MORTGAGE NOTES PROCEEDS COLLATERAL ACCOUNT AGREEMENT
This MORTGAGE NOTES PROCEEDS COLLATERAL ACCOUNT AGREEMENT (this
"Agreement") is dated as of November 14, 1997, and entered into by and among LAS
VEGAS SANDS, INC., a Nevada corporation ("LVSI"), VENETIAN CASINO RESORT, LLC, a
Nevada limited liability company ("VCR", and jointly and severally with LVSI,
"Pledgor"), THE BANK OF NOVA SCOTIA, a Canadian chartered bank, as Disbursement
Agent under the Disbursement Agreement (in such capacity herein called "Secured
Party").
PRELIMINARY STATEMENTS
A. The Project. LVSI, VCR and Grand Canal Shops Mall Construction, LLC, a
Delaware limited liability company ("GCCLLC"), propose to develop, construct and
operate the Venetian Casino Resort, a large scale Venetian-themed hotel, casino,
retail, meeting and entertainment complex, with related heating, ventilation and
air conditioning and power station facilities, as part of the redevelopment of
the site of the former Las Vegas Sands Hotel and Casino.
B. Bank Credit Agreement. Concurrently herewith, LVSI, VCR, the Bank Agent
and the Bank Lenders have entered into the Bank Credit Agreement pursuant to
which the Bank Lenders have agreed, subject to the terms thereof, to provide
certain loans to LVSI and VCR, jointly and severally, in an aggregate amount and
for purposes specified therein.
C. Interim Mall Credit Agreement. Concurrently herewith, LVSI, VCR,
GCCLLC, and the Interim Mall Lender have entered into the Interim Mall Credit
Agreement pursuant to which the Interim Mall Lender has agreed to provide loans
to LVSI, VCR and GCCLLC, jointly and severally, in an aggregate amount and for
purposes specified therein.
D. Mortgage Notes Indenture. Concurrently herewith, LVSI, VCR, certain
guarantors named therein, and the Mortgage Notes Indenture Trustee have entered
into the Mortgage Notes Indenture pursuant to which LVSI and VCR will issue
Mortgage Notes in an aggregate principal amount and for purposes specified
therein.
E. Subordinated Notes Indenture. Concurrently herewith, LVSI, VCR, certain
guarantors named therein, and the Subordinated Notes Indenture Trustee have
entered into the Subordinated Notes Indenture pursuant to which LVSI and VCR
will issue Subordinated Notes in an aggregate principal amount and for purposes
specified therein.
F. Funding Agents' Disbursement and Administration Agreement. Concurrently
herewith, Pledgor, GCCLLC, the Bank Agent (acting on behalf of itself and the
Bank Lenders), the Interim Mall Lender, the Mortgage Notes Indenture Trustee
(acting on behalf of itself and the Mortgage Note Holders), the HVAC Provider
and The Bank of Nova Scotia as "Disbursement Agent" have entered into that
certain Funding Agents'
1
Disbursement and Administration Agreement ("Disbursement Agreement") for the
purpose of setting forth, among other things, (a) the mechanics for and
allocation of the Company's requests for Advances under the Facilities and from
the Company's Funds Account, (b) the conditions precedent to the initial Advance
and conditions precedent to subsequent Advances, (c) certain common
representations, warranties and covenants of the Company in favor of the Funding
Agents, (d) the establishment of the Collateral Accounts, (e) the pledge and
management of the Collateral Accounts, and (f) the common events of default and
remedies.
G. Capacity and Obligations of Secured Party. Secured Party has entered
into this Agreement pursuant to the Disbursement Agreement and is obligated to
exercise its rights and perform its duties hereunder in accordance with the
Disbursement Agreement and the Intercreditor Agreement.
H. Condition. It is a condition precedent to the purchase of the Mortgage
Notes by the Mortgage Note Holders that Pledgor shall have established the
Collateral Accounts, grant control to the Disbursement Agent (as Secured Party)
of such accounts, and undertaken the obligations contemplated by this Agreement.
NOW, THEREFORE, in consideration of the premises and in order to
induce the Mortgage Note Holders to purchase the Mortgage Notes under the
Mortgage Notes Indenture and for other good and valuable consideration, the
receipt and adequacy of which are hereby acknowledged, Pledgor hereby agrees
with Secured Party as follows:
SECTION 1. Certain Definitions.
(a) Specific Definitions. The following terms used in this
Agreement shall have the following meanings:
"Collateral" shall have the meaning given to that term in the
Third-Party Account Agreement.
"Collateral Accounts" shall have the meaning given to that term in
the Third-Party Account Agreement.
"Investments" shall have the meaning given to that term in the
Third-Party Account Agreement.
"Mortgage Notes Proceeds Account" shall have the meaning given to
that term in the Third-Party Account Agreement.
"Permitted Investments" shall have the meaning given to that term in
the Third-Party Account Agreement.
"Secured Obligations" means all obligations and liabilities of every
nature of Pledgor now or hereafter existing under or arising out of or in
connection with the
2
Mortgage Notes Indenture, the Mortgage Notes, and each other Financing Agreement
to which the Mortgage Notes Indenture Trustee is a party or which grants a
security interest for the benefit of the Mortgage Notes Indenture Trustee or the
Mortgage Notes Holders, and all extensions or renewals thereof, whether for
principal, interest (including interest that, but for the filing of a petition
in bankruptcy with respect to Pledgor, would accrue on such obligations), fees,
expenses, indemnities or otherwise, whether voluntary or involuntary, direct or
indirect, absolute or contingent, liquidated or unliqui dated, whether or not
jointly owed with others, and whether or not from time to time decreased or
extinguished and later increased, created or incurred, and all or any portion of
such obligations or liabilities that are paid, to the extent all or any part of
such payment is avoided or recovered directly or indirectly from Secured Party
or any Mortage Notes Holder as a preference, fraudulent transfer or otherwise,
and all obligations of every nature of Pledgor now or hereafter existing under
this Agreement.
"Securities Intermediary" means ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co., identified as
the "Securities Intermediary" in the Third-Party Account Agreement.
"Third-Party Account Agreement" means the Mortgage Notes Proceeds
Third-Party Account Agreement, substantially in the form of Annex A hereto,
entered into among Pledgor, Secured Party and Securities Intermediary, as such
agreement may be amended, supplemented or otherwise modified from time to time.
(b) General Provisions. Capitalized terms used but not defined
herein or in the Third-Party Account Agreement shall have the meaning given to
such terms in Exhibit A to the Third-Party Account Agreement, although in the
event of a conflict, the meaning given to such term in the Third-Party Account
Agreement shall control. Unless otherwise defined herein, in the Third-Party
Account Agreement or in Exhibit A to the Third-Party Account Agreement, terms
used in Articles 8 and 9 of the Code are used herein as therein defined. Words
used herein, regardless of the number and gender specifically used, shall be
deemed and construed to include any other number, singular or plural, and any
other gender, masculine, feminine or neuter, as the context indicates is
appropriate. When a reference is made in this Agreement to an Appendix, Exhibit,
Introduction, Recital, Section or Schedule, such reference shall be to an
Appendix, an Exhibit, the Introduction, a Recital or a Section of, or a Schedule
to, this Agreement unless otherwise indicated. The headings contained in this
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement. Whenever the words "include,"
"includes" or "including" are used in this Agreement, they shall be deemed to be
followed by the words "without limitation."
SECTION 2. Establishment and Operation of the Mortgage Notes
Proceeds Account.
(a) Establishment of Mortgage Notes Proceeds Account. On the date
hereof, in accordance with the terms of the Third-Party Account Agreement,
Pledgor and Secured Party shall establish with Securities Intermediary at its
office at ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, as a securities account in
the name of Secured Party, a
3
restricted securities account designated as "The Bank of Nova Scotia Mortgage
Notes Proceeds Account".
(b) Compliance with Third-Party Account Agreement. The Collateral
Accounts shall be operated, and all Investments shall be purchased, registered
or held (as applicable), in accordance with the terms of the Third-Party Account
Agreement.
(c) Reasonable Reliance. Secured Party shall be fully protected
and shall suffer no liability in acting in accordance with any written
instructions reasonably believed by it to have been given by Pledgor with
respect to any aspect of the operation of the Collateral Accounts (including any
such instructions relating to any Investments of any amounts or Financial Assets
credited thereto).
SECTION 3. Pledge of Security for Secured Obligations. Pledgor
hereby pledges and assigns to Secured Party, and hereby grants to Secured Party,
in each case for the benefit of the Mortgage Notes Indenture Trustee and the
Mortgage Notes Holders, a security interest in, all of Pledgor's right, title
and interest in and to the Collateral as collateral security for the prompt
payment or performance in full when due, whether at stated maturity, by required
prepayment, declaration, acceleration, demand or otherwise (including the
payment of amounts that would become due but for the operation of the automatic
stay under Section 362(a) of the United States Bankruptcy Code, 11 U.S.C.
362(a)), of all Secured Obligations.
SECTION 4. Investment of Amounts in the Mortgage Notes Proceeds
Account.
(a) Strict Compliance On Investment of Collateral. Credit balances
held by Securities Intermediary in the Collateral Accounts shall not be invested
or reinvested except as provided in this Section 4 and in the Third-Party
Account Agreement.
