Exhibit 10.38
Conformed copy
PLEDGE AND SECURITY AGREEMENT
among
The Pledgors Named Herein
and
DEUTSCHE BANK TRUST COMPANY AMERICAS,
as Collateral Agent
dated as of June 6, 2002
Table of Contents
Page
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1. SECURITY FOR OBLIGATIONS .......................................................... 3
2. DEFINITION OF STOCK, LIMITED LIABILITY COMPANY INTERESTS, PARTNERSHIP
INTERESTS, SECURITIES, ETC .................................................... 5
3. PLEDGE OF SECURITIES, ETC. ........................................................ 6
4. APPOINTMENT OF SUB-AGENTS; ENDORSEMENTS, ETC ...................................... 9
5. VOTING, ETC., WHILE NO EVENT OF DEFAULT ........................................... 9
6. DIVIDENDS AND OTHER DISTRIBUTIONS ................................................. 9
7. REMEDIES IN CASE OF EVENT OF DEFAULT .............................................. 9
8. REMEDIES, ETC., CUMULATIVE ........................................................ 11
9. APPLICATION OF PROCEEDS ........................................................... 11
10. PURCHASERS OF COLLATERAL ......................................................... 13
11. INDEMNITY ........................................................................ 13
12. FURTHER ASSURANCES; POWER OF ATTORNEY ............................................ 13
13. THE PLEDGEE AS AGENT ............................................................. 14
14. TRANSFER BY PLEDGORS ............................................................. 14
15. REPRESENTATIONS, WARRANTIES AND COVENANTS OF PLEDGORS ............................ 14
16. PLEDGORS' OBLIGATIONS ABSOLUTE, ETC .............................................. 17
17. REGISTRATION, ETC ................................................................ 18
18. TERMINATION, RELEASE ............................................................. 18
19. NOTICES, ETC ..................................................................... 19
20. WAIVER; AMENDMENT ................................................................ 20
21. RELEASE OF PLEDGORS .............................................................. 20
22. ADDITIONAL PLEDGORS .............................................................. 20
23. RECOURSE ......................................................................... 21
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Table of Contents
(continued)
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24. PLEDGEE NOT BOUND ................................................................. 21
25. CONTINUING PLEDGORS ............................................................... 21
26. NO FRAUDULENT CONVEYANCE .......................................................... 22
27. CANADIAN REVOLVING LOAN BORROWERS ................................................. 22
28. MISCELLANEOUS ..................................................................... 22
29. WAIVER OF TRIAL BY JURY ........................................................... 22
30. SEVERABILITY ...................................................................... 22
Annex A - List of Pledged Stock
Annex B - List of Pledged Limited Liability Company Interests
Annex C - List of Pledged Partnership Interests
Annex D - Form of Partnership/LLC Notice
Annex E - Form of Acknowledgment and Agreement
Annex F - Jurisdiction of Formation and Organizational ID Number
Annex G - The Pledgee
Annex H-1 - Form of Pledge and Security Agreement Supplement
Annex H-2 - Form of New Pledgor Supplement
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PLEDGE AND SECURITY AGREEMENT
PLEDGE AND SECURITY AGREEMENT, dated as of June 6, 2002 (as amended,
modified or supplemented from time to time, this "Agreement"), made by each of
the undersigned pledgors (each a "Pledgor", and together with any entity that
becomes a party hereto pursuant to Section 22 hereof, the "Pledgors"), in favor
of DEUTSCHE BANK TRUST COMPANY AMERICAS, as Collateral Agent, for the benefit of
the Secured Creditors (as defined in Section 1 below) (in such capacity, the
"Pledgee"). Except as otherwise defined herein, terms used herein and defined in
the Credit Agreement (as defined below) shall be used herein as therein defined.
