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EXHIBIT 10.5
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EXCEL LEGACY CORPORATION, as Issuer
$19,963,509
10.0% Senior Redeemable Secured Notes
due November 5, 2004
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INDENTURE
Dated as of November 5, 1999
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Norwest Bank Minnesota, National Association, as Trustee
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TABLE OF CONTENTS
Page
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ARTICLE 1. DEFINITIONS AND INCORPORATION BY REFERENCE.......................................1
Section 1.01. Definitions.................................................................1
Section 1.02. Other Definitions...........................................................3
Section 1.03. Incorporation by Reference of Trust Indenture Act...........................3
Section 1.04. Rules of Construction.......................................................4
ARTICLE 2. THE SECURITIES...................................................................4
Section 2.01. Form and Dating.............................................................4
Section 2.02. Execution and Authentication................................................4
Section 2.03. Registrar and Paying Agent..................................................5
Section 2.04. Paying Agent to Hold Money in Trust.........................................5
Section 2.05. Securityholder Lists........................................................5
Section 2.06. Transfer and Exchange.......................................................6
Section 2.07. Replacement Securities......................................................6
Section 2.08. Outstanding Securities......................................................6
Section 2.09. Treasury Securities.........................................................7
Section 2.10. Temporary Securities........................................................7
Section 2.11. Cancellation................................................................7
Section 2.12. Defaulted Interest..........................................................7
ARTICLE 3. REDEMPTION.......................................................................8
Section 3.01. Notices to Trustee..........................................................8
Section 3.02. Selection of Securities to be Redeemed......................................8
Section 3.03. Notice of Redemption........................................................8
Section 3.04. Effect of Notice of Redemption..............................................9
Section 3.05. Deposit of Redemption Price.................................................9
Section 3.06. Securities Redeemed in Part.................................................9
ARTICLE 4. COVENANTS........................................................................9
Section 4.01. Payment of Securities.......................................................9
Section 4.02. SEC Reports................................................................10
Section 4.03. Compliance Certificate.....................................................10
Section 4.04. Stay, Extension and Usury Laws.............................................10
Section 4.05. Continued Existence........................................................11
Section 4.06. Taxes......................................................................11
ARTICLE 5. SUCCESSORS......................................................................11
Section 5.01. When Company May Merge, etc................................................11
Section 5.02. Successor Corporation Substituted..........................................11
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ARTICLE 6. DEFAULTS AND REMEDIES...........................................................12
Section 6.01. Events of Default..........................................................12
Section 6.02. Acceleration...............................................................13
Section 6.03. Other Remedies.............................................................14
Section 6.04. Waiver of Past Defaults....................................................14
Section 6.05. Control by Majority........................................................14
Section 6.06. Limitation on Suits........................................................14
Section 6.07. Rights of Holders to Receive Payment.......................................15
Section 6.08. Collection Suit by Trustee.................................................15
Section 6.09. Trustee May File Proofs of Claim...........................................15
Section 6.10. Priorities.................................................................15
Section 6.11. Undertaking for Costs......................................................16
ARTICLE 7. TRUSTEE.........................................................................16
Section 7.01. Duties of Trustee..........................................................16
Section 7.02. Rights of Trustee..........................................................17
Section 7.03. Individual Rights of Trustee...............................................17
Section 7.04. Trustee's Disclaimer.......................................................18
Section 7.05. Notice of Defaults.........................................................18
Section 7.06. Reports by Trustee to Holders..............................................18
Section 7.07. Compensation and Indemnity.................................................18
Section 7.08. Replacement of Trustee.....................................................19
Section 7.09. Successor Trustee by Merger, etc...........................................20
Section 7.10. Eligibility; Disqualification..............................................20
Section 7.11. Preferential Collection of Claims Against Company..........................20
Section 7.12. Sections Applicable to Registrar and Paying Agent..........................20
ARTICLE 8. DISCHARGE OF INDENTURE..........................................................20
Section 8.01. Termination of Company's Obligations.......................................20
Section 8.02. Application of Trust Money.................................................22
Section 8.03. Repayment to Company.......................................................22
Section 8.04. Reinstatement..............................................................23
ARTICLE 9. AMENDMENTS......................................................................23
Section 9.01. Without Consent of Holders.................................................23
Section 9.02. With Consent of Holders....................................................23
Section 9.03. Compliance with Trust Indenture Act........................................24
Section 9.04. Revocation and Effect of Consents..........................................24
Section 9.05. Notation on or Exchange of Securities......................................25
Section 9.06. Trustee Protected..........................................................25
ARTICLE 10. COLLATERAL AND SECURITY........................................................25
Section 10.01. Pledge Agreement..........................................................25
Section 10.02. Recording and Opinions....................................................26
Section 10.03. Release of Collateral.....................................................26
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Section 10.04. Certificates of the Company...............................................27
Section 10.05. Certificates of the Trustee...............................................27
Section 10.06. Authorization of Actions to Be Taken by the Trustee Under the Pledge
Agreement...............................................................27
Section 10.07. Authorization of Receipt of Funds by the Trustee Under the Pledge
Agreement...............................................................28
Section 10.08. Termination of Security Interest..........................................28
ARTICLE 11. MISCELLANEOUS..................................................................28
Section 11.01. Trust Indenture Act Controls..............................................28
Section 11.02. Notices...................................................................28
Section 11.03. Communication by Holders with Other Holders...............................29
Section 11.04. Certificate and Opinion as to Conditions Precedent........................29
Section 11.05. Statements Required in Certificate or Opinion.............................29
Section 11.06. Rules by Trustee and Agents...............................................29
Section 11.07. Legal Holidays............................................................30
Section 11.08. No Recourse Against Others................................................30
Section 11.09. Counterparts..............................................................30
Section 11.10. Variable Provisions.......................................................30
Section 11.11. Governing Law.............................................................31
Section 11.12. No Adverse Interpretation of Other Agreements.............................31
Section 11.13. Successors................................................................31
Section 11.14. Severability..............................................................31
Section 11.15. Table of Contents, Headings, Etc..........................................31
EXHIBITS
Exhibit A Form of Note
Exhibit B Form of Pledge Agreement
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CROSS-REFERENCE TABLE*
Trust Indenture
Act Section Indenture Section
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310 (a) (1) ................................................ 7.10
(a) (2) ................................................ 7.10
(a) (3) ................................................ N.A.
(a) (4) ................................................ N.A.
(b) ................................................ 7.08; 7.10; 11.02
(c) ................................................ N.A.
311 (a) ................................................ 7.11
X (b) ................................................ 7.11
(c) ................................................ N.A.
312 (a) ................................................ 2.05
(b) ................................................ 11.03
(c) ................................................ 11.03
313 (a) ................................................ 7.06
(b) (1) ................................................ N.A.
(b) (2) ................................................ 7.06
(c) ................................................ 7.06; 11.02
(d) ................................................ 7.06
314 (a) ................................................ 4.02; 11.02
(b) ................................................ N.A.
(c) (1) ................................................ 11.04
(c) (2) ................................................ 11.04
(c) (3) ................................................ N.A.
(d) ................................................ 10.03, 10.04, 10.05
(e) ................................................ 11.05
(f) ................................................ N.A.
315 (a) ................................................ 7.01(b)
(b) ................................................ 7.05; 11.02
(c) ................................................ 7.01(a)
(d) ................................................ 7.01(c)
(e) ................................................ 6.11
316 (a)(last sentence)............................................. 2.09
(a) (1) (A) ................................................ 6.05
(a) (1) (B) ................................................ 6.04
(a) (2) ................................................ N.A.
(b) ................................................ 6.07
317 (a) (1) ................................................ 6.08
(a) (2) ................................................ 6.09
(b) ................................................ 2.04
318 (a) ................................................ 11.01
N.A. means not applicable.
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* This Cross-Reference Table is not part of the Indenture.
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INDENTURE, dated as of November 5, 1999, between Excel Legacy
Corporation, a Delaware corporation ("Company"), and Norwest Bank Minnesota,
National Association ("Trustee").
Each party agrees as follows for the benefit of the other party and for
the equal and ratable benefit of the Holders of the Company's 10.0% Senior
Redeemable Secured Notes due November 5, 2004 ("Securities"):
ARTICLE 1.
DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.01. Definitions.
"Affiliate" of any specified person means any other person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified person. For the purposes of this definition,
"control" (including, with correlative meanings, the terms "controlled by" and
"under common control with"), as used with respect to any person, shall mean the
possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of such person, whether through the
ownership of voting securities or by agreement or otherwise.
"Agent" means any Registrar, Paying Agent or co-registrar.
"Board of Directors" means the Board of Directors of the Company or any
authorized committee of the Board of Directors.
"capital stock" means any and all shares, interests, participations or
other equivalents (however designated) of corporate stock.
"Collateral Agent" means the "Senior Notes Collateral Agent" as such
term is defined in the Pledge Agreement.
"Company" means the party named as such above until a successor
replaces it in accordance with Article 5 and thereafter means the successor.
"Default" means any event which is, or after notice or passage of time
would be, an Event of Default.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Holder" or "Securityholder" means a person in whose name a Security is
registered.
"Indenture" means this Indenture as amended from time to time.
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset,
whether or not filed, recorded or otherwise perfected under applicable law
(including any conditional sale or other title retention
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agreement, any lease in the nature thereof, any option or other agreement to
sell or give a security interest in and any filing of or agreement to give any
financing statement under the Uniform Commercial Code (or equivalent statutes)
of any jurisdiction).
"Material Subsidiary" means any subsidiary of the Company which is a
"significant subsidiary" as defined in Rule 1-02(v) of Regulation S-X under the
Securities Act of 1933 and the Exchange Act, as amended, (as such Regulation is
in effect on the date hereof), and any other subsidiary of the Company which is
material to the business, earnings, prospects, assets or condition, financial or
otherwise, of the Company and its subsidiaries taken as a whole.
"Obligations" means any principal, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable under
the documentation governing any Indebtedness.
"Officer" means, with respect to any person, the Chairman of the Board,
the Chief Executive Officer, the President, the Chief Operating Officer, the
Chief Financial Officer, the Treasurer, any Assistant Treasurer, the Controller,
the Secretary or any Vice-President of such Person.
"Officers' Certificate" means a certificate signed by two Officers, one
of whom must be the Chairman of the Board, the President, the Treasurer, a
Vice-President, the principal executive officer, the principal financial officer
and/or the principal accounting officer of the Company. See Sections 11.04 and
11.05
"Opinion of Counsel" means a written opinion from legal counsel who is
acceptable to the Trustee. The counsel may be an employee of or counsel to the
Company or the Trustee.
See Sections 11.04 and 11.05.
"person" means any individual, corporation, partnership, joint venture,
association, joint stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
"Pledge Agreement" means the Pledge Agreement dated as of the date of
this Indenture and substantially in the form attached as Exhibit B hereto, as
such agreement may be amended, modified or supplemented from time to time.
"Pledged Collateral" means the "Senior Notes Pledged Collateral" as
such term is defined in the Pledge Agreement.
"principal" of a debt security means the principal of the security plus
the premium, if any, on the security.
"SEC" means the Securities and Exchange Commission.
"Securities" means the Securities described above issued under this
Indenture in the form of Exhibit A hereto.
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"subsidiary" of any specified person means (i) a corporation a majority
of whose capital stock with voting power, under ordinary circumstances, to elect
directors is at the time, directly or indirectly owned by such person or by such
person and a subsidiary or subsidiaries of such person or (ii) any other person
(other than a corporation) in which such person or such person and a subsidiary
or subsidiaries of such person or a subsidiary or subsidiaries of such person
directly or indirectly, at the date of determination thereof has at least
majority ownership interest.
"TIA" means the Trust Indenture Act of 1939 (15 U.S. Code Sections
77aaa-77bbbb) as in effect on the date of execution of this Indenture.
"Trustee" means the party named as such above until a successor
replaces it in accordance with the applicable provisions of this Indenture and
thereafter means the successor.
"Trust Officer" means the Chairman of the Board, the President or any
other officer or assistant officer of the Trustee assigned by the Trustee to
administer its corporate trust matters.
Section 1.02. Other Definitions.
Term Defined in Section
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"Bankruptcy Law"............................................... 6.01
"Custodian..................................................... 6.01
"Event of Default"............................................. 6.01
"Legal Holiday"................................................ 11.07
"Officer"...................................................... 11.10
"Paying Agent"................................................. 2.03
"Payment Default".............................................. 6.01
"Registrar".................................................... 2.03
"U.S. Government Obligations".................................. 8.01
Section 1.03. Incorporation by Reference of Trust Indenture Act.
Whenever this Indenture refers to a provision of the TIA, the provision
is incorporated by reference in and made a part of this Indenture.
The following TIA terms used in this Indenture have the following
meanings:
"indenture securities" means the Securities;
"indenture security holder" means a Securityholder;
"indenture to be qualified" means this Indenture;
"indenture trustee" or "institutional trustee" means the Trustee;
"obligor" on the Securities means the Company.
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All other terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by SEC rule under the TIA
have the meanings so assigned to them.
Section 1.04. Rules of Construction.
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning
assigned to it in accordance with generally accepted accounting
principles;
(3) references to "generally accepted accounting principles" shall
mean generally accepted accounting principles in effect as of the time
when and for the period as to which such accounting principles are to
be applied;
(4) "or" is not exclusive;
(5) words in the singular include the plural, and in the plural
include the singular; and
(6) provisions apply to successive events and transactions.
ARTICLE 2.
THE SECURITIES
Section 2.01. Form and Dating.
The Securities shall be substantially in the form of Exhibit A, which
is part of this Indenture. The Securities may have notations, legends or
endorsements required by law, stock exchange rule or usage. Each Security shall
be dated the date of its authentication.
The terms and provisions contained in the Securities shall constitute,
and are hereby expressly made, a part of this Indenture and to the extent
applicable, the Company and the Trustee, by their execution and delivery of this
Indenture, expressly agree to such terms and provisions and to be bound thereby.
Section 2.02. Execution and Authentication.
An Officer shall sign the Securities for the Company by manual or
facsimile signature. The Company's seal shall be reproduced on the Securities.
If an Officer whose signature is on a Security no longer holds that
office at the time the Security is authenticated, the Security shall
nevertheless be valid.
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A Security shall not be valid until authenticated by the manual
signature of the Trustee. The signature shall be conclusive evidence that the
Security has been authenticated under this Indenture.
The Trustee shall authenticate Securities for original issue up to the
aggregate principal amount stated in paragraph 4 of the Securities upon a
written order of the Company signed by two Officers. The aggregate principal
amount of Securities outstanding at any time may not exceed that amount except
as provided in Section 2.07.
The Trustee may appoint an authenticating agent acceptable to the
Company to authenticate Securities. An authenticating agent may authenticate
Securities whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such agent. An
authenticating agent has the same right as an Agent to deal with the Company or
an Affiliate.
Section 2.03. Registrar and Paying Agent
The Company shall maintain in the Borough of Manhattan, City of New
York, State of New York, and in such other locations as it shall determine (i)
an office or agency where securities may be presented for registration of
transfer or for exchange ("Registrar"), and (ii) an office or agency where
Securities may be presented for payment ("Paying Agent"). The Registrar shall
keep a register of the Securities and of their transfer and exchange. The
Company may appoint one or more co-registrars and one or more additional paying
agents. The term "Paying Agent" includes any additional paying agent. The
Company may change any Paying Agent, Registrar or co-registrar without prior
notice. The Company shall notify the Trustee of the name and address of any
Agent not a party to this Indenture. If the Company fails to appoint or maintain
another entity as Registrar or Paying Agent, the Trustee shall act as such. The
Company or any of its subsidiaries may act as Paying Agent, Registrar or
co-registrar.
Section 2.04. Paying Agent to Hold Money in Trust.
The Company shall require each Paying Agent other than the Trustee to
agree in writing that the Paying Agent will hold in trust for the benefit of
Securityholders or the Trustee all money held by the Paying Agent for the
payment of principal or interest on the Securities, and will notify the Trustee
of any default by the Company in making any such payment. While any such default
continues, the Trustee may require a Paying Agent to pay all money held by it to
the Trustee. The Company at any time may require a Paying Agent to pay all money
held by it to the Trustee. Upon payment over to the Trustee, the Paying Agent
(if other than the Company or a subsidiary) shall have no further liability for
the money. If the Company or a subsidiary acts as Paying Agent, it shall
segregate and hold in a separate trust fund for the benefit of the
Securityholders all money held by it as Paying Agent.
Section 2.05. Securityholder Lists.
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
Securityholders. If the Trustee is not the
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Registrar, the Company shall furnish to the Trustee on or before each interest
payment date and at such other times as the Trustee may request in writing a
list in such form and as of such date as the Trustee may reasonably require of
the names and addresses of Securityholders.
Section 2.06. Transfer and Exchange.
Where Securities are presented to the Registrar or a co-registrar with
a request to register a transfer or to exchange them for an equal principal
amount of Securities of other denominations, the Registrar shall register the
transfer or make the exchange if its requirements for such transactions are met.
To permit registrations of transfers and exchanges, the Company shall issue and
the Trustee shall authenticate Securities at the Registrar's request. No service
charge shall be made for any registration of transfer or exchange (except as
otherwise expressly permitted herein), but the Company may require payment of a
sum sufficient to cover any transfer tax or similar governmental charge payable
in connection therewith (other than any such transfer tax or similar
governmental charge payable upon exchanges pursuant to Sections 2.10, 3.06 or
9.05).
The Company shall not be required (i) to issue, register the transfer
of or exchange Securities during a period beginning at the opening of business
15 days before the day of any selection of Securities for redemption under
Section 3.02 and ending at the close of business on the day of selection, or
(ii) to register the transfer or exchange of any Security so selected for
redemption in whole or in part, except the unredeemed portion of any Security
being redeemed in part.
Section 2.07. Replacement Securities.
If the Holder of a Security claims that the Security has been lost,
destroyed or wrongfully taken, the Company shall issue and the Trustee shall
authenticate a replacement Security if the Trustee's requirements are met. If
required by the Trustee or the Company, such Holder shall be required to provide
an indemnity bond sufficient in the judgment of both to protect the Company, the
Trustee, any Agent or any authenticating agent from any loss which any of them
may suffer if a Security is replaced. The Company may charge for its expenses in
replacing a Security.
