Exhibit 10.2
EQUITY INTEREST PLEDGE AND SECURITY AGREEMENT
between
THE PARTIES LISTED ON SCHEDULE 1 ATTACHED HERETO
as Pledgors
and
UBS AG, STAMFORD BRANCH,
as Administrative Agent
as Pledgee
Dated as of November 30, 1999
Page 1
EQUITY INTEREST PLEDGE AND SECURITY AGREEMENT
EQUITY INTEREST PLEDGE AND SECURITY AGREEMENT, dated as of November
30, 1999 (this "AGREEMENT"), is made by and between the parties listed on
SCHEDULE 1 attached hereto and made a part hereof (each, individually, a
"PLEDGOR" and all such Pledgors collectively, the "PLEDGORS"), each having its
chief executive office at 000 Xxxxxxxxxxx Xxxx, Xxxxxxxx, Xxx Xxxx 00000, to UBS
AG, STAMFORD BRANCH, as Administrative Agent, or its assigns ("PLEDGEE") having
its principal office at 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx.
W I T N E S S E T H:
WHEREAS, Reckson Services Incorporated (the "BORROWER"), as borrower,
and UBS AG, Stamford Branch, as Administrative Agent for the Lenders, and the
Lenders listed on the signature pages thereto (together with their successors
and assigns, collectively, the "LENDERS") have entered into the Credit
Agreement, dated of even date herewith (as the same may be amended, modified or
restated, the "CREDIT AGREEMENT"), pursuant to which the Lenders have agreed to
make a loan to Borrower in the principal amount of $60,000,000, subject to all
the terms and conditions of the Credit Agreement;
WHEREAS, as set forth on SCHEDULE 2 attached hereto and made a part
hereof, each Pledgor is the legal and beneficial owner of a direct equity
interest in one or more of the entities set forth on SCHEDULE 2 hereto (each
such entity and successor thereof being referred to as a "PLEDGED ENTITY", and
collectively as the "PLEDGED ENTITIES"), under and subject to the respective
corporate governing documents set forth on SCHEDULE 2 hereto next to such
Pledged Entity's name (as each of such agreements may hereafter be amended or
otherwise modified from time to time, a "GOVERNING DOCUMENT"); and
WHEREAS, the Borrower has covenanted to cause the Pledgors to execute
and deliver to the Pledgee this Agreement as collateral for the Obligations.
NOW, THEREFORE, in consideration of the foregoing, and in order to
induce the Lenders to enter into the Credit Agreement, the receipt of which is
hereby acknowledged, each Pledgor does hereby agree with Pledgee, as follows:
1. DEFINITIONS. Unless the context otherwise requires, capitalized
terms used herein without definition shall have the respective meanings
provided therefor in the Credit Agreement and the following terms shall have the
following meanings:
"CODE" shall mean the Uniform Commercial Code, as enacted in the State
of New York, as amended.
"DEFAULT" shall mean any event, act or condition which with notice or
lapse of time, or both, would constitute an Event of Default.
"EQUITY INTERESTS" shall mean, collectively, all of each Pledgor's
right, title and interest in and to the Pledged Entities, including, without
limitation, (a) all of each Pledgor's right, title and interest in, to and under
any and all agreements relating to such Pledged Entities or to which such
Pledged Entities are a party, (b) any and all rights of first refusal to which
Pledgor may be entitled in connection with any Equity Interest or the applicable
Governing Documents, and (c) all of Pledgor's right, title and interest in and
to the profits, capital, surplus, assets, allocations and distributions under
the applicable Governing Documents, both during the term of the applicable
Pledged Entity and upon any dissolution or liquidation of the applicable
Pledged Entity, if any shall occur.
"EVENT OF DEFAULT" shall mean the occurrence of any one or more of the
following events:
(a) Any representation or warranty made by Pledgors contained in this
Agreement was false or misleading in any material respect on the date when
made; or
(b) Any Pledgor's failure to comply with, or breach of any term,
covenant or agreement contained in Section 4 hereof, if such failure or
breach, as the case may be, shall continue for thirty (30) days after
notice shall have been given by Pledgee specifying such failure or breach,
as the case may be, and requiring such failure or breach, as the case may
be, to be remedied; or
(c) Any Pledgor's failure to comply with, or breach of any material
term, covenant or agreement contained in this Agreement (other than as
referred to in paragraph (b) above) if such failure or breach, as the case
may be, shall continue for thirty (30) days after notice shall have been
given by Pledgee specifying such failure or breach, as the case may be, and
requiring such failure or breach, as the case may be, to be remedied; or
(d) The occurrence and continuance beyond any applicable grace periods
(if any) of any default under the Credit Agreement.
"PLEDGED STOCK" shall mean the issued and outstanding capital stock of
any Pledged Entity owned by the Pledgors as of the Closing Date, as more
particularly described on SCHEDULE 2 hereto and hereafter, all shares of capital
stock pledged pursuant to the Credit Agreement, and all options, warrants and
other rights to acquire such capital stock.
"VANTACQ" shall mean VANTACQ, LLC, a Delaware limited liability
company.
"VANTAS" shall mean VANTAS, Incorporated, a Nevada corporation.