W I T N E S S E T H :
WHEREAS, Host Marriott, L.P. (the "U.S. Borrower"), each Canadian
evolving Loan Borrower from time to time party thereto (a "Canadian Revolving
Loan Borrower"), various lenders from time to time party thereto (the
"Lenders"), Deutsche Bank Trust Company Americas, as the Administrative Agent
(in such capacity and together with any successor thereto, the "Administrative
Agent"), and the Syndication Agents and Documentation Agents party thereto
(together with the Pledgee, the Lenders, the Documentation Agents, the
Administrative Agent and their respective successors and assigns, the "Lender
Creditors"), have entered into a Credit Agreement dated as of June 6, 2002,
providing for the making of Loans and other extensions of credit to the U.S.
Borrower and the Canadian Revolving Loan Borrowers as contemplated therein (as
used herein, the term "Credit Agreement" means the Credit Agreement described
above in this paragraph, as the same may be amended, modified, extended,
renewed, replaced, restated, supplemented or refinanced from time to time, and
including any agreement extending the maturity of, or refinancing or
restructuring (including, but not limited to, the inclusion of additional
borrowers or guarantors thereunder or any increase in the amount borrowed) all
or any portion of, the indebtedness under such agreement or any successor
agreement, whether or not with the same agent, trustee, representative, lenders
or holders; provided that, with respect to any agreement providing for the
refinancing or replacement of indebtedness under the Credit Agreement, such
agreement shall only be treated as, or as part of, the Credit Agreement
hereunder if (i) either (A) all obligations under the Credit Agreement being
refinanced or replaced shall be paid in full at the time of such refinancing or
replacement, and all commitments and letters of credit issued pursuant to the
refinanced or replaced Credit Agreement shall have terminated in accordance with
their terms or (B) the Required Lenders shall have consented in writing to the
refinancing or replacement indebtedness being treated as indebtedness pursuant
to the Credit Agreement, and (ii) a notice to the effect that the refinancing or
replacement indebtedness shall be treated as issued under the Credit Agreement
shall be delivered by the U.S. Borrower to the Pledgee);
WHEREAS, each Borrower may from time to time be party to (or guaranty
the obligations of one or more of its Subsidiaries under) one or more Interest
Rate Protection Agreements and/or Other Hedging Agreements that by its terms
requires the obligations of such Borrower under such Interest Rate Protection
Agreement or Other Hedging Agreement be secured by the Collateral (as
hereinafter defined) (such Interest Rate Protection or Other Hedging Agreement,
a "Secured Hedging Agreement") with a Lender Creditor or an affiliate of a
Lender Creditor (each such Lender Creditor or affiliate, even if the respective
Lender Creditor
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subsequently ceases to be a Lender under the Credit Agreement for any reason,
together with such Lender Creditor's or affiliate's successors and assigns,
collectively, the "Other Creditors");
WHEREAS, pursuant to the Subsidiaries Guaranty, each Guarantor that is
a Domestic Subsidiary (a "Domestic Guarantor") has jointly and severally
guaranteed to the Lender Creditors and the Other Creditors the payment when due
of all obligations and liabilities of the Borrowers under or with respect to (x)
the Credit Documents (as used herein, the term "Credit Documents" shall have the
meaning provided in the Credit Agreement and shall include any documentation
executed and delivered in connection with any replacement or refinancing of the
Credit Agreement) and (y) each Secured Hedging Agreement with one or more of the
Other Creditors;
WHEREAS, on the date hereof, there remain outstanding certain of the
U.S. Borrower's (i) 91/2% Senior Secured Notes due 2005, (ii) 87/8% Senior Notes
due 2007 and (iii) 9% Senior Notes due 2007 (collectively, the "HMH Notes")
(with the holders from time to time of such HMH Notes being herein called the
"HMH Noteholders") which were issued pursuant to each of the respective
indentures entered into by the Borrower (as successor to HMH Properties, Inc.),
the subsidiary guarantors named therein and Marine Midland Bank, as trustee in
connection with the HMH Notes (collectively, the "HMH Note Indentures");
WHEREAS, with respect to those HMH Notes that remain outstanding on
the date hereof, various of the Pledgors continue to guaranty the payment when