Every replacement Security is an additional obligation of the Company
and shall be entitled to all the benefits provided under this Indenture equally
and proportionately with all other Securities duly issued hereunder.
Section 2.08. Outstanding Securities.
The Securities outstanding at any time are all the Securities
authenticated by the Trustee except for those canceled by it, those delivered to
it for cancellation, and those described in this Section as not outstanding.
If a Security is replaced pursuant to Section 2.07, it ceases to be
outstanding unless the Trustee receives proof satisfactory to it that the
replaced Security is held by a bona fide purchaser.
If Securities are considered paid under Section 4.01, they cease to be
outstanding and interest on them ceases to accrue.
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A Security does not cease to be outstanding because the Company or an
Affiliate of the Company holds the Security.
Section 2.09. Treasury Securities.
In determining whether the Holders of the required principal amount of
Securities have concurred in any direction, waiver or consent, Securities owned
by the Company or an Affiliate of the Company shall be considered as though they
are not outstanding, except that for the purposes of determining whether the
Trustee shall be protected in relying on any such direction, waiver or consent,
only Securities which the Trustee knows are so owned shall be so disregarded.
Securities that the Company or any Affiliate of the Company offers to purchase
or acquire pursuant to an exchange offer, tender offer or otherwise shall not be
deemed to be owned by the Company or such Affiliate until legal title passes to
the Company or such Affiliate.
Section 2.10. Temporary Securities.
Until definitive Securities are ready for delivery, the Company may
prepare and the Trustee shall authenticate temporary Securities. Temporary
Securities shall be substantially in the form of definitive Securities but may
have variations that the Company considers appropriate for temporary Securities.
As promptly as is reasonably practicable, the Company shall prepare and the
Trustee shall authenticate definitive Securities in exchange for temporary
Securities.
Section 2.11. Cancellation.
The Company at any time may deliver Securities to the Trustee for
cancellation. The Registrar and Paying Agent shall forward to the Trustee any
Securities surrendered to them for registration of transfer, exchange or
payment. The Trustee shall cancel all Securities surrendered for registration of
transfer, exchange, payment, replacement or cancellation and shall dispose of
canceled Securities in accordance with its normal practices. The Company may not
issue new Securities to replace Securities that it has paid or that have been
delivered to the Trustee for cancellation.
Section 2.12. Defaulted Interest.
If the Company fails to make a payment of interest on the Securities,
it shall pay such defaulted interest plus any interest payable on the defaulted
interest in any lawful manner. It may pay such defaulted interest, plus any such
interest payable on it, to the persons who are Securityholders on a subsequent
special record date. The Company shall fix any such record date (which shall be
at least 5 and not more than 30 days before the payment date) and payment date.
At least 15 days before any such record date, the Company shall mail to
Securityholders a notice that states the record date, payment date, and amount
of such interest to be paid. Interest to be paid prior to the expiration of the
30-day grace period specified in Section 6.01 shall be paid to Securityholders
on the regular payment date for the interest payment that has not been made.
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ARTICLE 3.
REDEMPTION
Section 3.01. Notices to Trustee.
If the Company elects to redeem Securities pursuant to the optional
redemption provisions of paragraph 5, it shall notify the Trustee of the
redemption date and the principal amount of Securities to be redeemed.
The Company shall give each notice provided for in this Section at
least 50 days before the redemption date (unless a shorter notice period shall
be satisfactory to the Trustee).
Section 3.02. Selection of Securities to be Redeemed.
If less than all the Securities are to be redeemed, the Trustee shall
select the Securities to be redeemed pro rata or by lot or by a method that
complies with the requirements of any exchange on which the Securities are
listed and that the Trustee considers fair and appropriate. The Trustee shall
make the selection not more than 75 days and not less than 30 days before the
redemption date from Securities outstanding not previously called for
redemption. The Trustee may select for redemption portions of the principal of
Securities that have denominations larger than $1,000. Securities and portions
of them it selects shall be in amounts of $1,000 or integral multiples of
$1,000. Provisions of this Indenture that apply to Securities called for
redemption also apply to portions of Securities called for redemption. The
Trustee shall notify the Company promptly of the Securities or portions of
Securities to be called for redemption.
Section 3.03. Notice of Redemption.
At least 30 days but not more than 60 days before a redemption date,
the Company shall mail a notice of redemption to each Holder whose Securities
are to be redeemed at such Holder's registered address.
The notice shall identify the Securities to be redeemed and shall
state:
(1) the redemption date;
(2) the redemption price;
(3) if any Security is being redeemed in part, the portion of the
principal amount of such Security to be redeemed and that, after the
redemption date, upon surrender of such Security, a new Security or
Securities in principal amount equal to the unredeemed portion will be
issued in the name of the Holder thereof;
(4) the name and address of the Paying Agent;
(5) that Securities called for redemption must be surrendered to the
Paying Agent to collect the redemption price plus accrued interest;
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(6) that interest on Securities called for redemption ceases to
accrue on and after the redemption date; and
(7) the paragraph of the Securities pursuant to which the Securities
are being redeemed; and
(8) that no representation is made as to the correctness or accuracy
of the CUSIP number, if any, listed in such notice or printed on the
Securities.
At the Company's request, the Trustee shall give notice of redemption
in the Company's name and at its expense.
Section 3.04. Effect of Notice of Redemption.
Once notice of redemption is mailed, Securities called for redemption
become due and payable on the redemption date at the price set forth in the
Security.
Section 3.05. Deposit of Redemption Price.
On or before the redemption date, the Company shall deposit with the
Trustee or with the Paying Agent money sufficient to pay the redemption price of
and accrued interest on all Securities to be redeemed on that date (subject to
the rights of Holders of record on the relevant record date to receive interest
due on an interest payment date which may occur prior to the date of
redemption). The Trustee or the Paying Agent shall return to the Company any
money not required for that purpose.
Section 3.06. Securities Redeemed in Part.
Upon surrender of a Security that is redeemed in part, the Company
shall issue and the Trustee shall authenticate for the Holder at the expense of
the Company a new Security equal in principal amount to the unredeemed portion
of the Security surrendered.
ARTICLE 4.
COVENANTS
Section 4.01. Payment of Securities.
The Company shall pay the principal of and interest on the Securities
on the dates and in the manner provided in the Securities. Principal and
interest shall be considered paid on the date due if the Paying Agent (other
than the Company or a subsidiary) holds on that date money designated for and
sufficient to pay all principal and interest then due and such Paying Agent is
not prohibited from paying such money to the Holders on that date pursuant to
the terms of this Indenture.
To the extent lawful, the Company shall pay interest (including
post-petition interest in any proceeding under any Bankruptcy Law) on (i)
overdue principal, at the rate borne by the
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Securities, compounded semiannually; and (ii) overdue installments of interest
(without regard to any applicable grace period) at the same rate, compounded
semiannually.
Section 4.02. SEC Reports.
The Company shall deliver to the Trustee and to the Holders within 15
days after it files them with the SEC copies of the annual reports and of the
information, documents, and other reports (or copies of such portions of any of
the foregoing as the SEC may by rules and regulations prescribe) which the
Company is required to file with the SEC pursuant to Section 13 or 15(d) of the
Exchange Act. The Company also shall comply with the other provisions of TIA
Section 314(a). The Company shall timely comply with its reporting and filing
obligations under the applicable federal securities law.
Section 4.03. Compliance Certificate.
The Company shall deliver to the Trustee, within 105 days after the end
of each fiscal year of the Company, an Officers' Certificate stating that a
review of the activities of the Company and its subsidiaries during the
preceding fiscal year has been made under the supervision of the signing
Officers with a view to determining whether the Company has kept, observed,
performed and fulfilled its obligations under, and complied with the covenants
and conditions contained in, this Indenture, and further stating, as to each
such Officer signing such certificate, that to the best of his knowledge the
Company has kept, observed, performed and fulfilled each and every covenant, and
complied with the conditions, contained in this Indenture and is not in default
in the performance or observance of any of the terms, provisions and conditions
hereof (or, if a Default or Events of Default shall have occurred, describing
all such Defaults or Events of Default of which he may have knowledge) and that
to the best of his knowledge no event has occurred and remains in existence by
reason of which payments on account of the principal of or interest, if any, on
the Securities are prohibited. See Section 11.10.
The Company will, so long as any of the Securities are outstanding
deliver to the Trustee, forthwith upon becoming aware of (i) any Default, Event
of Default or default in the performance of any covenant, agreement or condition
in this Indenture or (ii) any event of default under any other mortgage,
indenture or instrument as that term is used in Section 6.01(4), an Officers'
Certificate specifying such Default, Event of Default or default.
Section 4.04. Stay, Extension and Usury Laws.
The Company covenants (to the extent that it may lawfully do so) that
it will not at any time insist upon, plead, or in any manner whatsoever claim or
take the benefit or advantage of, any stay, extension or usury law wherever
enacted, now or at any time hereafter in force, which may affect the covenants
or the performance of this Indenture; and the Company (to the extent it may
lawfully do so) hereby expressly waives all benefit or advantage of any such
law, and covenants that it will not, by resort to any such law, hinder, delay or
impede the execution of any power herein granted to the Trustee, but will suffer
and permit the execution of every such power as though no such law has been
enacted.
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Section 4.05. Continued Existence.
Subject to Article 5, the Company will do or cause to be done all
things necessary to preserve and keep in full force and effect its existence as
a corporation and will refrain from taking any action that would cause its
existence as a corporation to cease, including without limitation any action
that would result in its liquidation, winding up or dissolution.
Section 4.06. Taxes.
The Company shall, and shall cause each of its subsidiaries to, pay
prior to delinquency all taxes, assessments and governmental levies, except as
contested in good faith and by appropriate proceedings.
ARTICLE 5.
SUCCESSORS
Section 5.01. When Company May Merge, etc.
The Company shall not consolidate or merge with or into, or sell,
assign, transfer, lease, convey or otherwise dispose of all or substantially all
of its properties or assets to, any person unless:
(1) the person formed by or surviving any such consolidation or
merger (if other than the Company), or to which such sale, assignment,
transfer, lease, conveyance or other disposition shall have been made,
is a corporation organized and existing under the laws of the United
States, any state thereof or the District of Columbia;
(2) the corporation formed by or surviving any such consolidation or
merger (if other than the Company), or to which such sale, assignment,
transfer, lease, conveyance or other disposition shall have been made,
assumes by supplemental indenture in a form reasonably satisfactory to
the Trustee all the obligations of the Company under the Securities and
this Indenture; and
(3) immediately after the transaction no Default or Event of Default
exists.
The Company shall deliver to the Trustee prior to the consummation of
the proposed transaction an Officers' Certificate to the foregoing effect and an
Opinion of Counsel stating that the proposed transaction and such supplemental
indenture comply with this Indenture.
Section 5.02. Successor Corporation Substituted.
Upon any consolidation or merger, or any sale, assignment, transfer,
lease, conveyance or other disposition of all or substantially all of the assets
of the Company in accordance with Section 5.01, the successor corporation formed
by such consolidation or into or with which the Company is merged or to which
such sale, assignment, transfer, lease, conveyance or other disposition is made
shall succeed to, and be substituted for, and may exercise every right and
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power of, the Company under this Indenture with the same effect as if such
successor person has been named as the Company herein; provided, however, that
the predecessor Company in the case of a sale, assignment, transfer, lease,
conveyance or other disposition shall not be released from the obligation to pay
the principal of and interest on the Securities.
ARTICLE 6.
DEFAULTS AND REMEDIES
Section 6.01. Events of Default.
An "Event of Default" occurs if:
(1) the Company defaults in the payment of interest on any Security
when the same becomes due and payable and the Default continues for a
period of 30 days after the date due and payable;
(2) the Company defaults in the payment of the principal of any
Security when the same becomes due and payable at maturity, upon
redemption or otherwise;
(3) the Company fails to comply with any of its other agreements or
covenants in, or provisions of, the Securities, this Indenture or the
Pledge Agreement and the Default continues for the period and after the
notice specified below;
(4) an event of default occurs under any mortgage, indenture or
instrument under which there may be issued or by which there may be
secured or evidenced any indebtedness for money borrowed by the Company
or any subsidiary (or the payment of which is guaranteed by the Company
or a subsidiary), whether such indebtedness or guarantee now exists or
shall be created hereafter, if (a) either (i) such event of default
results from the failure to pay when due principal of or interest on
such indebtedness within the grace period provided for in such
indebtedness (which failure continues beyond any applicable grace
period) (a "Payment Default") or (ii) as a result of such event of
default the maturity of such indebtedness has been accelerated prior to
its expressed maturity and (b) the principal amount of such
indebtedness, together with the principal amount of any other such
indebtedness under which there is a Payment Default or the maturity of
which has been so accelerated, aggregates $1,000,000 or more;
(5) a final judgment or final judgments for the payment of money are
entered by a court or courts of competent jurisdiction against the
Company or any subsidiary which remains undischarged for a period
(during which execution shall not be effectively stayed) of 30 days,
provided that the aggregate of all such judgments exceeds $500,000.
(6) the Company or any Material Subsidiary pursuant to or within the
meaning of any Bankruptcy Law:
(A) commences a voluntary case,
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(B) consents to the entry of an order for relief against it in
an involuntary case,
(C) consents to the appointment of a Custodian of it or for all
or substantially all of its property,
(D) makes a general assignment for the benefit of its creditors,
or
(E) generally is unable to pay its debts as the same become due;
(7) a court of competent jurisdiction enters an order or decree
under any Bankruptcy Law that:
(A) is for relief against the Company or any Material Subsidiary
in an involuntary case,
(B) appoints a Custodian of the Company or any Material
Subsidiary or for all or substantially all of its property, or
(C) orders the liquidation of the Company or any Material
Subsidiary,
and the order or decree remains unstayed and in effect for 60 days.
The term "Bankruptcy Law" means title 11, U.S. Code or any similar
Federal or State Law for the relief of debtors. The term "Custodian" means any
receiver, trustee, assignee, liquidator or similar official under any Bankruptcy
Law.
A Default under clause (3) (other than Defaults under Section 4.05 or
5.01 which Defaults shall be Events of Default with the notice but without the
passage of time specified in this paragraph) or (5) is not an Event of Default
until the Trustee or the Holders of at least 25% in principal amount of the then
outstanding Securities notify the Company of the Default and the Company does
not cure the Default within 30 days after receipt of the notice. The notice must
specify the Default, demand that it be remedied and state that the notice is a
"Notice of Default."
Section 6.02. Acceleration.
If an Event of Default (other than an Event of Default specified in
clauses (6) and (7) of Section 6.01) occurs and is continuing, the Trustee by
notice to the Company, or the Holders of at least 25% in principal amount of the
then outstanding Securities by notice to the Company and the Trustee, may
declare the unpaid principal of and accrued interest on all the Securities to be
due and payable. Upon such declaration the principal and interest shall be due
and payable immediately. If an Event of Default specified in clause (6) or (7)
of Section 6.01 occurs, such an amount shall ipso facto become and be
immediately due and payable without any declaration or other act on the part of
the Trustee or any Holder. The Holders of a majority in principal amount of the
then outstanding Securities by notice to the Trustee may rescind an acceleration
and its consequences if (i) the rescission would not conflict with any judgment
or decree, (ii) all existing Events of Default have been cured or waived except
nonpayment of principal or interest that has
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become due solely because of the acceleration, and (iii) the Company has
delivered an Officers' Certificate to the Trustee to the effect of clauses (i)
and (ii) above.
Section 6.03. Other Remedies.
If an Event of Default occurs and is continuing, the Trustee may pursue
any available remedy to collect the payment of principal or interest on the
Securities or to enforce the performance of any provision of the Securities or
this Indenture.
The Trustee may maintain a proceeding even if it does not possess any
of the Securities or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Securityholder in exercising any right or remedy
accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. All remedies are
cumulative to the extent permitted by law.
Section 6.04. Waiver of Past Defaults.
The Holders of a majority in principal amount of the then outstanding
Securities by notice to the Trustee may waive an existing Default or Event of
Default and its consequences except a continuing Default or Event of Default in
the payment of the principal of or interest on any Security. When a Default or
Event of Default is waived, it is cured and ceases; but no such waiver shall
extend to any subsequent or other Default or impact any right consequent
thereon.
Section 6.05. Control by Majority.
The Holders of a majority in principal amount of the then outstanding
Securities may direct the time, method and place of conducting any proceeding
for any remedy available to the Trustee or exercising any trust or power
conferred on it. However, the Trustee may refuse to follow any direction that
conflicts with law or this Indenture, is unduly prejudicial to the rights of
other Securityholders, or would involve the Trustee in personal liability.
Section 6.06. Limitation on Suits.
A Securityholder may pursue a remedy with respect to this Indenture or
the Securities only if:
(1) the Holder gives to the Trustee notice of a continuing Event
of Default;
(2) the Holders of at least 25% in principal amount of the then
outstanding Securities make a request to the Trustee to pursue the
remedy;
(3) such Holder or Holders offer to the Trustee indemnity
satisfactory to the Trustee against any loss, liability or expense;
(4) the Trustee does not comply with the request within 60 days
after receipt of the request and the offer of indemnity; and
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(5) during such 60-day period the Holders of a majority in
principal amount of the then outstanding Securities do not give the
Trustee a direction inconsistent with the request.
A Securityholder may not use this Indenture to prejudice the rights of another
Securityholder or to obtain a preference or priority over another
Securityholder.
Section 6.07. Rights of Holders to Receive Payment.
Notwithstanding any other provision of this Indenture, the right of any
Holder of a Security to receive payment of principal and interest on the
Security, on or after the respective due dates expressed in the Security, or to
bring suit for the enforcement of any such payment on or after such respective
dates, shall not be impaired or affected without the consent of the Holder;
provided that a Holder shall not have the right to institute any such suit for
the enforcement of payment if and to the extent that the institution or
prosecution thereof or the entry of judgment therein would, under applicable
law, result in the surrender, impairment, waiver or loss of the Lien of the
Indenture upon any property subject to such Lien.