(b) Management by Pledgor. So long as no Potential Event of
Default or Event of Default shall have occurred and be continuing, Secured Party
shall instruct Securities Intermediary to follow, in accordance with the terms
of the Third-Party Account Agreement, any written instruction received by
Securities Intermediary from Pledgor (with a copy to Secured Party) (i) to
invest and reinvest funds held for the credit of the Collateral Accounts in
Permitted Investments for credit to the Collateral Accounts, (ii) to transfer
funds from the Collateral Accounts to the extent required for such investments,
against delivery of the related Financial Assets to Securities Intermediary for
credit to the Collateral Accounts, and (iii) to sell or redeem any Investment
against delivery of the proceeds to, or settlement to purchase an Permitted
Investment for credit of, the Collateral Accounts. Secured Party shall not
impose a Suspension Period so long as Pledgor is entitled to instruct Securities
Intermediary under this Section 4(b).
4
(c) Power of Secured Party to Sell. Pledgor agrees that Secured
Party may sell or cause the sale or redemption of any Investment and instruct
Securities Intermediary to transfer the proceeds of such sale or any other
credit in the Collateral Accounts to any third party or account, in either case
(i) if such sale or redemption is necessary to permit Secured Party to perform
its duties under this Agreement, the Disbursement Agreement or the Intercreditor
Agreement, or (ii) as provided in Section 9.
SECTION 5. Representations and Warranties. Pledgor represents and
warrants as follows:
(a) Ownership of Collateral; Security Interest; Perfection and
Priority. Pledgor is (or at the time of transfer thereof to Securities
Intermediary will be) the beneficial owner of the Collateral from time to time
transferred by Pledgor for the benefit of Pledgor to Securities Intermediary, as
agent for Secured Party, free and clear of any Lien except for the security
interest created by this Agreement and the Third-Party Account Agreement. The
pledge and assignment of the Collateral pursuant to this Agreement and the
Third-Party Account Agreement creates a valid security interest in the
Collateral securing the Payment of the Secured Obligations. Assuming compliance
by Securities Intermediary with the Third-Party Account Agreement, Secured Party
will have a perfected security interest in the Collateral Accounts senior in
priority to any other security interest created by Pledgor.
(b) Governmental Authorizations. Except as may be required under
Nevada gaming laws, no authorization, approval or other action by, and no notice
to or filing with, any governmental authority or regulatory body is required for
either (i) the grant by Pledgor of the security interest granted hereby or by
the Third-Party Account Agreement, (ii) the execution, delivery or performance
of this Agreement or the Third-Party Account Agreement by Pledgor, or (iii) the
perfection of or the exercise by Secured Party or Securities Intermediary of its
rights and remedies hereunder or under the Third-Party Account Agreement (except
as may have been taken by or at the direction of Pledgor).
(c) Other Information. All information heretofore, herein or
hereafter supplied to Secured Party or Securities Intermediary by or on behalf
of Pledgor with respect to the Collateral is accurate and complete in all
material respects.
SECTION 6. Further Assurances. Pledgor agrees that from time to
time, at the expense of Pledgor, Pledgor shall promptly execute and deliver all
further instruments and documents, and take all further action, that may be
necessary or reasonably desirable, or that Secured Party may reasonably request,
in order to perfect and protect any security interest granted or purported to be
granted hereby or by the Third-Party Account Agreement or to enable Secured
Party or Securities Intermediary to exercise and enforce its rights and remedies
hereunder or under the Third-Party Account Agreement with respect to any
Collateral. Without limiting the generality of the foregoing, Pledgor shall: (a)
execute and file such financing or continuation
5
statements, or amendments thereto, and such other instruments or notices, as may
be necessary or reasonably desirable, or as Secured Party may reasonably
request, in order to perfect and preserve the security interests granted or
purported to be granted hereby or by the Third-Party Account Agreement, and (b)
at Secured Party's request, appear in and defend any action or proceeding that
may affect Pledgor's title to or Secured Party's security interest in all or any
part of the Collateral.
SECTION 7. Transfers and other Liens. Pledgor agrees that, except as
permitted in Section 4(b), it shall not (a) sell, assign (by operation of law or
otherwise), redeem or otherwise dispose of any of the Collateral or (b) create
or suffer to exist any Lien upon or with respect to any of the Collateral,
except for the security interest created under this Agreement and the
Third-Party Account Agreement.
SECTION 8. Secured Party Appointed Attorney-in-Fact; Secured Party
Performance.
(a) Secured Party Appointed Attorney-in-Fact. Pledgor hereby
irrevocably appoints Secured Party as Pledgor's attorney-in-fact, with full
authority in the place and stead of Pledgor and in the name of Pledgor, Secured
Party or otherwise, from time to time in Secured Party's discretion to take any
action and to execute any instrument that Secured Party may deem necessary or
advisable to accomplish the purposes of this Agreement or the Third-Party
Account Agreement, including (a) to file one or more financing or continuation
statements, or amendments thereto, relative to all or any part of the Collateral
without the signature of Pledgor and (b) to receive, endorse and collect any
instruments or other Investments made payable to Pledgor representing any
dividend, principal or interest payment or other distribution in respect of the
Collateral or any part thereof and to give full discharge for the same.
(b) Performance by Secured Party. If Pledgor fails to perform any
agreement contained herein, Secured Party may itself perform, or cause
performance of, such agreement, and the expenses of Secured Party incurred in
connection therewith shall be payable by Pledgor under Section 11.
SECTION 9. Remedies.
(a) Transfer or Sequestration of Collateral. If any Potential
Event of Default or Event of Default shall have occurred and be continuing,
Secured Party may instruct Securities Intermediary to (i) sell or redeem any
Investments, (ii) transfer any or all of the Collateral to any account
designated by Secured Party, including account or accounts established in
Secured Party's name (whether with Secured Party or Securities Intermediary or
otherwise), (iii) register title to any Collateral in any name specified by
Secured Party, including the name of Secured Party or any of its nominees or
agents, without reference to any interest of Pledgor, or (iv) otherwise deal
with the Collateral as directed by Secured Party.
6
(b) Rights of Secured Party. If any Event of Default shall have
occurred and be continuing, Secured Party may exercise in respect of the
Collateral, in addition to all other rights and remedies provided for herein or
otherwise available to it, all the rights and remedies of a secured party on
default under the Uniform Commercial Code as in effect in any relevant
jurisdiction (the "UCC") (whether or not the UCC applies to the affected
Collateral), and Secured Party may also in its sole discretion sell the
Collateral or any part thereof in one or more parcels at public or private sale,
at any exchange or broker's board or at any of Secured Party's offices or
elsewhere, for cash, on credit or for future delivery, at such time or times and
at such price or prices and upon such other terms as Secured Party may deem
commercially reasonable, irrespective of the impact of any such sales on the
market price of the Collateral. Each purchaser at any such sale shall hold the
property sold absolutely free from any claim or right on the part of Pledgor,
and Pledgor hereby waives (to the extent permitted by applicable law) all rights
of redemption, stay or appraisal which it now has or may at any time in the
future have under any rule of law or statute now existing or hereafter enacted.
Secured Party shall not be obligated to make any sale of Collateral regardless
of notice of sale having been given. Secured Party may adjourn any public or
private sale from time to time by announcement at the time and place fixed
therefor, and such sale may, without further notice, be made at the time and
place to which it was so adjourned.
(c) Agreement as to Manner of Sale. Pledgor hereby agrees that
the Collateral is of a type customarily sold on recognized markets and,
accordingly, that no notice to any Person is required before any sale of any of
the Collateral pursuant to the terms of this Agreement; provided that, without
prejudice to the foregoing, Pledgor agrees that, to the extent notice of any
such sale shall be required by law, at least ten days' notice to Pledgor of the
time and place of any public sale or the time after which any private sale is to
be made shall constitute reasonable notification.
(d) Deficiency. If the proceeds of any sale or other disposition
of the Collateral are insufficient to pay all the Secured Obligations, Pledgor
shall be liable for the deficiency and the fees of any attorneys employed by
Secured Party to collect such deficiency.
SECTION 10. Application of Proceeds. If any Event of Default shall
have occurred and be continuing, all cash included as Collateral and all
proceeds received by Secured Party in respect of any sale or redemption of,
collection from, or other realization upon all or any part of the Collateral
may, in the discretion of Secured Party, be held by or for Secured Party as
Collateral for, or then, or at any other time thereafter, applied in full or in
part by Secured Party against, the Secured Obligations in the following order of
priority:
FIRST: To the payment of all costs and expenses of such sale,
collection or other realization, including reasonable compensation to
Secured Party and its agents and counsel, and all other expenses,
liabilities and advances made or incurred by Secured Party in connection
therewith, and all amounts for which Secured Party is entitled to
indemnification hereunder and all advances made by
7
Secured Party hereunder for the account of Pledgor, and to the payment of
all costs and expenses paid or incurred by Secured Party in connection
with the exercise of any right or remedy hereunder, all in accordance with
Section 11;
SECOND: To the payment of all of the Secured Obligations; and
THIRD: To the payment to or upon the order of Pledgor, or to
whosoever may be lawfully entitled to receive the same or as a court of
competent jurisdiction may direct, of any surplus then remaining from such
proceeds.