due of all of the obligations and liabilities of the U.S. Borrower under or with
respect to such HMH Notes and the HMH Note Indentures (with any such guarantees,
together with the HMH Notes and the HMH Note Indentures, being herein
collectively called "HMH Note Documents");
WHEREAS, the U.S. Borrower has prior to the date hereof issued (i)
$500,000,000 7-7/8% Series A Senior Notes due August 2005, (ii) $1,200,000,000
7-7/8% Series B Senior Notes due August 2008, (iii) $500,000,000 8.45% Series C
Senior Notes due December 2008, (iv) $300,000,000 8-3/8% Series E Senior Notes
due February 2006, (v) $250,000,000 9-1/4% Series G Senior Notes due 2007, (vi)
$450,000,000 9-1/2% Series H Senior Notes due January 2007, (vii) $5,922,000
93/8% Debentures due June 2007 and (viii) $6,873,000 10% Series L Senior Notes
due May 2012 (collectively, together with any other issue of senior notes
pursuant to the Senior Note Indenture (as hereinafter defined) not in violation
of Section 11.01 of the Credit Agreement, the "Senior Notes") (with the holders
from time to time of such Senior Notes being herein called the "Senior
Noteholders") pursuant to the Indenture, dated as of August 5, 1998, among the
U.S. Borrower, the guarantors and subsidiary guarantors named therein and Marine
Midland Bank, as trustee, in connection with the Senior Notes (the "Senior Note
Indenture");
WHEREAS, various of the Pledgors have issued, or in the future may
enter into, guarantees of the payment when due of all of the obligations and
liabilities of the U.S. Borrower under or with respect to the Senior Notes and
the Senior Note Indenture (with any such guarantees, together with the Senior
Notes and Senior Note Indenture, being herein collectively called "Senior Note
Documents");
WHEREAS, it is a condition precedent to the Credit Agreement that each
Pledgor shall have executed and delivered to the Pledgee this Agreement; and
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WHEREAS, each Pledgor desires to execute this Agreement to satisfy the
conditions described in the immediately preceding paragraph;
NOW, THEREFORE, in consideration of the benefits accruing to each
Pledgor, the receipt and sufficiency of which are hereby acknowledged, each
Pledgor hereby makes the following representations and warranties and hereby
covenants and agrees as follows:
1. SECURITY FOR OBLIGATIONS. (a) This Agreement is made by each
Pledgor in favor of the Pledgee for the benefit of the Lender Creditors, the
Other Creditors, the Senior Noteholders, and any trustee, agent or other similar
representative of any such creditors or holders (collectively, together with the
Pledgee, the "Secured Creditors"), to secure on an equal and ratable basis:
(i) the full and prompt payment when due (whether at the stated
maturity, by acceleration or otherwise) of all obligations (including
obligations which, but for the automatic stay under Section 362(a) of the
Bankruptcy Code, would become due) and liabilities (including, without
limitation, indemnities, fees and interest thereon) of such Pledgor (as
obligor or guarantor, as the case may be) and each Borrower to the Lender
Creditors, whether now existing or hereafter incurred under, arising out of
or in connection with the Credit Agreement and all other Credit Documents
to which it is at any time a party (including, without limitation, all such
obligations and liabilities of such Pledgor under the Credit Agreement (if
a party thereto) and under any guaranty by it of the obligations under the
Credit Agreement) and the due performance and compliance by such Pledgor
with the terms of each such Credit Document (all such obligations and
liabilities under this clause (i) being herein collectively called the
"Credit Document Obligations");
(ii) the full and prompt payment when due (whether at the stated
maturity, by acceleration or otherwise) of all obligations (including
obligations which, but for the automatic stay under Section 362(a) of the
Bankruptcy Code, would become due) and liabilities of such Pledgor (as
obligor or guarantor, as the case may be) to the Other Creditors, whether
now existing or hereafter incurred under, arising out of or in connection
with any Secured Hedging Agreement (including, without limitation, all such
obligations and liabilities of such Pledgor under any guaranty by it of the
obligations under any Secured Hedging Agreement) and the due performance
and compliance by such Pledgor with the terms of each such Secured Hedging
Agreement (all such obligations and liabilities under this clause (ii)