Section 6.08. Collection Suit by Trustee.
If an Event of Default specified in Section 6.01(1) or (2) occurs and
is continuing, the Trustee may recover judgment in its own name and as trustee
of an express trust against the Company for the whole amount of principal and
interest remaining unpaid on the Securities and interest on overdue principal
and interest and such further amount as shall be sufficient to cover the costs
and, to the extent lawful, expenses of collection, including the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel.
Section 6.09. Trustee May File Proofs of Claim.
The Trustee may file such proofs of claim and other papers or documents
as may be necessary or advisable in order to have the claims of the Trustee and
the Securityholders allowed in any judicial proceedings relative to the Company,
its creditors or its property. Nothing contained herein shall be deemed to
authorize the Trustee to authorize or consent to or accept or adopt on behalf of
any Securityholder any plan of reorganization, arrangement, adjustment or
composition affecting the Securities or the rights of any Holder thereof, or to
authorize the Trustee to vote in respect of the claim of any Securityholder in
any such proceeding.
Section 6.10. Priorities.
If the Trustee collects any money pursuant to this Article, it shall
pay out the money in the following order:
First: to the Trustee for amounts due under Section 7.07;
Second: to Securityholders for amounts due and unpaid on the
Securities for principal and interest, ratably, without
preference or priority of any kind,
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according to the amounts due and payable on the Securities for
principal and interest, respectively; and
Third:. to the Company.
Except as otherwise provided in Section 2.12, the Trustee may fix a
record date and payment date for any payment to Securityholders.
Section 6.11. Undertaking for Costs.
In any suit for the enforcement of any right or remedy under this
Indenture or in any suit against the Trustee for any action taken or omitted by
it as a Trustee, a court in its discretion may require the filing by any party
litigant in the suit of an undertaking to pay the costs of the suit, and the
court in its discretion may assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in the suit, having due regard to
the merits and good faith of the claims or defenses made by the party litigant.
This Section does not apply to a suit by the Trustee, a suit by a Holder
pursuant to Section 6.07, or a suit by Holders of more than 10% in principal
amount of the then outstanding Securities.
ARTICLE 7.
TRUSTEE
Section 7.01. Duties of Trustee.
(a) If an Event of Default has occurred and is continuing, the Trustee
shall exercise such of the rights and powers vested in it by this Indenture, and
use the same degree of care and skill in their exercise, as a prudent man would
exercise or use under the circumstances in the conduct of his own affairs.
(b) Except during the continuance of an Event of Default:
(1) The Trustee need perform only those duties that are specifically
set forth in this Indenture and no others.
(2) In the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Trustee and conforming to the requirements of
this Indenture. However, the Trustee shall examine the certificates and
opinions to determine whether or not they conform to the requirements
of this Indenture.
(c) The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(1) This paragraph does not limit the effect of paragraph (b) of
this Section.
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(2) The Trustee shall not be liable for any error of judgment made
in good faith by a Trust Officer, unless it is proved that the Trustee
was negligent in ascertaining the pertinent facts.
(3) The Trustee shall not be liable with respect to any action it
takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.05.
(d) Every provision of this Indenture that in any way relates to the
Trustee is subject to paragraphs (a), (b) and (c) of this Section.
(e) The Trustee may refuse to perform any duty or exercise any right or
power unless it receives indemnity satisfactory to it against any loss,
liability or expense.
(f) The Trustee shall not be liable for interest on any money received
by it except as the Trustee may agree in writing with the Company. Money held in
trust by the Trustee need not be segregated from other funds except to the
extent required by law.
Section 7.02. Rights of Trustee.
(a) The Trustee may rely on any document believed by it to be genuine
and to have been signed or presented by the proper person. The Trustee need not
investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may require an
Officers' Certificate or an Opinion of Counsel, or both. The Trustee shall not
be liable for any action it takes or omits to take in good faith in reliance on
such Officers' Certificate or Opinion of Counsel.
(c) The Trustee may act through agents and shall not be responsible for
the misconduct or negligence of any agent (other than an agent who is an
employee of the Trustee) appointed with due care.
(d) The Trustee shall not be liable for any action it takes or omits to
take in good faith which it believes to be authorized or within its rights or
powers, provided, however, that the Trustee's conduct does not constitute
willful misconduct or negligence.
Section 7.03 Individual Rights of Trustee.
The Trustee in its individual or any other capacity may become the
owner or pledgee of Securities and may otherwise deal with the Company or an
Affiliate with the same rights it would have if it were not Trustee. Any Agent
may do the same with like rights. However, the Trustee is subject to Sections
7.10 and 7.11.
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Section 7.04. Trustee's Disclaimer.
The Trustee makes no representation as to the validity or adequacy of
this Indenture or the Securities, it shall not be accountable for the Company's
use of the proceeds from the Securities, and it shall not be responsible for any
statement of the Company in the Indenture or any Statement in the Securities
other than its authentication.
Section 7.05. Notice of Defaults.
If a Default or Event of Default occurs and is continuing and if it is
known to the Trustee, the Trustee shall mail to Securityholders a notice of the
Default or Event of Default within 90 days after it occurs. Except in the case
of a Default or Event of Default in payment on any Security (including any
failure to make any mandatory redemption payment required hereunder), the
Trustee may withhold the notice if and so long as a committee of its Trust
Officers in good faith determines that withholding the notice is in the
interests of Securityholders.
Section 7.06. Reports by Trustee to Holders.
Within 60 days after the reporting date stated in Section 11.10, the
Trustee shall mail to Securityholders a brief report dated as of such reporting
date that complies with TIA Section 313(a). The Trustee also shall comply with
TIA Section 313(b)(2). The Trustee shall also transmit by mail all reports as
required by TIA Section 313(c).
A copy of each report at the time of its mailing to Securityholders
shall be filed with the SEC and each stock exchange on which the Securities are
listed, if any. The Company shall notify the Trustee when the Securities are
listed on any stock exchange.
Section 7.07. Compensation and Indemnity.
The Company shall pay to the Trustee from time to time reasonable
compensation for its services hereunder. The Trustee's compensation shall not be
limited by any law on compensation of a trustee of an express trust. The Company
shall reimburse the Trustee upon request for all reasonable out-of-pocket
expenses incurred by it. Such expenses may include the reasonable compensation
and out-of-pocket expenses of the Trustee's agents and counsel.
The Company shall indemnify the Trustee against any loss or liability
incurred by it except as set forth in the next paragraph. The Trustee shall
notify the Company promptly of any claim for which it may seek indemnity. The
Company shall defend the claim and the Trustee shall cooperate in the defense.
The Trustee may have separate counsel and the Company shall pay the reasonable
fees and expenses of such counsel. The Company need not pay for any settlement
made without its consent, which consent shall not be unreasonably withheld.
The Company need not reimburse any expense or indemnify against any
loss or liability incurred by the Trustee through negligence or bad faith.
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To secure the Company's payment obligations in this Section, the
Trustee shall have a lien prior to the Securities on all money or property held
or collected by the Trustee, except that held in trust to pay principal and
interest on particular Securities.
When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 6.01(6) or (7) occurs, the expenses and the
compensation for the services are intended to constitute expenses of
administration under any Bankruptcy Law.
Section 7.08. Replacement of Trustee.
A resignation or removal of the Trustee and appointment of a successor
Trustee shall become effective only upon the successor Trustee's acceptance of
appointment as provided in this Section.
The Trustee may resign by so notifying the Company. The Holders of a
majority in principal amount of the then outstanding Securities may remove the
Trustee by so notifying the Trustee and the Company. The Company may remove the
Trustee if:
(1) the Trustee fails to comply with Section 7.10;
(2) the Trustee is adjudged a bankrupt or an insolvent or an order
for relief is entered with respect to the Trustee under any Bankruptcy
Law;
(3) a Custodian or public officer takes charge of the Trustee or its
property; or
(4) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, the Company shall promptly appoint a successor
Trustee. Within one year after the successor Trustee takes office, the Holders
of a majority in principal amount of the then outstanding Securities may appoint
a successor Trustee to replace the successor Trustee appointed by the Company.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company or the
Holders of at least 10% in principal amount of the then outstanding Securities
may petition any court of competent jurisdiction for the appointment of a
successor Trustee.
If the Trustee fails to comply with Section 7.10, any Securityholder
may petition any court of competent jurisdiction for the removal of the Trustee
and the appointment of a successor Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. The successor Trustee shall mail a notice of its
succession to Securityholders. The retiring Trustee shall promptly transfer all
property held by it as Trustee to
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the successor Trustee, subject to the lien provided for in Section 7.07.
Notwithstanding the replacement of the Trustee pursuant to this Section 7.08,
the Company's obligations under Section 7.07 hereof shall continue for the
benefit of the retiring trustee with respect to expenses and liabilities
incurred by it prior to such replacement.
Section 7.09. Successor Trustee by Merger, etc.
If the Trustee consolidates, merges or converts into, or transfers all
or substantially all of its corporate trust business to, another corporation,
the successor corporation without any further act shall be the successor
Trustee, provided that such successor shall otherwise be qualified and eligible
to act as a Trustee pursuant to the provisions of this Article.
Section 7.10. Eligibility; Disqualification.
This Indenture shall always have a Trustee who satisfies the
requirements of TIA Section 310(a). The Trustee shall always have a combined
capital and surplus as stated in Section 11.10. The Trustee is subject to TIA
Section 310(b), including the optional provision permitted by the second
sentence of TIA Section 310(b)(9). Section 11.10 lists any excluded indenture or
trust agreement.
Section 7.11. Preferential Collection of Claims Against Company.
The Trustee is subject to TIA Section 311(a), excluding any creditor
relationship listed in TIA Section 311(b). A Trustee who has resigned or been
removed shall be subject to TIA Section 311(a) to the extent indicated therein.
Section 7.12. Sections Applicable to Registrar and Paying Agent.
The term "Trustee" as used in Sections 7.01, 7.02, 7.03, 7.04 and 7.07
shall (unless the context otherwise requires) be construed as extending to and
including the Trustee acting in its capacity, if any, as Paying Agent and
Registrar.
ARTICLE 8.
DISCHARGE OF INDENTURE
Section 8.01. Termination of Company's Obligations.
This Indenture shall cease to be of further effect (except that the
Company's obligations under Section 7.07 and 8.03 shall survive) when all
outstanding Securities theretofore authenticated and issued have been delivered
to the Trustee for cancellation and the Company has paid all sums payable
hereunder. In addition, subject to Section 8.04, the Company may terminate all
of its obligations under this Indenture (except the Company's obligations under
Sections 7.07 and 8.03) if:
(1) the Securities mature within one year or all of them are to be
called for redemption within one year under arrangements satisfactory
to the Trustee for giving the notice of redemption;
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(2) the Company irrevocably deposits in trust with the Trustee money
or U.S. Government Obligations sufficient without investment of such
money or reinvestment of interest or proceeds from such U.S. Government
Obligation to pay principal and interest on the Securities to maturity
or redemption, as the case may be, and to pay all other sums payable by
it hereunder. The Company may make the deposit only during the one-year
period;
(3) the Company delivers to the Trustee a certificate from a
nationally recognized firm of independent certified public accountants
expressing their opinion that the money or U.S. Government Obligations
so deposited, without investment of such money or reinvestment of
interest or proceeds on such U.S. Government Obligations, will provide
cash at such times and in such amounts as will be sufficient to pay
principal and interest when due on all the Securities to maturity or
redemption, as the case may be;
(4) the Company delivers to the Trustee an Opinion of Counsel
stating that (A) the Company has received from, or there has been
published by, the Internal Revenue Service a ruling or (B) since the
date of this Indenture, there has been a change in the applicable
federal income tax law, in either case to the effect that, and based
thereon such Opinion of Counsel shall confirm that, the holders of the
outstanding Securities will not recognize income, gain or loss for
federal income tax purposes as a result of such defeasance and will be
subject to federal income tax on the same amount and in the same manner
and at the same time as would have been the case if such defeasance had
not occurred;
(5) no Default or Event of Default or event which with notice or
lapse of time or both would become an Event of Default shall have
occurred and be continuing on the date of such deposit and after giving
effect thereto or, insofar as subsections (6) and (7) of Section 6.01
are concerned, at any time during the period ending on and including
the 91st day after the date of such deposit (it being understood that
this condition shall not be deemed satisfied until the expiration of
such period);
(6) such defeasance shall not result in a breach or violation of, or
constitute a default under any agreement or instrument to which the
Company or any of its subsidiaries is bound;
(7) the Company delivers to the Trustee an Opinion of Counsel to the
effect that after the 91st day following the deposit, the trust funds
will not be subject to the effect of any applicable bankruptcy,
insolvency, reorganization or similar laws affecting creditors' rights
generally, except that if a court were to rule under any such law in
any case or proceeding that the trust funds remained property of the
Company, no opinion is given as to the effect of such laws on the trust
funds except the following: (A) assuming such trust funds remained in
the Trustee's possession prior to such court ruling to the extent not
paid to holders of the Securities, the Trustee will hold, for the
benefit of such holders, a valid and perfected security interest in
such trust funds that is not avoidable in bankruptcy or otherwise and
(B) such holders will be entitled to receive adequate protection of
their interest in such trust funds if such trust funds are used;
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(8) the Company delivers to the Trustee an Officers' Certificate
stating that the deposit was not made by the Company with the intent of
preferring the holders of the Securities over the other creditors of
the Company with the intent of defeating, hindering, delaying or
defrauding creditors of the Company or others;
(9) the Company delivers to the Trustee an Opinion of Counsel
stating that neither the trust nor the Trustee will be required to
register as an investment company under the Investment Company Act of
1940, as amended; and
(10) the Company delivers to the Trustee an Officers' Certificate
stating that all conditions precedent to the defeasance and discharge
of the Securities as contemplated by this Article 8 have been complied
with.
However, the Company's obligations in Sections 2.03, 2.04, 2.05, 2.06,
2.07, 4.01, 7.07, 8.03 and 8.04, shall survive until the Securities are no
longer outstanding. Thereafter, only the Company's obligations in Sections 7.07
and 8.03 shall survive.
After a deposit made pursuant to this Section 8.01 and satisfaction of
the conditions set forth herein, the Trustee upon request shall acknowledge in
writing the discharge of the Company's obligations under this Indenture except
for those surviving obligations specified above.
"U.S. Government Obligations" means direct obligations of the United
States of America for the payment of which the full faith and credit of the
United States of America is pledged. In order to have money available on a
payment date to pay principal or interest on the Securities, the U.S. Government
Obligations shall be payable as to principal or interest on or before such
payment date in such amounts as will provide the necessary money. U.S.
Government Obligations shall not be callable at the issuer's option.
Section 8.02. Application of Trust Money.
The Trustee shall hold in trust money or U.S. Government Obligations
deposited with it pursuant to Section 8.01. It shall apply the deposited money
and the money from U.S. Government Obligations through the Paying Agent and in
accordance with this Indenture to the payment of principal and interest on the
Securities.
Section 8.03. Repayment to Company.
The Trustee and the Paying Agent shall promptly pay to the Company upon
request any excess money or securities held by them at any time.
Subject to applicable abandoned property law, the Trustee and the
Paying Agent shall pay to the Company upon request any money held by them for
the payment of principal or interest that remains unclaimed for two years after
the date upon which such payment shall have become due; provided, however, that
the Company shall have first caused notice of such payment to the Company to be
mailed to each Securityholder entitled thereto no less than 30 days prior to
such payment. After payment to the Company, Securityholders entitled to the
money must look to the
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Company for payment as general creditors unless an applicable abandoned property
law designates another person.
Section 8.04. Reinstatement.
If (i) the Trustee or Paying Agent is unable to apply any money in
accordance with Section 8.02 by reason of any order or judgment of any court or
governmental authority enjoining, restraining or otherwise prohibiting such
application and (ii) the Holders of at least a majority in principal amount of
the then outstanding Securities so request by written notice to the Trustee, the
Company's obligations under this Indenture and the Securities shall be revived
and reinstated as though no deposit had occurred pursuant to Section 8.01 until
such time as the Trustee or Paying Agent is permitted to apply all such money in
accordance with Section 8.02; provided, however, that if the Company makes any
payment of interest on or principal of any Security following the reinstatement
of its obligations, the Company shall be subrogated to the rights of the Holders
of such Securities to receive such payment from the money or U.S. Government
Obligations held by the Trustee or Paying Agent.
ARTICLE 9.
AMENDMENTS
Section 9.01. Without Consent of Holders.
The Company and the Trustee may amend this Indenture or the Securities
without the consent of any Securityholder:
(1) to cure any ambiguity, defect or inconsistency;
(2) to comply with Section 5.01;
(3) to provide for uncertificated Securities in addition to
certificated Securities; or
(4) to make any change that does not adversely affect the rights
hereunder of any Securityholder.
Section 9.02. With Consent of Holders.
Subject to Section 6.07, the Company and the Trustee may amend this
Indenture or the Securities with the written consent of the Holders of at least
a majority in principal amount of the then outstanding Securities. Subject to
Sections 6.04 and 6.07, the Holders of a majority in principal amount of the
Securities then outstanding may also waive compliance in a particular instance
by the Company with any provision of this Indenture or the Securities. However,
without the consent of each Securityholder affected, an amendment or waiver
under this Section may not:
(1) reduce the amount of Securities whose Holders must consent to an
amendment or waiver;
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(2) reduce the rate of or change the time for payment of interest on
any Security;
(3) reduce the principal of or change the fixed maturity of any
Security or alter the redemption provisions with respect thereto;
(4) make any Security payable in money other than that stated in the
Security;
(5) make any change in Section 6.04, 6.07 or 9.02 (this sentence);
or
(6) waive a default in the payment of the principal of, or interest
on, any Security.
To secure a consent of the Holders under this Section, it shall not be
necessary for the Holders to approve the particular form of any proposed
amendment or waiver, but it shall be sufficient if such consent approves the
substance thereof.
After an amendment or waiver under this Section becomes effective, the
Company shall mail to Securityholders a notice briefly describing the amendment
or waiver.
