EXHIBIT 10.2
PLEDGE AND SECURITY AGREEMENT
This PLEDGE AND SECURITY AGREEMENT (this "AGREEMENT") is dated as of
June 6, 2001 and entered into by and among Meditrust Corporation, a Delaware
corporation ("MEDITRUST"), Meditrust Operating Company, a Delaware corporation
("MEDITRUST OPCO"; together with Meditrust jointly and severally, the
"BORROWERS"), each of THE UNDERSIGNED DIRECT AND INDIRECT SUBSIDIARIES of
BORROWERS (each of such undersigned Subsidiaries being a "SUBSIDIARY GRANTOR"
and collectively "SUBSIDIARY GRANTORS") and each ADDITIONAL GRANTOR that may
become a party hereto after the date hereof in accordance with Section 18 hereof
(each of the BORROWERS, each Subsidiary Grantor, and each Additional Grantor
being a "GRANTOR" and collectively the "GRANTORS") and Canadian Imperial Bank of
Commerce, as collateral agent for and representative of (in such capacity herein
called "COLLATERAL AGENT") the financial institutions ("LENDERS") party to the
Credit Agreement referred to below, any Hedge Exchangers (as hereinafter
defined) and any holders of the Senior Notes (as hereinafter defined)
(individually, a "SENIOR NOTE HOLDER" and collectively, the "SENIOR NOTE
HOLDERS").
PRELIMINARY STATEMENTS
A. Pursuant to the Credit Agreement dated as of June 6, 2001 (said
Credit Agreement, as amended to the date hereof, and as it may hereafter be
further amended, restated, supplemented or otherwise modified from time to time,
being the "CREDIT AGREEMENT"; the terms defined therein and not otherwise
defined herein being used herein as therein defined), by and among Borrowers,
the financial institutions party thereto from time to time as Lenders
("LENDERS"), Canadian Imperial Bank of Commerce, acting through one or more of
its agencies, branches or affiliates as Administrative Agent ("ADMINISTRATIVE
AGENT"), Fleet Securities Inc., acting through one or more of its agencies,
branches or affiliates as Syndication Agent and Co-Lead Arranger and CIBC World
Markets Corp. as Co-Lead Arranger, Lenders have made certain commitments,
subject to the terms and conditions set forth in the Credit Agreement, to extend
certain credit facilities to Borrowers.
B. Borrowers may from time to time enter, or may from time to time have
entered, into one or more Hedge Agreements (collectively, the "LENDER HEDGE
AGREEMENTS") with one or more Persons that are Lenders or Affiliates of Lenders
at the time such Lender Hedge Agreements are entered into (in such capacity,
collectively, "HEDGE EXCHANGERS") in accordance with the terms of the Credit
Agreement, and it is desired that the obligations of Borrowers under the Lender
Hedge Agreements, including without limitation the obligation of Borrowers to
make payments thereunder in the event of early termination thereof, together
with all obligations of Borrowers under the Credit Agreement and the other Loan
Documents, be secured hereunder.
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C. Subsidiary Grantors have executed and delivered that certain
Subsidiary Guaranty dated the date hereof (said Subsidiary Guaranty, as amended
to the date hereof, and as it may hereafter be further amended, restated,
supplemented or otherwise modified from time to time, being the "SUBSIDIARY
GUARANTY") in favor of Collateral Agent for the benefit of Lenders and any Hedge
Exchangers, pursuant to which each Subsidiary Grantor has guarantied the prompt
payment and performance when due of all obligations of Borrowers under the
Credit Agreement and all obligations of Borrowers under the Lender Hedge
Agreements, including without limitation the obligation of Borrowers to make
payments thereunder in the event of early termination thereof.
D. It is a condition precedent to the initial extensions of credit by
Lenders under the Credit Agreement that Grantors listed on the signature pages
hereof shall have granted the security interests and undertaken the obligations
contemplated by this Agreement.
E. The Borrowers have issued certain indebtedness evidenced by the
Senior Notes described on Schedule B attached hereto (the "SENIOR NOTES").
Pursuant to the indentures and the supplements thereto described on Schedule B
(collectively, the "SENIOR INDENTURES") between the trustees (individually, a
"TRUSTEE" and collectively, the "TRUSTEES") for the Senior Notes and Meditrust,
the obligations thereunder (the "NOTE OBLIGATIONS") are or will be (pursuant to
an amendment to the supplemental indentures referenced in items 6 and 7 on
Schedule B).
required to be equally and ratably secured with the Obligations under
the Credit Agreement and other Loan Documents so long as such Obligations are
secured by the Collateral (as defined in Section 1).
NOW, THEREFORE, in consideration of the premises and in order to induce
Lenders to make Loans and other extensions of credit under the Credit Agreement
and to induce Hedge Exchangers to enter into the Lender Hedge Agreements, and
for other good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, each Grantor hereby agrees with Collateral Agent as
follows:
SECTION 1. GRANT OF SECURITY.
Each Grantor hereby assigns to Collateral Agent and hereby grants to
Collateral Agent as security for the Secured Obligations (as defined in Section
2) equally and ratably, a First Priority security interest in, all of such
Grantor's right, title and interest in and to the following, in each case
whether now or hereafter existing, whether tangible or intangible, or in which
such Grantor now has or hereafter acquires an interest and wherever the same may
be located (the "COLLATERAL"):
(a) the "SECURITIES COLLATERAL", which term means:
(i) all shares of stock, partnership interests, interests in
joint ventures, limited liability company interests and all other
equity interests now or hereafter owned by such Grantor in any
Meditrust Subsidiary set forth, or required to be set forth, on
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Schedule 1(a)(i) from time to time, including all securities
convertible into, and rights, warrants, options and other rights to
purchase or otherwise acquire, any of the foregoing now or hereafter
owned by such Grantor, including those owned on the date hereof and
described on Schedule 1(a)(i) from time to time, and the certificates
or other instruments representing any of the foregoing and any interest
of such Grantor in the entries on the books of any securities
intermediary pertaining thereto (the "PLEDGED INTERESTS"), and all
dividends, distributions, returns of capital, cash, warrants, option,
rights, instruments, rights to vote or manage the business of such
Meditrust Subsidiary pursuant to organizational documents governing the
rights and obligations of the stockholders, partners, members or other
owners thereof and other property or proceeds from time to time
received, receivable or otherwise distributed in respect of or in
exchange for any or all of such Pledged Interests; provided, that if
the issuer of any of such Pledged Interests is a controlled foreign
corporation (used hereinafter as such term is defined in Section 957(a)
or a successor provision of the Internal Revenue Code), the Pledged
Interests shall not include any shares of stock of such issuer in
excess of the number of Securities of such issuer possessing up to but
not exceeding 65% of the voting power of all classes of Securities
entitled to vote of such issuer, and all dividends, cash, warrants,
rights, instruments and other property or proceeds from time to time
received, receivable or otherwise distributed in respect of or in
exchange for any or all of such Pledged Interests (as used herein,
"MEDITRUST SUBSIDIARY" shall mean each Person and successor thereof as
set forth on Schedule 1(a)(i) from time to time, together with any
Person or Persons that may be direct or indirect Subsidiaries of the
Borrowers from time to time);
(ii) all indebtedness from time to time owed to such Grantor
by any obligor that is, or becomes, a direct or indirect Subsidiary of
such Grantor, including the indebtedness described on Schedule 1(a)(ii)
and issued by the obligors named therein, and the instruments
evidencing such indebtedness (the "PLEDGED DEBT"), and all interest,
cash, instruments and other property or proceeds from time to time
received, receivable or otherwise distributed in respect of or in
exchange for any or all of the Pledged Debt;
(b) the mortgage loans listed in Schedule 1(b), as each such mortgage
loan may be amended, restated, supplemented or otherwise modified from time to
time (said mortgage loans, as so amended, restated, supplemented or otherwise
modified, being referred to herein individually as a "MORTGAGE LOAN" and
collectively as the "MORTGAGE LOANS"), including, without limitation, (i) all
rights of such Grantor to receive moneys due or to become due under or pursuant
to the Mortgage Loans, including, interest, principal and late charges and other
payments, if any, due or to become due to Grantor whether as contractual
obligations, damages, condemnation rights or otherwise, (ii) all documents,
notes, instruments and other agreements executed in connection with the Mortgage
Loans (collectively, the "MORTGAGE LOAN DOCUMENTS"), (iii) all rights of such
Grantor to receive proceeds of any insurance, indemnity, warranty or guaranty
with respect to the Mortgage Loans and Mortgage Loan Documents, (iv) all claims
of such Grantor for damages arising out of any breach of or default under the
Mortgage Loans and Mortgage Loan Documents, and (v) all rights of such Grantor
to terminate, amend, supplement, modify or exercise rights or options under the
Mortgage Loans or Mortgage Loan
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Documents, to perform thereunder and to compel performance and otherwise
exercise all remedies thereunder; and
(c) all proceeds, products, rents and profits of or from any and all of
the foregoing Collateral and, to the extent not otherwise included, all payments
under insurance (whether or not Collateral Agent is the loss payee thereof), or
any indemnity, warranty or guaranty, payable by reason of loss or damage to or
otherwise with respect to any of the foregoing Collateral. For purposes of this
Agreement, the term "PROCEEDS" includes whatever is receivable or received when
Collateral or proceeds are sold, exchanged, collected or otherwise disposed of,
whether such disposition is voluntary or involuntary.