2. GRANT OF SECURITY INTEREST, ETC. As security for the full and
punctual payment and performance of the Obligations when due, Pledgors hereby
grant and pledge a continuing first priority lien on and security interest in,
and, as a part of such grant and pledge, hereby transfer and assign to Pledgee
as security, all of the following (the "COLLATERAL") whether now owned or
hereafter acquired: (i) the Equity Interests; (ii) any other equity interest(s)
now owned or hereafter acquired by any Pledgor in any Pledged Entity which the
Pledgors are required to pledge pursuant to the terms of the Credit Agreement
(the "ADDITIONAL EQUITY INTERESTS"); (iii) all of Pledgors' right, title and
interest in the undated stock powers relating to the Pledged Stock duly executed
in blank and (subject to the provisions of Section 8 hereof) all income and
profits thereof, all distributions thereon, and all rights and privileges
pertaining thereto; (iv) all of any Pledgor's right, title and interest in any
of the Pledged Entities, including without limitation: (a) all of each
Pledgor's interest in the capital of the Pledged Entities, and each Pledgor's
interest in all profits and distributions to which such Pledgor shall at any
time be entitled in respect of the Equity Interests and in respect of any
Additional Equity Interests; (b) all other payments, if any, due or to become
due to each Pledgor in respect of the Equity Interests and in respect of any
Additional Equity Interests, under or arising out of any Governing Document,
whether as contractual obligations, damages, insurance proceeds, condemnation
awards or otherwise; (c) all of each Pledgor's claims, rights, powers,
privileges, authority, options, security interest, liens and remedies, if any,
under or arising out of any Governing Document or the ownership of any Equity
Interests pursuant thereto and Additional Equity Interests; (d) all present and
future claims, if any, of any Pledgor against any Pledged Entities, under or
arising out of the applicable Governing Document for monies loaned or advanced,
for services rendered or otherwise; and (e) to the extent permitted by
applicable law, all of each Pledgor's rights, if any, under any Governing
Document or at law, to exercise and enforce every right, power, remedy,
authority, option and privilege of such Pledgor relating to the Equity Interests
(or any Additional Equity Interests), including any power to terminate, cancel
or modify any Governing Documents, to execute any instruments and to take any
and all other action on behalf of and in the name of such Pledgor in respect of
the Equity Interests and Additional Equity Interests and any Pledged Entities,
to make determinations, to exercise any election (including, but not limited
to, election of remedies) or option or to give or receive any notice, consent,
amendment, waiver or approval, together with full power and authority to
demand, receive, enforce or collect any of the foregoing or any property of any
Pledged Entities, to enforce or execute any checks, or other instruments or
orders, to file any claims and to take any action in connection with any of the
foregoing; and (v) to the extent not otherwise included, all proceeds of any or
all of the foregoing.
3. POWERS OF PLEDGORS PRIOR TO AN EVENT OF DEFAULT.
Prior to the occurrence and continuance of an Event of Default,
Pledgors shall be entitled to receive and retain all distributions with respect
to the Equity Interests (and any Additional Equity Interests). Notwithstanding
anything else herein to the contrary, unless an Event of Default shall have
occurred and then be continuing, Pledgors shall be entitled to exercise their
respective voting, consent and other rights and remedies under the Governing
Documents or other applicable organizational documents, as the case may be, or
otherwise with respect to the Equity Interests (and any Additional Equity
Interests); PROVIDED, HOWEVER, that no action shall be taken or fail to be taken
which could adversely affect Pledgee's rights to the Collateral or the value of
the Collateral.
4. REPRESENTATIONS, WARRANTIES AND COVENANTS.
Each Pledgor hereby covenants with, and represents and warrants to,
Pledgee, as follows:
(a) Each Pledgor has the full power and authority to acquire, own and
pledge that portion of the Equity Interests relating to its ownership
interests in the Pledged Entities and to execute and deliver and perform
its obligations hereunder.
(b) The execution and delivery by each Pledgor of this Agreement, each
Pledgor's performance of its respective obligations hereunder and the
creation of the security interests and liens provided for in this Agreement
have been duly authorized by all requisite action on the part of each
Pledgor, including the consent of any Person where required, and will not
violate any provision of law, any order of any court or other Governmental
Authority, the Governing Documents, or any indenture, agreement or other
instrument to which any Pledgor is a party, or by which any Pledgor is
bound, or be in conflict with, result in a breach of, or constitute (with
due notice or lapse of time or both) a default under, or except as may be
provided by this Agreement, result in the creation or imposition of any
lien, of any nature whatsoever upon any of the property or assets of any
Pledgor pursuant to any such indenture, agreement or instrument. No Pledgor
is required to obtain any consent, approval or authorization from, or to
file any declaration or statement with, any Governmental Authority or other
agency in connection with or as a condition to the execution, delivery or
performance of this Agreement.
(c) Each Pledgor owns the percentage equity interest (each such equity
interest referred to herein as a "CURRENT EQUITY INTEREST") in the Pledged
Entities set forth under each Pledgor's names on SCHEDULE 2 annexed hereto
and made a part hereof pursuant to the terms of each Governing Document,
and, except as permitted by the Credit Agreement, will at all times
hereafter during the term of this Agreement continue to hold its Current
Equity Interest in each of the Pledged Entities. No Pledgor has any
outstanding options or rights or other agreements to sell or otherwise
transfer all or any portion of its respective Equity Interest (or any
Additional Equity Interests). In the event that (i) any Pledgor acquires an
Additional Equity Interest or (ii) in accordance with the terms of this
Agreement any Pledgor transfers all or any portion of any Equity Interest
(or Additional Equity Interests), Pledgors agree to enter into an
amendment to this Agreement modifying SCHEDULE 2 hereof to account for
such change and, in the case of clause (i) above, Pledgors shall provide
Pledgee with notice thereof immediately upon any such acquisition.
(d) Pledgors will defend Pledgee's right, title and interest in and to
the Equity Interests and any Additional Equity Interests and in and to the
Collateral pledged by it pursuant hereto and in which it has granted a
security interest pursuant hereto against the claims and demands of all
other Persons.
(e) Each Pledgor is the legal and beneficial owner of and has good
title to the Equity Interests relating to its ownership interest in the
Pledged Entities and in and to the Collateral in which it has granted a
security interest pursuant hereto, free and clear of all claims or security
interests of every nature whatsoever, except the security interests as are
created pursuant to this Agreement. Each Pledgor has the unqualified right
to pledge and grant a security interest in the same (and to transfer the
same, whether pursuant to foreclosure or otherwise) as herein provided
without the consent of any other Person other than any such consent that
has been obtained and there are no restrictions upon the exercise of the
voting rights associated with, or the transfer of, any of the Pledged
Stock.
(f) The Equity Interests have been validly acquired by Pledgors and
are duly and validly pledged hereunder. All consents and approvals required
for the execution and delivery of this Agreement and the consummation of
the transactions contemplated by this Agreement have been obtained.