Section 9.03. Compliance with Trust Indenture Act.
Every amendment to this Indenture or the Securities shall be set forth
in a supplemental indenture that complies with the TIA as then in effect.
Section 9.04. Revocation and Effect of Consents.
Until an amendment or waiver becomes effective, a consent to it by a
Holder of a Security is a continuing consent by the Holder and every subsequent
Holder of a Security or portion of a Security that evidences the same debt as
the consenting Holder's Security, even if notation of the consent is not made on
any Security. However, any such Holder or subsequent Holder may revoke the
consent as to his Security or portion of a Security if the Trustee receives the
notice of revocation before the date on which the Trustee receives an Officer's
Certificate certifying that the Holders of the requisite principal amount of
Securities have consented to the amendment or waiver.
The Company may, but shall not be obligated to, fix a record date for
the purpose of determining the Holders entitled to consent to any amendment or
waiver. If a record date is fixed, then notwithstanding the provisions of the
immediately preceding paragraph, those persons who were Holders at such record
date (or their duly designated proxies), and only those persons, shall be
entitled to consent to such amendment or waiver or to revoke any consent
previously given, whether or not such persons continue to be Holders after such
record date. No consent shall be valid or effective for more than 90 days after
such record date unless consents from Holders of the principal amount of
Securities required hereunder for such amendment or waiver to be effective shall
have also been given and not revoked within such 90-day period.
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After an amendment or waiver becomes effective it shall bind every
Securityholder, unless it is of the type described in any of clauses (1) through
(6) of Section 9.02. In such case, the amendment or waiver shall bind each
Holder of a Security who has consented to it and every subsequent Holder of a
Security that evidences the same debt as the consenting Holder's Security.
Section 9.05. Notation on or Exchange of Securities.
The Trustee may place an appropriate notation about an amendment or
waiver on any Security thereafter authenticated. The Company in exchange for all
Securities may issue and the Trustee shall authenticate new Securities that
reflect the amendment or waiver.
Section 9.06. Trustee Protected.
The Trustee shall sign any amended or supplemental indenture authorized
pursuant to this Article 9 if the amendment or supplement does not adversely
affect the rights, duties, liabilities or immunities of the Trustee. The Company
may not sign an amendment or supplemental indenture until the Board of Directors
approves it. In executing any amended or supplemental indenture, the Trustee
shall be entitled to receive and (subject to Section 7.01 hereof) shall be fully
protected in relying upon, in addition to the documents required by Section
11.04 hereof, an Officer's Certificate and an Opinion of Counsel stating that
the execution of such amended or supplemental indenture is authorized or
permitted by this Indenture.
ARTICLE 10.
COLLATERAL AND SECURITY
Section 10.01. Pledge Agreement.
The due and punctual payment of the principal of and interest, if any,
on the Securities when and as the same shall be due and payable, whether on an
interest payment date, at maturity, by acceleration, repurchase, redemption or
otherwise, and interest on the overdue principal of and interest (to the extent
permitted by law), if any, on the Securities and performance of all other
obligations of the Company to the Holders of Securities or the Trustee under
this Indenture and the Securities, according to the terms hereunder or
thereunder, shall be secured as provided in the Pledge Agreement which the
Company has entered into simultaneously with the execution of this Indenture and
which is attached as Exhibit B hereto. Each Holder of Securities, by its
acceptance thereof, consents and agrees to the terms of the Pledge Agreement
(including, without limitation, the provisions providing for foreclosure and
release of Pledged Collateral) as the same may be in effect or may be amended
from time to time in accordance with its terms and authorizes and directs the
Collateral Agent to enter into the Pledge Agreement and to perform its
obligations and exercise its rights thereunder in accordance therewith. The
Company shall deliver to the Trustee copies of all documents delivered to the
Collateral Agent pursuant to the Pledge Agreement, and shall do or cause to be
done all such acts and things as may be necessary or proper, or as may be
required by the provisions of the Pledge Agreement, to assure and confirm to the
Trustee and the Collateral Agent the security interest in the Pledged Collateral
contemplated hereby, by the Pledge Agreement or any part thereof, as from time
to time constituted, so as to render the same
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available for the security and benefit of this Indenture and of the Securities
secured hereby, according to the intent and purposes herein expressed. The
Company shall take, or shall cause its Subsidiaries to take, upon request of the
Trustee, any and all actions reasonably required to cause the Pledge Agreement
to create and maintain, as security for the Obligations of the Company
hereunder, a valid and enforceable perfected Lien in and on all the Pledged
Collateral, in favor of the Collateral Agent for the benefit of the Holders of
Securities, superior to and prior to the rights of all third persons and subject
to no Liens other than the security interests granted to third persons as
expressly contemplated by the Pledge Agreement.
Section 10.02. Recording and Opinions.
(a) The Company shall furnish to the Trustee simultaneously with the
execution and delivery of this Indenture an Opinion of Counsel either (i)
stating that in the opinion of such counsel all action has been taken with
respect to the recording, registering and filing of this Indenture, financing
statements or other instruments necessary to make effective the Lien intended to
be created by the Pledge Agreement, and reciting with respect to the security
interests in the Pledged Collateral, the details of such action, or (ii) stating
that, in the opinion of such counsel, no such action is necessary to make such
Lien effective.
(b) The Company shall furnish to the Collateral Agent and the Trustee
on September 1 in each year beginning with September 1, 2000, an Opinion of
Counsel, dated as of such date, either (i) (A) stating that, in the opinion of
such counsel, action has been taken with respect to the recording, registering,
filing, re-recording, re-registering and refiling of all supplemental
indentures, financing statements, continuation statements or other instruments
of further assurance as is necessary to maintain the Lien of the Pledge
Agreement and reciting with respect to the security interests in the Pledged
Collateral the details of such action or referring to prior Opinions of Counsel
in which such details are given, (B) stating that, based on relevant laws as in
effect on the date of such Opinion of Counsel, all financing statements and
continuation statements have been executed and filed that are necessary as of
such date and during the succeeding 12 months fully to preserve and protect, to
the extent such protection and preservation are possible by filing, the rights
of the Holders of Securities and the Collateral Agent and the Trustee hereunder
and under the Pledge Agreement with respect to the security interests in the
Pledged Collateral, or (ii) stating that, in the opinion of such counsel, no
such action is necessary to maintain such Lien and assignment.
(c) The Company shall otherwise comply with the provisions of TIA
Section 314(b).
Section 10.03. Release of Collateral.
(a) Subject to subsections (b), (c) and (d) of this Section 10.03,
Pledged Collateral may be released from the Lien and security interest created
by the Pledge Agreement at any time or from time to time in accordance with the
provisions of the Pledge Agreement or as provided hereby.
(b) At any time when a Default or Event of Default shall have occurred
and be continuing and the maturity of the Securities shall have been accelerated
(whether by declaration
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or otherwise) and the Trustee shall have delivered a notice of acceleration to
the Collateral Agent, no release of Pledged Collateral pursuant to the
provisions of the Pledge Agreement shall be effective as against the Holders of
Securities.
(c) The release of any Pledged Collateral from the terms of this
Indenture and the Pledge Agreement shall not be deemed to impair the security
under this Indenture in contravention of the provisions hereof if and to the
extent the Pledged Collateral is released pursuant to the terms of the Pledge
Agreement. To the extent applicable, the Company shall cause TIA Section 313(b),
relating to reports, and TIA Section 314(d), relating to the release of property
or securities from the Lien and security interest of the Pledge Agreement and
relating to the substitution therefor of any property or securities to be
subjected to the Lien and security interest of the Pledge Agreement, to be
complied with. Any certificate or opinion required by TIA Section 314(d) may be
made by an Officer of the Company except in cases where TIA Section 314(d)
requires that such certificate or opinion be made by an independent person,
which person shall be an independent engineer, appraiser or other expert
selected or approved by the Trustee and the Collateral Agent in the exercise of
reasonable care.
Section 10.04. Certificates of the Company.
The Company shall furnish to the Trustee and the Collateral Agent,
prior to each proposed release of Pledged Collateral pursuant to the Pledge
Agreement, (i) all documents required by TIA Section 314(d) and (ii) an Opinion
of Counsel, which may be rendered by internal counsel to the Company, to the
effect that such accompanying documents constitute all documents required by TIA
Section 314(d). The Trustee may, to the extent permitted by Sections 7.01 and
7.02 hereof, accept as conclusive evidence of compliance with the foregoing
provisions the appropriate statements contained in such documents and such
Opinion of Counsel.
Section 10.05. Certificates of the Trustee.
In the event that the Company wishes to release Pledged Collateral in
accordance with the Pledge Agreement and has delivered the certificates and
documents required by the Pledge Agreement and Sections 10.03 and 10.04 hereof,
the Trustee shall determine whether it has received all documentation required
by TIA Section 314(d) in connection with such release and, based on such
determination and the Opinion of Counsel delivered pursuant to Section 11.04(b),
shall deliver a certificate to the Collateral Agent setting forth such
determination.
Section 10.06. Authorization of Actions to Be Taken by the Trustee Under the
Pledge Agreement.
Subject to the provisions of Section 7.01 and 7.02 hereof, the Trustee
may, in its sole discretion and without the consent of the Holders of
Securities, direct, on behalf of the Holders of Securities, the Collateral Agent
to, take all actions it deems necessary or appropriate in order to (a) enforce
any of the terms of the Pledge Agreement and (b) collect and receive any and all
amounts payable in respect of the Obligations of the Company hereunder. The
Trustee shall have power to institute and maintain such suits and proceedings as
it may deem expedient to prevent any impairment of the Pledged Collateral by any
acts that may be unlawful or in violation of the
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Pledge Agreement or this Indenture, and such suits and proceedings as the
Trustee may deem expedient to preserve or protect its interests and the
interests of the Holders of Securities in the Pledged Collateral (including
power to institute and maintain suits or proceedings to restrain the enforcement
of or compliance with any legislative or other governmental enactment, rule or
order that may be unconstitutional or otherwise invalid if the enforcement of,
or compliance with, such enactment, rule or order would impair the security
interest hereunder or be prejudicial to the interests of the Holders of
Securities or of the Trustee).
Section 10.07. Authorization of Receipt of Funds by the Trustee Under the Pledge
Agreement.
The Trustee is authorized to receive any funds for the benefit of the
Holders of Securities distributed under the Pledge Agreement, and to make
further distributions of such funds to the Holders of Securities according to
the provisions of this Indenture.
Section 10.08. Termination of Security Interest.
Upon the payment in full of all Obligations of the Company under this
Indenture and the Securities, or upon termination of the Company's obligations
in accordance with Article 8, the Trustee shall, at the request of the Company,
deliver a certificate to the Collateral Agent stating that such Obligations have
been paid in full, and instruct the Collateral Agent to release the Liens
pursuant to this Indenture and the Pledge Agreement.
ARTICLE 11.
MISCELLANEOUS
Section 11.01. Trust Indenture Act Controls.
If any provision of this Indenture limits, qualifies, or conflicts with
another provision which is required to be included in this Indenture by the TIA,
the required provision shall control.
Section 11.02. Notices.
Any notice or communication by the Company or the Trustee to the other
is duly given if in writing and delivered in person or mailed by first-class
mail to the other's address stated in Section 11.10. The Company or the Trustee
by notice to the other may designate additional or different address for
subsequent notices or communications.
Any notice or communication to a Securityholder shall be mailed by
first-class mail to his address shown on the register kept by the Registrar.
Failure to mail a notice or communication to a Securityholder or any defect in
it shall not affect its sufficiency with respect to other Securityholders.
If a notice or communication is mailed in the manner provided above
within the time prescribed, it is duly given, whether or not the addressee
receives it.
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If the Company mails a notice or communication to Securityholders, it
shall mail a copy to the Trustee and each Agent at the same time.
All other notices or communications shall be in writing.
Section 11.03. Communication by Holders with Other Holders.
Securityholders may communicate pursuant to TIA Section 312(b) with
other Securityholders with respect to their rights under this Indenture or the
Securities. The Company, the Trustee, the Registrar and anyone else shall have
the protection of TIA Section 312(c).
Section 11.04. Certificate and Opinion as to Conditions Precedent.
Upon any request or application by the Company to the Trustee to take
any action under this Indenture, the Company shall furnish to the Trustee:
(a) an Officers' Certificate stating that, in the opinion of the
signers, all conditions precedent, if any, provided for in this
Indenture relating to the proposed action have been complied with; and
(b) an Opinion of Counsel stating that, in the opinion of such
counsel, all such conditions precedent have been complied with.
Section 11.05. Statements Required in Certificate or Opinion.
Each certificate or opinion with respect to compliance with a condition
or covenant provided for in this Indenture shall include:
(1) a statement that the person making such certificate or opinion
has read such covenant or condition;
(2) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions contained in
such certificate or opinion are based;
(3) a statement that, in the opinion of such person, he has made
such examination or investigation as is necessary to enable him to
express an informed opinion as to whether or not such covenant or
condition has been complied with; and
(4) a statement as to whether or not, in the opinion of such person,
such condition or covenant has been complied with.
Section 11.06. Rules by Trustee and Agents.
The Trustee may make reasonable rules for action by or a meeting of
Securityholders. The Registrar or Paying Agent may make reasonable rules and set
reasonable requirements for its functions.
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Section 11.07. Legal Holidays.
A "Legal Holiday" is a Saturday, a Sunday or a day on which banking
institutions in the State of New York are not required to be open. If a payment
date is a Legal Holiday at a place of payment, payment may be made at that place
on the next succeeding day that is not a Legal Holiday, and no interest shall
accrue for the intervening period.
Section 11.08. No Recourse Against Others.
A director, officer, employee or stockholder, as such, of the Company
shall not have any liability for any obligations of the Company under the
Securities, the Indenture or the Pledge Agreement or for any claim based on, in
respect of or by reason of such obligations or their creation. Each
Securityholder by excepting a Security waives and releases all such liability.
The waiver and release are part of the consideration for the issue of the
Securities.
Section 11.09. Counterparts.
This Indenture may be executed in any number of counterparts and by the
parties hereto in separate counterparts, each of which when so executed shall be
deemed to be an original and all of which taken together shall constitute one
and the same agreement.
Section 11.10. Variable Provisions.
"Officer" means Chairman of the Board, the President, any Vice
President, the Treasurer, the Secretary, any Assistant Treasurer or any
Assistant Secretary of the Company.
The Company initially appoints the Trustee as Paying Agent, Registrar
and authenticating agent.
The first certificate pursuant to Section 4.03 shall be for the fiscal
year ending on December 31, 1999.
The reporting date for Section 7.06 is May 15 of each year. The first
reporting date is May 15, 2000.
The Trustee shall always have a combined capital and surplus of at
least $100,000,000 as set forth in its most recent published annual report of
condition.
The Company's address is:
16955 Xxx Xxx Xxxxx, Xxxxx 000
Xxx Xxxxx, Xxxxxxxxxx 00000
Attn: Xxxx X. Xxxxx, President and
Chief Executive Officer
Facsimile No.: (000) 000-0000
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The Trustee's address is:
Norwest Bank Minnesota, National Association
Corporate Trust Services
Sixth & Marquette
MAC-N9303-120
Xxxxxxxxxxx, Xxxxxxxxx 00000
Facsimile No.: (000) 000-0000
Section 11.11. Governing Law.
The internal laws of the State of New York shall govern this Indenture
and the Securities, without regard to the conflicts of laws provisions thereof.
Section 11.12. No Adverse Interpretation of Other Agreements.
This Indenture may not be used to interpret another indenture, loan or
debt agreement of the Company or a subsidiary. Any such indenture, loan or debt
agreement may not be used to interpret this Indenture.
Section 11.13. Successors.
All agreements of the Company in this Indenture and the Securities
shall bind its successor. All agreements of the Trustee in this Indenture shall
bind its successor.
Section 11.14. Severability.
In case any provision in this Indenture or in the Securities shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
Section 11.15. Table of Contents, Headings, Etc.
The Table of Contents, Cross-Reference Table, and headings of the
Articles and Sections of this Indenture have been inserted for convenience of
reference only, are not to be considered a part hereof, and shall in no way
modify or restrict any of the terms or provisions hereof.
[Signature Page Follows]
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[Indenture Signature Page]
SIGNATURES
Dated: as of November 5, 1999 EXCEL LEGACY CORPORATION,
a Delaware corporation
By: /s/ Xxxxxxx X. Xxxx
--------------------------------
Name: Xxxxxxx X. Xxxx
Title: Executive Vice President
Dated: as of November 5, 1999 NORWEST BANK MINNESOTA,
National Association
By: /s/ Xxxx X. Xxxxxxxxx
--------------------------------
Name: Xxxx X. Xxxxxxxxx
Title: Corporate Trust Officer
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Exhibit A
(Face of Security)
CUSIP 300665 AB 2
No. ___ $ _____________
10.0% SENIOR REDEEMABLE SECURED NOTE
DUE NOVEMBER 5, 2004
EXCEL LEGACY CORPORATION
promises to pay to
_____________
or registered assigns,
the principal sum of _____________ Dollars on November 5, 2004
Interest Payment Dates: February 15 and August 15
Record Dates: February 1 and August 1
This is one of the Securities described in the
within-mentioned Indenture. Additional provisions of this Security are
set forth on the other side of this Security.
Authenticated: Dated:
Norwest Bank Minnesota, National Association, Excel Legacy Corporation
as Trustee
By ________________________ By _____________________
Authorized Signature
OR
as Authenticating Agent
By ________________________
Authorized Signature
A-1
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(Back of Security)
10.0% Senior Redeemable Secured Note
due November 5, 2004
1. Interest. Excel Legacy Corporation, a Delaware corporation (the
"Company"), promises to pay interest on the principal amount of this Security at
the rate per annum shown above. The Company will pay interest semiannually on
February 15 and August 15 of each year. Interest on the Securities will accrue
from the most recent date to which interest has been paid or, if no interest has
been paid, from August 15, 1999. Interest will be computed on the basis of a
360-day year of twelve 30-day months.