SECTION 11. Exculpation; Indemnity; Expenses.
(a) Exculpation. The powers conferred on Secured Party hereunder
are solely to protect its interest in the Collateral and shall not impose any
duty upon it to exercise any such powers. Except for the exercise of reasonable
care in the custody of any Collateral in its possession and the accounting for
moneys actually received by it hereunder, Secured Party shall have no duty as to
any Collateral, it being understood that Secured Party shall have no
responsibility for (a) ascertaining or taking action with respect to calls,
conversions, exchanges, maturities, tenders or other matters relating to any
Collateral, whether or not Secured Party has or is deemed to have knowledge of
such matters, (b) taking any necessary steps (other than steps taken in
accordance with the standard of care set forth above to maintain possession of
the Collateral) to preserve rights against any parties with respect to any
Collateral, (c) taking any necessary steps to collect or realize upon the
Secured Obligations or any guarantee therefor, or any part thereof, or any of
the Collateral, (d) initiating any action to protect the Collateral against the
possibility of a decline in market value, (e) any loss resulting from
Investments made, held or sold pursuant to Section 4, except for a loss
resulting from Secured Party's gross negligence or wilful misconduct in
complying with Section 4, or (f) determining (i) the correctness of any
statement or calculation made by Pledgor in any written or telex (tested or
otherwise) instructions or (ii) whether any transfer to or from the Collateral
Accounts is proper. Secured Party shall be deemed to have exercised reasonable
care in the custody and preservation of Collateral in its possession if such
Collateral is accorded treatment substantially equal to that which Secured Party
accords its own property of like kind. In addition to the foregoing and without
limiting the generality thereof, Secured Party shall not be responsible for any
actions or omissions of Securities Intermediary.
(b) Indemnification. Pledgor agrees to indemnify Secured Party,
the Mortgage Notes Indenture Trustee and each Mortgage Note Holder from and
against any and all claims, losses and liabilities in any way relating to,
growing out of or resulting from this Agreement and the transactions
contemplated hereby (including enforcement of this Agreement), except to the
extent such claims, losses or liabilities result solely from Secured Party's
gross negligence or wilful misconduct as finally determined by a court of
competent jurisdiction.
8
(c) Expenses. Pledgor shall pay to Secured Party upon demand the
amount of any and all costs and expenses, including the reasonable fees and
expenses of its counsel and of any experts and agents, that Secured Party may
reasonably incur in connection with (i) the administration of this Agreement,
(ii) the custody, preservation, use or operation of, or the sale of, collection
from, or other realization upon, any of the Collateral, (iii) the exercise or
enforcement of any of the rights of Secured Party hereunder, or (iv) the failure
by Pledgor to perform or observe any of the provisions hereof.
SECTION 12. Continuing Security Interest. This Agreement shall
create a continuing security interest in the Collateral and shall (a) remain in
full force and effect until the indefeasible payment in full of the Secured
Obligations, (b) be binding upon Pledgor, its successors and assigns, and (c)
inure, together with the rights and remedies of Secured Party hereunder, to the
benefit of Secured Party and the Mortgage Note Holders and their respective
successors, transferees and assigns. Upon the indefeasible payment in full of
all Secured Obligations, the security interest granted hereby shall terminate
and all rights to the Collateral shall revert to Pledgor. Upon any such
termination Secured Party shall, at Pledgor's expense, execute and deliver to
Pledgor such documents as Pledgor shall reasonably request to evidence such
termination and Pledgor shall be entitled to the return, upon its request and at
its expense, against receipt and without recourse to Secured Party, of such of
the Collateral as shall not have been sold, transferred or otherwise applied
pursuant to the terms hereof. Secured Party may terminate the Mortgage Note
Proceeds Account on full disbursement of the Mortgage Notes Proceeds pursuant to
the Disbursement Agreement.
SECTION 13. Secured Party as Disbursement Agent.
(a) Agency. Secured Party has been appointed to act as Secured
Party hereunder by Lenders pursuant to the Disbursement Agreement. Secured Party
shall be obligated, and shall have the right hereunder, to make demands, to give
notices, to exercise or refrain from exercising any rights, and to take or
refrain from taking any action (including, without limitation, the release or
substitution of Collateral), solely in accordance with this Agreement, the
Disbursement Agreement and the Intercreditor Agreement.
(b) Identity of Agent. Secured Party shall at all times be the
same Person that is Disbursement Agent under the Disbursement Agreement. Written
notice of resignation by Disbursement Agent pursuant to subsection 9.7 of the
Disbursement Agreement shall also constitute notice of resignation as Secured
Party under this Agreement; removal of Disbursement Agent pursuant to subsection
9.7 of the Disbursement Agreement shall also constitute removal as Secured Party
under this Agreement; and substitution of a successor disbursement agent
pursuant to subsection 9.7 of the Disbursement Agreement shall also constitute
substitution of a successor Secured Party under this Agreement. Upon the
acceptance of any appointment as Disbursement Agent under subsection 9.7 of the
Disbursement Agreement by a successor Disbursement Agent, that successor
Disbursement Agent shall thereupon succeed to and
9
become vested with all the rights, powers, privileges and duties of the retiring
or removed Secured Party under this Agreement, and the retiring or removed
Secured Party under this Agreement shall promptly (i) transfer to such successor
Secured Party all items of Collateral held by Secured Party together with all
records and other documents necessary or appropriate in connection with the
performance of the duties of the successor Secured Party under this Agreement,
and (ii) execute and deliver to such successor Secured Party such amendments to
financing statements, and take such other actions, as may be necessary or
appropriate in connection with the assignment to such successor Secured Party of
the security interests created hereunder, whereupon such retiring or removed
Secured Party shall be discharged from its duties and obligations under this
Agreement. After any retiring or removed Disbursement Agent's resignation or
removal hereunder as Secured Party, the provisions of this Agreement shall inure
to its benefit as to any actions taken or omitted to be taken by it under this
Agreement while it was Secured Party hereunder.
SECTION 14. Amendments; Etc. No amendment or waiver of any provision
of this Agreement, or consent to any departure by Pledgor herefrom, shall in any
event be effective unless the same shall be in writing and signed by Secured
Party, and then such waiver or consent shall be effective only in the specific
instance and for the specific purpose for which it was given.
SECTION 15. Notices. Any communications between the parties hereto
or notices provided herein to be given may be given to the address of the party
as set forth under such party's name on the signature pages hereof. All notices
or other communications required or permitted to be given hereunder shall be in
writing and shall be considered as properly given (a) if delivered in person,
(b) if sent by reputable overnight delivery service, (c) in the event overnight
delivery services are not readily available, if mailed by first class mail,
postage prepaid, registered or certified with return receipt requested or (d) if
sent by prepaid telex, or by telecopy with correct answer back received. Notice
so given shall be effective upon receipt by the addressee, except that
communication or notice so transmitted by telecopy or other direct written
electronic means shall be deemed to have been validly and effectively given on
the day (if a Business Day and, if not, on the next following Business Day) on
which it is validly transmitted if transmitted before 4 p.m., recipient's time,
and if transmitted after that time, on the next following Business Day;
provided, however, that if any notice is tendered to an addressee and the
delivery thereof is refused by such addressee, such notice shall be effective
upon such tender. Any party shall have the right to change its address for
notice hereunder to any other location by giving of no less than twenty (20)
days' notice to the other parties in the manner set forth hereinabove.
SECTION 16. Failure or Indulgence Not Waiver; Remedies Cumulative.
No failure or delay on the part of Secured Party in the exercise of any power,
right or privilege hereunder shall impair such power, right or privilege or be
construed to be a waiver of any default or acquiescence therein, nor shall any
single or partial exercise of any such power, right or privilege preclude any
other or further exercise thereof or of any
10
other power, right or privilege. All rights and remedies existing under this
Agreement are cumulative to, and not exclusive of, any rights or remedies
otherwise available.
SECTION 17. Severability. In case any provision in or obligation
under this Agreement shall be invalid, illegal or unenforceable in any
jurisdiction, the validity, legality and enforceability of the remaining
provisions or obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired thereby.
SECTION 18. Headings. Section and subsection headings in this
Agreement are included herein for convenience of reference only and shall not
constitute a part of this Agreement for any other purpose or be given any
substantive effect.
SECTION 19. Governing Law; Terms. THIS AGREEMENT SHALL BE GOVERNED
BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF
THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES, EXCEPT TO
THE EXTENT THAT THE UCC PROVIDES THAT THE VALIDITY OR PERFECTION OF THE SECURITY
INTEREST HEREUNDER, OR REMEDIES HEREUNDER, IN RESPECT OF ANY PARTICULAR
COLLATERAL ARE GOVERNED BY THE LAWS OF A JURISDICTION OTHER THAN THE STATE OF
NEW YORK.