SECTION 2. SECURITY FOR OBLIGATIONS.
This Agreement secures, and the Collateral assigned by each Grantor is
collateral security for, on an equal and ratable basis, the prompt payment or
performance in full when due, whether at stated maturity, by required
prepayment, declaration, acceleration, demand or otherwise (including without
limitation the payment of amounts that would become due but for the operation of
the automatic stay under Section 362(a) of the Bankruptcy Code), of all Secured
Obligations of such Grantor. The Obligations described in subsection 2(a) are
referred to as the "LOAN OBLIGATIONS." "SECURED OBLIGATIONS" means:
(a) with respect to Borrowers each Subsidiary Grantor and each
Additional Grantor, all obligations and liabilities of every nature of each of
them now or hereafter existing under or arising out of or in connection with the
Credit Agreement and the other Loan Documents and any Lender Hedge Agreement; in
each case together with all extensions or renewals thereof, whether for
principal, interest (including without limitation interest that, but for the
filing of a petition in bankruptcy with respect to Borrowers or any other
Grantor, would accrue on such obligations, whether or not a claim is allowed
against Borrowers or such Grantor for such interest in the related bankruptcy
proceeding), reimbursement of amounts drawn under Letters of Credit, payments
for early termination of Lender Hedge Agreements, fees, expenses, indemnities or
otherwise, whether voluntary or involuntary, direct or indirect, absolute or
contingent, liquidated or unliquidated, whether or not jointly owed with others,
and whether or not from time to time decreased or extinguished and later
increased, created or incurred, and all or any portion of such obligations or
liabilities that are paid, to the extent all or any part of such payment is
avoided or recovered directly or indirectly from Collateral Agent or any Lender
or Hedge Exchanger as a preference, fraudulent transfer or otherwise, and all
obligations of every nature of Grantors now or hereafter existing under this
Agreement; and
(b) with respect to Meditrust, the obligations of Meditrust under the
Senior Notes (the "NOTE OBLIGATIONS").
SECTION 3. GRANTORS REMAIN LIABLE.
Anything contained herein to the contrary notwithstanding, (a) each
Grantor shall remain liable under any contracts and agreements included in the
Collateral, to the extent set forth therein, to perform all of its duties and
obligations thereunder to the same extent as if this
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Agreement had not been executed, (b) the exercise by Collateral Agent of any of
its rights hereunder shall not (except as provided in Section 15) release any
Grantor from any of its duties or obligations under the contracts and agreements
included in the Collateral, and (c) Collateral Agent shall not have any
obligation or liability under any contracts, licenses, and agreements included
in the Collateral by reason of this Agreement, nor shall Collateral Agent 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. REPRESENTATIONS AND WARRANTIES.
Each Grantor represents and warrants as follows:
(a) OWNERSHIP OF COLLATERAL. Except as expressly permitted by the
Credit Agreement (including subsection 5.5 thereof) and for the security
interest created by this Agreement, such Grantor owns the Collateral owned by
such Grantor free and clear of any Lien other than Liens disclosed in Schedule
7.2 of the Credit Agreement and/or Schedule 4(e) attached hereto, as such
Schedule 4(e) may be amended or modified by Grantor (as reasonably approved by
Collateral Agent) in connection with the delivery of any such Pledge Supplement.
Except as expressly permitted by the Credit Agreement and such as may have been
filed in favor of Collateral Agent relating to this Agreement, no effective
financing statement or other instrument similar in effect covering all or any
part of the Collateral is on file in any filing or recording office.
(b) OFFICE LOCATIONS. The chief place of business, the chief executive
office and the office where such Grantor keeps its records regarding the
Collateral and all originals of all chattel paper that evidence Collateral are,
as of the date hereof, and, have been for the four month period preceding the
date hereof, or, in the case of an Additional Grantor, the date of the
applicable Counterpart (defined in Section 17), located at the locations set
forth on Schedule 4(b);
(c) NAMES. No Grantor (or predecessor by merger or otherwise of such
Grantor) has, within the four month period preceding the date hereof, or, in the
case of an Additional Grantor, the date of the applicable Counterpart, had a
different name from the name of such Grantor listed or the signature pages
hereof.
(d) DELIVERY OF CERTAIN COLLATERAL. All certificates or instruments
(excluding checks) evidencing, comprising or representing the Collateral, to the
extent required by Collateral Agent, have been delivered to Collateral Agent
duly endorsed or accompanied by duly executed instruments of transfer or
assignment in blank.
(e) SECURITIES COLLATERAL. (i) All of the Pledged Interests described
on Schedule 1(a)(i) have been duly authorized and validly issued and are fully
paid and non-assessable; (ii) all of the Pledged Debt described on Schedule
1(a)(ii) has been duly authorized, authenticated or issued, and delivered and is
the legal, valid and binding obligation of the issuers thereof and is not in
default; (iii) the Pledged Interests constitute all of the issued and
outstanding shares of stock or other equity interests of each issuer thereof
(subject to the proviso to Section
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1(a)(i) with respect to shares of a foreign controlled corporation), and, except
as disclosed on Schedule 4(e) attached hereto, there are no outstanding
warrants, options or other rights to purchase, or other agreements outstanding
with respect to, or property that is now or hereafter convertible into, or that
requires the issuance or sale of, any Pledged Interests; (iv) the Pledged Debt
constitutes all of the issued and outstanding intercompany indebtedness
evidenced by a promissory note of the respective issuers thereof owing to such
Grantor; (v) Schedule 1(a)(i) sets forth all of the Pledged Interests owned by
each Grantor on the date hereof; and (vi) Schedule 1(a)(ii) sets forth all of
the Pledged Debt in existence on the date hereof.