(g) Each Pledgor agrees that it will not mortgage, encumber, pledge or
grant a security interest in, any of the Collateral or any interest
therein, or suffer or permit any of the same to occur or exist, except as
expressly permitted in this Agreement or the Credit Agreement, and any
mortgage, pledge, encumbrance or security interest whatsoever made in
violation of this covenant shall be a nullity and of no force and effect,
and upon demand of Pledgee, shall forthwith be canceled or satisfied by an
appropriate instrument in writing. Any sale, assignment or transfer of the
Collateral shall be made in accordance with the provisions of the Credit
Agreement. Without limiting the generality of the foregoing, Pledgors
will, within thirty (30) days after Pledgors have actual notice thereof,
discharge or cause to be discharged as a lien of record by payment or
filing of the bond required by law, or otherwise, any judgment, tax or
other involuntary liens filed or otherwise asserted against the
Collateral, and any proceedings for the enforcement thereof; PROVIDED,
HOWEVER, so long as no Event of Default shall have occurred and be
continuing here under, Pledgors shall have the right to contest in good
faith and with reasonable diligence the validity of any such judgment,
liens or tax or other such involuntary liens upon the filing of such bond
or, if no such bond is required by law to be filed, establishing reserves
in accordance with GAAP. If Pledgors fail to so discharge or bond or
contest liens in the manner provided above, then Pledgee may, but shall not
be required to, procure the release and discharge of any such lien and any
judgment or decree thereon, and in furtherance thereof may effect any
reasonable settlement or compromise or furnish any security or indemnity as
may be required. Pledgors shall reimburse Pledgee, upon demand, for any
reasonable amounts expended by Pledgee in connection with the provisions of
this Paragraph (g), and all amounts expended by Pledgee hereunder shall be
secured by this Agreement. In settling, compromising or arranging for the
discharge of any liens under this Paragraph (g), Pledgee shall not be
required to establish or confirm the validity or amount thereof.
(h) The chief executive office of each Pledgor, and the principal
place where the records of each Pledgor concerning the Collateral are kept,
is 000 Xxxxxxxxxxx Xxxx, Xxxxxxxx, Xxx Xxxx 00000. No Pledgor shall change
such chief executive office or remove such records unless such Pledgor
shall provide Pledgee with written notice thereof within fifteen (15) days
after such change (but in any event, within the period required pursuant to
the Code) and there shall have been taken such action, satisfactory to
Pledgee, as may be necessary to maintain the security interest of Pledgee
hereunder at all times fully perfected and in full force and effect. No
Pledgor shall change its name unless such Pledgor shall have given Pledgee
written notice thereof within fifteen (15) days after such change (but in
any event, within the period required pursuant to the Code) and shall have
taken such action, satisfactory to Pledgee, as may be necessary to maintain
the security interest of Pledgee in the Collateral granted hereunder at all
times fully perfected and in full force and effect.
(i) Giving effect to the aforesaid grant and assignment to Pledgee,
Pledgee has, as of the date of this Agreement, and as to Collateral
acquired from time to time after the date hereof, shall have, a valid,
perfected and continuing first priority lien upon and security interest in
the Collateral; PROVIDED, HOWEVER, that no representation or warranty is
made with respect to the perfected status of the security interest of
Pledgee in the proceeds of Collateral consisting of "cash proceeds" or
"non-cash proceeds" as defined in the Code except if, and to the extent,
the provisions of Section 9-306 of the Code shall be complied with.
(j) There are no financing statements under the Code covering any or
all of the Collateral and no Pledgor will, without the prior written
consent of Pledgee, execute and, until payment in full of all of the
Obligations, there will not ever be on file in any public office, any
enforceable financing statement or statements covering any or all of the
Collateral, except financing statements filed or to be filed in favor of
Pledgee as secured party.
(k) Each of the Governing Documents have been duly executed and
delivered by the Pledgor(s) which is/are a party(ies) thereto and
constitutes the legal, valid and binding obligation of such Pledgor(s),
enforceable in accordance with its 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. No
Pledgor is in default under or with respect to, nor has any Pledgor
received any notice alleging any default that remains uncured under or with
respect to, such Pledgor's obligations under any Governing Documents.
(l) Each of the Governing Documents delivered to Pledgee is a true,
correct and complete copy of a signed copy thereof of the complete and
entire Governing Document in effect on the date hereof and has not, as of
the date hereof, been further modified or amended.
(m) Pledgors shall deliver to Pledgee a copy of each notice of default
given or received by them under any Governing Document, promptly, but in
any event within ten (10) days after, any Pledgor gives or receives such
notice.
(n) Except as permitted by the Credit Agreement, no Pledgor shall
withdraw as a shareholder of any of the Pledged Entities, or file or pursue
or take any action which may, directly or indirectly, cause a dissolution
or liquidation of any of the Pledged Entities or seek a partition of any
property of the Pledged Entities.
(o) Except as permitted by the Credit Agreement, no Pledgor shall
terminate or agree to terminate or amend or modify, or agree to amend or
modify, any Governing Documents or waive compliance with any provision of
any Governing Documents with out the prior written consent of Pledgee in
each instance.
(p) None of the Collateral is, as of the date of this Agreement, and
as to Collateral which arises from time to time after such date will be,
evidenced by any instrument, note or chattel paper except such as have been
or will be duly endorsed to Pledgee or in blank, and delivered to Pledgee
by Pledgors simultaneously with the creation thereof.
(q) Each Pledgor shall, at its sole cost and expense, keep, observe,
perform and discharge, duly and punctually, all and singular the
obligations, terms, covenants, conditions, representations and warranties
of the Governing Documents to which it is a party on the part of the
applicable Pledgor to be kept, observed, performed and discharged. Pledgors
shall hold Pledgee harmless and indemnify it against any cost or expense
(including reasonable attorneys' fees and disbursements) that Pledgee may
incur or sustain by reason of the failure on any Pledgor's part to so
perform and observe any Governing Document or to satisfy, perform and
observe such conditions thereunder.
(r) All the shares of the Pledged Stock have been duly and validly
issued, are fully paid and non-assessable. Except as set forth on SCHEDULE
3 attached hereto and made a part hereof, none of the Pledged Entities has
outstanding any options or rights or other agreements to issue stock or
other equity interests not outstanding on the date hereof or to sell or
otherwise transfer all or any portion of any interests in any of such
Pledged Entities.
