be given may be given to the address of the party
as set forth under such party's name on the signature pages hereof. All notices
or other communications required or permitted to be given hereunder shall be in
writing and shall be considered as properly given (a) if delivered in person,
(b) if sent by reputable overnight delivery service, (c) in the event overnight
delivery services are not readily available, if mailed by first class mail,
postage prepaid, registered or certified with return receipt requested or (d) if
sent by prepaid telex, or by telecopy with correct answer back received. Notice
so given shall be effective upon receipt by the addressee, except that
communication or notice so transmitted by telecopy or other direct written
electronic means shall be deemed to have been validly and effectively given on
the day (if a Banking Day and, if not, on the next following Banking Day) on
which it is validly transmitted if transmitted before 4 p.m., recipient's time,
and if transmitted after that time, on the next following Banking Day; provided,
however, that if any notice is tendered to an addressee and the delivery thereof
is refused by such addressee, such notice shall be effective upon such tender.
Any party shall have the right to change its address for notice hereunder to any
other location by giving of no less than twenty (20) days' notice to the other
parties in the manner set forth hereinabove.
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SECTION 22. Failure or Indulgence Not Waiver; Remedies Cumulative.
No failure or delay on the part of Secured Party in the exercise of any power,
right or privilege hereunder shall impair such power, right or privilege or be
construed to be a waiver of any default or acquiescence therein, nor shall any
single or partial exercise of any such power, right or privilege preclude any
other or further exercise thereof or of any other power, right or privilege. All
rights and remedies existing under this Agreement are cumulative to, and not
exclusive of, any rights or remedies otherwise available.
SECTION 23. Severability. In case any provision in or obligation
under this Agreement shall be invalid, illegal or unenforceable in any
jurisdiction, the validity, legality and enforceability of the remaining
provisions or obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired thereby.
SECTION 24. Headings. Section and subsection headings in this
Agreement are included herein for convenience of reference only and shall not
constitute a part of this Agreement for any other purpose or be given any
substantive effect.
SECTION 25. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND
SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE
STATE OF NEW YORK, WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES. Securities
Intermediary's Jurisdiction shall be New York.
SECTION 26. Consent to Jurisdiction and Service of Process. ALL
JUDICIAL PROCEEDINGS BROUGHT AGAINST PLEDGOR ARISING OUT OF OR RELATING TO THIS
AGREEMENT MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT JURISDICTION
IN THE STATE OF NEW YORK, AND BY AND DELIVERY OF THIS AGREEMENT
PLEDGOR ACCEPTS FOR ITSELF AND IN CONNECTION WITH ITS PROPERTIES, GENERALLY AND
UNCONDITIONALLY, THE NONEXCLUSIVE JURISDICTION OF THE AFORESAID COURTS AND
WAIVES ANY DEFENSE OF FORUM NON CONVENIENS AND IRREVOCABLY AGREES TO BE BOUND BY
ANY JUDGMENT RENDERED THEREBY IN CONNECTION WITH THIS AGREEMENT. Pledgor hereby
agrees that service of all process in any such proceeding in any such court may
be made by registered or certified mail, return receipt requested, to Pledgor at
its address provided in Section 21, such service being hereby acknowledged by
Pledgor to be sufficient for personal jurisdiction in any action against Pledgor
in any such court and to be otherwise effective and binding service in every
respect. Nothing herein shall affect the right to serve process in any other
manner permitted by law or shall limit the right of Secured Party to bring
proceedings against Pledgor in the courts of any other jurisdiction.