(f) PERFECTION. The security interests in the Collateral granted to
Collateral Agent for the equal and ratable benefit of the Lenders, Hedge
Exchangers and Senior Note Holders hereunder constitute valid security interests
in the Collateral, securing the payment of the Secured Obligations upon (i) the
filing of UCC financing statements naming each Grantor as "debtor", naming
Collateral Agent as "SECURED PARTY" and describing the Collateral in the filing
offices with respect to such Grantor set forth on Schedule 4(f), (ii) in the
case of the Securities Collateral consisting of certificated securities or
evidenced by instruments, delivery of the certificates representing such
certificated securities and delivery of such instruments to Collateral Agent, in
each case duly endorsed or accompanied by duly executed instruments of
assignment or transfer in blank, and (iii) in the case of the Mortgage Loans,
delivery of the original promissory notes evidencing the Mortgage Loans, in each
case duly endorsed or accompanied by duly executed instruments of assignment or
transfer in blank, together with original Mortgage Loan Documents and other
instruments evidencing such Collateral, to the extent required by Collateral
Agent.
(g) MORTGAGE LOANS. To the best of Grantor's knowledge, (i) the
Mortgage Loan Documents have been duly executed and delivered, and constitute
the legal, valid and binding obligations of the mortgagors thereunder,
enforceable in accordance with their terms, except as enforceability may be
limited by applicable insolvency, bankruptcy or other laws affecting creditors
rights generally, or general principles of equity, whether such enforceability
is considered in a proceeding in equity or at law and (ii) the promissory notes
delivered to Collateral Agent in connection with the Mortgage Loans are true,
correct and complete originals of all such promissory notes in effect on the
date hereof and have not, as of the date hereof, been further modified or
amended.
SECTION 5. FURTHER ASSURANCES.
(a) GENERALLY. Each Grantor agrees that from time to time, at the
expense of Grantors, such Grantor will promptly execute and deliver all further
instruments and documents, and take all further action, that may be necessary or
desirable, or that Collateral Agent may request, in order to perfect and protect
any security interest granted or purported to be granted hereby or to enable
Collateral Agent to exercise and enforce its rights and remedies hereunder with
respect to any Collateral. Without limiting the generality of the foregoing,
each Grantor will: (i) at the reasonable request of Collateral Agent, xxxx
conspicuously each of its records pertaining to the Collateral, with a legend,
in form and substance satisfactory to Collateral Agent, indicating that such
Collateral is subject to the security interest granted hereby, (ii) execute and
file such financing or continuation statements, or amendments thereto, and such
other
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instruments or notices, as may be necessary or desirable, or as Collateral Agent
may request, in order to perfect and preserve the security interests granted or
purported to be granted hereby, (iii) furnish to Collateral Agent from time to
time statements and schedules further identifying and describing the Collateral
and such other reports in connection with the Collateral as Collateral Agent may
reasonably request, all in reasonable detail, (iv) at any reasonable time, upon
request by Collateral Agent, exhibit the Collateral to and allow inspection of
the Collateral by Collateral Agent, or persons designated by Collateral Agent,
(v) at Collateral Agent's request, appear in and defend any action or proceeding
that may affect such Grantor's title to or Collateral Agent's security interest
in all or any part of the Collateral, and (vi) use commercially reasonable
efforts to obtain any necessary consents of third parties to the assignment and
perfection of a security interest to Collateral Agent with respect to any
Collateral. Each Grantor hereby authorizes Collateral Agent to file one or more
financing or continuation statements, and amendments thereto, relative to all or
any part of the Collateral without the signature of any Grantor. Each Grantor
agrees that a carbon, photographic or other reproduction of this Agreement or of
a financing statement signed by such Grantor shall be sufficient as a financing
statement and may be filed as a financing statement in any and all
jurisdictions.
(b) SECURITIES COLLATERAL. Without limiting the generality of the
foregoing Section 5(a), each Grantor agrees that it will, upon obtaining any
additional shares of stock or other securities required to be pledged hereunder,
promptly (and in any event within five Business Days) deliver to Collateral
Agent a Pledge Supplement, duly executed by such Grantor, in substantially the
form of Exhibit I (a "PLEDGE SUPPLEMENT"), in respect of the additional Pledged
Interests or Pledged Debt to be pledged pursuant to this Agreement. Upon each
delivery of a Pledge Supplement to Collateral Agent, the representations and
warranties contained in clauses (i)-(vi) of Section 4(e) hereof shall be deemed
to have been made by such Grantor as to the Securities Collateral described in
such Pledge Supplement as of the date thereof subject to the matters disclosed
in Schedule 4(e), as such Schedule 4(e) may be amended or modified by Grantor
(as reasonably approved by Collateral Agent) in connection with the delivery of
any such Pledge Supplement. Each Grantor hereby authorizes Collateral Agent to
attach each Pledge Supplement to this Agreement and agrees that all Pledged
Interests or Pledged Debt of such Grantor listed on any Pledge Supplement shall
for all purposes hereunder be considered Collateral of such Grantor; provided
that the failure of any Grantor to execute a Pledge Supplement with respect to
any additional Pledged Interests or Pledged Debt pledged pursuant to this
Agreement shall not impair the security interest of Collateral Agent therein or
otherwise adversely affect the rights and remedies of Collateral Agent hereunder
with respect thereto.
(c) MORTGAGE LOANS. Without limiting the generality of the foregoing
subsection 5(a), each Grantor agrees that it will, upon providing any mortgage
loans or financing to any Person (other than Pledged Debt which is subject to
subsection 5(b)), promptly (and in any event within five Business Days) deliver
to Collateral Agent a Pledge Supplement, duly executed by such Grantor, in
substantially the form of Exhibit II (a "MORTGAGE PLEDGE SUPPLEMENT"), in
respect of the additional Mortgage Loan and Mortgage Loan Documents to be
pledged pursuant to this Agreement. Each Grantor hereby authorizes Collateral
Agent to attach each Pledge Supplement to this Agreement and agrees that all
Mortgage Loan and Mortgage Loan Documents of such Grantor listed on any Pledge
Supplement shall for all purposes
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hereunder be considered Collateral of such Grantor; provided that the failure of
any Grantor to execute a Pledge Supplement with respect to any additional
Mortgage Loan and Mortgage Loan Documents pledged pursuant to this Agreement
shall not impair the security interest of Collateral Agent therein or otherwise
adversely affect the rights and remedies of Collateral Agent hereunder with
respect thereto.
SECTION 6. CERTAIN COVENANTS OF GRANTORS.
Each Grantor shall:
(a) not use or permit any Collateral to be used unlawfully or in
violation of any provision of this Agreement or any applicable statute,
regulation or ordinance or any policy of insurance covering the Collateral;
(b) notify Collateral Agent of any change in such Grantor's name,
identity or corporate structure within 15 days of such change;
(c) if Collateral Agent gives value to enable such Grantor to acquire
rights in or the use of any Collateral, use such value for such purposes; and
(d) except as expressly permitted by the Credit Agreement, pay or cause
to be paid promptly when due all property and other taxes, assessments and
governmental charges or levies imposed upon, and all claims (including claims
for labor, services, materials and supplies) against, the Collateral, except to
the extent the validity thereof is being contested in good faith; provided that
such Grantor shall in any event pay such taxes, assessments, charges, levies or
claims not later than one day prior to the date of any proposed sale under any
judgment, writ or warrant of attachment entered or filed against such Grantor or
any of the Collateral as a result of the failure to make such payment.