2. Method of Payment. The Company will pay interest on the Securities
(except defaulted interest) to the persons who are registered holders of
Securities at the close of business on the record date for the next interest
payment date even though Securities are canceled after the record date and on or
before the interest payment date. Holders must surrender Securities to a Paying
Agent to collect principal payments. The Company will pay principal and interest
in money of the United States that at the time of payment is legal tender for
payment of public and private debts. However, the Company may pay principal and
interest by check payable in such money. It may mail an interest check to a
holder's registered address.
3. Paying Agent and Registrar. The Trustee will act as Paying Agent and
Registrar. The Company may change any Paying Agent, Registrar or co-registrar
without prior notice. The Company or any of its subsidiaries may act in any such
capacity.
4. Indenture and Pledge Agreement. The Company issued the Securities
under an Indenture dated as of November 5, 1999 ("Indenture") between the
Company and the Trustee. The terms of the Securities include those stated in the
Indenture and those made part of the Indenture by reference to the Trust
Indenture Act of 1939 (15 U.S. Code Sections 77aaa-77bbbb) (the "TIA") as
in effect on the date of the Indenture. The Securities are subject to, and
qualified by, all such terms, certain of which are summarized hereon, and
Securityholders are referred to the Indenture and such Act for a statement of
such terms. The Securities are general obligations of the Company limited to
$19,963,509 in aggregate principal amount. The Securities are secured by a
pledge of certain shares of common stock, par value $.0001 per share, of Price
Enterprises, Inc., a Maryland corporation, pursuant to the Pledge Agreement
referred to in the Indenture.
5. Optional Redemption. The Company may redeem all or some of the
Securities at any time and from time to time at the redemption price of 100% of
the principal amount of such Securities plus accrued interest to the redemption
date.
6. Notice of Redemption. Notice of redemption will be mailed at least
30 days but not more than 60 days before the redemption date to each holder of
Securities to be redeemed at his registered address. Securities in denominations
larger than $1,000 may be redeemed in part but only in whole multiples of
$1,000. In the event of a redemption of less than all of the Securities, the
Securities will be chosen for redemption by the Trustee, generally pro rata or
by
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lot. On and after the redemption date interest ceases to accrue on Securities or
portions of them called for redemption.
If this Security is redeemed subsequent to a record date with respect
to any interest payment date specified above and on or prior to such interest
payment date, then any accrued interest will be paid to the person in whose name
this Security is registered at the close of business on such record date.
7. Denominations, Transfer, Exchange. The Securities are in registered
form without coupons in denominations of $1,000 and integral multiples of
$1,000. The transfer of Securities may be registered and Securities may be
exchanged as provided in the Indenture. The Registrar may require a holder,
among other things, to furnish appropriate endorsements and transfer documents
and to pay any taxes and fees required by law or permitted by the Indenture. The
Registrar need not exchange or register the transfer of any Security or portion
of a Security selected for redemption (except the unredeemed portion of any
Security being redeemed in part). Also, it need not exchange or register the
transfer of any Securities for a period of 15 days before a selection of
Securities to be redeemed.
8. Persons Deemed Owners. Except as provided in paragraph 2, the
registered holder of a Security may be treated as its owner for all purposes.
9. Amendments and Waivers. Subject to certain exceptions, the Indenture
or the Securities may be amended with the consent of the holders of at least a
majority in principal amount of the then outstanding Securities, and any
existing default may be waived with the consent of the holders of a majority in
principal amount of the then outstanding Securities. Without the consent of any
Securityholder, the Indenture or the Securities may be amended to cure any
ambiguity, defect or inconsistency, to provide for assumption of the Company's
obligations to Securityholders or to make any change that does not adversely
affect the rights of any Securityholder.
10. Defaults and Remedies. An Event of Default is: default for 30 days
in payment of interest on the Securities; default in payment of principal on
them; failure by the Company for 30 days after notice to it to comply with any
of its other agreements in the Indenture or the Securities or, in the case of
failure by the Company to maintain its corporate existence or to comply with the
restrictions on consolidation, merger or transfer or lease of substantially all
its assets, with such notice but without such passage of time; certain defaults
under and accelerations prior to maturity of other indebtedness; certain final
judgments which remain undischarged; and certain events of bankruptcy or
insolvency. If an Event of Default occurs and is continuing, the Trustee or the
holders of at least 25% in principal amount of the then outstanding Securities
may declare all the Securities to be due and payable immediately, except that in
the case of an Event of Default arising from certain events of bankruptcy or
insolvency, all outstanding Securities become due and payable without further
action or notice. Securityholders may not enforce the Indenture or the
Securities except as provided in the Indenture. The Trustee may require
indemnity satisfactory to it before it enforces the Indenture or the Securities.
Subject to certain limitations, holders of a majority in principal amount of the
then outstanding Securities may direct the Trustee in its exercise of any trust
or power. The Trustee may withhold from Securityholders notice of any
A-3
41
continuing default (except a default in payment of principal or interest) if it
determines that withholding notice is in their interests. The Company must
furnish an annual compliance certificate to the Trustee.
11. Trustee Dealings with the Company. Subject to certain limitations
imposed by the TIA, the Trustee under the Indenture, in its individual or any
other capacity, may make loans to, accept deposits from, and perform services
for the Company or its Affiliates, and may otherwise deal with the Company or
its Affiliates, as if it were not Trustee.
12. No Recourse Against Others. A director, officer, employee or
stockholder, as such, of the Company shall not have any liability for any
obligations of the Company under the Securities or the Indenture or for any
claim based on, in respect of or by reason of such obligations or their
creation. Each Securityholder by accepting a Security waives and releases all
such liability. The waiver and release are part of the consideration for the
issue of the Securities.
13. Authentication. This Security shall not be valid until
authenticated by the manual signature of the Trustee or an authenticating agent.
14. Abbreviations. Customary abbreviations may be used in the name of a
Securityholder or an assignee, such as: TEN COM (= tenants in common), TEN ENT
(= tenants by the entireties), JT TEN (= joint tenants with right of
survivorship and not as tenants in common), CUST (= Custodian), and U/G/M/A (=
Uniform Gifts to Minors Act).
15. CUSIP Numbers. Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures, the Company has caused
CUSIP numbers to be printed on the Securities and the Trustee may use CUSIP
numbers in notices of redemption as a convenience to Securityholders. No
representation is made as to the accuracy of such numbers either as printed on
the Securities or as contained in any notice of redemption and reliance may be
placed only on the other identification numbers placed thereon.
The Company will furnish to any Securityholder upon written request and without
charge a copy of the Indenture, which has in it the text of this Security in
larger type. Requests may be made to:
Treasurer, Excel Legacy Corporation
16955 Xxx Xxx Xxxxx, Xxxxx 000
Xxx Xxxxx, Xxxxxxxxxx 00000
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ASSIGNMENT FORM
To Assign this Security, fill in the form below:
I or we assign and transfer this Security to
__________________
[__________________]
(Insert assignee's social security or tax I.D. number)
_________________________
_________________________
_________________________
_________________________
(Print or type assignee's name, address and zip code)
and irrevocably appoint _________________________, agent to transfer this
Security on the books of the Company. The agent may substitute another to act
for him.
Dated: _________________________ Signed: _____________________________
(Sign exactly as your name
appears on the other side of
this Security)
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Exhibit B
PLEDGE AGREEMENT
THIS PLEDGE AGREEMENT (this "Agreement") is made and entered into as of
November 5, 1999 by Excel Legacy Corporation, a Delaware corporation (the
"Pledgor"), having its principal office at 16955 Xxx Xxx Xxxxx, Xxxxx 000, Xxx
Xxxxx, Xxxxxxxxxx, in favor of Norwest Bank Minnesota, National Association (the
"Senior Notes Collateral Agent"), having an office at Sixth & Marquette,
XXX-X0000-000, Xxxxxxxxxxx, Xxxxxxxxx, as collateral agent in favor of the
holders (the "Holders") of the Pledgor's 10.0% Senior Redeemable Secured Notes
due 2004 (the "Senior Notes"). Capitalized terms used and not defined herein
shall have the meanings given to such terms in the Indenture referred to below.
W I T N E S S E T H:
WHEREAS, the Pledgor is the legal and beneficial owner of certain
shares of common stock, par value $.0001 per share (the "Common Stock"), of
Price Enterprises, Inc., a Maryland corporation (the "Issuer");
WHEREAS, the Pledgor and Norwest Bank Minnesota, National Association,
as trustee, have entered into that certain indenture dated as of November 5,
1999 (as amended, amended and restated, supplemented or otherwise modified from
time to time, the "Indenture"), pursuant to which the Pledgor proposes to issue,
from time to time, up to $19,983,509 in aggregate principal amount of the Senior
Notes;
WHEREAS, the terms of the Indenture require that the Pledgor (i) pledge
to the Senior Notes Collateral Agent for the benefit of the Holders, and grant
to the Senior Notes Collateral Agent for the benefit of the Holders a security
interest in, the Senior Notes Pledged Collateral (as defined herein) and (ii)
execute and deliver this Agreement in order to secure the payment and
performance by the Pledgor of all of the Obligations of the Pledgor under the
Indenture and the Senior Notes (the "Obligations"); and
WHEREAS, the Pledgor and The Sol and Xxxxx Xxxxx Trust have entered
into that certain Note Purchase Agreement dated as of October 1, 1999 (the
"Price Note Purchase Agreement") pertaining to the Secured Promissory Note (the
"Price Note") issued thereunder, and the Pledgor and Xxxxx X. Xxxxxx (the "Price
Note Collateral Agent") have entered a Pledge Agreement of even date therewith
(the "Price Note Pledge Agreement") pursuant to which Pledgor has granted to the
Price Note Collateral Agent, as collateral agent for the holders of the Price
Note, a security interest (the "Price Note Security Interest") in, among other
things, the Senior Notes Pledged Shares.
AGREEMENT
NOW, THEREFORE, in consideration of the above recitals and the mutual
covenants hereinafter set forth, the parties hereto agree as follows:
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SECTION 1. Pledge. The Pledgor hereby pledges to the Senior Notes Collateral
Agent for its benefit and for the ratable benefit of the Holders, and grants to
the Senior Notes Collateral Agent for the ratable benefit of the Holders a
continuing first priority security interest in, all of the Pledgor's right,
title and interest in the following (the "Senior Notes Pledged Collateral"):
(i) The shares of Common Stock (the "Senior Notes Pledged Shares")
from time to time identified on a certificate (a "Senior Notes Collateral
Identification Certificate") in the form attached hereto as Exhibit A, and all
products and proceeds of any of the Senior Notes Pledged Shares, including,
without limitation, all dividends, cash, options, warrants, rights, instruments,
subscriptions 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 Senior Notes Pledged Shares or any of the foregoing
(ii) Each Senior Notes Collateral Identification Certificate (i)
shall have been completed to identify the principal amount of Senior Notes to be
issued at such time (for purposes of said Senior Notes Collateral Identification
Certificate, the "Incremental Senior Notes"), (ii) shall have been completed to
identify a number of Senior Notes Pledged Shares equal to 117.647 shares of
Common Stock for each $1,000 principal amount of Incremental Senior Notes (the
"Incremental Senior Notes Pledged Shares"), as well as the appropriate
certificate(s) evidencing the Incremental Senior Notes Pledged Shares, (iii)
shall have been duly executed by the Pledgor, and (iv) shall include an
Acknowledgment of Price Note Collateral Agent duly executed by the Price Note
Collateral Agent.
The pledge and security interest made and granted in this Section 1 is
made and granted for the purpose of securing all of the Obligations under the
Indenture and the Senior Notes (including, without limitation, interest and any
other Obligations accruing after the date of any filing by the Pledgor of any
petition in bankruptcy or the commencement of any bankruptcy, insolvency or
similar proceeding with respect to the Pledgor).
The Pledgor agrees that it shall not be entitled to issue Senior
Notes at any time under the Indenture unless and until it shall have provided to
the Senior Notes Collateral Agent a Senior Notes Collateral Identification
Certificate (and the accompanying Incremental Senior Notes Pledged Shares) in
connection therewith.
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SECTION 2. Delivery of Pledged Collateral. Pledgor hereby agrees that all
certificates or instruments representing or evidencing the Senior Notes Pledged
Collateral shall be immediately delivered to and held at all times by the Senior
Notes Collateral Agent pursuant hereto. All Senior Notes Pledged Shares shall be
in suitable form for transfer by delivery, or issued in the name of Pledgor and
accompanied by instruments of transfer or assignment duly executed in blank and
undated, and in either case having attached thereto all requisite federal or
state stock transfer tax stamps, all in form and substance satisfactory to the
Senior Notes Collateral Agent.
SECTION 3. Price Notes Security Interest. The Senior Notes Collateral Agent
acknowledges the security interest and pledge of the Senior Notes Pledged
Collateral pursuant to the Price Note Pledge Agreement. Until the earlier to
occur of the termination of this Agreement or the Price Note Pledge Agreement,
the Senior Notes Collateral Agent agrees to hold the Senior Notes Pledged
Collateral for itself and for the Price Note Collateral Agent, in order to
perfect the security interest in the Senior Notes Pledged Collateral for itself
under this Agreement and for the Price Note Collateral Agent under the Price
Note Pledge Agreement. The Senior Notes Collateral Agent shall not be required
to hold, and agrees that it will not hold, the Senior Notes Pledged Collateral
for any person other than the Holders and the Price Note Collateral Agent in
order to perfect a security interest in the Senior Notes Pledged Collateral.
SECTION 4. Release.
(a) General. Subject to the receipt by the Senior Notes Collateral
Agent of a Release Certificate as described in Section 4(b) below, following the
repurchase, redemption or defeasance from time to time by the Pledgor of any or
all of the Senior Notes (and upon receipt by the Senior Notes Collateral Agent
of evidence reasonably satisfactory to it of the principal amount of Senior
Notes so repurchased, redeemed or defeased and subject to the satisfaction of
any additional applicable conditions set forth in the Indenture, including the
furnishing of a certificate of the Trustee to the Senior Notes Collateral Agent
as required by Section 10.07 of the Indenture), the Senior Notes Collateral
Agent shall release from the pledge and security interest created by Section 1
of this Agreement a number of Senior Notes Pledged Shares equal to 117.647
Senior Notes Pledged Shares for each $1,000 in principal amount of Senior Notes
subject to such repurchase, redemption or defeasance. In connection with such
release, the Senior Notes Collateral Agent also shall take such steps as the
Pledgor reasonably may request in order to evidence the termination of said
pledge and security interest in the Senior Notes Pledged Shares so released. Any
shares released pursuant to this Section 4 shall no longer be deemed to be
"Senior Notes Pledged Shares" or "Senior Notes Pledged Collateral" for purposes
of this Agreement.
(b) Release Certificate. The Senior Notes Collateral Agent shall not
release any Senior Notes Pledged Shares unless and until the Pledgor shall have
provided to the Senior Notes Collateral Agent a Release Certificate and
accompanying Acknowledgment of Price Note Collateral Agent in the form attached
hereto as Exhibit B duly executed by each of the Pledgor and the Price Note
Collateral Agent. The Release Certificate shall indicate whether all obligations
owed by Pledgor under the Price Note and the Price Note Purchase Agreement have
been satisfied in full, the amount of Senior Notes Pledged Shares to be released
and the party to whom such shares shall be delivered. Any Senior Notes Pledged
Shares required to be released pursuant to Section 4(a) of this Agreement or
upon the termination of this Agreement shall be released and delivered by the
Senior Notes Collateral Agent in accordance with the instructions contained in
an applicable Release Certificate.
(c) For purposes of this Agreement, any reference to a Release
Certificate shall be deemed to include an accompanying Acknowledgment of Price
Note Collateral Agent, unless no such acknowledgment is required as provided by
the following sentence. From and after the date the Price Notes
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Collateral Agent provides to the Senior Notes Collateral Agent a Payment
Certificate in the form attached hereto as Exhibit C, which certificate shall
indicate that all obligations of the Pledgor under the Price Note and the Price
Note Purchase Agreement have been satisfied in full, then any Release
Certificate provided by the Pledgor to the Senior Notes Collateral Agent need
not be accompanied by an Acknowledgment of Price Note Collateral Agent.
SECTION 5. Representations and Warranties. The Pledgor hereby makes all
representations and warranties applicable to the Pledgor contained in the
Indenture. The Pledgor further represents and warrants that:
(a) The Pledgor is the legal, record and beneficial owner of the
Senior Notes Pledged Collateral, free and clear of any Lien or claims of any
person other than the security interest created under this Agreement and the
Price Note Security Interest.
(b) This Agreement has been duly executed and delivered by the
Pledgor and constitutes a legal, valid and binding obligation of the Pledgor,
enforceable against the Pledgor in accordance with its terms.
(c) Upon (i) the delivery to the Senior Notes Collateral Agent of
the Senior Notes Pledged Collateral, and (ii) the filing of Uniform Commercial
Code (the "UCC") financing statements in the Secretary of State's office for the
State of California referencing Pledgor as debtor thereunder, the Senior Notes
Collateral Agent (as agent for the Holders) as the secured party thereunder, and
the Senior Notes Pledged Collateral as the collateral thereunder, the pledge of
the Senior Notes Pledged Collateral pursuant to this Agreement shall create a
valid and perfected security interest in the Senior Notes Pledged Collateral,
securing the payment of the Obligations for the benefit of the Senior Notes
Collateral Agent and the Holders, and enforceable as such against all creditors
of the Pledgor and any persons purporting to purchase any of the Senior Notes
Pledged Collateral from the Pledgor.