SECTION 20. Consent to Jurisdiction and Service of Process. ALL
JUDICIAL PROCEEDINGS BROUGHT AGAINST PLEDGOR ARISING OUT OF OR RELATING TO THIS
AGREEMENT MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT JURISDICTION
IN THE STATE OF NEW YORK, AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT
PLEDGOR ACCEPTS FOR ITSELF AND IN CONNECTION WITH ITS PROPERTIES, GENERALLY AND
UNCONDITIONALLY, THE NONEXCLUSIVE JURISDICTION OF THE AFORESAID COURTS AND
WAIVES ANY DEFENSE OF FORUM NON CONVENIENS AND IRREVOCABLY AGREES TO BE BOUND BY
ANY JUDGMENT RENDERED THEREBY IN CONNECTION WITH THIS AGREEMENT. Pledgor hereby
agrees that service of all process in any such proceeding in any such court may
be made by registered or certified mail, return receipt requested, to Pledgor at
its address as provided in Section 15, such service being hereby acknowledged by
Pledgor to be sufficient for personal jurisdiction in any action against Pledgor
in any such court and to be otherwise effective and binding service in every
respect. Nothing herein shall affect the right to serve process in any other
manner permitted by law or shall limit the right of Secured Party to bring
proceedings against Pledgor in the courts of any other jurisdiction.
SECTION 21. Waiver of Jury Trial. PLEDGOR AND SECURED PARTY HEREBY
AGREE TO WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF
ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT OR THE THIRD-PARTY ACCOUNT
AGREEMENT. The scope of this waiver is intended to be all-encompassing of any
and all disputes that may be filed in any
11
court and that relate to the subject matter of this transaction, including
contract claims, tort claims, breach of duty claims, and all other common law
and statutory claims. Pledgor and Secured Party each acknowledge that this
waiver is a material inducement for Pledgor and Secured Party to enter into a
business relationship, that Pledgor and Secured Party have already relied on
this waiver in entering into this Agreement and that each will continue to rely
on this waiver in their related future dealings. Pledgor and Secured Party
further warrant and represent that each has reviewed this waiver with its legal
counsel, and that each knowingly and voluntarily waives its jury trial rights
following consultation with legal counsel. THIS WAIVER IS IRREVOCABLE, MEANING
THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING, AND THIS WAIVER SHALL
APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO
THIS AGREEMENT OR THE THIRD-PARTY ACCOUNT AGREEMENT. In the event of litigation,
this Agreement may be filed as a written consent to a trial by the court.
SECTION 22. Counterparts. This Agreement may be executed in one or
more counterparts and by different parties hereto in separate counterparts, each
of which when so executed and delivered shall be deemed an original, but all
such counterparts together shall constitute but one and the same instrument;
signature pages may be detached from multiple separate counterparts and attached
to a single counterpart so that all signature pages are physically attached to
the same document.
[Remainder of page intentionally left blank]
12
IN WITNESS WHEREOF, Pledgor and Secured Party have caused this
Agreement to be duly executed and delivered by their respective officers
thereunto duly authorized as of the date first written above.
PLEDGOR:
LAS VEGAS SANDS, INC.,
a Nevada corporation
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: President
Notice Address: ▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile Number: (▇▇▇) ▇▇▇-▇▇▇▇
VENETIAN CASINO RESORT, LLC,
a Nevada limited liability company
By: LAS VEGAS SANDS, INC., its managing member
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: President
Notice Address: ▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile Number: (▇▇▇) ▇▇▇-▇▇▇▇
S-1
SECURED PARTY:
THE BANK OF NOVA SCOTIA, a Canadian
chartered bank, as Disbursement Agent under
the Disbursement Agreement
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
-------------------
Title: Relationship Manager
Notice Address: The Bank of Nova Scotia
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Relationship Manager
Facsimile Number: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to: The Bank of Nova Scotia
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Facsimile Number: (▇▇▇) ▇▇▇-▇▇▇▇
S-2
ANNEX A
[FORM OF MORTGAGE NOTES PROCEEDS THIRD-PARTY ACCOUNT AGREEMENT]
This MORTGAGE NOTES PROCEEDS THIRD-PARTY ACCOUNT AGREEMENT (this
"Agreement") is dated as of November 14, 1997 and entered into by and among LAS
VEGAS SANDS, INC., A Nevada corporation ("LVSI"), VENETIAN CASINO RESORT, LLC, a
Nevada limited liability company ("VCR", and jointly and severally with LVSI,
"Pledgor"), THE BANK OF NOVA SCOTIA, a Canadian chartered bank, as Disbursement
Agent under the Disbursement Agreement (in such capacity herein called "Secured
Party") and ▇▇▇▇▇▇▇, ▇▇▇▇▇ & CO., a Broker-Dealer ("Securities Intermediary").
PRELIMINARY STATEMENTS
A. The Project. LVSI, VCR and Grand Canal Shops Mall Construction, LLC, a
Delaware limited liability company ("GCCLLC"), propose to develop, construct and
operate the Venetian Casino Resort, a large scale Venetian-themed hotel, casino,
retail, meeting and entertainment complex, with related heating, ventilation and
air conditioning and power station facilities, as part of the redevelopment of
the site of the former Las Vegas Sands Hotel and Casino.
B. Bank Credit Agreement. Concurrently herewith, LVSI, VCR, the Bank Agent
and the Bank Lenders have entered into the Bank Credit Agreement pursuant to
which the Bank Lenders have agreed, subject to the terms thereof, to provide
certain loans to LVSI and VCR, jointly and severally, in an aggregate amount and
for purposes specified therein.
C. Interim Mall Credit Agreement. Concurrently herewith, LVSI, VCR,
GCCLLC, and the Interim Mall Lender have entered into the Interim Mall Credit
Agreement pursuant to which the Interim Mall Lender has agreed to provide loans
to LVSI, VCR and GCCLLC, jointly and severally, in an aggregate amount and for
purposes specified therein.
D. Mortgage Notes Indenture. Concurrently herewith, LVSI, VCR, certain
guarantors named therein, and the Mortgage Notes Indenture Trustee have entered
into the Mortgage Notes Indenture pursuant to which LVSI and VCR will issue
Mortgage Notes in an aggregate principal amount and for purposes specified
therein.
E. Subordinated Notes Indenture. Concurrently herewith, LVSI, VCR, certain
guarantors named therein, and the Subordinated Notes Indenture Trustee, have
entered into the Subordinated Notes Indenture pursuant to which LVSI and VCR
will issue Subordinated Notes in an aggregate principal amount and for purposes
specified therein.
F. Funding Agents' Disbursement and Administration Agreement. Concurrently
herewith, Pledgor, GCCLLC, the Bank Agent (acting on behalf of itself and the
Bank Lenders),
ANNEX A-1
the Interim Mall Lender, the Mortgage Notes Indenture Trustee (acting on behalf
of itself and the Mortgage Note Holders), the HVAC Provider and The Bank of Nova
Scotia as "Disbursement Agent" have entered into that certain Funding Agents'
Disbursement and Administration Agreement ("Disbursement Agreement") for the
purpose of setting forth, among other things, (a) the mechanics for and
allocation of the Company's requests for Advances under the Facilities and from
the Company's Funds Account, (b) the conditions precedent to the initial Advance
and conditions precedent to subsequent Advances, (c) certain common
representations, warranties and covenants of the Company in favor of the Funding
Agents, (d) the establishment of the Collateral Accounts, (e) the pledge and
management of the Collateral Accounts, and (f) the common events of default and
remedies.
G. Condition. It is a condition precedent to the purchase of the Mortgage
Notes by the Mortgage Note Holders that Pledgor shall have established the
Mortgage Note Proceeds Account, granted control to the Disbursement Agent (as
Secured Party) of such account, and undertaken the obligations contemplated by
this Agreement.
NOW, THEREFORE, in consideration of the premises and in order to
induce the Mortgage Note Holders to purchase the Mortgage Notes under the
Mortgage Notes Indenture and for other good consideration, the receipt and
adequacy of which are hereby acknowledged, Pledgor, Securities Intermediary and
Secured Party hereby agree as follows:
SECTION 1. Definitions.
(a) Specific Definitions. The following terms used in this
Agreement shall have the following meanings:
"Broker-Dealer" means a person registered as a broker or dealer
under the Securities Exchange Act of 1934, as amended.
"Business Day" means any day excluding Saturday, Sunday and any day
which is a legal holiday under the laws of the States of New York or Nevada or
is a day on which banking institutions located in such states are authorized or
required by law or other governmental action to close, or a day on which the New
York Stock Exchange is closed.
"Code" shall mean the Uniform Commercial Code as in effect in New
York.
"Collateral" means (i) the Mortgage Notes Proceeds Account, (ii) all
amounts held from time to time in the Mortgage Notes Proceeds Account, (iii) all
Investments, including all Financial Assets, security entitlements, securities
(whether certificated or uncertificated), instruments, accounts, general
intangibles and deposits representing or evidencing any Investments, (iv) all
interest, dividends, cash, instruments, securities and other property from time
to time received, receivable or otherwise distributed in respect of or in
exchange for any or all of the Collateral, and (v) to the extent not covered by
clauses (i) through (iv) above, all proceeds of any or all of the foregoing
Collateral.
"Collateral Accounts" means the Mortgage Notes Proceeds Account and
any
ANNEX A-2
other accounts in which Investments may be held or registered.