SECTION 7. SPECIAL COVENANTS WITH RESPECT TO THE SECURITIES COLLATERAL
AND MORTGAGE LOANS.
(a) DELIVERY. Each Grantor agrees that all certificates or instruments
representing or evidencing the Securities Collateral and Mortgage Loans to the
extent required by Collateral Agent shall be delivered to and held by or on
behalf of Collateral Agent pursuant hereto and shall be in suitable form for
transfer by delivery or, as applicable, shall be accompanied by such Grantor's
endorsement, where necessary, or duly executed instruments of transfer or
assignment in blank, all in form and substance satisfactory to Collateral Agent.
Collateral Agent shall have the right at any time to exchange certificates or
instruments representing or evidencing Securities Collateral for certificates or
instruments of smaller or larger denominations.
(b) COVENANTS. Each Grantor shall, except as permitted by the Credit
Agreement, (i) not permit any issuer of Pledged Interests to merge or
consolidate unless all the outstanding capital stock or other equity interests
of the surviving or resulting Person is, upon such merger or consolidation,
pledged hereunder and no cash, securities or other property is
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distributed in respect of the outstanding shares of any other constituent
corporation; provided, if the surviving or resulting Person upon any such merger
or consolidation involving an issuer of Pledged Interests which is a controlled
foreign corporation is a controlled foreign corporation, then such Grantor shall
only be required to pledge outstanding capital stock of such surviving or
resulting Person possessing up to but not exceeding 65% of the voting power of
all classes of capital stock of such issuer entitled to vote; (ii) cause each
issuer of Pledged Interests not to issue any stock, other equity interests or
other securities in addition to or in substitution for the Pledged Interests
issued by such issuer, except to such Grantor; (iii) pledge hereunder,
immediately upon its acquisition (directly or indirectly) thereof, any and all
additional shares of stock, other equity interests or other securities of each
issuer of Pledged Interests; (iv) pledge hereunder, immediately upon its
acquisition (directly or indirectly) thereof, any and all shares of stock or
other equity interests of any Person that, after the date of this Agreement,
becomes, as a result of any occurrence, a direct Subsidiary of such Grantor;
provided, notwithstanding anything contained in this clause (iv) to the
contrary, such Grantor shall only be required to pledge the outstanding capital
stock of a controlled foreign corporation possessing up to but not exceeding 65%
of the voting power of all classes of capital stock of such controlled foreign
corporation entitled to vote; (v) pledge hereunder, immediately upon their
issuance, any and all instruments or other evidences of additional indebtedness
from time to time owed to such Grantor by any obligor on the Pledged Debt; (vi)
pledge hereunder, immediately upon their issuance, any and all instruments or
other evidences of indebtedness from time to time owed to such Grantor by any
Person that after the date of this Agreement becomes, as a result of any
occurrence, a direct or indirect Subsidiary of such Grantor; and (vii), at the
request of Collateral Agent, promptly execute and deliver to Collateral Agent an
agreement providing for the control, as that term is defined in the UCC, by
Collateral Agent of all securities entitlements and securities accounts of such
Grantor.
(c) VOTING AND DISTRIBUTIONS. 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 Securities
Collateral and Mortgage Loans or any part thereof for any purpose not
inconsistent with the terms of this Agreement or the Credit Agreement; provided,
no Grantor shall exercise or refrain from exercising any such right if
Collateral Agent shall have notified such Grantor that, in Collateral Agent's
reasonable judgment, such action would have a Material Adverse Effect on the
value of the Securities Collateral or Mortgage Loans (it being understood,
however, that neither (A) the voting by such Grantor of any Pledged Interests
for or such Grantor's consent to the election of directors or other members of a
governing body of an issuer of Pledged Interests at a regularly scheduled annual
or other meeting of stockholders or holders of equity interests or with respect
to incidental matters at any such meeting, nor (B) such Grantor's consent to or
approval of any action otherwise permitted under this Agreement and the Credit
Agreement shall be deemed inconsistent with the terms of this Agreement or the
Credit Agreement within the meaning of this Section, and no notice of any such
voting or consent need be given to Collateral Agent); (ii) each Grantor shall be
entitled to receive and retain, and to utilize free and clear of the lien of
this Agreement, any and all dividends, other distributions and interest paid in
respect of the Securities Collateral and Mortgage Loans; provided, upon the
occurrence and during the continuation of an Event of Default, any and all (A)
dividends, distributions and interest paid or payable other than
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in cash in respect of, and instruments and other property received, receivable
or otherwise distributed in respect of, or in exchange for, any Securities
Collateral, (B) dividends and other distributions paid or payable in cash in
respect of any Securities 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 or in redemption of or in exchange for any Securities
Collateral, shall be, and shall forthwith be delivered to Collateral Agent to
hold as, Securities Collateral and shall, if received by such Grantor, be
received in trust for the benefit of Collateral Agent, be segregated from the
other property or funds of such Grantor and be forthwith delivered to Collateral
Agent as Securities Collateral in the same form as so received (with all
necessary endorsements); and (iii) Collateral Agent shall promptly execute and
deliver (or cause to be executed and delivered) to such Grantor all such
proxies, dividend payment orders and other instruments as such Grantor may from
time to time reasonably request for the purpose of enabling such Grantor to
exercise the voting and other consensual rights which it is entitled to exercise
pursuant to clause (i) above and to receive the dividends, distributions,
principal or interest payments which it is authorized to receive and retain
pursuant to clause (ii) above.
Upon the occurrence and during the continuation of an Event of Default,
upon written notice from Collateral Agent to any Grantor, (x) all rights of such
Grantor to exercise the voting and other consensual rights which it would
otherwise be entitled to exercise pursuant hereto shall cease, and all such
rights shall thereupon become vested in Collateral Agent who shall thereupon
have the sole right to exercise such voting and other consensual rights; (y) all
rights of such Grantor to receive the dividends, other distributions and
interest payments which it would otherwise be authorized to receive and retain
pursuant hereto shall cease, and all such rights shall thereupon become vested
in Collateral Agent who shall thereupon have the sole right to receive and hold
as Securities Collateral such dividends, other distributions and interest
payments; and (z) all dividends, principal, interest payments and other
distributions which are received by such Grantor contrary to the provisions of
clause (ii) of the immediately preceding paragraph or clause (y) above shall be
received in trust for the benefit of Collateral Agent for the equal and ratable
benefit of the Lenders, the Hedge Exchangers and the Senior Note Holders as
provided herein shall be segregated from other funds of such Grantor and shall
forthwith be paid over to Collateral Agent as Securities Collateral in the same
form as so received (with any necessary endorsements).
In order to permit Collateral Agent to exercise the voting and other
consensual rights which it may be entitled to exercise pursuant hereto and to
receive all dividends and other distributions which it may be entitled to
receive hereunder, (I) each Grantor shall promptly execute and deliver (or cause
to be executed and delivered) to Collateral Agent all such proxies, dividend
payment orders and other instruments as Collateral Agent may from time to time
reasonably request, and (II) without limiting the effect of clause (I) above,
each Grantor hereby grants to Collateral Agent an irrevocable proxy to vote the
Pledged Interests and to exercise all other rights, powers, privileges and
remedies to which a holder of the Pledged Interests would be entitled (including
giving or withholding written consents of shareholders or other holders of
equity interests, calling special meetings of shareholders or other holders of
equity interests and voting at such meetings), which proxy shall be effective,
automatically and without the necessity
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of any action (including any transfer of any Pledged Interests on the record
books of the issuer thereof) by any other Person (including the issuer of the
Pledged Interests or any officer or agent thereof), upon the occurrence and
during the continuation of an Event of Default and which proxy shall only
terminate upon the payment in full of the Secured Obligations.