(s) The Pledged Stock is not listed on any recognized stock exchange
in the United States of America.
5. INTENTIONALLY OMITTED.
6. DISTRIBUTIONS.
(a) Subject to the terms of the Credit Agreement, unless an Event of
Default shall have occurred and be continuing, Pledgors at any time may
receive and retain all distributions or dividends with respect to its
interest in the capital or profits or other cash distributions or
dividends, liquidating or otherwise, with respect to the Equity Interests
(and any Additional Equity Interests).
5 (b) If Pledgor at any time shall be entitled to receive any cash
distributions or dividends with respect to the Equity Interests and/or
any Additional Equity Interests or otherwise pursuant to any Governing
Document, all such amounts shall, immediately upon receipt by any
Pledgor, be remitted to Pledgee for application to the Obligations and
until so remitted shall be received and held by Pledgor in trust for
Pledgee. In the event a non-cash distribution or dividends shall be paid
or made to any Pledgor, such Pledgor shall receive the same in trust for
the sole purpose of forthwith delivering the same in kind (appropriately
endorsed) to Pledgee, subject to the terms hereof, to be added to the
Collateral hereunder.
If any Pledgor shall become entitled to receive or shall receive
from any Pledged Entity any instrument, certificate, option or right, as
an addition to and in respect of, in substitution of, or in exchange for,
that portion of the Equity Interests (and/or any Additional Equity
Interests) relating to its ownership interest in the Pledged Entities or
any part of any of the foregoing, such Pledgor shall hold the same as the
agent and in trust for Pledgee, and shall deliver it forthwith to Pledgee
in the exact form received, with such Pledgor's endorsement or assignment
or other instrument as Pledgee may reasonably deem appropriate, to be
held by Pledgee, as further Collateral for the Obligations.
7. APPLICATION OF COLLATERAL. All proceeds of any Collateral now or at
any time hereafter received or retained by Pledgee pursuant to the provisions of
this Agreement (including, without limitation, any proceeds from the sale of all
or any portion of the Equity Interests (and/or any Additional Equity Interests)
and all distributions, liquidating and otherwise, received by Pledgee in respect
of the Equity Interests (and/or any Additional Equity Interests) shall, after an
Event of Default and acceleration of the Loans, be applied by Pledgee to the
Obligations in the priority set forth in the Credit Agreement, and, if after all
of the Obligations shall have been paid in full, any surplus then remaining
shall be paid to Pledgors.
8. REMEDIES. If an Event of Default shall occur and then be
continuing:
(a) Pledgee, without obligation to resort to any other security, right
or remedy granted under any other agreement or instrument, shall have the
right to, in addition to all rights, powers and remedies of a secured party
pursuant to the Code, at any time and from time to time, (i) cause any or
all of the Equity Interests (and/or any Additional Equity Interests) to be
registered in or transferred into the name of Pledgee or into the name of a
nominee or nominees, or designee or designees, of Pledgee; and/or (ii)
sell, resell, assign and deliver, in its sole discretion, any or all of
the Collateral or any other collateral security for the Obligations
(whether in whole or in part and at the same or different times) and all
right, title and interest, claim and demand therein and right of redemption
thereof, at public or private sale, for cash, upon credit or for future
delivery as Pledgee may deem appropriate in a commercially reasonable
manner, and in connection therewith Pledgee may grant options and may
impose reasonable conditions such as requiring any purchaser to represent
that any "securities" constituting any part of the Collateral are being
purchased for investment only, Pledgors hereby waiving and releasing any
and all equity or right of redemption. If all or any of the Collateral is
sold by Pledgee upon credit or for future delivery, Pledgee shall not be
liable for the failure of the purchaser to purchase or pay for the same
and, in the event of any such failure, Pledgee may resell such Collateral.
It is expressly agreed that Pledgee may exercise its rights with respect to
less than all of the Collateral, leaving unexercised its rights with
respect to the remainder of the Collateral, PROVIDED, HOWEVER, that such
partial exercise shall in no way restrict or jeopardize Pledgee's right to
exercise its rights with respect to all or any other portion of the
Collateral at a later time or times.
(b) Pledgee may exercise, either by itself or by its nominee or
designee, in the name of Pledgors, all of the rights, powers and remedies
granted to Pledgee in Section 2 hereof in respect of the Governing
Documents, the Equity Interests (and/or any Additional Equity Interests),
the Pledged Entities, and the other Collateral, and may exercise and
enforce all of Pledgee's rights and remedies hereunder and under law. Such
rights and remedies shall include, without limitation, the right to
exercise all voting, consent and other rights relating to the Equity
Interests (and/or any Additional Equity Interests) whether in the name of
any Pledgor or otherwise.
(c) Pledgee may exercise all of the rights and remedies of a secured
party under the Code.
(d) Without limiting any other provision of this Agreement, and
without waiving or releasing Pledgors from any obligation or default
hereunder, Pledgee shall have the right, but not the obligation, to
perform any act or take any appropriate action, as it, in its reasonable
judgment, may deem necessary to cure such Event of Default or cause any
term, covenant, condition or obligation required under this Agreement, the
Credit Agreement, the Notes or any Governing Documents, to be performed or
observed by any Pledgor, to be promptly performed or observed on behalf of
any Pledgor or to protect the security of this Agreement. All amounts
advanced by, or on behalf of, Pledgee in exercising its rights under this
Section 8 (including, but not limited to, reasonable legal expenses and
disbursements incurred in connection therewith), together with interest
thereon at the rate set forth in Section 5.1(d) of the Credit Agreement
(the "DEFAULT RATE"), shall be payable by Pledgors to Pledgee upon demand
and shall be secured by this Agreement.