(d) Upon (i) the delivery to the Senior Notes Collateral Agent of
the Senior Notes Pledged Collateral, the delivery to the Debentures Collateral
Agent (as defined in the Price Note Pledge Agreement) of the Debentures Pledged
Collateral (as defined in the Price Note Pledge Agreement) and the delivery to
the Price Note Collateral Agent of the Price Note Pledged Collateral (as defined
in the Price Note Pledge Agreement) other than the Debentures Pledged Collateral
and the Senior Notes Pledged Collateral, and (ii) the filing of UCC financing
statements in the Secretary of State's office for the State of California
referencing Pledgor as debtor thereunder, the Price Note Collateral Agent (as
agent for the holders of the Price Note) as the secured party thereunder, and
the Price Note Pledged Collateral as the collateral thereunder, the pledge of
the Price Note Pledged Collateral (which includes the Debentures Pledged
Collateral and the Senior Notes Pledged Collateral) pursuant to the Price Note
Pledge Agreement shall create a valid and perfected security interest in the
Senior Notes Pledged Collateral, securing the payment of the obligations of the
Pledgor under the Price Note and the Price Note Purchase Agreement for the
benefit of the Price Note Collateral Agent and the holders of the Price Note,
and enforceable as such against all creditors of the Pledgor and any persons
purporting to purchase any of the Price Note Pledged Collateral from the Pledgor
SECTION 6. Further Assurance. Pledgor will at all times cause the security
interests granted pursuant to this Agreement to constitute valid perfected
security interests in the Senior Notes Pledged Collateral, enforceable as such
against all creditors of Pledgor and (except as otherwise specifically provided
herein) any persons purporting to purchase any Senior Notes Pledged Collateral
from Pledgor. The Pledgor will, promptly upon request by the Senior Notes
Collateral Agent, execute and deliver or cause to be executed
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and delivered, or use its best efforts to procure, all substitute stock
certificates, stock powers, proxies, tax stamps, assignments, instruments and
other documents, all in form and substance satisfactory to the Senior Notes
Collateral Agent, deliver any instruments to the Senior Notes Collateral Agent
and take any other actions that are necessary or, in the reasonable opinion of
the Senior Notes Collateral Agent, desirable to perfect, continue the perfection
of, or protect the first priority of the Senior Notes Collateral Agent's
security interest in, the Senior Notes Pledged Collateral, to protect the Senior
Notes Pledged Collateral against the rights, claims, or interests of third
persons, to enable the Senior Notes Collateral Agent to exercise or enforce its
rights and remedies hereunder, or otherwise to effect the purposes of this
Agreement. The Pledgor also hereby authorizes the Senior Notes Collateral Agent
to file any financing or continuation statements with respect to the Senior
Notes Pledged Collateral without the signature of the Pledgor to the extent
permitted by applicable law. The Pledgor will pay all costs incurred in
connection with any of the foregoing.
SECTION 7. Voting Rights; Dividends; Etc.
(a) So long as no Event of Default shall have occurred and be
continuing, the Pledgor shall be entitled to exercise any and all voting and
other consensual rights pertaining to the Senior Notes Pledged Shares or any
part thereof for any purpose not inconsistent with the terms of this Agreement
or the Indenture; provided, however, that the Pledgor shall not exercise or
shall refrain from exercising any such right if such action would have a
material adverse effect on the value of the Senior Notes Pledged Collateral or
any part thereof or be inconsistent with or violate any provisions of this
Agreement or the Indenture.
(b) So long as no Event of Default shall have occurred and be
continuing, and subject to the other terms and conditions of the Indenture, the
Pledgor shall be entitled to receive, and to utilize (subject to the provisions
of the Indenture) free and clear of the Lien of this Agreement, all cash
dividends paid from time to time in respect of the Senior Notes Pledged Shares
(other than the dividends described in Section 7(c)(ii) below).
(c) Any and all (i) dividends, other distributions, interest and
principal payments paid or payable in the form of instruments and/or other
property (other than cash dividends permitted under Section 7(b) hereof)
received, receivable or otherwise distributed in respect of, or in exchange for,
any Senior Notes Pledged Collateral, (ii) dividends and other distributions paid
or payable in cash in respect of any Senior Notes Pledged Shares 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 (iii) cash paid,
payable or otherwise distributed in redemption of, or in exchange for, any
Senior Notes Pledged Collateral, shall in each case be forthwith delivered to
the Senior Notes Collateral Agent to hold as Senior Notes Pledged Collateral and
shall, if received by the Pledgor, be received in trust for the benefit of the
Senior Notes Collateral Agent and the Holders, be segregated from the other
property and funds of the Pledgor and be forthwith delivered to the Senior Notes
Collateral Agent as Senior Notes Pledged Collateral in the same form as so
received (with any necessary endorsements).
(d) The Senior Notes Collateral Agent shall execute and deliver (or
cause to be executed and delivered) to the Pledgor all such proxies and other
instruments as the Pledgor may reasonably request for the purpose of enabling
the Pledgor to exercise the voting and other rights that it is entitled to
exercise pursuant to Sections 7(a) and 7(b) above.
(e) Upon the occurrence and during the continuance of an Event of
Default, (i) all rights of the Pledgor to exercise the voting and other
consensual rights that it would otherwise be entitled to
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exercise pursuant to Section 7(a) shall cease, and all such rights shall
thereupon become vested in the Senior Notes Collateral Agent, which, to the
extent permitted by law, shall thereupon have the sole right to exercise such
voting and other consensual rights, and (ii) all dividends payable in respect of
the Senior Notes Pledged Collateral shall be paid to the Senior Notes Collateral
Agent and the Pledgor's right to receive such cash payments pursuant to Sections
7(b) hereof shall immediately cease.
(f) Upon the occurrence and during the continuance of an Event of
Default, the Pledgor shall execute and deliver (or cause to be executed and
delivered) to the Senior Notes Collateral Agent all such proxies, dividend and
interest payment orders and other instruments as the Senior Notes Collateral
Agent may reasonably request for the purpose of enabling the Senior Notes
Collateral Agent to exercise the voting and other rights that it is entitled to
exercise pursuant to Section 7(e) above.
(g) All payments of interest, principal or premium and all dividends
and other distributions that are received by the Pledgor contrary to the
provisions of this Section 7 shall be received in trust for the benefit of the
Senior Notes Collateral Agent and the Holders, shall be segregated from the
other property or funds of the Pledgor and shall be forthwith delivered to the
Senior Notes Collateral Agent as Senior Notes Pledged Collateral in the same
form as so received (with any necessary endorsements).
SECTION 8. Covenants. The Pledgor hereby covenants and agrees with the Senior
Notes Collateral Agent and the Holders that it will comply with all of the
obligations, requirements and restrictions applicable to the Pledgor contained
in the Indenture. The Pledgor further covenants and agrees, from and after the
date of this Agreement and until the Obligations have been paid in full, that it
will not (i) sell, assign, transfer, convey or otherwise dispose of, or grant
any option or warrant with respect to, any of the Senior Notes Pledged
Collateral without the prior written consent of the Senior Notes Collateral
Agent, (ii) create or permit to exist any Lien upon or with respect to any of
the Senior Notes Pledged Collateral, other than the security interest granted
under this Agreement and the Price Note Security Interest, and Pledgor at all
times will be the sole beneficial owner of the Senior Notes Pledged Collateral,
(iii) other than the Price Note Pledge Agreement, enter into any agreement or
understanding that purports to or that may restrict or inhibit the Senior Notes
Collateral Agent's rights or remedies hereunder, including, without limitation,
the Senior Notes Collateral Agent's right to sell or otherwise dispose of the
Senior Notes Pledged Collateral, or (iv) fail to pay or discharge any tax,
assessment or levy of any nature not later than five days prior to the date of
any proposed sale under any judgement, writ or warrant of attachment with regard
to the Senior Notes Pledged Collateral.
SECTION 9. Power of Attorney. In addition to all of the powers granted to the
Senior Notes Collateral Agent pursuant to Section 10.06 of the Indenture, the
Pledgor hereby appoints and constitutes the Senior Notes Collateral Agent as the
Pledgor's attorney-in-fact to exercise all of the following powers upon and at
any time after the occurrence of an Event of Default: (i) collection of proceeds
of any Senior Notes Pledged Collateral; (ii) conveyance of any item of Senior
Notes Pledged Collateral to any purchaser thereof; (iii) giving of any notices
or recording of any Liens under Section 6 hereof; (iv) making of any payments or
taking any acts under Section 10 hereof and (v) paying or discharging taxes or
Liens levied or placed upon or threatened against the Senior Notes Pledged
Collateral, the legality or validity thereof and the amounts necessary to
discharge the same to be determined by the Senior Notes Collateral Agent in its
sole discretion, and such payments made by the Senior Notes Collateral Agent to
become the obligations of the Pledgor to the Senior Notes Collateral Agent, due
and payable immediately without demand. The Senior Notes Collateral Agent's
authority hereunder shall include, without limitation, the authority to endorse
and negotiate, for the Senior Notes Collateral Agent's own account, any checks
or instruments in the name of the Pledgor, execute and give receipt for any
certificate of ownership or any document, transfer title to any item of Senior
Notes Pledged Collateral, sign the Pledgor's name on all financing statements or
any other
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documents deemed necessary or appropriate to preserve, protect or perfect the
security interest in the Senior Notes Pledged Collateral and to file the same,
prepare, file and sign the Pledgor's name on any notice of Lien, and prepare,
file and sign the Pledgor's name on a proof of claim in bankruptcy or similar
document against any customer of the Pledgor, and to take any other actions
arising from or incident to the powers granted to the Senior Notes Collateral
Agent in this Agreement. This power of attorney is coupled with an interest and
is irrevocable by the Pledgor.
SECTION 10. Collateral Agent May Perform. If the Pledgor fails to perform any
agreement contained herein, the Senior Notes Collateral Agent may itself
perform, or cause performance of, such agreement, and the reasonable expenses of
the Senior Notes Collateral Agent incurred in connection therewith shall be
payable by the Pledgor under Section 15 hereof.
SECTION 11. No Assumption of Duties; Reasonable Care. The rights and powers
granted to the Senior Notes Collateral Agent hereunder are being granted in
order to preserve and protect the Senior Notes Collateral Agent's and the
Holders' security interest in and to the Senior Notes Pledged Collateral granted
hereby and shall not be interpreted to, and shall not, impose any duties on the
Senior Notes Collateral Agent in connection therewith. Further, the rights and
powers granted to the Senior Notes Collateral Agent hereunder are being granted
in order to permit the Senior Notes Collateral Agent to hold the Senior Notes
Pledged Collateral for the Price Note Collateral Agent, in order to perfect the
security interest in the Senior Notes Pledged Collateral for the Price Note
Collateral Agent under the Price Note Pledge Agreement. The Senior Notes
Collateral Agent shall be deemed to have exercised reasonable care in the
custody and preservation of the Senior Notes Pledged Collateral in its
possession if the Senior Notes Pledged Collateral is accorded treatment
substantially equal to that which the Senior Notes Collateral Agent accords its
own property, it being understood that the Senior Notes Collateral Agent shall
not have any responsibility for (i) ascertaining or taking action with respect
to calls, conversions, exchanges, maturities, tenders or other matters relative
to any Senior Notes Pledged Collateral, whether or not the Senior Notes
Collateral Agent has or is deemed to have knowledge of such matters, or (ii)
taking any necessary steps to preserve rights against any parties with respect
to any Senior Notes Pledged Collateral.
SECTION 12. Subsequent Changes Affecting Collateral. The Pledgor represents to
the Senior Notes Collateral Agent and the Holders that the Pledgor has made its
own arrangements for keeping informed of changes or potential changes affecting
the Senior Notes Pledged Collateral (including, but not limited to, rights to
convert, rights to subscribe, payment of dividends, payments of interest and/or
principal, reorganization or other exchanges, tender offers and voting rights),
and the Pledgor agrees that the Senior Notes Collateral Agent and the Holders
shall have no responsibility or liability for informing the Pledgor of any such
changes or potential changes or for taking any action or omitting to take any
action with respect thereto. The Pledgor covenants that it will not, without the
prior written consent of the Senior Notes Collateral Agent, vote to enable, or
take any other action to permit, the Issuer to sell or otherwise dispose of, or
grant any option with respect to, any of the Senior Notes Pledged Collateral or
create or permit to exist any Lien upon or with respect to any of the Senior
Notes Pledged Collateral (except that the Pledgor may create and permit to exist
the Price Note Security Interest in accordance with Section 3 of this
Agreement). The Pledgor will defend the right, title and interest of the Senior
Notes Collateral Agent and the Holders in and to the Senior Notes Pledged
Collateral against the claims and demands of all persons.
SECTION 13. Remedies Upon Default. If any Event of Default shall have occurred
and be continuing, the Senior Notes Collateral Agent and the Holders shall have,
in addition to all other rights given by law or by this Agreement or the
Indenture, all of the rights and remedies with respect to the Senior Notes
Pledged Collateral of a secured party under the UCC as in effect in the State of
California at that time. The Senior Notes Collateral Agent may, without notice
and at its option, transfer or register, and the Pledgor shall
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register or cause to be registered upon request therefor by the Senior Notes
Collateral Agent, the Senior Notes Pledged Collateral or any part thereof on the
books of the Issuer into the name of the Senior Notes Collateral Agent or the
Senior Notes Collateral Agent's nominee(s), with or without any indication that
such Senior Notes Pledged Collateral is subject to the security interest
hereunder. In addition, (i) with respect to any Senior Notes Pledged Collateral
that shall then be in or shall thereafter come into the possession or custody of
the Senior Notes Collateral Agent, the Senior Notes Collateral Agent may sell or
cause the same to be sold at any broker's board or at public or private sale, in
one or more sales or lots, at such price or prices as the Senior Notes
Collateral Agent may deem best, for cash or on credit or for future delivery,
without assumption of any credit risk, and (ii) with respect to any Senior Notes
Pledged Collateral that shall be in or shall thereafter come into the possession
or custody of the Price Note Collateral Agent, the Senior Notes Collateral Agent
may instruct and otherwise work with the Price Note Collateral Agent to sell or
cause the same to be sold at any broker's board or at public or private sale, in
one or more sales or lots, at such price or prices as the Senior Notes
Collateral Agent may deem best, for cash or on credit or for future delivery,
without assumption of any credit risk. The purchaser of any or all Senior Notes
Pledged Collateral so sold shall thereafter hold the same absolutely, free from
any claim, encumbrance or right of any kind whatsoever (except that with respect
to any such collateral consisting of Price Note Pledged Collateral, the Senior
Notes Collateral Agent may instruct or otherwise work with the Price Note
Collateral Agent to sell such collateral subject to Liens in favor of the Senior
Notes Collateral Agent). Unless any of the Senior Notes Pledged Collateral
threatens to decline speedily in value or is or becomes of a type sold on a
recognized market, the Senior Notes Collateral Agent will give Pledgor
reasonable notice of the time and place of any public sale thereof, or of the
time after which any private sale or other intended disposition is to be made.
Any sale of the Senior Notes Pledged Collateral conducted in conformity with
reasonable commercial practices of banks, insurance companies, commercial
finance companies, or other financial institutions disposing of property similar
to the Senior Notes Pledged Collateral shall be deemed to be commercially
reasonable. Any requirements of reasonable notice shall be met if such notice is
mailed to the Pledgor as provided below in Section 19.1, at least ten days
before the time of the sale or disposition. Any other requirement of notice,
demand or advertisement for sale is, to the extent permitted by law, waived. The
Senior Notes Collateral Agent or any Holder may, in its own name or in the name
of a designee or nominee, buy any of the Senior Notes Pledged Collateral at any
public sale and, if permitted by applicable law, at any private sale. All
expenses (including court costs and reasonable attorneys' fees and
disbursements) of, or incident to, the enforcement of any of the provisions
hereof shall be recoverable from the proceeds of the sale or other disposition
of the Senior Notes Pledged Collateral.
SECTION 14. Irrevocable Authorization and Instruction to the Issuer. The Pledgor
hereby authorizes and instructs the Issuer to comply with any instruction
received by the Issuer from the Senior Notes Collateral Agent that (i) states
that an Event of Default has occurred and (ii) is otherwise in accordance with
the terms of this Agreement, without any other or further instructions from the
Pledgor, and the Pledgor agrees that the Issuer shall be fully protected in so
complying.
SECTION 15. Fees and Expenses. The Pledgor will upon demand pay to the Senior
Notes Collateral Agent the amount of any and all reasonable fees and expenses
(including, without limitation, the reasonable fees and disbursements of its
counsel, of any investment banking firm, business broker or other selling agent
and of any other experts and agents retained by the Senior Notes Collateral
Agent) that the Senior Notes Collateral Agent may incur in connection with (i)
the administration of this Agreement, (ii) the custody or preservation of, or
the sale of, collection from, or other realization upon, any of the Senior Notes
Pledged Collateral, (iii) the exercise or enforcement of any of the rights of
the Senior Notes Collateral Agent and the Holders hereunder or (iv) the failure
by the Pledgor to perform or observe any of the provisions hereof.
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SECTION 16. Interest Absolute. All rights of the Senior Notes Collateral Agent
and the Holders and the security interests created hereunder, and all
obligations of the Pledgor hereunder, shall be absolute and unconditional
irrespective of:
(a) any lack of validity or enforceability of the Indenture or any
other agreement or instrument relating thereto;
(b) any change in the time, manner or place of payment of, or in any
other term of, all or any of the Obligations, or any other amendment or waiver
of or any consent to any departure from the Indenture;
(c) any exchange, surrender, release or non-perfection of any other
collateral, or any release or amendment or waiver of or consent to departure
from any guarantee, for all or any of the Obligations; or
(d) any other circumstance that might otherwise constitute a defense
available to, or a discharge of, the Pledgor in respect of the Obligations or of
this Agreement.