SECTION 8. SPECIAL COVENANTS WITH RESPECT TO THE MORTGAGE LOAN
DOCUMENTS.
(a) Each Grantor shall at its expense:
(i) if consistent with sound business practices, perform and
observe all terms and provisions of the Mortgage Loan Documents to be
performed or observed by it, maintain the Mortgage Loan Documents in
full force and effect, modify or amend such Mortgage Loan Documents or
otherwise enforce the Mortgage Loan Documents in accordance with their
terms as and to the extent that the failure to so perform and observe
could constitute an Event of Default; and
(ii) upon the reasonable request of Collateral Agent, furnish
to Collateral Agent, promptly upon receipt thereof, copies of all
notices, requests and other documents received by such Grantor under or
pursuant to the Mortgage Loan Documents, and from time to time (A)
furnish to Collateral Agent such information and reports regarding the
Mortgage Loan Documents as Collateral Agent may reasonably request and
(B) upon request of Collateral Agent make to the parties to such
Mortgage Loan Documents such demands and requests for information and
reports or for action as such Grantor is entitled to make under the
Mortgage Loan Documents.
(b) Upon the occurrence and during the continuance of an Event of
Default, no Grantor shall:
(i) cancel or terminate any of the Mortgage Loan Documents or
consent to or accept any cancellation or termination thereof, except in
accordance with its terms;
(ii) amend or otherwise modify the Mortgage Loan Documents or
give any consent, waiver or approval thereunder;
(iii) waive any default under or breach of the Mortgage Loan
Documents;
(iv) consent to or permit or accept any prepayment of amounts
to become due under or in connection with the Mortgage Loan Documents,
except as expressly provided therein; or
(v) take any other action in connection with the Mortgage Loan
Documents that could reasonably be expected to materially impair the
value of the
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interest or rights of such Grantor thereunder or that could reasonably
be expected to materially impair the interest or rights of Collateral
Agent.
SECTION 9. COLLATERAL AGENT APPOINTED ATTORNEY-IN-FACT.
Each Grantor hereby irrevocably appoints Collateral Agent as such
Grantor's attorney-in-fact, with full authority in the place and stead of such
Grantor and in the name of such Grantor, Collateral Agent or otherwise, from
time to time in Collateral Agent's discretion, effective upon the occurrence and
during the continuation of an Event of Default, to take any action and to
execute any instrument that Collateral Agent may deem necessary or advisable to
accomplish the purposes of this Agreement, including without limitation:
(a) to obtain and adjust insurance required to be maintained by such
Grantor or paid to Collateral Agent pursuant to the Credit Agreement;
(b) to ask for, demand, collect, xxx for, recover, compound, receive
and give acquittance and receipts for moneys due and to become due under or in
respect of any of the Collateral;
(c) to receive, endorse and collect any drafts or other instruments,
documents and chattel paper in connection with clauses (a) and (b) above;
(d) to file any claims or take any action or institute any proceedings
that Collateral Agent may deem necessary or desirable for the collection of any
of the Collateral or otherwise to enforce the rights of Collateral Agent with
respect to any of the Collateral;
(e) to pay or discharge taxes or Liens (other than Liens permitted
under this Agreement or the Credit Agreement) levied or placed upon or
threatened against the Collateral, the legality or validity thereof and the
amounts necessary to discharge the same to be determined by Collateral Agent in
its sole discretion, any such payments made by Collateral Agent to become
obligations of such Grantor to Collateral Agent, due and payable immediately
without demand; and
(f) generally to sell, transfer, pledge, make any agreement with
respect to or otherwise deal with any of the Collateral as fully and completely
as though Collateral Agent were the absolute owner thereof for all purposes, and
to do, at Collateral Agent's option and Grantors' expense, at any time or from
time to time, all acts and things that Collateral Agent deems necessary to
protect, preserve or realize upon the Collateral and Collateral Agent's security
interest therein in order to effect the intent of this Agreement, all as fully
and effectively as such Grantor might do.
SECTION 10. COLLATERAL AGENT MAY PERFORM.
Upon the occurrence and during the continuation of any Event of
Default, if any Grantor fails to perform any agreement contained herein,
Collateral Agent may itself perform, or
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cause performance of, such agreement, and the expenses of Collateral Agent
incurred in connection therewith shall be payable by Grantors under Section
14(b).
SECTION 11. STANDARD OF CARE.
The powers conferred on Collateral Agent 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, Collateral Agent shall have no duty as to any
Collateral or as to the taking of any necessary steps to preserve rights against
prior parties or any other rights pertaining to any Collateral. Collateral Agent
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 Collateral Agent accords its own
property.
SECTION 12. REMEDIES.
(a) GENERALLY. If any Event of Default (as defined in the Credit
Agreement) or the occurrence of an Early Termination Date (as defined in a
Master Agreement in the form prepared by the International Swap and Derivatives
Association, Inc. or a similar event under any similar swap agreement) under any
Lender Hedge Agreement or an "Event of Default" under the Senior Notes and
Senior Indentures (each such occurrence being an "EVENT OF DEFAULT" for purposes
of this Agreement) shall have occurred and be continuing, Collateral Agent 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 Collateral Agent on default under the UCC (whether or not the UCC
applies to the affected Collateral), and also may (i) enter onto the property
where any Collateral is located and take possession thereof with or without
judicial process, (ii) prior to the disposition of the Collateral, store,
process, repair or recondition the Collateral or otherwise prepare the
Collateral for disposition in any manner to the extent Collateral Agent deems
appropriate, (iii) take possession of any Grantor's premises or place custodians
in exclusive control thereof, remain on such premises and use the same and any
of such Grantor's equipment for the purpose of completing any work in process,
taking any actions described in the preceding clause (ii) and collecting any
Secured Obligation, (iv) 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 Collateral Agent'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 Collateral Agent may deem commercially reasonable, and (v)
without notice to any Grantor, transfer to or to register in the name of
Collateral Agent or any of its nominees any or all of the Securities Collateral,
Mortgage Loans and Mortgage Loan Documents. Collateral Agent, any Lender or
Hedge Exchanger or any Senior Note Holder or Trustee may be the purchaser of any
or all of the Collateral at any such sale and Collateral Agent, as agent for and
representative of Lenders, Hedge Exchangers and Senior Note Holders (but not any
Lender, Hedge Exchanger or Senior Note Holder in its individual capacity unless
Requisite Obligees (as defined in Section 16(a)) shall otherwise agree in
writing), shall be entitled, for the purpose of bidding and making settlement or
payment of the purchase price for all or any portion of the Collateral sold at
any such public sale, to use and apply any of the Secured Obligations as a
credit on account of the
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purchase price for any Collateral payable by Collateral Agent at such sale. Each
purchaser at any such sale shall hold the property sold absolutely free from any
claim or right on the part of any Grantor, and each Grantor hereby waives (to
the extent permitted by applicable law) all rights of redemption, stay and/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. 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.
