EXHIBIT 14
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SECURITIES ACCOUNT CONTROL AGREEMENT
THIS SECURITIES CONTROL AGREEMENT (this "AGREEMENT") is entered into as
of June 10, 2004, by and among THE 520 GROUP, LLC, a California limited
liability company ("CUSTOMER"), XXXXX FARGO INSTITUTIONAL SECURITIES, LLC;
("INTERMEDIARY"), and XXXXX FARGO BANK, NATIONAL ASSOCIATION ("SECURED PARTY").
RECITALS
A. Customer maintains that certain Securities Account No.
[REDACTED] (the "SECURITIES ACCOUNT") with Intermediary pursuant to an agreement
between Intermediary and Customer (the "ACCOUNT AGREEMENT"), a copy of which is
attached hereto as EXHIBIT A, and Customer has granted to Secured Party a
security interest in the Securities Account and all financial assets and other
property now or at any time hereafter held in the Securities Account.
B. Secured Party, Customer and Intermediary have agreed to enter
into this Agreement to perfect Secured Party's security interests in the
Collateral, as defined below.
NOW, THEREFORE, in consideration of their mutual covenants and promises,
the parties agree as follows:
1. DEFINITIONS. As used herein:
(a) the term "COLLATERAL" shall mean: (i) the Securities
Account; (ii) all financial assets credited to the Securities Account; (iii) all
security entitlements with respect to the financial assets credited to the
Securities Account; (iv) any and all other investment property or assets
maintained or recorded in the Securities Account; and (v) all replacements or
substitutions for, and proceeds of the sale or other disposition of, any of the
foregoing, including without limitation, cash proceeds; and
(b) the terms "INVESTMENT PROPERTY," "ENTITLEMENT ORDER,"
"FINANCIAL ASSET" and "SECURITY ENTITLEMENT" shall have the respective meanings
set forth in the Minnesota Uniform Commercial Code. The parties hereby expressly
agree that all property, including without limitation, cash, certificates of
deposit and mutual funds, at any time held in the Securities Account is to be
treated as a "FINANCIAL ASSET."
2. AGREEMENT FOR CONTROL. Intermediary is authorized by Customer
and agrees to comply with all entitlement orders originated by Secured Party
with respect to the Securities Account, and all other requests or instructions
from Secured Party regarding disposition and/or delivery of the Collateral,
without further consent or direction from Customer or any other party.
3. LIMITATION ON CUSTOMER'S RIGHTS WITH RESPECT TO THE COLLATERAL.
(a) Until Intermediary is notified otherwise by Secured
Party, Intermediary may distribute to Customer or any other party in accordance
with Customer's directions that
portion of the Collateral which consists of interest and/or cash dividends
earned on financial assets maintained in the Securities Account.
(b) Without Secured Party's prior written consent, except to
the extent permitted by SECTION 3(A) hereof: (i) neither Customer nor any party
other than Secured Party may withdraw any Collateral from the Securities
Account; and (ii) Intermediary will not comply with any entitlement order or
request to withdraw any Collateral from the Securities Account given by any
party other than Secured Party.
(c) Upon receipt of either written or oral notice from
Secured Party: (i) Intermediary shall promptly cease complying with entitlement
orders and other instructions concerning the Collateral, including the
Securities Account, from all parties other than Secured Party; and (ii)
Intermediary shall not make any further distributions of any Collateral to any
party other than Secured Party, nor permit any further voluntary changes in the
financial assets.
4. INTERMEDIARY'S REPRESENTATIONS AND WARRANTIES. Intermediary
represents and warrants to Secured Party that:
(a) The Securities Account is maintained with Intermediary
solely in Customer's name.
(b) Intermediary has no knowledge of any claim to, security
interest in or lien upon any of the Collateral, except: (i) the security
interests in favor of Secured Party; and (ii) Intermediary's liens securing fees
and charges, or payment for open trade commitments, as described in SECTION 4(E)
hereof.
(c) Attached hereto as EXHIBIT A is a true and complete copy
of the Account Agreement.
(d) Attached hereto as EXHIBIT B is an accurate and complete
statement of the financial assets in the Securities Account as of the date set
forth in said statement.
(e) Any claim to, security interest in or lien upon any of
the Collateral which Intermediary now has or at any time hereafter acquires
shall be junior and subordinate to the security interests of Secured Party in
the Collateral, except for Intermediary's liens securing: (i) fees and charges
owed by Customer with respect to the operation of the Securities Account; and
(ii) payment owed to Intermediary for open trade commitments for purchases in
and for the Securities Account.
5. AGREEMENTS OF INTERMEDIARY AND CUSTOMER. Intermediary and
Customer agree that:
(a) Intermediary shall flag its books, records and systems
to reflect Secured Party's security interests in the Collateral, and shall
provide notice thereof to any party making inquiry as to Customer's accounts
with Intermediary to whom or which Intermediary is legally required or permitted
to provide information.
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(b) Intermediary shall send copies of all statements
relating to the Securities Account simultaneously to Customer and Secured Party.