SECTION 17. Application of Proceeds. Upon the occurrence and during the
continuance of an Event of Default, the proceeds of any sale of, or other
realization upon, all or any part of the Senior Notes Pledged Collateral and any
cash held shall be applied by the Senior Notes Collateral Agent in the following
order of priorities:
first, to payment of the expenses of such sale or other realization,
including reasonable compensation to agents and counsel for the Senior Notes
Collateral Agent, and all expenses, liabilities and advances incurred or made by
the Senior Notes Collateral Agent in connection therewith, and any other
unreimbursed fees and expenses for which the Senior Notes Collateral Agent is to
be reimbursed pursuant to Section 15 hereof;
second, to the ratable payment (based on the principal amount of Senior
Notes deemed by the Indenture to be outstanding at the time of distribution) of
accrued but unpaid interest on such outstanding Senior Notes;
third, to the ratable payment (based on the principal amount of Senior
Notes deemed by the Indenture to be outstanding at the time of distribution) of
unpaid principal of such outstanding Senior Notes;
fourth, to the ratable payment (based on the principal amount of Senior
Notes deemed by the Indenture to be outstanding at the time of distribution) of
all other Obligations, until all Obligations shall have been paid in full; and
fifth, to the payment to all persons who may be entitled by law thereto
(including, without limitation, the Price Note Collateral Agent until such time
as the Senior Notes Collateral Agent has received written notice from the Price
Note Collateral Agent that the obligations of the Pledgor under the Price Note
and the Price Note Purchase Agreement have been satisfied in full), or as a
court of competent jurisdiction may direct, until all obligations to such
persons shall have been paid in full; and
finally, to payment to the Pledgor or its successors or assigns, or as
a court of competent jurisdiction may direct, of any surplus then remaining from
such proceeds.
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SECTION 18. Uncertificated Securities. Notwithstanding anything to the contrary
contained herein, if any Senior Notes Pledged Shares (whether now owned or
hereafter acquired) are uncertificated Senior Notes Pledged Shares, the Pledgor
shall promptly notify the Senior Notes Collateral Agent, and shall promptly take
all actions required to perfect the security interest of the Senior Notes
Collateral Agent under applicable law. The Pledgor further agrees to take such
actions as the Senior Notes Collateral Agent deems necessary or desirable to
effect the foregoing and to permit the Senior Notes Collateral Agent to exercise
any of its rights and remedies hereunder, and agrees to provide an Opinion of
Counsel reasonably satisfactory to the Senior Notes Collateral Agent with
respect to any such pledge of uncertificated Senior Notes Pledged Shares
promptly upon request of the Senior Notes Collateral Agent.
SECTION 19. Miscellaneous Provisions.
Section 19.1 Notices. All notices, approvals, consents or other
communications required or desired to be given hereunder shall be in the form
and manner as set forth in Section 11.02 of the Indenture, and delivered to the
addresses set forth in such Section, or, in the case of the Senior Notes
Collateral Agent, to: Norwest Bank Minnesota, National Association, Sixth &
Marquette, XXX-X0000-000, Xxxxxxxxxxx, Xxxxxxxxx, Attention: Corporate Trust
Services, Telecopy No. (000) 000-0000.
Section 19.2 Certificate and Opinion as to Conditions Precedent. Upon
any request or application by the Pledgor to the Senior Notes Collateral Agent
to take any action or omit to take any action under this Agreement, the Pledgor
shall deliver to the Senior Notes Collateral Agent an Officer's Certificate
and/or an Opinion of Counsel in accordance with the requirements of Section
11.04 of the Indenture.
Section 19.3 No Adverse Interpretation of Other Agreements. This
Agreement may not be used to interpret another pledge, security or debt
agreement of the Pledgor, the Issuer or any subsidiary thereof. No such pledge,
security or debt agreement may be used to interpret this Agreement.
Section 19.4 Severability. The provisions of this Agreement are
severable, and if any clause or provision shall be held invalid or unenforceable
in whole or in part in any jurisdiction, then such invalidity or
unenforceability shall affect in that jurisdiction only such clause or
provision, or part thereof, and shall not in any manner affect such clause or
provision in any other jurisdiction or any other clause or provision of this
Agreement in any jurisdiction.
Section 19.5 No Recourse Against Others. No director, officer,
employee, stockholder or affiliate, as such, of the Pledgor or the Issuer shall
have any liability for any obligations of the Pledgor under this Agreement or
for any claim based on, in respect of or by reason of such obligations or their
creation. Each Holder, by accepting a Senior Note, waives and releases all such
liability. The waiver and release are part of the consideration for the issue of
the Senior Notes.
Section 19.6 Headings. The headings of the Sections of this Agreement
have been inserted for convenience of reference only, are not to be considered a
part hereof and shall in no way modify or restrict any of the terms or
provisions hereof.
Section 19.7 Counterpart Originals. This Agreement may be signed in two
or more counterparts. Each signed copy shall be an original, but all of them
together represent one and the same agreement. Each counterpart may be executed
and delivered by telecopy, if such delivery is promptly followed by the original
manually signed copy sent by overnight courier.
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Section 19.8 Benefits of Agreement. Nothing in this Agreement, express
or implied, shall give to any person, other than the parties hereto and their
successors hereunder, and the Holders, any benefit or any legal or equitable
right, remedy or claim under this Agreement. The parties hereto acknowledge that
the Price Note Collateral Agent is entitled to rely on any Senior Notes
Collateral Identification Certificate which may be delivered under this
Agreement.
Section 19.9 Amendments, Waivers and Consents. Any amendment or waiver
of any provision of this Agreement and any consent to any departure by the
Pledgor from any provision of this Agreement shall be effective only if made or
given in compliance with all of the terms and provisions of the Indenture
necessary for amendments or waivers of, or consents to any departure by the
Pledgor from any provision of the Indenture, as applicable; provided, however,
that no amendment or waiver of any provision of this Agreement may adversely
affect the rights of the Price Note Collateral Agent hereunder or under the
Acknowledgment of Senior Notes Collateral Agent included within any Senior Notes
Collateral Identification Certificate delivered pursuant to this Agreement
without the prior written consent of the Price Note Collateral Agent. Neither
the Senior Notes Collateral Agent nor any Holder shall be deemed, by any act,
delay, indulgence, omission or otherwise, to have waived any right or remedy
hereunder or to have acquiesced in any Default or Event of Default or in any
breach of any of the terms and conditions hereof. Failure of the Senior Notes
Collateral Agent or any Holder to exercise, or delay in exercising, any right,
power or privilege hereunder shall not operate as a waiver thereof. No single or
partial exercise of any right, power or privilege hereunder shall preclude any
other or further exercise thereof or the exercise of any other right, power or
privilege. A waiver by the Senior Notes Collateral Agent or any Holder of any
right or remedy hereunder on any one occasion shall not be construed as a bar to
any right or remedy that the Senior Notes Collateral Agent or such Holder would
otherwise have on any future occasion. The rights and remedies herein provided
are cumulative, may be exercised singly or concurrently and are not exclusive of
any rights or remedies provided by law.
Section 19.10 Interpretation of Agreement. Time is of the essence in
each provision of this Agreement of which time is an element. All terms not
defined herein or in the Indenture shall have the meaning set forth in the
applicable UCC, except where the context otherwise requires. To the extent a
term or provision of this Agreement conflicts with the Indenture and is not
dealt with herein with more specificity, the Indenture shall control with
respect to the subject matter of such term or provision. Acceptance of or
acquiescence in a course of performance rendered under this Agreement shall not
be relevant to determine the meaning of this Agreement even though the accepting
or acquiescing party had knowledge of the nature of the performance and
opportunity for objection.
Section 19.11 Continuing Security Interest; Transfer of Senior Notes.
This Agreement shall create a continuing security interest in the Senior Notes
Pledged Collateral and shall (i) remain in full force and effect until the
payment in full of all the Obligations and all the fees and expenses owing to
the Senior Notes Collateral Agent and the fulfillment of the conditions set
forth in Section 19.17, (ii) be binding upon the Pledgor, its successors and
assigns, and (iii) inure, together with the rights and remedies of the Senior
Notes Collateral Agent hereunder, to the benefit of the Senior Notes Collateral
Agent, the Holders and their respective successors, transferees and assigns.
Section 19.12 Reinstatement. This Agreement shall continue to be
effective or be reinstated if at any time any amount received by the Senior
Notes Collateral Agent or any Holder in respect of the Obligations is rescinded
or must otherwise be restored or returned by the Senior Notes Collateral Agent
or any Holder upon the insolvency, bankruptcy, dissolution, liquidation or
reorganization of the Pledgor or upon the appointment of any receiver,
intervenor, conservator, trustee or similar official for the Pledgor or any
substantial part of its assets, or otherwise, all as though such payments had
not been made.
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Section 19.13 Survival of Provisions. All representations, warranties
and covenants of the Pledgor contained herein shall survive the execution and
delivery of this Agreement, and shall terminate only upon the full and final
payment and performance by the Pledgor of the Obligations and the fulfillment of
the conditions set forth in Section 19.17.
Section 19.14 Waivers. The Pledgor waives presentment and demand for
payment of any of the Obligations, protest and notice of dishonor or default
with respect to any of the Obligations, and all other notices to which the
Pledgor might otherwise be entitled, except as otherwise expressly provided
herein or in the Indenture.
Section 19.15 Authority of the Collateral Agent.
(a) The Senior Notes Collateral Agent shall have and be entitled to
exercise all powers hereunder that are specifically granted to the Senior Notes
Collateral Agent by the terms hereof, together with such powers as are
reasonably incident thereto. The Senior Notes Collateral Agent may perform any
of its duties hereunder or in connection with the Senior Notes Pledged
Collateral by or through agents or employees and shall be entitled to retain
counsel and to act in reliance upon the advice of counsel concerning all such
matters. Neither the Senior Notes Collateral Agent nor any director, officer,
employee, attorney or agent of the Senior Notes Collateral Agent shall be
responsible for the validity, effectiveness or sufficiency hereof or of any
document or security furnished pursuant hereto. The Senior Notes Collateral
Agent and its directors, officers, employees, attorneys and agents shall be
entitled to rely on any communication, instrument or document believed by it or
them to be genuine and correct and to have been signed or sent by the proper
person or persons. The Pledgor agrees to indemnify and hold harmless the Senior
Notes Collateral Agent, the Holders and any other person from and against any
and all costs, expenses (including the reasonable fees and disbursements of
counsel (including, the allocated costs of inside counsel)), claims and
liabilities incurred by the Senior Notes Collateral Agent, the Holders or such
person hereunder, unless such claim or liability shall be due to willful
misconduct or gross negligence on the part of the Senior Notes Collateral Agent,
the Holders or such person.
(b) The Pledgor acknowledges that the rights and responsibilities of
the Senior Notes Collateral Agent under this Agreement with respect to any
action taken by the Senior Notes Collateral Agent or the exercise or
non-exercise by the Senior Notes Collateral Agent of any option, right, request,
judgment or other right or remedy provided for herein or resulting or arising
out of this Agreement shall, as between the Senior Notes Collateral Agent and
the Holders, be governed by the Indenture and by such other agreements with
respect thereto as may exist from time to time among them, but, as between the
Senior Notes Collateral Agent and the Pledgor, the Senior Notes Collateral Agent
shall be conclusively presumed to be acting as agent for the Holders with full
and valid authority so to act or refrain from acting, and the Pledgor shall not
be obligated or entitled to make any inquiry respecting such authority.
Section 19.16 Resignation or Removal of the Collateral Agent. Until
such time as the Obligations shall have been paid in full, the Senior Notes
Collateral Agent may at any time, by giving written notice to the Pledgor and
Holders, resign and be discharged of the responsibilities hereby created, such
resignation to become effective upon (i) the appointment of a successor Senior
Notes Collateral Agent and (ii) the acceptance of such appointment by such
successor Senior Notes Collateral Agent. As promptly as practicable after the
giving of any such notice, the Holders shall appoint a successor Senior Notes
Collateral Agent, which successor Senior Notes Collateral Agent shall be
reasonably acceptable to the Pledgor. If no successor Senior Notes Collateral
Agent shall be appointed and shall have accepted such appointment within 90 days
after the Senior Notes Collateral Agent gives the aforesaid notice of
resignation, the Senior Notes Collateral Agent may apply to any court of
competent jurisdiction to appoint
B-12
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a successor Senior Notes Collateral Agent to act until such time, if any, as a
successor shall have been appointed as provided in this Section 19.16. Any
successor so appointed by such court shall immediately and without further act
be superseded by any successor Senior Notes Collateral Agent appointed by the
Holders, as provided in this Section 19.16. Simultaneously with its replacement
as Senior Notes Collateral Agent hereunder, the Senior Notes Collateral Agent so
replaced shall deliver to its successor all documents, instruments, certificates
and other items of whatever kind (including, without limitation, the
certificates and instruments evidencing the Senior Notes Pledged Collateral and
all instruments of transfer or assignment) held by it pursuant to the terms
hereof. The Senior Notes Collateral Agent that has resigned shall be entitled to
fees, costs and expenses to the extent incurred or arising, or relating to
events occurring, before its resignation or removal.
Section 19.17 Release; Termination of Agreement. Subject to the
provisions of Section 19.12 hereof and the penultimate sentence of this Section
19.17, this Agreement shall terminate (i) upon full and final payment and
performance of the Obligations (and upon receipt by the Senior Notes Collateral
Agent of the Pledgor's written certification that all such Obligations have been
satisfied, the Trustee's written certification as required by Section 10.05 of
the Indenture, and such other evidence reasonably satisfactory to the Senior
Notes Collateral Agent that such Obligations have been satisfied, and the
satisfaction of any additional applicable conditions set forth in the Indenture)
and payment in full of all fees and expenses owing by the Pledgor to the Senior
Notes Collateral Agent or (ii) on the day after the first anniversary of the
defeasance of all of the Obligations pursuant to Article 8 of the Indenture
(other than those surviving Obligations specified therein). At such time, the
Senior Notes Collateral Agent shall upon receipt of a Release Certificate as
provided for by Section 4(b) above, reassign and redeliver all of the Senior
Notes Pledged Collateral hereunder that has not been sold, disposed of, retained
or applied by the Senior Notes Collateral Agent in accordance with the terms of
such Release Certificate. Notwithstanding anything in this Agreement to the
contrary, this Agreement shall not terminate unless and until a Release
Certificate is provided to the Senior Notes Collateral Agent as provided above.
Such reassignment and redelivery shall be without warranty by or recourse to the
Senior Notes Collateral Agent, except as to the absence of any prior assignments
by the Senior Notes Collateral Agent of its interest in the Senior Notes Pledged
Collateral, and shall be at the expense of the Pledgor.
Section 19.18 Final Expression. This Agreement, together with any other
agreement executed in connection herewith, is intended by the parties as a final
expression of their Agreement and is intended as a complete and exclusive
statement of the terms and conditions thereof.
Section 19.19 Governing Law; Submission to Jurisdiction; Waiver of Jury
Trial; Waiver of Damages.
(i) THIS AGREEMENT SHALL BE GOVERNED BY AND INTERPRETED UNDER
THE LAWS OF THE STATE OF CALIFORNIA, AND ANY DISPUTE ARISING OUT OF, CONNECTED
WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED BETWEEN THE
PLEDGOR, THE SENIOR NOTES COLLATERAL AGENT AND THE HOLDERS IN CONNECTION WITH
THIS AGREEMENT, AND WHETHER ARISING IN CONTRACT, TORT, EQUITY OR OTHERWISE,
SHALL BE RESOLVED IN ACCORDANCE WITH THE INTERNAL LAWS (AS OPPOSED TO THE
CONFLICTS OF LAWS PROVISIONS) AND DECISIONS OF THE STATE OF CALIFORNIA.
(ii) EXCEPT AS PROVIDED IN THE NEXT PARAGRAPH AND IN PARAGRAPH
(vi) BELOW, THE PLEDGOR, THE SENIOR NOTES COLLATERAL AGENT AND THE HOLDERS AGREE
THAT ALL DISPUTES BETWEEN OR AMONG THEM ARISING OUT
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OF, CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED
BETWEEN THEM IN CONNECTION WITH THIS AGREEMENT, AND WHETHER ARISING IN CONTRACT,
TORT, EQUITY, OR OTHERWISE, SHALL BE RESOLVED ONLY BY STATE OR FEDERAL COURTS
LOCATED IN NEW YORK, NEW YORK, BUT THE PLEDGOR, THE SENIOR NOTES COLLATERAL
AGENT AND THE HOLDERS ACKNOWLEDGE THAT ANY APPEALS FROM THOSE COURTS MAY HAVE TO
BE HEARD BY A COURT LOCATED OUTSIDE OF NEW YORK, NEW YORK. THE PLEDGOR WAIVES IN
ALL DISPUTES ANY OBJECTION THAT IT MAY HAVE TO THE LOCATION OF THE COURT
CONSIDERING THE DISPUTE INCLUDING, WITHOUT LIMITATION, ANY OBJECTION TO THE
LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS.
(iii) THE PLEDGOR AGREES THAT THE SENIOR NOTES COLLATERAL AGENT
SHALL, IN ITS OWN NAME OR IN THE NAME AND ON BEHALF OF ANY HOLDER, HAVE THE
RIGHT, TO THE EXTENT PERMITTED BY APPLICABLE LAW, TO PROCEED AGAINST THE SENIOR
NOTES PLEDGED COLLATERAL IN A COURT IN ANY LOCATION REASONABLY SELECTED IN GOOD
FAITH TO ENABLE THE SENIOR NOTES COLLATERAL AGENT TO REALIZE ON SUCH PROPERTY,
OR TO ENFORCE A JUDGMENT OR OTHER COURT ORDER ENTERED IN FAVOR OF THE SENIOR
NOTES COLLATERAL AGENT. THE PLEDGOR AGREES THAT IT WILL NOT ASSERT ANY
PERMISSIVE COUNTERCLAIMS IN ANY PROCEEDING BROUGHT BY THE SENIOR NOTES
COLLATERAL AGENT TO REALIZE ON SUCH PROPERTY, OR TO ENFORCE A JUDGMENT OR OTHER
COURT ORDER IN FAVOR OF THE SENIOR NOTES COLLATERAL AGENT. THE PLEDGOR WAIVES
ANY OBJECTION THAT IT MAY HAVE TO THE LOCATION OF THE COURT IN WHICH THE SENIOR
NOTES COLLATERAL AGENT HAS COMMENCED A PROCEEDING DESCRIBED IN THIS PARAGRAPH
INCLUDING, WITHOUT LIMITATION, ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON
THE GROUNDS OF FORUM NON CONVENIENS.