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SECTION 27. Waiver of Jury Trial. PLEDGOR, SECURITIES INTERMEDIARY
AND SECURED PARTY HEREBY AGREE TO WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL
OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT. The
scope of this waiver is intended to be all-encompassing of any and all disputes
that may be filed in any court and that relate to the subject matter of this
transaction, including contract claims, tort claims, breach of duty claims, and
all other common law and statutory claims. Pledgor and Secured Party each
acknowledge that this waiver is a material inducement for Pledgor and Secured
Party to enter into a business relationship, that Pledgor and Secured Party have
already relied on this waiver in entering into this Agreement and that each will
continue to rely on this waiver in their related future dealings. Pledgor and
Secured Party further warrant and represent that each has reviewed this waiver
with its legal counsel, and that each knowingly and voluntarily waives its jury
trial rights following consultation with legal counsel. THIS WAIVER IS
IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING,
AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS
OR MODIFICATIONS TO THIS AGREEMENT. In the event of litigation, this Agreement
may be filed as a written consent to a trial by the court.
SECTION 28. Counterparts. This Agreement may be executed in one or
more counterparts and by different parties hereto in separate counterparts, each
of which when so executed and delivered shall be deemed an original, but all
such counterparts together shall constitute but one and the same instrument;
signature pages may be detached from multiple separate counterparts and attached
to a single counterpart so that all signature pages are physically attached to
the same document.
[Remainder of page intentionally left blank]
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IN WITNESS WHEREOF, the undersigned have executed this Agreement as
of the date first set forth above.
PLEDGOR:
LAS VEGAS SANDS, INC.,
a Nevada corporation
By: /s/ Xxxxxxx X. Xxxxxxx
----------------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: President
Notice Address: 0000 Xxx Xxxxx Xxxx Xxxxx
Xxxx 0X
Xxx Xxxxx, Xxxxxx 00000
Facsimile Number:(000) 000-0000
VENETIAN CASINO RESORT, LLC,
a Nevada limited liability company
By: LAS VEGAS SANDS, INC., its managing
member
By: /s/ Xxxxxxx X. Xxxxxxx
----------------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: President
Notice Address: 0000 Xxx Xxxxx Xxxx Xxxxx
Xxxx 0X
Xxx Xxxxx, Xxxxxx 00000
Facsimile Number:(000) 000-0000
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GRAND CANAL SHOPS MALLS
CONSTRUCTION, LLC,
a Delaware limited liability company
By: Venetian Casino Resort, LLC,
as sole member
By: Las Vegas Sands, Inc.,
its managing member
By: /s/ Xxxxxxx X. Xxxxxxx
----------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: President
Notice Address: 0000 Xxx Xxxxx Xxxx Xxxxx
Xxxx 0X
Xxx Xxxxx, Xxxxxx 00000
Facsimile Number: (000) 000-0000
S - 2
SECURITIES INTERMEDIARY:
THE BANK OF NOVA SCOTIA, a Canadian
chartered bank
By: /s/ Xxxx X. Xxxxxxxxxx
----------------------------------------
Name: Xxxx X. Xxxxxxxxxx
Title: Relationship Manager
Notice Address: The Bank of Nova Scotia
000 Xxxxxxxxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
Attention: Xxxx Xxxxxxxxxx
Relationship Manager
Facsimile Number: (000) 000-0000
with a copy to: The Bank of Nova Scotia
000 Xxxxxxxxx Xxxxxx, X.X.
Xxxxxxx, XX 00000
Attention: Xxxxxxxx Xxxxxx
Facsimile Number: (000) 000-0000
SECURED PARTY:
THE BANK OF NOVA SCOTIA, a Canadian
chartered bank, as Disbursement Agent under
the Disbursement Agreement
By: /s/ Xxxx X. Xxxxxxxxxx
----------------------------------------
Name: Xxxx X. Xxxxxxxxxx
Title: Relationship Manager
Notice Address: The Bank of Nova Scotia
000 Xxxxxxxxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
Attention: Xxxxx Xxxxxxxxxx
Relationship Manager
Facsimile Number: (000) 000-0000
with a copy to: The Bank of Nova Scotia
000 Xxxxxxxxx Xxxxxx, X.X.
Xxxxxxx, XX 00000
Attention: Xxxxxxxx Xxxxxx
Facsimile Number: (000) 000-0000
S - 3