"Investments" means any Financial Assets credited to the Mortgage
Notes Proceeds Account, and any other property acquired by Securities
Intermediary as securities intermediary hereunder in exchange for, with proceeds
from or distributions on, or otherwise in respect of any Investments.
"Mortgage Notes Proceeds Account" means the restricted securities
account established and maintained with Securities Intermediary pursuant to
Section 2(a).
"Overnight Investments" means Investments of the kind described in
subdivision (a)(v), (b) or (c) of the definition of "Permitted Investments."
"Permitted Investments" means (a) (i) direct obligations of the
United States of America (including obligations issued or held in book-entry
form on the books of the Department of the Treasury of the United States of
America) or obligations fully guaranteed by the United States of America, (ii)
obligations, debentures, notes or other evidence of indebtedness issued or
guaranteed by any other agency or instrumentality of the United States, (iii)
interest-bearing demand or time deposits (which may be represented by
certificates of deposit) issued by banks having general obligations rated (on
the date of acquisition thereof) at least "A" or the equivalent by any Rating
Agency or, if not so rated, secured at all times, in the manner and to the
extent provided by law, by collateral security in clause (i) or (ii) of this
definition, of a market value of no less than the amount of monies so invested,
(iv) commercial paper rated (on the date of acquisition thereof) at least "A-1"
or "P-1" or the equivalent by any Rating Agency issued by any Person, (v)
repurchase obligations for underlying securities of the types described in
clause (i) or (ii) above, entered into with any commercial bank or any other
financial institution having long-term unsecured debt securities rated (on the
date of acquisition thereof) at least "A" or "A2" or the equivalent by any
Rating Agency in connection with which such underlying securities are held in
trust or by a third-party custodian, (vi) guaranteed investment contracts of any
financial institution which has a long-term debt rated (on the date of
acquisition thereof) at least "A" or "A2" or the equivalent by any Rating
Agency, (vii) obligations (including both taxable and nontaxable municipal
securities) issued or guaranteed by, and any other obligations the interest on
which is excluded from income for Federal income tax purposes issued by, any
state of the United States of America or the District of Columbia or the
Commonwealth of Puerto Rico or any political subdivision, agency, authority or
instrumentality thereof, which issuer or guarantor has (A) a short-term debt
rated (on the date of acquisition thereof) at least "A-1" or "P-1" or the
equivalent by any Rating Agency and (B) a long-term debt rated (on the date of
acquisition thereof) at least "A" or "A2" or the equivalent by any Rating
Agency, (viii) investment contracts of any financial institution either (A)
fully secured by (1) direct obligations of the United States, (2) obligations of
a Person controlled or supervised by and acting as an agency or instrumentality
of the United States or (3) securities or receipts evidencing ownership interest
in obligations or specified portions thereof described in clause (1) or (2), in
each case guaranteed as full faith and credit obligations of the United States
of America, having a market value at least equal to 102% of the amount deposited
thereunder, or (B) with long-term debt rated (on the date of acquisition
thereof) at least "A" or "A2" or the equivalent by any Rating Agency and
short-term debt rated at least
ANNEX A-3
"A-1" or "P-1" or the equivalent by any Rating Agency, (ix) a contract or
investment agreement with a provider or guarantor (A) which provider or
guarantor is rated at least "A" or "A2" or the equivalent by any Rating Agency
(provided that if a guarantor is party to the rating, the guaranty must be
unconditional and must be confirmed in writing prior to any assignment by the
provider to another subsidiary of such guarantor,) (B) providing that monies
invested shall be payable without condition (other than notice) and without
brokerage fee or other penalty, upon not more than two Business Days' notice for
application when and as required or permitted under the Collateral Documents,
and (C) stating that such contract or agreement is unconditional, expressly
disclaiming any right of setoff and providing for immediate termination in the
event of insolvency of the provider and termination upon demand of the
Disbursement Agent if prior to Completion (which demand shall only be made at
the direction of the Pledgor) after payment or other covenant default by the
provider, or (x) any debt instruments of any Person which instruments are rated
(on the date of acquisition thereof) at least "▇," "▇▇," "A-1" or "P-1" or the
equivalent by any Rating Agency; provided that in each case of clauses (i)
through (x), such investments are denominated in United States dollars and
maturing not more than 13 months from the date of acquisition thereof; (b)
investments in any money market fund which is rated (on the date of acquisition
thereof) at least "A" or "A2" or the equivalent by any Rating Agency; (c)
investments in mutual funds sponsored by any securities broker-dealer of
recognized national standing having an investment policy that requires
substantially all the invested assets of such fund to be invested in investments
described in any one or more of the foregoing clauses and having a rating of at
least "A" or "A2" or the equivalent by any Rating Agency or (d) investments in
both taxable and nontaxable (i) periodic auction reset securities ("PARS") which
have final maturities between one and 30 years from the date of issuance and are
repriced through a dutch auction or other similar method every 35 days or (ii)
auction preferred shares ("APS") which are senior securities of leveraged closed
end municipal bond funds and are repriced pursuant to a variety of rate reset
periods, in each case having rating of at least "A" or "A2" or the equivalent by
any Rating Agency.
"Suspension Period" means the period (i) beginning promptly after
receipt by Securities Intermediary of written notice from Secured Party,
substantially in the form of the Prohibition Notice attached to this Agreement
as Attachment 1, suspending Pledgor's right to direct the investment of funds
held for the credit of the Collateral Accounts, and (ii) ending promptly after
receipt by Securities Intermediary of written notice from Secured Party,
substantially in the form of the Rescission of Prohibition Notice attached to
this Agreement as Attachment 2, rescinding the preceding Prohibition Notice.
ANNEX A-4
(b) General Provisions. Capitalized terms used but not defined
herein shall have the meaning given to such terms in Exhibit A. Unless otherwise
defined herein or in Exhibit A, terms used in Articles 8 and 9 of the Code are
used herein as therein defined. Words used herein, regardless of the number and
gender specifically used, shall be deemed and construed to include any other
number, singular or plural, and any other gender, masculine, feminine or neuter,
as the context indicates is appropriate. When a reference is made in this
Agreement to an Appendix, Exhibit, Introduction, Recital, Section or Schedule,
such reference shall be to an Appendix, an Exhibit, the Introduction, a Recital
or a Section of, or a Schedule to, this Agreement unless otherwise indicated.
The headings contained in this Agreement are for reference purposes only and
shall not affect in any way the meaning or interpretation of this Agreement.
Whenever the words "include," "includes" or "including" are used in this
Agreement, they shall be deemed to be followed by the words "without
limitation."
SECTION 2. Establishment and Operation of Mortgage Notes Proceeds
Account.
(a) Establishment of Mortgage Notes Proceeds Account. Pledgor and
Secured Party hereby authorize and direct Securities Intermediary to establish
and maintain at its office at ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, a
securities account in the name of Secured Party and under the sole dominion and
control of Secured Party, designated as "Bank of Nova Scotia Mortgage Notes
Proceeds Account." Securities Intermediary hereby undertakes to treat Secured
Party as the person entitled to exercise the rights that comprise any Financial
Asset credited to the Mortgage Notes Proceeds Account. Secured Party and Pledgor
agree that this account shall be the "Mortgage Notes Proceeds Account."
(b) Operations of the Mortgage Notes Proceeds Account. The
Mortgage Notes Proceeds Account shall be operated, and all Investments shall be
acquired and registered or held (as applicable), in accordance with the terms of
this Agreement.
(c) Account Statements. Securities Intermediary shall send Secured
Party and Pledgor written account statements with respect to the Mortgage Notes
Proceeds Account not less frequently than monthly. Reports or confirmation of
the execution of orders and statements of account shall be conclusive if not
objected to in writing within 30 days after delivery pursuant to Section 12.
ANNEX A-5
SECTION 3. Mechanics of Deposits of Funds to the Mortgage Notes
Proceeds Account.
(a) Transfers to the Mortgage Notes Proceeds Account. All
transfers of funds to the Mortgage Notes Proceeds Account shall be made by wire
transfer (or, if applicable, intra-bank transfer) of immediately available funds
addressed as follows:
The Chase Manhattan Bank, New York, New York
ABA No.: ▇▇▇-▇▇▇▇-▇▇
Reference: A/C ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co.
A/C# ▇▇▇-▇-▇▇▇▇▇▇
FFC A/C: BANK OF NOVA SCOTIA MORTGAGE NOTES
PROCEEDS ACCOUNT (VCR)
A/C#: ▇▇▇-▇▇▇▇▇-▇
ANNEX A-6
(b) Notice of Transfers. In the event of any transfer of funds to
the Mortgage Notes Proceeds Account pursuant to any provision of Section 3,
Pledgor, Secured Party, as the case may be, shall promptly after initiating or
sending out written instructions with respect to such transfer, give notice to
the other such party by facsimile of the date and amount of such transfer.
SECTION 4. Permitted Investments and Transfers of Amounts in the
Mortgage Notes Proceeds Account.
(a) Strict Compliance. Credit balances held by Securities
Intermediary in the Collateral Accounts shall not be (i) invested or reinvested,
(ii) sold or redeemed, or (iii) transferred from the Collateral Accounts, in
either case except as provided in this Section 4.