(iv) THE PLEDGOR, THE SENIOR NOTES COLLATERAL AGENT AND THE
HOLDERS EACH WAIVE ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY
DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT, OR OTHERWISE ARISING OUT OF,
CONNECTED WITH, RELATED TO OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED BETWEEN
THEM IN CONNECTION WITH THIS AGREEMENT. INSTEAD, ANY DISPUTES RESOLVED IN COURT
WILL BE RESOLVED IN A BENCH TRIAL WITHOUT A JURY.
(v) THE PLEDGOR HEREBY IRREVOCABLY CONSENTS TO THE SERVICE OF
PROCESS 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 THE PLEDGOR AT ITS ADDRESS SET FORTH IN SECTION 11.02 OF THE INDENTURE, SUCH
SERVICE TO BECOME EFFECTIVE FIVE (5) BUSINESS DAYS AFTER SUCH MAILING.
(vi) NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE SENIOR NOTES
COLLATERAL AGENT OR ANY HOLDER TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY
LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST THE PLEDGOR IN
ANY OTHER JURISDICTION.
(vii) THE PLEDGOR HEREBY AGREES THAT NEITHER THE SENIOR NOTES
COLLATERAL AGENT NOR ANY HOLDER SHALL HAVE ANY LIABILITY TO
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THE PLEDGOR (WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) FOR LOSSES
SUFFERED BY THE PLEDGOR IN CONNECTION WITH, ARISING OUT OF, OR IN ANY WAY
RELATED TO, THE TRANSACTIONS CONTEMPLATED AND THE RELATIONSHIP ESTABLISHED BY
THIS AGREEMENT, OR ANY ACT, OMISSION OR EVENT OCCURRING IN CONNECTION THEREWITH,
UNLESS IT IS DETERMINED BY A FINAL AND NONAPPEALABLE JUDGMENT OF A COURT THAT IS
BINDING ON THE SENIOR NOTES COLLATERAL AGENT OR SUCH HOLDER, AS THE CASE MAY BE,
THAT SUCH LOSSES WERE THE RESULT OF ACTS OR OMISSIONS ON THE PART OF THE SENIOR
NOTES COLLATERAL AGENT OR SUCH HOLDER, AS THE CASE MAY BE, CONSTITUTING GROSS
NEGLIGENCE OR WILLFUL MISCONDUCT.
(viii) THE PLEDGOR WAIVES ALL RIGHTS OF NOTICE AND HEARING OF
ANY KIND PRIOR TO THE EXERCISE BY THE SENIOR NOTES COLLATERAL AGENT OR ANY
HOLDER OF ITS RIGHTS DURING THE CONTINUANCE OF AN EVENT OF DEFAULT TO REPOSSESS
THE COLLATERAL WITH JUDICIAL PROCESS OR TO REPLEVY, ATTACH OR LEVY UPON THE
COLLATERAL OR OTHER SECURITY FOR THE OBLIGATIONS. THE PLEDGOR WAIVES THE POSTING
OF ANY BOND OTHERWISE REQUIRED OF THE SENIOR NOTES COLLATERAL AGENT OR ANY
HOLDER IN CONNECTION WITH ANY JUDICIAL PROCESS OR PROCEEDING TO OBTAIN
POSSESSION OF, REPLEVY, ATTACH OR LEVY UPON COLLATERAL OR OTHER SECURITY FOR THE
OBLIGATIONS, TO ENFORCE ANY JUDGMENT OR OTHER COURT ORDER ENTERED IN FAVOR OF
THE SENIOR NOTES COLLATERAL AGENT OR ANY HOLDER, OR TO ENFORCE BY SPECIFIC
PERFORMANCE, TEMPORARY RESTRAINING ORDER OR PRELIMINARY OR PERMANENT INJUNCTION
THIS AGREEMENT OR ANY OTHER AGREEMENT OR DOCUMENT BETWEEN THE PLEDGOR, THE
SENIOR NOTES COLLATERAL AGENT AND THE HOLDERS.
Section 19.20 Acknowledgments. The Pledgor hereby acknowledges that:
(a) it has been advised by counsel in the negotiation, execution and
delivery of this Agreement;
(b) neither the Senior Notes Collateral Agent nor any Holder has any
fiduciary relationship to the Pledgor, and the relationship between the Senior
Notes Collateral Agent and the Holders, on the one hand, and the Pledgor, on the
other hand, is solely that of a secured party and a creditor; and
(c) no joint venture exists among the Holders or among the Pledgor
and the Holders.
[Signature Page Follows]
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[Pledge Agreement Signature Page]
PLEDGOR:
EXCEL LEGACY CORPORATION
a Delaware corporation
By:
-----------------------------------------
Name: Xxxx X. Xxxxx
Title: President and
Chief Executive Officer
SENIOR NOTES COLLATERAL AGENT:
NORWEST BANK MINNESOTA, NATIONAL
ASSOCIATION
By:
-----------------------------------------
Name:
Title:
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59
EXHIBIT A
FORM OF SENIOR NOTES COLLATERAL IDENTIFICATION CERTIFICATE
This Certificate is provided by Excel Legacy Corporation, a Delaware
corporation (the "Pledgor"), pursuant to:
(i) that certain Pledge Agreement (the "Senior Notes Pledge Agreement")
dated as of November 5, 1999 by and between Pledgor and Norwest Bank Minnesota,
National Association (the "Senior Notes Collateral Agent"), pursuant to which
Pledgor has granted to the Senior Notes Collateral Agent, as collateral agent
for the holders of the Pledgor's 10.0% Senior Redeemable Secured Senior Notes
due 2004 (the "Senior Notes") issued pursuant to an Indenture (the "Senior Notes
Indenture") dated as of November 5, 1999 by and between Pledgor and the Senior
Notes Collateral Agent, a security interest (the "Senior Notes Security
Interest") in certain property of the Pledgor (the "Senior Notes Pledged
Collateral"), including certain shares (the "Senior Notes Pledged Shares") of
the common stock, par value $.0001 per share of Price Enterprises Inc., a
Maryland corporation ("the Common Stock"), in order to secure the obligations of
the Pledgor under the Senior Notes Indenture; and
(ii) that certain Pledge Agreement (the "Price Note Pledge Agreement")
dated as of October 1, 1999 by and between Pledgor and Xxxxx X. Xxxxxx (the
"Price Note Collateral Agent"), pursuant to which the Pledgor has granted to the
Price Note Collateral Agent, as collateral agent in favor of the holders of the
Pledgor's Secured Promissory Notes (the "Price Note") issued pursuant to that
certain Note Purchase Agreement by and between the Pledgor and The Sol and Xxxxx
Xxxxx Trust dated as of October 1, 1999 (the "Price Note Purchase Agreement"), a
security interest in certain property of the Pledgor (the "Price Note Pledged
Collateral"), including all of the shares of Common Stock of Price Enterprises,
Inc. (the "Price Note Pledged Shares"), in order to secure the obligations of
the Pledgor under the Price Note and the Price Note Purchase Agreement.
Pledgor hereby certifies and confirms to the Senior Notes Collateral
Agent and the Price Note Collateral Agent as follows:
(a) Concurrently herewith, Pledgor is issuing $18,126,000 principal
amount of Senior Notes in accordance with the Senior Notes Indenture (for
purposes of this Certificate, the "Incremental Senior Notes");
(b) In accordance with Section 3 of the Senior Notes Pledge
Agreement and Section 3(b) of the Price Note Pledge Agreement, Pledgor confirms
that the property identified on Schedule 1 hereto constitutes Incremental Senior
Notes Pledged Shares pledged to the Senior Notes Collateral Agent, and that such
Incremental Senior Notes Pledged Shares, together with any Incremental Senior
Notes Pledged Shares identified in any previous Senior Notes Collateral
Identification Certificate, constitute "Senior Notes Pledged Shares" for
purposes of the Senior Notes Pledge Agreement and the Price Note Pledge
Agreement.
(c) The Pledgor consents to the agreements of the Senior Notes
Collateral Agent and the Price Note Collateral Agent confirmed below in this
Certificate, and the Pledgor waives any right to object to the performance of
any of said agreements.
60
(d) Pledgor acknowledges and agrees that the Senior Notes
Collateral Agent and the Price Note Collateral Agent shall rely upon the
foregoing certifications in taking actions under the Senior Notes Pledge
Agreement and the Price Note Pledge Agreement, respectively.
IN WITNESS WHEREOF, Pledgor has executed this Certificate as of November
12, 1999.
EXCEL LEGACY CORPORATION,
a Delaware corporation
By:
--------------------------------------------
Name: Xxxx X. Xxxxx
Title: President and Chief Executive Officer
61
ACKNOWLEDGMENT OF SENIOR NOTES COLLATERAL AGENT
The undersigned hereby certifies and confirms to the Price Note
Collateral Agent as follows:
(a) The undersigned is the "Collateral Agent" under the Senior Notes
Pledge Agreement referenced above,
(b) The Senior Notes Collateral Agent acknowledges the security
interest and pledge of the Senior Notes Pledged Collateral pursuant to the Price
Note Pledge Agreement. Until the earlier to occur of the termination of the
Senior Notes Pledge Agreement or the Price Note Pledge Agreement, the Senior
Notes Collateral Agent agrees to hold the Senior Notes Pledged Collateral for
itself and for the Price Note Collateral Agent, in order to perfect the security
interest in the Senior Notes Pledged Collateral for itself under the Senior
Notes Pledge Agreement and for the Price Note Collateral Agent under the Price
Note Pledge Agreement. The Senior Notes Collateral Agent shall not be required
to hold, and agrees that it will not hold, the Senior Notes Pledged Collateral
for any person other than the Holders and the Price Note Collateral Agent in
order to perfect a security interest in the Senior Notes Pledged Collateral.
(c) The Senior Notes Collateral Agent agrees to not release any
Senior Notes Pledged Collateral except pursuant to a Release Certificate and, if
applicable, an accompanying Acknowledgment of Price Note Collateral Agent, as
provided for by Section 4 of the Senior Notes Pledge Agreement.
IN WITNESS WHEREOF, the undersigned has executed this Certificate as of
November 12, 1999.
NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION,
By:
-----------------------------------------
Name:
Title:
62
ACKNOWLEDGMENT OF PRICE NOTE COLLATERAL AGENT
The undersigned certifies to the Senior Notes Collateral Agent under
the Senior Notes Pledge Agreement referenced above as follows:
(a) The undersigned is the "Collateral Agent" under the Price Note
Pledge Agreement referenced above,
(b) The security interest granted in favor of the undersigned, as
Price Note Collateral Agent, in the property described in (i) Schedule 1
attached to this Certificate or (ii) any previous Senior Notes Collateral
Identification Certificate executed by the Price Note Collateral Agent, is
subject and subordinate to the security interest granted in such property to the
Senior Notes Collateral Agent under the Senior Notes Pledge Agreement. Said
priority shall be applicable irrespective of the time or order of attachment or
perfection of the respective security interests or the time of filing of any
financing statements pertaining thereto, or any statutes, rules of law, or court
decisions to the contrary.
IN WITNESS WHEREOF, the undersigned has executed this Certificate as of
November 12, 1999.
-----------------------------------------
XXXXX X. XXXXXX
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EXHIBIT B
[FORM OF RELEASE CERTIFICATE]
This Certificate is provided by Excel Legacy Corporation, a Delaware
corporation (the "Pledgor"), pursuant to:
(i) that certain Pledge Agreement (the "Senior Notes Pledge Agreement")
dated as of November 5, 1999 by and between Pledgor and Norwest Bank Minnesota,
National Association (the "Senior Notes Collateral Agent"), pursuant to which
Pledgor has granted to the Senior Notes Collateral Agent, as collateral agent
for the holders of the Pledgor's 10.0% Senior Redeemable Secured Senior Notes
due 2004 (the "Senior Notes") issued pursuant to an Indenture (the "Senior Notes
Indenture") dated as of November 5, 1999 by and between Pledgor and the Senior
Notes Collateral Agent, a security interest (the "Senior Notes Security
Interest") in certain property of the Pledgor (the "Senior Notes Pledged
Collateral"), including certain shares (the "Senior Notes Pledged Shares") of
the common stock, par value $.0001 per share of Price Enterprises Inc., a
Maryland corporation ("the Common Stock"), in order to secure the obligations of
the Pledgor under the Senior Notes Indenture; and
(ii) that certain Pledge Agreement (the "Price Note Pledge Agreement")
dated as of October __, 1999 by and between Pledgor and Xxxxx X. Xxxxxx (the
"Price Note Collateral Agent"), pursuant to which the Pledgor has granted to the
Price Note Collateral Agent, as collateral agent in favor of the holders of the
Pledgor's Secured Promissory Notes (the "Price Note") issued pursuant to that
certain Note Purchase Agreement by and between the Pledgor and The Sol and Xxxxx
Xxxxx Trust dated as of October __, 1999 (the "Price Note Purchase Agreement"),
a security interest in certain property of the Pledgor (the "Price Note Pledged
Collateral"), including all of the shares of Common Stock of Price Enterprises,
Inc. (the "Price Note Pledged Shares"), in order to secure the obligations of
the Pledgor under the Price Note and the Price Note Purchase Agreement.
Pledgor hereby certifies and confirms to the Senior Notes Collateral
Agent and the Price Note Collateral Agent as follows:
(a) Concurrently herewith, Pledgor is repurchasing, redeeming or
defeasing Senior Notes in the aggregate principal amount of:
$____________________________________________;
and, in accordance with Section 4 of the Senior Notes Pledge Agreement,
instructs the Senior Notes Collateral Agent to release from the pledge and
security interest created by Section 1 of the Senior Notes Pledge Agreement the
following number of Senior Notes Pledged Shares (equal to 117.647 Senior Notes
Pledged Shares for each $1,000 in principal amount of Senior Notes subject to
such repurchase, redemption or defeasance):
_______________________________________ shares.
(b) Pledgor represents to the Senior Notes Collateral Agent and
instructs as follows (check applicable box):
64
[ ] The Pledgor has satisfied all obligations under the Price Note
and the Price Note Purchase Agreement. The Pledgor instructs
the Senior Notes Collateral Agent to deliver the Senior Notes
Pledged Shares to the Pledgor in accordance with the Senior
Notes Pledge Agreement.
[ ] The Pledgor has not satisfied all obligations under the Price
Note and the Price Note Purchase Agreement. The Pledgor
instructs the Senior Notes Collateral Agent to deliver the
Senior Notes Pledged Shares to the Price Note Collateral Agent.
The Pledgor waives any right to receive the Senior Notes
Pledged Shares from the Senior Notes Collateral Agent.
(c) Pledgor acknowledges and agrees that the Senior Notes Collateral
Agent shall rely upon the foregoing certifications in taking actions under the
Senior Notes Pledge Agreement.
IN WITNESS WHEREOF, Pledgor has executed this Certificate as of
________, ______.
EXCEL LEGACY CORPORATION,
a Delaware corporation
By:
-----------------------------------------
Name:
Title:
65
ACKNOWLEDGMENT OF PRICE NOTE COLLATERAL AGENT
The undersigned certifies to the Senior Notes Collateral Agent under the Senior
Notes Pledge Agreement referenced above as follows:
(a) The undersigned is the "Collateral Agent" under the Price Note
Pledge Agreement referenced above,
(b) The representation of the Pledgor in Paragraph (b) of the above
Release Certificate is true and correct, and the Senior Notes Pledged Shares
which are the subject of the above Release Certificate shall be delivered in
accordance with the instructions contained in said Paragraph.
IN WITNESS WHEREOF, the undersigned has executed this Certificate as of
__________,_____.
-----------------------------------------
XXXXX X. XXXXXX
66
EXHIBIT C
[FORM OF PAYMENT CERTIFICATE]
This Certificate is provided by Xxxxx X. Xxxxxx, (the "Price Notes
Collateral Agent"), pursuant to:
(i) that certain Pledge Agreement (the "Senior Notes Pledge Agreement")
dated as of November 5, 1999 by and between Pledgor and Norwest Bank Minnesota,
National Association (the "Senior Notes Collateral Agent"), pursuant to which
Pledgor has granted to the Senior Notes Collateral Agent, as collateral agent
for the holders of the Pledgor's 10.0% Senior Redeemable Secured Senior Notes
due 2004 (the "Senior Notes") issued pursuant to an Indenture (the "Senior Notes
Indenture") dated as of November 5, 1999 by and between Pledgor and the Senior
Notes Collateral Agent, a security interest (the "Senior Notes Security
Interest") in certain property of the Pledgor (the "Senior Notes Pledged
Collateral"), including certain shares (the "Senior Notes Pledged Shares") of
the common stock, par value $.0001 per share of Price Enterprises Inc., a
Maryland corporation ("the Common Stock"), in order to secure the obligations of
the Pledgor under the Senior Notes Indenture; and
(ii) that certain Pledge Agreement (the "Price Note Pledge Agreement")
dated as of October __, 1999 by and between Pledgor and Xxxxx X. Xxxxxx (the
"Price Note Collateral Agent"), pursuant to which the Pledgor has granted to the
Price Note Collateral Agent, as collateral agent in favor of the holders of the
Pledgor's Secured Promissory Notes (the "Price Note") issued pursuant to that
certain Note Purchase Agreement by and between the Pledgor and The Sol and Xxxxx
Xxxxx Trust dated as of October __, 1999 (the "Price Note Purchase Agreement"),
a security interest in certain property of the Pledgor (the "Price Note Pledged
Collateral"), including all of the shares of Common Stock of Price Enterprises,
Inc. (the "Price Note Pledged Shares"), in order to secure the obligations of
the Pledgor under the Price Note and the Price Note Purchase Agreement.
The Price Note Collateral Agent hereby certifies and confirms to the
Senior Notes Collateral Agent as follows:
The Pledgor has satisfied all obligations under the Price Note and the
Price Note Purchase Agreement. The Senior Notes Collateral Agent shall, from and
after the date of this Certificate, deliver the Senior Notes Pledged Shares to
the Pledgor in accordance with the Senior Notes Pledge Agreement and the Price
Note Collateral Agent hereby waives any right to receive the Senior Notes
Pledged Shares from the Senior Notes Collateral Agent.
IN WITNESS WHEREOF, the undersigned has executed this Certificate as of
__________,_____.
-----------------------------------------
XXXXX X. XXXXXX