Collateral Agent shall not be obligated to make any sale of Collateral
regardless of notice of sale having been given. 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. Each Grantor hereby waives any claims
against Collateral Agent arising by reason of the fact that the price at which
any Collateral may have been sold at such a private sale was less than the price
which might have been obtained at a public sale, even if Collateral Agent
accepts the first offer received and does not offer such Collateral to more than
one offeree. If the proceeds of any sale or other disposition of the Collateral
(after equal and ratable application of such proceeds to the Secured Obligations
to the extent then due and payable) are insufficient to pay in full all of the
Secured Obligations, Grantors shall be jointly and severally liable for the
deficiency and the fees of any attorneys employed by Collateral Agent to collect
such deficiency. Each Grantor further agrees that a breach of any of the
covenants contained in this Section will cause irreparable injury to Collateral
Agent, that Collateral Agent has no adequate remedy at law in respect of such
breach and, as a consequence, that each and every covenant contained in this
Section shall be specifically enforceable against such Grantor, and each Grantor
hereby waives and agrees not to assert any defenses against an action for
specific performance of such covenants except for a defense that no default has
occurred giving rise to the Secured Obligations becoming due and payable prior
to their stated maturities.
(b) SECURITIES COLLATERAL.
(i) Each Grantor recognizes that, by reason of certain
prohibitions contained in the Securities Act and applicable state
securities laws, Collateral Agent may be compelled, with respect to any
sale of all or any part of the Securities Collateral conducted without
prior registration or qualification of such Securities Collateral under
the Securities Act and/or such state securities laws, to limit
purchasers to those who will agree, among other things, to acquire the
Securities Collateral for their own account, for investment and not
with a view to the distribution or resale thereof. Each Grantor
acknowledges that any such private sales may be at prices and on terms
less favorable than those obtainable through a public sale without such
restrictions (including a public offering made pursuant to a
registration statement under the Securities Act) and, notwithstanding
such circumstances and the registration rights granted to Collateral
Agent by such Grantor pursuant hereto, each Grantor agrees that any
such private sale shall be deemed to have been made in a commercially
reasonable manner and that Collateral Agent shall have no obligation to
engage in public sales and no obligation to delay the sale of any
Securities Collateral for the period of time necessary to permit the
issuer thereof to register it for a form of public sale requiring
registration under the
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Securities Act or under applicable state securities laws, even if such
issuer would, or should, agree to so register it. If Collateral Agent
determines to exercise its right to sell any or all of the Securities
Collateral, upon written request, each Grantor shall and shall cause
each issuer of any Pledged Interests to be sold hereunder from time to
time to furnish to Collateral Agent all such information as Collateral
Agent may request in order to determine the number of shares and other
instruments included in the Securities Collateral which may be sold by
Collateral Agent in exempt transactions under the Securities Act and
the rules and regulations of the Securities and Exchange Commission
thereunder, as the same are from time to time in effect.
(ii) If Collateral Agent shall determine to exercise its right
to sell all or any of the Securities Collateral pursuant to this
Section, each Grantor agrees that, upon request of Collateral Agent
(which request may be made by Collateral Agent in its sole discretion),
such Grantor will, at its own expense (A) execute and deliver, and
cause each issuer of the Securities Collateral contemplated to be sold
and the directors and officers thereof to execute and deliver, all such
instruments and documents, and do or cause to be done all such other
acts and things, as may be necessary or, in the opinion of Collateral
Agent, advisable to register such Securities Collateral under the
provisions of the Securities Act and to cause the registration
statement relating thereto to become effective and to remain effective
for such period as prospectuses are required by law to be furnished,
and to make all amendments and supplements thereto and to the related
prospectus which, in the opinion of Collateral Agent, are necessary or
advisable, all in conformity with the requirements of the Securities
Act and the rules and regulations of the Securities and Exchange
Commission applicable thereto; (B) use its best efforts to qualify the
Securities Collateral under all applicable state securities or "Blue
Sky" laws and to obtain all necessary governmental approvals for the
sale of the Securities Collateral, as requested by Collateral Agent;
(C) cause each such issuer to make available to its security holders,
as soon as practicable, an earnings statement which will satisfy the
provisions of Section 11(a) of the Securities Act; (D) do or cause to
be done all such other acts and things as may be necessary to make such
sale of the Securities Collateral or any part thereof valid and binding
and in compliance with applicable law; and (E) bear all costs and
expenses, including reasonable attorneys' fees, of carrying out its
obligations under this Section.
(iii) Without limiting the generality of subsections 10.2 and
10.3 of the Credit Agreement, in the event of any public sale described
herein, each Grantor agrees to indemnify and hold harmless Collateral
Agent, each Lender, each Hedge Exchanger and each Senior Note Holder
and each of their respective directors, officers, employees and agents
from and against any loss, fee, cost, expense, damage, liability or
claim, joint or several, to which any such Persons may become subject
or for which any of them may be liable, under the Securities Act or
otherwise, insofar as such losses, fees, costs, expenses, damages
(excluding consequential damages), liabilities or claims (or any
litigation commenced or threatened in respect thereof) arise out of or
are based upon an untrue statement or alleged untrue statement of a
material fact contained in any preliminary prospectus, registration
statement, prospectus or other such document
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published or filed in connection with such public sale, or any
amendment or supplement thereto, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not
misleading, and will reimburse Collateral Agent and such other Persons
for any legal or other expenses reasonably incurred by Collateral Agent
and such other Persons in connection with any litigation, of any nature
whatsoever, commenced or threatened in respect thereof (including any
and all fees, costs and expenses whatsoever reasonably incurred by
Collateral Agent and such other Persons and counsel for Collateral
Agent and such other Persons in investigating, preparing for, defending
against or providing evidence, producing documents or taking any other
action in respect of, any such commenced or threatened litigation or
any claims asserted). This indemnity shall be in addition to any
liability which any Grantor may otherwise have and shall extend upon
the same terms and conditions to each Person, if any, that controls
Collateral Agent or such Persons within the meaning of the Securities
Act.
SECTION 13. APPLICATION OF PROCEEDS.
Except as expressly provided elsewhere in this Agreement, all proceeds
received by Collateral Agent after an Event of Default and an acceleration of
the Loan Obligations and/or the Note Obligations in respect of any sale of,
collection from, or other realization upon all or any part of the Collateral
shall be applied by Collateral Agent equally and ratably to the payment of the
Secured Obligations (it being understood that in the event of an Event of
Default under the Senior Notes and Senior Indentures and the acceleration
thereof, Collateral Agent shall deliver that portion of any proceeds allocable
to the Senior Notes to the Trustees for the Senior Note Holders) in the
priority, in the case of the Secured Obligations consisting of Loan Obligations
then due and owing, set forth in the Credit Agreement and, if after all of the
Secured Obligations shall have been paid in full, any surplus then remaining
shall be paid to Grantor.
SECTION 14. INDEMNITY AND EXPENSES.
(a) Grantors jointly and severally agree to indemnify Collateral Agent,
each Lender, each Hedge Exchanger and each Senior Note Holder 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 without limitation enforcement of this Agreement), except to the
extent such claims, losses or liabilities result solely from Collateral Agent's
or such Lender's or Hedge Exchanger's or Senior Note Holder's gross negligence
or willful misconduct as finally determined by a court of competent
jurisdiction.
(b) Grantors jointly and severally agree to pay to Collateral Agent
upon demand the amount of any and all out-of-pocket costs and expenses,
including the reasonable fees and expenses of its counsel and of any experts and
agents, that Collateral Agent may 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
Collateral Agent hereunder, or (iv) the failure by any Grantor to perform or
observe any of the provisions hereof.