9. ATTORNEY-IN-FACT.
(a) Each Pledgor hereby irrevocably authorizes and empowers Pledgee
and its successors and/or assigns and transfers unto Pledgee, and
constitutes and appoints Pledgee its true and lawful attorney-in-fact, and
as its agent, irrevocably, with full power of substitution for it and in
its name, for the purpose of carrying out the provisions of this Agreement
and taking any action and executing any instrument which Pledgee may deem
necessary or advisable to accomplish the purposes hereof. With out limiting
the generality of the foregoing, upon the occurrence and during the
continuation of an Event or Default, Pledgee shall have the right to
exercise and enforce every right, power, remedy, authority, option and
privilege of Pledgors under the Governing Documents or with respect to the
Pledged Stock, including, without limitation, any power to subordinate,
terminate, cancel or modify any Governing Documents or to give any notices,
or to take any action resulting in such subordination, termination,
cancellation or modification and to furnish any information, to make any
demands, to execute any instruments and to take any and all other action on
behalf of and in the name of Pledgor which, in the opinion of Pledgee, may
be necessary or appropriate to be given, furnished, made, exercised or
taken under any Governing Documents or with respect to the Pledged Stock in
order to comply therewith, to perform the conditions thereof or to prevent
or remedy any default by any Pledgor there under or to enforce any of any
Pledgor's rights thereunder or with respect to the Pledged Stock. Pledgee
may, during the continuation of an Event of Default, without notice to, or
assent by, any Pledgor or any other Person (to the extent permitted by
law), but without affecting any of the Obligations, in the name of Pledgor
or in the name of Pledgee, notify any other party to any Governing
Documents to make payment and performance directly to Pledgee; extend the
time of payment and performance of, compromise or settle for cash, credit
or otherwise, and upon any terms and conditions, any obligations owing to
Pledgors, or claims of any Pledgor, under any Governing Documents or with
respect to the Pledged Stock; file any claims, commence, maintain or
discontinue any actions, suits or other proceedings deemed by Pledgee
necessary or advisable for the purpose of collecting upon or enforcing any
Governing Documents or with respect to the Pledged Stock; execute and file
proof claim for the full amount of any Collateral and vote such claims for
the full amount thereof (x) for or against proposal or resolution, (y) for
a trustee or trustees or for a receiver or receivers or for a committee of
creditors and/or (z) for the acceptance or rejection of any proposed
arrangement, plan or reorganization, composition or extension, and Pledgee
or its nominee may receive any payment or distribution and give acquittance
therefor and may exchange or release Collateral; and execute any instrument
and do all other things deemed necessary and proper by Pledgee to protect
and preserve and realize upon the Collateral and the other rights
contemplated hereby. This power-of-attorney is irrevocable and coupled with
an interest, and any similar or dissimilar powers heretofore given by
Pledgors in respect of the Equity Interests (and/or any Additional Equity
Interests) to any other Person are hereby revoked.
(b) Further, without limiting the generality of the foregoing,
Pledgee, after the occurrence and during the continuation of an Event of
Default, shall have the right and power to receive, endorse and collect all
checks and other orders for the payment of money made payable to any
Pledgor representing any interest, payment of principal or other
distribution payable in respect of the Collateral or any part thereof, and
for and in the name, place and stead of such Pledgor, to execute
endorsements, assignments or other instruments of conveyance or transfer in
respect of the Equity Interests (and/or any Additional Equity Interests) or
any other property which is or may become a part of the Collateral
hereunder.
10. SALES OF COLLATERAL. No demand, advertisement or notice, all of
which are hereby expressly waived by Pledgors, shall be required in connection
with any sale or other disposition of all or any part of the Collateral, except
that Pledgee shall give Pledgors at least ten (10) days' prior written notice of
the time and place of any public sale or of the time and the place where any
private sale or other disposition is to be made, which notice Pledgors hereby
agree is reasonable, all other demands, advertisements and notices being hereby
waived. To the extent permitted by law, Pledgee shall not be obligated to make
any sale of the Collateral if it shall determine not to do so, regardless of the
fact that notice of sale may have been given, and Pledgee may without notice or
publication adjourn any public or private sale, and such sale may, without
further notice, be made at the time and place to which the same was so
adjourned. Upon each private sale of the Collateral of a type customarily sold
in a recognized market and upon each public sale, unless prohibited by any
applicable statute which cannot be waived, Pledgee (or its nominee or designee)
may purchase any or all of the Collateral being sold, free and clear of and
discharged from any trusts, claims, equity or right of redemption of any Pledgor
all of which are hereby waived and released to the extent permitted by law, and
may make payment there for by credit against any of the Obligations in lieu of
cash or any other obligations. In the case of all sales of the Collateral,
public or private, Pledgors will pay all costs and expenses of every kind for
sale or delivery, including, without limitation, brokers' and reason able
attorneys' fees and disbursements and any stamp, transfer or other tax imposed
thereon. However, the proceeds of sale of Collateral shall be available to cover
such costs and expenses, and, after deducting such costs and expenses from the
proceeds of sale, Pledgee shall apply any residue to the payment of the
Obligations.
11. SECURITIES ACT OF 1933, ETC. Pledgors recognize that Pledgee may
be unable to effect a public sale of all or a part of the Collateral by reason
of certain prohibitions contained in the Securities Act of 1933, as amended, as
now or hereafter in effect, or in applicable Blue Sky or other state securities
laws, as now or hereafter in effect, but may be compelled to resort to one or
more private sales to a restricted group of purchasers who will be obliged to
agree, among other things, to acquire such Collateral for their own account, for
investment and not with a view to the distribution or resale thereof. If, at the
time of any sale of Collateral, the same or any part thereof to be sold shall
not, for any reason whatsoever, be effectively registered under the Securities
Act of 1933, as then in effect, Pledgee, in its sole and absolute discretion, is
hereby authorized to sell such Collateral or such part thereof by private sale
in such manner and under such circumstances as Pledgee may reasonably deem
necessary or advisable in order that such sale may legally be effected without
registration. Each Pledgor acknowledges that private sales so made may be at
prices and on other terms less favorable to the seller than if such Collateral
were sold at public sales, and agrees that Pledgee has no obligation to delay
the sale of any such Collateral for the period of time necessary to permit the
issuer of such Collateral, even if such issuer would agree, to register such
Collateral for public sale under such applicable securities laws. Each Pledgor
agrees that private sales made under the foregoing circumstances shall not,
because so made, be deemed to have been made in a commercially unreasonable
manner.