(b) Pledgor's Right to Direct Investment. Except during any
Suspension Period, Securities Intermediary shall, in accordance with Pledgor's
written Entitlement Orders given to Securities Intermediary from time to time,
sell or redeem Investments, and apply amounts transferred to or held for the
credit of the Mortgage Notes Proceeds Account to make investments for credit to
the Mortgage Notes Proceeds Account, in Securities Intermediary's name and as
custodian under this Agreement, in Permitted Investments denominated and payable
in United States dollars. During any Suspension Period, (i) Pledgor's right to
direct such investments under this Section 4(b) shall be suspended, and
Securities Intermediary shall not accept Entitlement Orders with respect to the
Mortgage Notes Proceeds Account from any person other than Secured Party; and
(ii) any credit balances shall be invested and reinvested only as provided in
Section 4(c).
(c) Overnight Investments. To the extent that, as of 12:00 noon,
New York time on any Business Day, there are credit balances expected to remain
after settlement of all pending transactions in any of the Collateral Accounts,
unless otherwise instructed by Secured Party, Securities Intermediary shall
apply the expected credit balances to acquire Overnight Investments. Any
Overnight Investments shall be held for the credit of the Collateral Accounts
from which the proceeds for acquisition was derived. If for any reason
Securities Intermediary fails to invest credit balances in Overnight Investments
as provided in this Section, Securities Intermediary shall credit the Mortgage
Notes Proceeds Account with daily interest on the uninvested free credit balance
in accordance with its usual practice.
ANNEX A-7
(d) Actions of Securities Intermediary on Purchase of Investments.
Promptly upon the purchase, acquisition or transfer for credit of the Collateral
Accounts of any Investment, Securities Intermediary shall take all steps that it
customarily takes in the ordinary course of its business to ensure that such
Investment is credited on its books to the Collateral Accounts. Without limiting
the generality of the foregoing, Securities Intermediary shall promptly (i) send
to Pledgor and Secured Party a written confirmation of the acquisition of such
Investment, and (ii) indicate by book entry in its records that such Investment
has been credited to, and is held for the credit of, the Mortgage Notes Proceeds
Account. Securities Intermediary agrees with Pledgor and Secured Party that any
credit balances or property credited to, or held for the credit of, the
Collateral Accounts shall be treated as "Financial Assets" as that term is
defined in Section 8-103(a)(9)(iii) of the Code.
(e) Control Agreement. Anything contained herein to the contrary
notwithstanding, Securities Intermediary shall, if and as directed in writing by
Secured Party, without the consent of Pledgor, (i) comply with Entitlement
Orders originated by Secured Party with respect to the Collateral Accounts and
any Security Entitlements therein, (ii) transfer, sell or redeem any of the
Collateral, (iii) transfer any or all of the Collateral to any account or
accounts designated by Secured Party, including an account established in
Secured Party's name (whether at Secured Party or Securities Intermediary or
otherwise), (iv) register title to any Collateral in any name specified by
Secured Party consistent with the policies or practices of the applicable
depository, including the name of Secured Party or any of its nominees or
agents, without reference to any interest of Pledgor, or (v) otherwise deal with
the Collateral as directed by Secured Party. Nothing contained in this paragraph
shall constitute a waiver of by Pledgor of any rights or remedies it may have
against Secured Party under this Agreement or any other agreement.
(f) Deposit of Proceeds. Any interest, cash dividends or other
cash distributions received in respect of any Investments and the net proceeds
of any sale or payment of any Investments shall be promptly credited to, and
held for the credit of, the Mortgage Notes Proceeds Account. Any distribution of
property other than cash in respect of any Investment shall be credited to, and
held for the credit of, the Mortgage Notes Proceeds Account.
SECTION 5. Acknowledgement of Security Interest in Favor of Secured
Party; Covenant Against Creation of other Interests.
(a) Acknowledgement of Security Interest. Securities Intermediary
acknowledges the security interest granted by Pledgor in favor of Secured Party
in the Collateral.
(b) Acknowledgement of Securities Intermediary's Role. Securities
Intermediary hereby further acknowledges that it holds the Collateral Accounts,
and all Security Entitlements therein, as custodian for, for the benefit of, and
subject to the control of, Secured Party. Securities Intermediary shall, by book
entry or otherwise, indicate that the Collateral Accounts, and all Security
Entitlements registered to or held therein, are subject to the control of
Secured Party as provided in Section 4(e).
ANNEX A-8
(c) Securities Intermediary Has No Notice of Adverse Claims.
Securities Intermediary represents and warrants that (i) it has no notice of any
Adverse Claim against any of the Collateral other than the claim of Secured
Party under this Agreement; and (ii) it is not party to any agreement other than
this Agreement that governs its rights or duties, or limits or conflicts with
the rights of Secured Party, including the exclusive right of Secured Party to
control as provided in Section 4(e), with respect to the Collateral Accounts.
(d) Securities Intermediary Shall Not Acknowledge Other Claims.
Securities Intermediary agrees that, except as expressly provided in this
Agreement (including Section 6(d)) or with the written consent of Secured Party,
it shall not agree to or acknowledge (i) any right by any Person other than
Secured Party to originate Entitlement Orders or control with respect to the
Collateral Accounts; or (ii) any limitation on the right of Secured Party to
originate Entitlement Orders with respect to or direct the transfer of any
Investments or cash credited to the Collateral Accounts.
SECTION 6. Securities Intermediary Maintenance of the Collateral
Accounts.
(a) Transactions Shall Comply With Rules. The parties acknowledge
that all transactions in Financial Assets under this Agreement shall be in
accordance with the rules and customs of the exchange, market or clearing
organization, if any, in which the transactions are executed or settled and in
conformity with applicable law and regulations of governmental authorities and
future amendments or supplements thereto.
(b) Fees and Charges of Securities Intermediary. Pledgor shall
promptly pay Securities Intermediary, in accordance with Securities
Intermediary's usual schedule of charges or any written agreement between
Securities Intermediary and Pledgor, any fees or charges reasonably imposed by
Securities Intermediary with respect to the establishment, maintenance or
transactions in or affecting the Collateral Accounts.
(c) Securities Intermediary Shall Not Permit Leverage of
Investments. Securities Intermediary shall not execute any transaction to
acquire Financial Assets under Section 4(b) unless (A) there are sufficient
funds in the Collateral Accounts to settle such transactions or (B) it is
reasonably anticipated that such funds may be generated through the liquidation
of Financial Assets then in the Collateral Accounts, or to sell or redeem any
Financial Asset which is not held, or reasonably expected to be acquired in
pending transactions, for the credit of the Mortgage Notes Proceeds Account.
Notwithstanding the foregoing sentence, in the event that Securities
Intermediary executes a transaction without adequate funds to settle the
transaction, Pledgor shall be liable to Securities Intermediary for any
deficiency and shall promptly reimburse Securities Intermediary for any loss or
expense incurred thereby, including losses sustained by reason of Securities
Intermediary's inability to borrow any securities or other property sold for the
Collateral Accounts. Pledgor agrees to pay interest charges which may be imposed
by Securities Intermediary in accordance with its usual custom, with respect to
late payments for securities or Financial Assets purchased for the Collateral
Accounts and prepayments in the Collateral Accounts (i.e., the crediting of the
proceeds of sale before the settlement date or receipt by Securities
Intermediary of the items
ANNEX A-9
sold in good deliverable form). Pledgor agrees to pay promptly any amount which
may become due in order to satisfy demands for additional margin or marks to
market with respect to any security purchased or sold on instruction from
Pledgor.
(d) Risk of Investments and Transactions. It is not the intention
of the parties that Securities Intermediary should bear any investment risk
associated with Permitted Investments or Overnight Investments acquired for the
credit of the Collateral Accounts in accordance with Section 4. Any losses or
gains realized on such Investments shall be charged or credited to the
Collateral Accounts, as appropriate. On committing to a transaction for the
credit of the Collateral Accounts pursuant to an instruction permitted in
accordance with Section 4, Securities Intermediary may, (i) pending settlement,
block (A) the Investments to be sold or (B) credit balances sufficient to settle
any acquisition, or investments the liquidation of which will yield funds
sufficient to settle any acquisition and, (ii) at the time of settlement,
deliver such Investments or funds in accordance with the rules, custom or
practice of the particular market.
(e) Use of Intermediaries and Nominees. Securities Intermediary is
authorized, subject to Secured Party's written instructions, to register any
Financial Assets acquired by Securities Intermediary pursuant to this Agreement
in the name of Securities Intermediary or in the name of its nominee, or to
cause such securities to be registered in the name of a Federal reserve bank or
a recognized securities intermediary or clearing corporation, or any nominee
thereof. Securities Intermediary may at any time and from time to time appoint,
and may at any time remove, any bank, trust company, clearing corporation, or
Broker-Dealer as its agent to carry out such of the provisions of this
Agreement. The appointment or use of any intermediary, or the appointment of any
such agent, shall not relieve Securities Intermediary of any responsibility or
liability under this Agreement.