being herein collectively called the "Other Obligations");
(iii) the full and prompt payment when due (whether at the stated
maturity, by acceleration or otherwise) of all obligations (including
obligations which, but for the automatic stay under Section 362(a) of the
Bankruptcy Code, would become due) and liabilities (including, without
limitation, indemnities, fees and interest thereon) of such Pledgor (as
obligor or guarantor, as the case may be) to the HMH Noteholders, whether
now existing or hereafter incurred under, arising out of or in connection
with the HMH Notes and the other HMH Note Documents to which such Pledgor
is at any time a party (including, without limitation, all such obligations
and liabilities of such Pledgor under any guaranty with respect thereto)
and the due performance and compliance by such
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Pledgor with all of the terms, conditions and agreements on its part
contained in each such HMH Note Document (all such obligations and
liabilities under this clause (iii) being herein collectively called the
"HMH Note Obligations");
(iv) the full and prompt payment when due (whether at the stated
maturity, by acceleration or otherwise) of all obligations (including
obligations which, but for the automatic stay under Section 362(a) of the
Bankruptcy Code, would become due) and liabilities (including, without
limitation, indemnities, fees and interest thereon) of such Pledgor (as
obligor or guarantor, as the case may be) to the Senior Noteholders,
whether now existing or hereafter incurred under, arising out of or in
connection with the Senior Note Documents to which such Pledgor is at any
time a party (including, without limitation, all such obligations and
liabilities of such Pledgor under the Senior Note Indenture or any guaranty
by it of the obligations under the Senior Note Indenture) and the due
performance and compliance by such Pledgor with all of the terms,
conditions and agreements on its part contained in each such Senior Note
Document (all such obligations and liabilities under this clause (iv) being
herein collectively called the "Senior Note Obligations");
(v) any and all sums advanced by the Pledgee in order to preserve
the Collateral (as hereinafter defined) or preserve its security interest
in the Collateral;
(vi) in the event of any proceeding for the collection or enforcement
of any indebtedness, obligations, or liabilities referred to in clauses (i)
through (iv) above after an Event of Default (such term, as used in this
Agreement, shall mean (a) any "Event of Default" at any time under, and as
defined in, any of the Credit Agreement, the HMH Note Documents and the
Senior Note Documents, and (b) any payment default (after the expiration of
any applicable grace period) on any of the Obligations secured hereunder at
such time) shall have occurred and be continuing, the reasonable expenses
of retaking, holding, preparing for sale or lease, selling or otherwise
disposing or realizing on the Collateral, or of any exercise by the Pledgee
of its rights hereunder, together with reasonable attorneys' fees and court
costs; and
(vii) all amounts paid by any Secured Creditor as to which such
Secured Creditor has the right to reimbursement under Section 11 of this
Agreement;
all such obligations, liabilities, sums and expenses set forth in clauses (i)
through (vii) of this Section 1, subject to the provisions of following clause
(b), being herein collectively called the "Obligations," it being acknowledged
and agreed that the "Obligations" shall include extensions of credit of the type
described above, whether outstanding on the date of this Agreement or extended
from time to time after the date of this Agreement.
(b) The U.S. Borrower will give prompt written notice to the
Pledgee of any Senior Notes issued after the date hereof (each, a "Notice of
Pledge Agreement Entitlement") as follows:
Such written notice from the U.S. Borrower (i) shall
state that it is a "Notice of Pledge Agreement
Entitlement", (ii) shall be delivered to the Pledgee,
(iii) shall describe the new Senior Notes to be secured
hereby, (iv) shall state that it is delivered pursuant
to
Section 1(b) of this Pledge and Security Agreement, (v)
shall reference the aggregate principal amount of such
new Indebtedness, and (vi) shall state that such new
Indebtedness and the incurrence thereof does not
violate, and may be incurred and secured hereunder in
accordance with, the applicable provisions of Sections
11.02 of the Credit Agreement and Section 4.7 of the
Senior Note Indenture.