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(c) The obligations of Grantors in this Section 14 shall survive the
termination of this Agreement and the discharge of Grantors' other obligations
under this Agreement, the Lender Hedge Agreements, the Credit Agreement, the
other Loan Documents, the Senior Notes and the Senior Indentures.
SECTION 15. CONTINUING SECURITY INTEREST; TRANSFER OF LOANS;
TERMINATION AND RELEASE.
(a) This Agreement shall create a continuing security interest in the
Collateral and shall (i) remain in full force and effect until the payment in
full of the Loan Obligations and the cancellation or termination of the
Commitments and the cancellation or expiration of all outstanding Letters of
Credit under the Credit Agreement, (ii) be binding upon Grantors and their
respective successors and assigns, and (iii) inure, together with the rights and
remedies of Collateral Agent hereunder, to the benefit of Collateral Agent and
its successors, transferees and assigns. Without limiting the generality of the
foregoing clause (iii), (A) but subject to the provisions of subsection 10.1 of
the Credit Agreement, any Lender may assign or otherwise transfer any Loans held
by it to any other Person, and such other Person shall thereupon become vested
with all the benefits in respect thereof granted to Lenders herein or otherwise
and (B) any Hedge Exchanger may assign or otherwise transfer any Lender Hedge
Agreement to which it is a party to any other Person in accordance with the
terms of such Lender Hedge Agreement, and such other Person shall thereupon
become vested with all the benefits in respect thereof granted to Hedge
Exchangers herein or otherwise.
(b) Upon the payment in full of all Loan Obligations and the
cancellation or termination of the Commitments and the cancellation or
expiration of all outstanding Letters of Credit under the Credit Agreement, the
security interest granted hereby shall terminate and all rights to the
Collateral shall revert to the applicable Grantors. Upon any such termination
Collateral Agent will, at Grantors' expense, execute and deliver to Grantors
such documents as Grantors shall reasonably request to evidence such
termination. In addition, upon the proposed sale, transfer or other disposition
of any Collateral by a Grantor in accordance with the Credit Agreement for which
such Grantor desires to obtain a security interest release from Collateral
Agent, such Grantor shall deliver an Officers' Certificate (i) stating that the
Collateral subject to such disposition is being sold, transferred or otherwise
disposed of in compliance with the terms of the Credit Agreement, (ii)
specifying the Collateral being sold, transferred or otherwise disposed of in
the proposed transaction and (iii) stating that at the time of and after giving
effect to such sale, transfer or other disposition of the Collateral and
application of proceeds thereof, there is and shall be no Event of Default under
the Senior Notes or the Senior Indentures. Upon the receipt of such Officers'
Certificate, Collateral Agent shall, at such Grantor's expense, so long as
Collateral Agent has no reason to believe that the Officers' Certificate
delivered by such Grantor with respect to such sale is not true and correct,
promptly execute and deliver such releases of its security interest in such
Collateral which is to be so sold, transferred or disposed of, as may be
reasonably requested by such Grantor.
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SECTION 16. COLLATERAL AGENT AS AGENT.
(a) Collateral Agent has been appointed to act as Collateral Agent
hereunder by Lenders and, by their acceptance of the benefits hereof, Hedge
Exchangers and the Senior Note Holders and Trustees. Collateral Agent 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 and the Credit Agreement;
provided that Collateral Agent shall exercise, or refrain from exercising, any
remedies provided for in Section 12 in accordance with the instructions of (i)
Requisite Lenders or (ii) after payment in full of all Obligations under the
Credit Agreement and the cancellation or expiration of all Letters of Credit
under the Credit Agreement and the termination of the Commitments, (A) the
holders of a majority of the aggregate notional amount under all Lender Hedge
Agreements (including Lender Hedge Agreements that have been terminated) or (B)
if all Lender Hedge Agreements have been terminated in accordance with their
terms, the aggregate amount then due and payable (exclusive of expenses and
similar payments but including any early termination payments then due) under
such Lender Hedge Agreements (Requisite Lenders or, if applicable, such holders
being referred to herein as "REQUISITE OBLIGEES"). In furtherance of the
foregoing provisions of this Section 16(a), each Hedge Exchanger and the Senior
Note Holders and Trustees, by acceptance of the benefits hereof, agrees that
each of them shall have no right individually to realize upon any of the
Collateral hereunder, it being understood and agreed by such Hedge Exchanger and
Senior Note Holders and Trustees, that all rights and remedies hereunder may be
exercised solely by Collateral Agent for the benefit of Lenders, Hedge
Exchangers and the Senior Note Holders and Trustees in accordance with the terms
of this Section 16(a).
(b) Collateral Agent shall at all times be the same Person that is
Administrative Agent under the Credit Agreement. Written notice of resignation
by Administrative Agent pursuant to subsection 9.5 of the Credit Agreement shall
also constitute notice of resignation as Collateral Agent under this Agreement;
removal of Administrative Agent pursuant to subsection 9.5 of the Credit
Agreement shall also constitute removal as Collateral Agent under this
Agreement; and appointment of a successor Administrative Agent pursuant to
subsection 9.5 of the Credit Agreement shall also constitute appointment of a
successor Collateral Agent under this Agreement. Upon the acceptance of any
appointment as Administrative Agent under subsection 9.5 of the Credit Agreement
by a successor Administrative Agent, that successor Administrative Agent shall
thereupon succeed to and become vested with all the rights, powers, privileges
and duties of the retiring or removed Collateral Agent under this Agreement, and
the retiring or removed Collateral Agent under this Agreement shall promptly (i)
transfer to such successor Collateral Agent all sums, securities and other items
of Collateral held hereunder, together with all records and other documents
necessary or appropriate in connection with the performance of the duties of the
successor Collateral Agent under this Agreement, and (ii) execute and deliver to
such successor Collateral Agent such amendments to financing statements, and
take such other actions, as may be necessary or appropriate in connection with
the assignment to such successor Collateral Agent of the security interests
created hereunder, whereupon such retiring or removed Collateral Agent shall be
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discharged from its duties and obligations under this Agreement. After any
retiring or removed Administrative Agent's resignation or removal hereunder as
Collateral Agent, 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 Collateral Agent hereunder.
(c) Collateral Agent shall not be deemed to have any duty whatsoever
with respect to any Hedge Exchanger until it shall have received written notice
in form and substance satisfactory to Collateral Agent from a Grantor or the
Hedge Exchanger as to the existence and terms of the applicable Lender Hedge
Agreement.
SECTION 17. ADDITIONAL GRANTORS.
The initial Subsidiary Grantors hereunder shall be such of the
Subsidiaries of Borrowers as are signatories hereto on the date hereof. From
time to time subsequent to the date hereof, additional Subsidiaries of Borrowers
may become parties hereto as additional Grantors (each an "ADDITIONAL GRANTOR"),
by executing a Counterpart substantially in the form of EXHIBIT III annexed
hereto (each, a "COUNTERPART"). Upon delivery of any such Counterpart to
Collateral Agent, notice of which is hereby waived by Grantors, each such
Additional Grantor shall be a Grantor and shall be as fully a party hereto as if
such Additional Grantor were an original signatory hereto. Each Grantor
expressly agrees that its obligations arising hereunder shall not be affected or
diminished by the addition or release of any other Grantor hereunder, nor by any
election of Administrative Agent not to cause any Subsidiary of Borrowers to
become an Additional Grantor hereunder. This Agreement shall be fully effective
as to any Grantor that is or becomes a party hereto regardless of whether any
other Person becomes or fails to become or ceases to be a Grantor hereunder.