(f) Corporate Actions. Except as otherwise set forth herein,
Pledgor and Secured Party agree that Securities Intermediary shall have no
responsibility for ascertaining or acting upon any calls, conversions, exchange
offers, tenders, interest rate changes or similar matters relating to any
Financial Assets credited to or held for the credit of the Collateral Accounts
(except based on written instructions originated by Pledgor or Secured Party),
or for informing Pledgor or Secured Party with respect thereto, whether or not
Securities Intermediary has, or is deemed to have, knowledge of any of the
aforesaid. Securities Intermediary is authorized to withdraw securities sold or
otherwise disposed of, and to credit the Mortgage Notes Proceeds Account's
account with the proceeds thereof or make such other disposition thereof as may
be directed in accordance with this Agreement. Securities Intermediary is
further authorized to collect all income and other payments which may become due
on Financial Assets credited to the Collateral Accounts, to surrender for
payment maturing obligations and those called for redemption and to exchange
certificates in temporary form for like certificates in definitive form, or, if
the par value of any shares is changed, to effect the exchange for new
certificates. It is understood and agreed by Pledgor and Secured Party that,
although Securities Intermediary will use reasonable efforts to effect the
transactions set forth in the preceding sentence, Securities Intermediary shall
incur no liability for its failure to effect the same unless its failure is the
result of wilful misconduct.
(g) Disclosure of Account Relationships. Pledgor and Secured Party
ANNEX A-10
acknowledge that Securities Intermediary may be required to disclose to
securities issuers the name, address and securities positions with respect to
Financial Assets credited to the Collateral Accounts, and hereby consent to such
disclosures.
(h) Forwarding of Documents. Securities Intermediary shall forward
to Pledgor and, if requested, Secured Party, or notify Pledgor and, if
requested, Secured Party by telephone of, all written communications received by
Securities Intermediary as owner of any Financial Assets credited to the
Collateral Accounts and which are intended to be transmitted to the beneficial
owner thereof.
(i) Direction of Secured Party Controls in Disputes. Pledgor,
Securities Intermediary and Secured Party hereby agree that in the event any
dispute arises with respect to the payment, ownership or right to possession of
the Collateral Accounts or any other Collateral credited to or held therein,
Securities Intermediary shall take such actions and shall refrain from taking
such actions with respect thereto as may be directed by Secured Party.
(j) No Setoff, etc. Securities Intermediary shall not exercise on
its own behalf any claim, right of set-off, banker's lien, clearing lien,
counterclaim or similar right against any of the Collateral; provided that
Securities Intermediary may deduct, from any credit balances, any usual and
ordinary transaction and administration fees payable in connection with the
administration and operation of the Collateral Accounts. Except for claims for
deductions permitted in the preceding sentence, Securities Intermediary agrees
that any security interest it may have in the Collateral Accounts or any
security entitlement carried therein shall be subordinate and junior to the
interest of Secured Party.
(k) Only Agreement. This Agreement shall govern the actions,
rights and obligations of Securities Intermediary, and shall determine the
governing law, with respect to the Collateral Accounts and the Collateral
notwithstanding any term or condition in any agreement other than this Agreement
as it may be amended, supplemented or otherwise modified in writing.
(l) Care of Financial Assets. Securities Intermediary shall
maintain possession or control of all Financial Assets credited to the
Collateral Accounts by segregating such Financial Assets from its proprietary
assets and keeping them free of any lien, charge or claim of any third party
granted or created by Securities Intermediary. Securities Intermediary shall
take such other steps to ensure that Financial Assets credited to the Collateral
Accounts are identified as being held for customers of Securities Intermediary
as may required under applicable law or in accordance with custom and practice
in the industry.
(m) Further Actions. Securities Intermediary shall take such
further actions as Secured Party shall reasonably request as being necessary or
desirable to maintain or achieve perfection or priority of Secured Party's
security interest with respect to the Collateral and to permit Secured Party to
exercise its rights with respect to the Collateral.
SECTION 7. Limitations on Duties, and Exculpation and
Indemnification, of Securities Intermediary.
ANNEX A-11
(a) Limitation on Duty of Care; Exculpation. Securities
Intermediary's duties hereunder are only those specifically provided herein, and
Securities Intermediary shall incur no liability whatsoever for any actions or
omissions hereunder except for any such liability arising out of or in
connection with Securities Intermediary's gross negligence or wilful misconduct.
Securities Intermediary has no obligation to ensure the sufficiency of this
Agreement or the arrangements described hereunder to satisfy any objectives of
Secured Party or Pledgor. Securities Intermediary shall have no duty to
supervise or to provide investment counseling or advice to Pledgor or Secured
Party with respect to the purchase, sale, retention or other disposition of any
Financial Assets held hereunder. Except as specifically otherwise provided in
this Agreement, Securities Intermediary shall not be responsible for enforcing
compliance by the other parties to this Agreement with their respective duties
and obligations to each other under this or any other Agreement.
(b) Consultation with Counsel. Securities Intermediary may consult
with, and obtain advice from, legal counsel as to the construction of any of the
provisions of this Agreement, and shall incur no liability in acting in good
faith in accordance with the reasonable advice and opinion of such counsel.
(c) Reasonable Reliance. Securities Intermediary shall be fully
protected and shall suffer no liability in acting in accordance with any written
instructions reasonably believed by it to have been given (i) by Secured Party
with respect to any aspect of the operation of the Collateral Accounts
(including any such instructions relating to any investment or transfer of any
amounts held therein), (ii) by Pledgor, to the extent provided in Section 4(b),
with respect to the Collateral Accounts, or (iii) by Secured Party originally
named herein until such time as Securities Intermediary receives notice of the
substitution of Secured Party pursuant to Section 11.
(d) Indemnification. Pledgor agrees to indemnify Securities
Intermediary from and against any and all claims, losses, liabilities and
expenses (including reasonable attorneys' fees and expenses) in any way relating
to, growing out of or resulting from this Agreement or the performance of its
obligations hereunder, except to the extent arising out of or in connection with
Securities Intermediary's gross negligence or wilful misconduct.
SECTION 8. Representations and Warranties By Securities
Intermediary. Securities Intermediary hereby represents and warrants to Pledgor
and Secured Party as follows:
(a) Corporate Power. Securities Intermediary has all necessary
corporate power and authority to enter into and perform this Agreement.
(b) Execution Authorized. The execution, delivery and performance
of this Agreement by Securities Intermediary have been duly authorized by all
necessary corporate action on the part of Securities Intermediary.
(c) Securities Intermediary. Securities Intermediary is a
"securities intermediary" (as that term is defined in Section 8-102(a)(14) of
the Code) and is acting in such
ANNEX A-12
capacity with respect to the Collateral Accounts. Securities Intermediary is not
a "clearing corporation" (as that term is defined in Section 8-102(a)(5) of the
Code).
SECTION 9. Termination. This Agreement shall terminate, and all
rights to the Collateral Accounts and all other Collateral registered to or held
therein shall revert to Pledgor, upon Securities Intermediary's receipt of
written notice, signed by an authorized officer of Secured Party, that the
Mortgage Notes Proceeds Collateral Account Agreement has terminated.
SECTION 10. Resignation and Removal of Securities Intermediary.
(a) Removal. Securities Intermediary may be removed at any time by
written notice given by Secured Party to Securities Intermediary and Pledgor,
but such removal shall not become effective until a successor Securities
Intermediary shall have been appointed by Secured Party and shall have accepted
such appointment in writing.
(b) Resignation. Securities Intermediary may resign at any time by
giving not less than thirty days' written notice to Secured Party and Pledgor,
but such removal shall not become effective until a successor Securities
Intermediary shall have been appointed by Secured Party and shall have accepted
such appointment in writing. If an instrument of acceptance by a successor
Securities Intermediary shall not have been delivered to the resigning
Securities Intermediary within sixty days after the giving of any such notice of
resignation, the resigning Securities Intermediary may, at the expense of
Pledgor, petition any court of competent jurisdiction for the appointment of a
successor Securities Intermediary.
(c) Successor Securities Intermediary. Any successor Securities
Intermediary shall be a bank or trust company, having capital and surplus of at
least $100 million, located in the State of New York.
(d) Process of Succession. Upon the appointment of a successor
Securities Intermediary and its acceptance of such appointment, the resigning or
removed Securities Intermediary shall transfer all items of Collateral held by
it to such successor (which items of Collateral shall be transferred to a new
Mortgage Notes Proceeds Account established and maintained by such successor).
Following such appointment all references herein to Securities Intermediary
shall be deemed a reference to such successor; provided that the provisions of
Section 7 hereof shall continue to inure to the benefit of the resigning or
removed Securities Intermediary with respect to any actions taken or omitted to
be taken by it under this Agreement while it was Securities Intermediary
hereunder.