(c) Intermediary shall promptly notify Secured Party if any
other party asserts any claim to, security interest in or lien upon any of the
Collateral, and Intermediary shall not enter into any control, custodial or
other similar agreement with any other party that would create or acknowledge
the existence of any such other claim, security interest or lien.
(d) Without Secured Party's prior written consent,
Intermediary and Customer shall not amend or modify the Account Agreement, other
than amendments to reflect ordinary and reasonable changes in Intermediary's
fees and charges for handling the Securities Account.
(e) Neither Intermediary nor Customer shall terminate the
Account Agreement without giving thirty (30) days' prior written notice to
Secured Party.
6. AGREEMENT OF CUSTOMER. Customer agrees to indemnify and hold
harmless Intermediary, its officers, directors, employees and agents, against
claims, liabilities or expenses (including reasonable attorney's fees) arising
out of Intermediary's compliance with any instructions from Secured Party with
respect to the Securities Account, except if such claims, liabilities or
expenses are caused by Intermediary's negligence or willful misconduct.
7. MISCELLANEOUS.
(a) This Agreement shall not create any obligation or duty
of Intermediary except as expressly set forth herein.
(b) As to the matters specifically the subject of this
Agreement, in the event of any conflict between this Agreement and the Account
Agreement or any other agreement between Intermediary and Customer, the terms of
this Agreement shall control.
(c) All notices, requests and demands which any party is
required or may desire to give to any other party under any provision of this
Agreement must be in writing (unless otherwise specifically provided) and
delivered to each party at the address or facsimile number set forth below its
signature, or to such other address or facsimile number as any party may
designate by written notice to all other parties. Each such notice, request and
demand shall be deemed given or made as follows: (i) if sent by hand delivery,
upon delivery; (ii) if sent by facsimile, upon receipt; and (iii) if sent by
mail, upon the earlier of the date of receipt or three (3) days after deposit in
the U.S. mail, first class and postage prepaid.
(d) The prevailing party in the prosecution or defense of
any action arising out of this Agreement, including any action for declaratory
relief, shall be reimbursed by the party whose course of action necessitated
such prosecution or defense for all costs and expenses, including reasonable
attorneys' fees (to include outside counsel fees and all allocated costs of the
prevailing party's in-house counsel), expended or incurred by the prevailing
party in connection therewith, whether incurred at the trial or appellate level,
in an arbitration proceeding, bankruptcy proceeding or otherwise.
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(e) This Agreement shall be binding upon and inure to the
benefit of the heirs, executors, administrators, legal representatives,
successors and assigns of the parties; provided however, that Intermediary may
not assign its obligations hereunder without Secured Party's prior written
consent. This Agreement may be amended or modified only in writing signed by all
parties hereto.
(f) This Agreement shall terminate upon: (i) Intermediary's
receipt of written notice from Secured Party expressly stating that Secured
Party no longer claims any security interest in the Collateral; or (ii)
termination of the Account Agreement pursuant to SECTION 5(E) hereof and
Intermediary's delivery of all Collateral to Secured Party or its designee in
accordance with Secured Party's written instructions.
(g) This Agreement shall be governed by and construed in
accordance with the laws of the State of Minnesota.
(SIGNATURES FOLLOW ON NEXT PAGE)
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first set forth above.
INTERMEDIARY: SECURED PARTY:
XXXXX FARGO INSTITUTIONAL XXXXX FARGO BANK,
SECURITIES, LLC NATIONAL ASSOCIATION
By: ___________________________ By:___________________________________
Name: Xxxxx Xxxxxxx Name:_________________________________
Title: Operations Manager Its:__________________________________
Address:
000 Xxxxxxxxxx Xxxxxx, 0xx Xxxxx Lender's Address:
Xxx Xxxxxxxxx, XX 00000 XXXXX FARGO BANK, NATIONAL ASSOCIATION
Fax: 000 000-0000 000 X Xxxxxx, Xxxxx 000
Xxx Xxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx Xxxxxx
Fax:
CUSTOMER:
THE 520 GROUP, LLC,
a California limited liability company
By: ___________________________
Name: Xxxx Xxxxxx
Its: Manager
By: ___________________________
Name: Xxxxx XxXxxxx
Its: Manager
Borrower's Address:
The 520 Group
0000 Xxxxxxx Xxxxxx, Xxx. 000
Xx Xxxxx, XX 00000
Attention: Xxxx XxXxxxx
Fax:
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EXHIBIT 14
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EXHIBIT A TO SECURITIES CONTROL AGREEMENT
[True copy of Account Agreement attached]
EXHIBIT 14
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EXHIBIT B TO SECURITIES CONTROL AGREEMENT
Financial Assets in the Securities Account as of June 10, 2004
Cash in the amount of $0; and
Quantity Issuer/Type of Security CUSIP #/ Certificate #
------------- ---------------------------------------- ------------------------
3,631,756 Price Legacy Corporation / Common Stock CUSIP # 74144P 50 2
Certificate # PLC0258
2,618,243 Price Legacy Corporation / Common Stock CUSIP # 74144P 50 2
Certificate # PLC0257