12. WAIVERS; MODIFICATIONS. No delay on the part of Pledgee in
exercising any of its options, powers or rights, or partial or single exercise
thereof, shall constitute a waiver thereof. None of the terms and conditions of
this Agreement may be discharged, changed, waived, modified or varied in any
manner unless in a writing duly signed by the parties hereto.
13. REMEDIES CUMULATIVE. All rights and remedies afforded to Pledgee
by reason of this Agreement are separate and cumulative remedies, and shall be
in addition to all other rights and remedies in favor of Pledgee existing at law
or in equity or otherwise. No one of such remedies, whether or not exercised by
Pledgee, shall be deemed to exclude, limit or prejudice the exercises of any
other legal or equitable remedy or remedies available to Pledgee.
14. NOTICES. All notices, requests and other communications to any
party hereunder shall be in writing (including bank wire, telex, facsimile
transmission or similar writing) addressed to Pledgors at the address provided
on the first page of this Agreement, Attention: Xxxxx Xxxxxxx, with a copy to:
Xxxxx & Wood, Xxx Xxxxx Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention:
Xxxxxxx Xxxxxxxxx, Esq.; and addressed to Pledgee at the address provided on
this first page of this Agreement, Attention: Xxxxx Xxxxxxx, with a copy to
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000, Attention: Xxxxxx Xxxxxxxxxxx, Esq., Telephone: (000) 000-0000, Telecopy:
(000) 000-0000; or in the case of any party, such other address or telecopy
number as such party may hereafter specify for the purpose by notice to the
other party. Each such notice, request or other communication shall be effective
(i) if given by telecopy, when such telecopy is transmitted to the telecopy
number specified in this Section, (ii) if given by mail, 72 hours after such
communication is deposited in the mails with first class postage prepaid,
addressed as aforesaid or (iii) if given by any other means, when delivered at
the address specified in this Section 14.
15. JURISDICTION, ETC. Any legal action or proceeding with respect to
this Agreement and any action for enforcement of any judgment in respect thereof
may be brought in the courts of the State of New York or of the United States of
America for the Southern District of New York, and, by execution and delivery of
this Agreement, each Pledgor hereby accepts for itself and in respect of its
property, generally and unconditionally, the non-exclusive jurisdiction of the
aforesaid courts and appellate courts. Each Pledgor irrevocably consents to the
service of process out of any of the aforementioned courts in any such action
or proceeding by the mailing of copies thereof by registered or certified mail,
postage prepaid, to such Pledgor at its address set forth in Section 14 hereof.
Each Pledgor hereby irrevocably waives any objection which it may now or
hereafter have to the laying of venue of any of the aforesaid actions or
proceedings arising out of or in connection with this Agreement brought in the
courts referred to above and hereby further irrevocably waives and agrees not to
plead or claim in any such court that any such action or proceeding brought in
any such court has been brought in an inconvenient forum. Nothing herein shall
affect the right of Pledgee to serve process in any other manner permitted by
law or to commence legal proceedings or otherwise proceed against any Pledgor
in any other jurisdiction.
16. SUCCESSORS AND ASSIGNS. This Agreement, and all representations,
warranties and covenants of Pledgors made herein, shall be binding upon and
inure to the benefit of each Pledgor and its respective successors and assigns,
provided that nothing in this Section 16 shall be deemed to constitute the
consent of Pledgee to any transaction in this Agreement elsewhere not permitted.
This Agreement shall be binding upon and shall inure to the benefit of Pledgee
and its successors and assigns.
17. PLEDGEE NOT BOUND.
(a) Nothing herein shall be construed to make Pledgee liable as a
partner of any Pledged Entity, and Pledgee, by virtue of this Agreement or
other wise (except as referred to in the following sentence) shall not
have any of the duties, obligations or liabilities of a partner of any
Pledged Entity. The parties hereto expressly agree that, unless and until
Pledgee shall become the absolute owner of all or any portion of the Equity
Interests (and/or any Additional Equity Interests) pursuant hereto, this
Agreement shall not be construed as creating a partnership or joint venture
between Pledgee and any Pledgor.
(b) Pledgee, by accepting this Agreement, does not intend to become a
partner of any Pledged Entity or any Pledgor or otherwise be deemed to be a
co-venturer with respect to any Pledged Entity or any Pledgor either before
or after an Event of Default shall have occurred. Pledgee shall have only
those powers set forth herein and shall assume none of the duties,
obligations or liabilities of a partner of any Pledged Entity or of any
Pledgor.
(c) Pledgee shall not be obligated to perform or discharge any
obligation of Pledgors as a result of the collateral assignment hereby
effected.
(d) The acceptance by Pledgee of this Agreement, with all the rights,
powers, privileges and authority so created, shall not at any time or in
any event obligate Pledgee to appear in or defend any action or proceeding
relating to the Collateral to which it is not a party, or to take any
action hereunder or thereunder, or to expend any money or incur any
expenses or perform or discharge any obligation, duty or liability under
the Collateral.
18. ACTS OF PLEDGEE. All Collateral at any time delivered to Pledgee
pursuant hereto shall be held by Pledgee subject to the terms, covenants and
conditions set forth in this Agreement. Neither Pledgee nor any of Pledgee's
directors, officers, agents, employees or counsel shall be liable for any action
taken or omitted to be taken by such party or parties relative to any of the
Collateral, except for such party's or parties' own gross negligence or willful
misconduct. Pledgee shall be entitled to rely in good faith upon any writing or
other document, telegram or telephone conversation reasonably believed by it to
be genuine and correct and to have been signed, sent or made by the proper
person or persons, and, with respect to any legal matter, Pledgee may rely in
acting or in refraining from acting upon the advice of counsel selected by it
concerning all matters hereunder. Each Pledgor hereby agrees to indemnify and
hold harmless Pledgee, its successors and as signs, and any of Pledgee's
directors, officers, agents, and employees and their respective successors and
as signs (collectively, the "INDEMNIFIED PARTIES") from and against any and all
claims, demands, losses, judgments and liabilities arising out of or resulting
from the sale or disposition of all or a portion of the Collateral, including,
without limitation, the Equity Interests (and/or any Additional Equity
Interests), together with interest on such sums at the Default Rate, from the
date such expenses were paid by Pledgee to the date of payment to Pledgee of
such sums. In any action to enforce this Agreement, the provisions of this
Section 18 shall, to the extent permitted by law, prevail notwithstanding any
provision of applicable law respecting the recovery of costs, disbursements and
allowances to the contrary.