SECTION 18. AMENDMENTS; ETC.
No amendment, modification, termination or waiver of any provision of
this Agreement, and no consent to any departure by any Grantor therefrom, shall
in any event be effective unless the same shall be in writing and signed by
Collateral Agent and, in the case of any such amendment or modification, by
Grantors; PROVIDED this Agreement may be modified by the execution of a
Counterpart by an Additional Grantor in accordance with Section 18 and Grantors
hereby waive any requirement of notice of or consent to any such amendment. Any
such waiver or consent shall be effective only in the specific instance and for
the specific purpose for which it was given.
SECTION 19. NOTICES.
Any notice or other communication herein required or permitted to be
given shall be in writing and may be personally served or sent by telefacsimile
or United States mail or courier service and shall be deemed to have been given
when delivered in person or by courier service, upon receipt of telefacsimile,
or three Business Days after depositing it in the United States mail with
postage prepaid and properly addressed; PROVIDED that notices to Collateral
Agent shall not be effective until received. For the purposes hereof, the
address of each party hereto shall be as provided in subsection 10.8 of the
Credit Agreement or as set forth under such
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party's name on the signature pages hereof or such other address as shall be
designated by such party in a written notice delivered to the other parties
hereto.
SECTION 20. FAILURE OR INDULGENCE NOT WAIVER; REMEDIES CUMULATIVE.
No failure or delay on the part of Collateral Agent 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 21. 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 22. 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 23. GOVERNING LAW; TERMS; RULES OF CONSTRUCTION.
THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER
SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH,
THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING WITHOUT LIMITATION SECTION
5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT REGARD
TO CONFLICTS OF LAWS PRINCIPLES, EXCEPT TO THE EXTENT THAT THE UCC PROVIDES THAT
THE PERFECTION OF THE SECURITY INTEREST HEREUNDER, OR REMEDIES HEREUNDER, IN
RESPECT OF ANY PARTICULAR COLLATERAL ARE GOVERNED BY THE LAWS OF A JURISDICTION
OTHER THAN THE STATE OF NEW YORK. Unless otherwise defined herein or in the
Credit Agreement, terms used in Articles 8 and 9 of the Uniform Commercial Code
in the State of New York are used herein as therein defined. The rules of
construction set forth in subsection 1.3 of the Credit Agreement shall be
applicable to this Agreement MUTATIS MUTANDIS.
SECTION 24. CONSENT TO JURISDICTION AND SERVICE OF PROCESS.
ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST ANY GRANTOR ARISING OUT OF OR
RELATING TO THIS AGREEMENT, OR ANY OBLIGATIONS HEREUNDER, MAY BE BROUGHT IN ANY
STATE OR FEDERAL COURT OF
Pledge and Security Agreement
20
COMPETENT JURISDICTION IN XXX XXXXX, XXXXXX XXX XXXX XX XXX XXXX. BY EXECUTING
AND DELIVERING THIS AGREEMENT, EACH GRANTOR, FOR ITSELF AND IN CONNECTION WITH
ITS PROPERTIES, IRREVOCABLY (I) ACCEPTS GENERALLY AND UNCONDITIONALLY THE
NONEXCLUSIVE JURISDICTION AND VENUE OF SUCH COURTS; (II) WAIVES ANY DEFENSE OF
FORUM NON CONVENIENS; (III) 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 SUCH GRANTOR AT ITS ADDRESS PROVIDED IN ACCORDANCE WITH
SECTION 19; (IV) AGREES THAT SERVICE AS PROVIDED IN CLAUSE (III) ABOVE IS
SUFFICIENT TO CONFER PERSONAL JURISDICTION OVER SUCH GRANTOR IN ANY SUCH
PROCEEDING IN ANY SUCH COURT, AND OTHERWISE CONSTITUTES EFFECTIVE AND BINDING
SERVICE IN EVERY RESPECT; (V) AGREES THAT COLLATERAL AGENT RETAINS THE RIGHT TO
SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO BRING PROCEEDINGS
AGAINST SUCH GRANTOR IN THE COURTS OF ANY OTHER JURISDICTION; AND (VI) AGREES
THAT THE PROVISIONS OF THIS SECTION 24 RELATING TO JURISDICTION AND VENUE SHALL
BE BINDING AND ENFORCEABLE TO THE FULLEST EXTENT PERMISSIBLE UNDER NEW YORK
GENERAL OBLIGATIONS LAW SECTION 5-1402 OR OTHERWISE.
SECTION 25. WAIVER OF JURY TRIAL.
GRANTORS AND COLLATERAL AGENT 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 without limitation contract
claims, tort claims, breach of duty claims, and all other common law and
statutory claims. Each Grantor and Collateral Agent acknowledge that this waiver
is a material inducement for Grantors and Collateral Agent to enter into a
business relationship, that Grantors and Collateral Agent 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. Each Grantor and Collateral
Agent 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 (OTHER THAN BY A
MUTUAL WRITTEN WAIVER SPECIFICALLY REFERRING TO THIS SECTION 25 AND EXECUTED BY
EACH OF THE PARTIES HERETO), 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 26. 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.
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Pledge and Security Agreement
21
IN WITNESS WHEREOF, Grantors and Collateral Agent have caused this
Agreement to be duly executed and delivered by their respective officers
thereunto duly authorized as of the date first written above.
MEDITRUST CORPORATION
MEDITRUST HEALTHCARE CORPORATION
MEDITRUST MORTGAGE INVESTMENTS, INC.
By: /s/ XXXXX X. XXX
--------------------------------
On behalf of each of the entities immediately preceding this
signature block
Name: Xxxxx X. Xxx
Title: Chief Financial Officer and Treasurer
MEDITRUST OPERATING COMPANY
MOC HOLDING COMPANY
THE LA QUINTA COMPANY
LA QUINTA INVESTMENTS, INC.
LA QUINTA PLAZA, INC.
LA QUINTA REALTY CORP.
LQI ACQUISITION CORP.
By: /s/ XXXXX X. XXX
---------------------------------
On behalf of each of the entities immediately preceding this
signature block
Name: Xxxxx X. Xxx
Title: Executive Vice President, Chief Financial Officer
and Treasurer
Pledge and Security Agreement
LQ - WB, LLC
By: MEDITRUST CORPORATION, Manager
By: /s/ XXXXX X. XXX
----------------------------------
Name: Xxxxx X. Xxx
Title: Chief Financial Officer and Treasurer
MT LIMITED I LLC
MT GENERAL LLC
By: /s/ XXXX X. XXXXXXX
----------------------------------
On behalf of each of the entities immediately preceding this
signature block
Name: Xxxx X. Xxxxxxx
Title: Manager
LA QUINTA MOTOR INNS, LIMITED PARTNERSHIP
By: LA QUINTA REALTY CORP., its General Partner
On behalf of each of the entities immediately preceding
this signature block
By: /s/ XXXXX X. XXX
-----------------------------------
Name: Xxxxx X. Xxx
Title: Chief Financial Officer and Treasurer
Pledge and Security Agreement
CANADIAN IMPERIAL BANK OF
COMMERCE, as Collateral Agent
By: /s/ XXXX X. XXXXXX
-----------------------------------
Xxxx X. Xxxxxx
Managing Director
CIBC World Markets Corp., AS AGENT
Pledge and Security Agreement