SECTION 11. Secured Party as Disbursement Agent. Secured Party has
been appointed to act as Secured Party hereunder by Lenders pursuant to the
Disbursement Agreement. Secured Party shall at all times be the same Person that
is Disbursement Agent under the Disbursement Agreement. Written notice of
resignation by Disbursement Agent pursuant to subsection 9.7 of the Disbursement
Agreement shall also constitute notice of resignation as Secured Party under
this Agreement; removal of Disbursement Agent pursuant to subsection 9.7 of the
Disbursement Agreement shall also constitute removal as Secured Party
ANNEX A-13
under this Agreement; and substitution of a successor disbursement agent
pursuant to subsection 9.7 of the Disbursement Agreement shall also constitute
substitution of a successor Secured Party under this Agreement. Upon the
acceptance of any appointment as Disbursement Agent under subsection 9.7 of the
Disbursement Agreement by a successor Disbursement Agent, that successor
Disbursement Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the retiring or removed Secured Party
under this Agreement, and the retiring or removed Secured Party under this
Agreement shall promptly (i) transfer to such successor Secured Party all items
of Collateral held by Secured Party, together with all records and other
documents necessary or appropriate in connection with the performance of the
duties of the successor Secured Party under this Agreement, and (ii) execute and
deliver to such successor Secured Party such documents and take such other
actions, as may be necessary or appropriate in connection with the assignment to
such successor Secured Party of the security interests created hereunder,
whereupon such retiring or removed Secured Party shall be discharged from its
duties and obligations under this Agreement.
SECTION 12. Notices. Any communications between the parties hereto
or notices provided herein to be given may be given to the address of the party
as set forth under such party's name on the signature pages hereof. All notices
or other communications required or permitted to be given hereunder shall be in
writing and shall be considered as properly given (a) if delivered in person,
(b) if sent by reputable overnight delivery service, (c) in the event overnight
delivery services are not readily available, if mailed by first class mail,
postage prepaid, registered or certified with return receipt requested or (d) if
sent by prepaid telex, or by telecopy with correct answer back received. Notice
so given shall be effective upon receipt by the addressee, except that
communication or notice so transmitted by telecopy or other direct written
electronic means shall be deemed to have been validly and effectively given on
the day (if a Business Day and, if not, on the next following Business Day) on
which it is validly transmitted if transmitted before 4 p.m., recipient's time,
and if transmitted after that time, on the next following Business Day;
provided, however, that if any notice is tendered to an addressee and the
delivery thereof is refused by such addressee, such notice shall be effective
upon such tender. Any party shall have the right to change its address for
notice hereunder to any other location by giving of no less than twenty (20)
days' notice to the other parties in the manner set forth hereinabove.
SECTION 13. Amendments; Etc. No amendment or waiver of any provision
of this Agreement, or consent to any departure by any party herefrom, shall in
any event be effective unless the same shall be in writing and signed by the
other parties, and then such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which it was given.
SECTION 14. Severability. In case any provision in or obligation
under this Agreement shall be invalid, illegal or unenforceable in any
jurisdiction, the validity, legality and enforceability of the remaining
provisions or obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired thereby.
SECTION 15. Headings. Section and subsection headings in this
Agreement are included herein for convenience of reference only and shall not
constitute a part of this
ANNEX A-14
Agreement for any other purpose or be given any substantive effect.
SECTION 16. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND
SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE
STATE OF NEW YORK, WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES. Securities
Intermediary's Jurisdiction shall be New York.
SECTION 17. Waiver of Jury Trial. PLEDGOR, SECURED PARTY AND
SECURITIES INTERMEDIARY HEREBY AGREE TO WAIVE THEIR RESPECTIVE RIGHTS TO A JURY
TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS
AGREEMENT. The scope of this waiver is intended to be all-encompassing of any
and all disputes that may be filed in any court and that relate to the subject
matter of this transaction, including contract claims, tort claims, breach of
duty claims, and all other common law and statutory claims. Pledgor, Secured
Party and Securities Intermediary each acknowledge that this waiver is a
material inducement for Pledgor and Secured Party to enter into a business
relationship, that Pledgor, Secured Party and Securities Intermediary have
already relied on this waiver in entering into this Agreement and that each will
continue to rely on this waiver in their related future dealings. Pledgor,
Secured Party and Securities Intermediary further warrant and represent that
each has reviewed this waiver with its legal counsel, and that each knowingly
and voluntarily waives its jury trial rights following consultation with legal
counsel. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER
ORALLY OR IN WRITING, AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT. In the event of
litigation, this Agreement may be filed as a written consent to a trial by the
court.
SECTION 18. Counterparts. This Agreement may be executed in one or
more counterparts and by different parties hereto in separate counterparts, each
of which when so executed and delivered shall be deemed an original, but all
such counterparts together shall constitute but one and the same instrument;
signature pages may be detached from multiple separate counterparts and attached
to a single counterpart so that all signature pages are physically attached to
the same document.
[Remainder of page intentionally left blank]
ANNEX A-15
IN WITNESS WHEREOF, the undersigned have executed this Agreement as
of the date first set forth above.
PLEDGOR:
LAS VEGAS SANDS, INC.,
a Nevada corporation
By: __________________________________
Name:
Title:
Notice Address: ▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile Number: (▇▇▇) ▇▇▇-▇▇▇▇
VENETIAN CASINO RESORT, LLC,
a Nevada limited liability company
By: LAS VEGAS SANDS, INC., its managing member
By:______________________________
Name:
Title:
Notice Address: ▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile Number: (▇▇▇) ▇▇▇-▇▇▇▇
ANNEX A-S-1
GRAND CANAL SHOPS MALL CONSTRUCTION, LLC,
a Delaware limited liability company
By: VENETIAN CASINO RESORT, LLC, its sole
member
By: LAS VEGAS SANDS, INC., its managing
member
By:______________________________
Name:
Title:
Notice Address: ▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile Number: (▇▇▇) ▇▇▇-▇▇▇▇
SECURED PARTY:
THE BANK OF NOVA SCOTIA, a Canadian chartered
bank, as Disbursement Agent under the Disbursement
Agreement
By: __________________________________
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Title: Relationship Manager
Notice Address: The Bank of Nova Scotia
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Relationship Manager
Facsimile Number: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to: The Bank of Nova Scotia
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Facsimile Number: (▇▇▇) ▇▇▇-▇▇▇▇
ANNEX A-S-2
SECURITIES INTERMEDIARY:
▇▇▇▇▇▇▇, SACHS & CO., as Securities Intermediary
By: __________________________________
Title:
Notice Address: ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co.
▇▇▇▇▇▇ Street Tower
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile Number: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to: ▇▇▇▇▇▇▇, Sachs & Co.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
Facsimile Number: (▇▇▇) ▇▇▇-▇▇▇▇
ANNEX A-S-3
ATTACHMENT 1
[FORM OF PROHIBITION NOTICE]
[Letterhead of Secured Party]
[date of notice]
TO: [Securities Intermediary]
-------------------------------
-------------------------------
-------------------------------
Attn:
--------------------------
Facsimile no.
------------------
CC: [Pledgor]
---------------------
-------------------------------
-------------------------------
-------------------------------
Attn:
--------------------------
Facsimile no.
------------------
Re: Prohibition Notice under that Certain Mortgage Notes Proceeds Third-
Party Account Agreement/Bank of Nova Scotia Mortgage Notes
Proceeds Account Number ▇▇▇-▇▇▇▇▇-▇ ________________________________
Ladies and Gentlemen:
Pursuant to the Mortgage Notes Proceeds Third-Party Account Agreement dated
November 14, 1997 ("Third-Party Account Agreement") among The Bank of Nova
Scotia, as Secured Party, certain Pledgors and Securities Intermediary, we
hereby give you this Prohibition Notice and notify you of the commencement of a
Suspension Period. Until further notice from the undersigned substantially in
the form of Attachment 2 to the Third-Party Account Agreement, [Securities
Intermediary] shall not accept or follow instructions from Pledgor pursuant to
Section 4(b) of the Third-Party Account Agreement.
Capitalized terms used and not otherwise defined in this notice are used with
their respective meanings in the Third-Party Account Agreement.
Yours truly,
[Secured Party]
By:
-------------------------
Its:
-------------------------
ANNEX A/ATTACHMENT 1-1
ATTACHMENT 2
[FORM OF RESCISSION OF PROHIBITION NOTICE]
[Letterhead of Secured Party]
[date of notice]
TO: [Securities Intermediary]
-------------------------------
-------------------------------
-------------------------------
Attn:
--------------------------
Facsimile no.
------------------
CC: [Pledgor]
---------------------
-------------------------------
-------------------------------
-------------------------------
Attn:
--------------------------
Facsimile no.
------------------
Re: Rescission of Prohibition Notice under that Certain Mortgage Notes
Proceeds Third-Party Account Agreement/Bank of Nova Scotia Mortgage
Notes Proceeds Account Number ▇▇▇-▇▇▇▇▇-▇ _________________________
Ladies and Gentlemen:
Pursuant to the Mortgage Notes Proceeds Third-Party Account Agreement dated
November 14, 1997 ("Third-Party Account Agreement") among The Bank of Nova
Scotia, as Secured Party, certain Pledgors and Securities Intermediary, we
hereby notify you of the rescission by [Secured Party] of the Prohibition Notice
dated [date of Prohibition Notice] and the end of the related Suspension Period.
You are hereby instructed that, until receipt of a new Prohibition Notice, you
shall accept and follow written instructions from Pledgor pursuant to Section
4(b) of the Third-Party Account Agreement.
Capitalized terms used and not otherwise defined in this notice are used with
their respective meanings in the Third-Party Account Agreement.
Yours truly,
[Secured Party]
By:
-------------------------
Its:
-------------------------
ANNEX A/ATTACHMENT 2-1