19. CUSTODY OF COLLATERAL; NOTICE OF EXERCISE OF REMEDIES. Pledgee
shall not have any duty as to the collection or protection of the Collateral or
any income thereon or payments with respect thereto, or as to the preservation
of any rights pertaining thereto beyond exercising reasonable care with respect
to the custody of any thereof actually in its possession. Each Pledgor hereby
waives notice of acceptance hereof, and except as otherwise specifically
provided herein or required by provision of law which may not be waived, hereby
waives any and all notices or demands with respect to any exercise by Pledgee
of any rights or powers which it may have or to which it may be entitled with
respect to the Collateral.
20. SEVERABILITY. In case any one or more of the provisions contained
in this Agreement shall be found to be invalid, illegal or unenforceable in any
respect, the validity, legality and enforceability of the remaining provisions
contained herein shall not in any way be affected or impaired thereby, and this
Agreement shall continue in full force and effect in accordance with its
remaining terms.
21. FURTHER ASSURANCES. Each Pledgor agrees to do such further acts
and things and to execute and deliver to Pledgee such additional conveyances,
assignments, agreements and instruments as Pledgee from time to time may
reasonably require or deem advisable to carry into effect this Agreement or to
further assure and confirm unto Pledgee its rights, powers and remedies
hereunder. Each Pledgor hereby agrees to sign and deliver to Pledgee financing
statements, in form accept able to Pledgee, as Pledgee may from time to time
reasonably request or as are necessary in the opinion of Pledgee to establish
and maintain a valid and perfected security interest in the Collateral and to
pay any filing fees relative thereto. Each Pledgor also authorizes Pledgee, to
the extent permitted by law, to file such financing statements without the
signature of such Pledgor and further authorizes Pledgee, to the extent
permitted by law, to file a photographic or other reproduction of this
Agreement or of a financing statement in lieu of a financing statement.
22. HEADINGS. The Article and/or Section 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.
23. RELEASE. Pledgee agrees to release its security interest in all or
any part of the Collateral, as the case may be, upon satisfaction of all of the
following conditions precedent:
(a) That the documents to effect such release be prepared by Pledgors'
counsel, in form and sub stance reasonably satisfactory to Pledgee, at the
expense of Pledgors;
(b) That the Obligations secured by the pledge of that portion of the
Collateral to be released shall have been fully paid;
(c) That (i) all costs, fees, expenses and other sums paid or incurred
by or on behalf of Pledgee in exercising any of its rights, powers,
options, privileges and remedies hereunder or under the Credit Agreement,
including, without limitation, reasonable attorneys' fees and
disbursements, and (ii) any and all other obligations and liabilities of
Pledgors to Pledgee arising out of or in connection with or otherwise
related to this Agreement shall have been fully paid; and
(d) There shall be remaining, after giving effect to such release, at
least 0.41667 shares of VANTAS pledged to the Pledgee hereunder for every
dollar of Loans outstanding as of the date of such release.
Any release of a portion of the Collateral hereunder shall be made
on a PRO RATA basis in accordance with the amount of Obligations secured by
such Collateral. Any such release and any documents delivered to confirm the
same shall expressly provide that such release is made without recourse and
without any representation or warranty, express or implied (except that
Pledgee shall represent that such release has been and is duly authorized,
that all necessary consents to the execution and delivery thereof have been
obtained and that it has not assigned or encumbered the Collateral or its
interest therein). If the Collateral is so released, Pledgee, at the request
and sole cost and expense of Pledgors will execute and deliver to Pledgors a
proper instrument or instruments acknowledging the satisfaction and
termination of this Agreement, and will duly assign, transfer and deliver,
without recourse and without any representation or warranty, express or implied
(except that Pledgee shall represent that such release has been and is
duly authorized, that all necessary consents to the execution and delivery
thereof have been obtained and that it has not assigned or encumbered the
Collateral or its interest therein), to Pledgors such of the Collateral as may
be in the possession of Pledgee and as has not theretofore been sold or other
wise applied or released pursuant to this Agreement, together with any moneys
at the time held by Pledgee hereunder and not applied to the payment of the
Obligations. Notwithstanding the foregoing, the Pledgor may obtain a release
of (x) up to 759,943 shares of Capital Stock of VANTAS without complying with
the provisions of clause (b) above so long as such shares are transferred by
Pledgor to Vantacq immediately after such release, and (y) the Collateral
consisting of the equity interests in Vantacq pledged hereunder without
complying with the provisions of clause (b) above so long as the Pledgor
shall have delivered the Vantacq Loan Documents to Pledgee in accordance with
the terms of the Credit Agreement.
24. GOVERNING LAW. This Agreement shall be governed by and construed
and enforced in accordance with the laws of the State of New York applicable to
contracts entered into and to be performed entirely within such State and
without regard to the conflicts or choice of laws rules of such State. This
Agreement, together with the Credit Agreement and the other Loan Documents, set
forth the entire understanding of the parties hereto and thereto with respect to
the subject matter hereof and thereof and supersedes all prior agreements and
understandings, whether oral or written, relating thereto.
25. MISCELLANEOUS.
(a) In enforcing any rights hereunder or under the Credit Agreement,
Pledgee shall not be required to resort to any particular security, right
or remedy through foreclosure or otherwise or to proceed in any particular
order of priority, or otherwise act or refrain from acting, and, to the
extent permitted by law, each Pledgor hereby waives and releases any right
to a marshalling of assets or a sale in inverse order of alienation.
(b) Whenever any payment or performance of any obligation hereunder
shall be due on a day which is not a Business Day, such payment or
performance shall be made on the next succeeding Business Day and such
extension of time shall be included in the computation of the time period
within which such payment may be made or performance rendered without an
Event of Default occurring hereunder.
(c) Except as set forth in Section 14.15 of the Credit Agreement, each
Pledgor hereby waives any claim for monetary damages against Pledgee which
it may have based on any assertion that Pledgee has unreasonably withheld
or unreasonably delayed any determination, consent or approval hereunder,
and each Pledgor agrees that its sole remedy shall be an action or
proceeding to enforce any such provision or for specific performance,
injunction or declaratory judgment with respect thereto. In the event of
such a determination in favor of any Pledgor(s) in an action or proceeding
seeking only the relief permitted hereunder, the requested determination,
consent or approval shall be deemed to have been granted. However, Pledgee
shall have no liability to any Pledgor for its refusal or failure to give
such determination, consent or approval.
(d) Pledgee agrees at any time and from time to time upon not less
than ten (10) Business Days' prior notice by Pledgors to execute,
acknowledge and deliver to Pledgors or any other party specified by
Pledgors a statement in writing certifying that this Agreement is
unmodified and in full force and effect (or if there have been
modifications, that the same, as modified, is in full force and effect and
stating the modifications), and stating whether or not to the best
knowledge of Pledgee there is a continuing Event of Default, and, if so,
specifying each such Event of Default.
(e) Each Pledgor agrees at any time and from time to time upon not
less than ten (10) Business Days' prior notice by Pledgee to execute,
acknowledge and deliver to Pledgee, or any other party specified by
Pledgee, a statement in writing certifying that this Agreement is
unmodified and in full force and effect (or if there have been
modifications, that the same, as modified, is in full force and effect and
stating the modifications) and stating whether or not to the best
knowledge of Pledgors there is a continuing Default or Event of Default,
and, if so, specifying each such Event of Default.
[THE REMAINDER OF THIS PAGE
IS INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the parties have duly executed and delivered this
Agreement in the City of New York as of the day and year first above written.
PLEDGORS:
RECKSON SERVICE INDUSTRIES, INC.
By: _____________________
Name:
Title:
RSI-OSA HOLDINGS, INC.
By: _____________________
Name:
Title:
RSI ONSITE HOLDINGS LLC
By: Reckson Service Industries,
Inc., its managing member
By: _____________________
Name:
Title:
RSI I/O HOLDINGS, INC.
By: _____________________
Name:
Title:
RECKSON OFFICE CENTERS, LLC
By: RSI I/O Holdings, Inc.,
its managing member
By: _____________________
Name:
Title:
PLEDGEE:
UBS AG, STAMFORD BRANCH, as
Administrative Agent for the Lenders
By: _____________________
Name:
Title:
By: _____________________
Name:
Title:
SCHEDULE 1
LIST OF PLEDGORS
NAME: STATE OF FORMATION/INCORPORATION:
----- ---------------------------------
Reckson Service Industries, Inc. Delaware
RSI-OSA Holdings, Inc. Delaware
RSI OnSite Holdings, LLC Delaware
RSI I/O Holdings, Inc. Delaware
Reckson Office Centers LLC Delaware
SCHEDULE 2
LIST OF OWNERSHIP INTERESTS
Name of Pledged Entity Current Equity Interest Governing Documents
and the Holder Thereof
VANTAS, Incorporated, a 4,694,560 shares of Amended and Restated Arti-
Nevada corporation Series A Convertible cles of Incorporation
Preferred Stock owned
by RSI I/O Holdings, Fifth Amended and Restated
Inc. which are convert- Certificate of Designation
ible to common shares of VANTAS Incorporated
representing ___% of
the equity interests in Second Amended and Restated
such company Certificate of Designation
of VANTAS Incorporated
626,202 shares of Series
B Convertible Pre- Amended and Restated Cer-
ferred Stock owned by tificate of Designation of
RSI I/O Holdings, Inc. VANTAS Incorporated
which are convertible
to common shares repre- Amended and Restated Cer-
senting ___% of the tificate of Designation of
equity interests in VANTAS Incorporated
such company
Certificate of Designation
1,318,633 shares of of VANTAS Incorporated
Series C Convertible
Preferred Stock owned Restated By-Laws
by Reckson Office Cen-
ters LLC which are con-
vertible to common
shares representing
___% of the equity in-
terests in such company
3,711,287 shares of Series
D Convertible Preferred
Stock owned by RSI I/O
Holdings, Inc. which are
convert ible to common
shares representing ___%
of the equity interests in
such company
143,101 shares of Series D
Convertible Preferred
Stock owned by Reckson
Office Centers LLC which
are convertible to common
shares representing ___%
of the equity interests in
such company
719,184 shares of Common
Stock owned by RSI I/O
Holdings, Inc.
OnSite Access, Inc., 8,859,315 shares of Certificate of Incorpora-
a Delaware corporation Series B Redeemable tion
Preferred Stock owned
Preferred Stock owned
by RSI OnSite Holdings By-Laws
LLC
4,511,473 shares of
Series C Convertible
Preferred Stock owned by
RSI OnSite Holdings LLC
which are convertible to
common shares representing
___% of the equity
interests in such company
5,869,000 shares of Series
A Convertible Preferred
Stock owned by RSI-OSA
Holdings, Inc. which are
convertible to common
shares representing ___% of
the equity interests in
such company
2,597,396 shares of Common
Stock owned by RSI-OSA
Holdings, Inc.
RSI OnSite Holdings LLC 100% of membership Certificate of Formation,
interests as amended
Operating Agreement
RSI-OSA Holdings Inc. 100 shares of Common Certificate of Incorpora-
Stock (100% of all issued tion, as amended
& outstanding shares)
By-Laws
RSI I/O Holdings, Inc. 100 shares of Common Certificate of Incorpora-
Stock (100% of all issued tion, as amended
& outstanding shares)
By-Laws
Reckson Office Centers 100% of membership Certificate of Formation,
LLC interests as amended
Operating Agreement
VANTACQ, LLC 100% of membership Certificate of Formation,
interests as amended
Operating Agreement
SCHEDULE 3
OUTSTANDING STOCK OPTIONS
AND SHAREHOLDER AGREEMENTS
(See Schedule 7.1-C of the Credit Agreement)