2. DEFINITION OF STOCK, LIMITED LIABILITY COMPANY INTERESTS,
PARTNERSHIP INTERESTS, SECURITIES, ETC. (a) As used herein: (i) the term "Stock"
shall mean (x) with respect to corporations incorporated under the laws of the
United States or any State or territory thereof (each a "Domestic Corporation"),
all of the issued and outstanding shares of capital stock of any Domestic
Corporation at any time owned by any Pledgor and (y) with respect to
corporations that are not Domestic Corporations (each a "Foreign Corporation"),
all of the issued and outstanding shares of capital stock of any Foreign
Corporation at any time owned by any Pledgor, provided that, (A) except as
provided in the last sentence of this Section 2(a) and except for Foreign
Subsidiaries that are Look-Through Subsidiaries, such Pledgor shall not be
required to pledge hereunder more than 65% of the total combined voting power of
all classes of capital stock entitled to vote for the directors of such Foreign
Corporation (herein called "Voting Stock") owned by such Pledgor of any Foreign
Corporation and (B) such Pledgor shall be required to pledge hereunder 100% of
the issued and outstanding shares of all capital stock which is not Voting Stock
(herein called "Non-Voting Stock") at any time owned by such Pledgor of any
Foreign Corporation; (ii) the term "Limited Liability Company Interest" shall
mean the entire limited liability company interests or membership interests at
any time owned by each Pledgor in any limited liability company (each such
limited liability company to the extent an interest therein is required to be
pledged pursuant to the Credit Agreement, a "Pledged Limited Liability
Company"); (iii) the term "Partnership Interest" shall mean the entire
partnership interests (whether general and/or limited partnership interests) at
any time owned by each Pledgor in any partnership (whether a general or limited
partnership) (each such partnership, to the extent an interest therein is
required to be pledged pursuant to the Credit Agreement, a "Pledged
Partnership"); and (iv) the term "Securities" shall mean all of the Stock,
Limited Liability Company Interests and Partnership Interests.
In the circumstances and to the extent provided in Section 10.14 of
the Credit Agreement, the limitation set forth in part (A) of the proviso to
clause (i)(y) of this Section 2(a) and in Section 3.2 hereof shall no longer be
applicable and such Pledgor shall duly pledge and deliver to the Pledgee such of
the Securities not theretofore required to be pledged hereunder.
(b) All Stock at any time pledged or required to be pledged hereunder
and under the Credit Agreement is hereinafter called the "Pledged Stock," all
Limited Liability Company Interests at any time pledged or required to be
pledged hereunder and under the Credit Agreement are hereinafter called the
"Pledged Limited Liability Company Interests," all Partnership Interests at any
time pledged or required to be pledged hereunder and under the Credit Agreement
are hereinafter called the "Pledged Partnership Interests," and all of the
Pledged Stock, Pledged Limited Liability Company Interests and Pledged
Partnership Interests together are hereinafter called the "Pledged Securities,"
which together with (i) all proceeds thereof, including any securities and
moneys received and at the time held by the Pledgee hereunder, (ii) the entries
on the books of any securities intermediary pertaining to the Pledged
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Stock, Pledged Limited Liability Company Interests and Pledged Partnership
Interests, (iii) all dividends, cash, warrants, rights, instruments and other
property or proceeds from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of the Pledged Stock,
Pledged Limited Liability Company Interests and Pledged Partnership Interests
and (iv) all rights under Sections 3.1(a)(iv) and (v) hereof are hereinafter
called the "Collateral".
(c) Notwithstanding anything to the contrary contained in this
Agreement, no Pledgor shall be required to pledge hereunder the Securities of a
Person as, and to the extent, that the Securities of such Person are not
required to be pledged pursuant to Section 10.15(a)(2) of the Credit Agreement,
and such Securities shall be excluded from the Collateral hereunder.
3. PLEDGE OF SECURITIES, ETC.
3.1 Pledge. (a) To secure all Obligations of such Pledgor and for the
purposes set forth in Section 1 hereof, each Pledgor hereby: (i) grants to the
Pledgee for the benefit of the Secured Creditors a first priority security
interest in all of the Collateral owned by such Pledgor; (ii) pledges and
deposits as security with the Pledgee for the benefit of the Secured Creditors
the certificated Pledged Securities owned by such Pledgor on the date hereof,
and delivers to the Pledgee all certificates or instruments therefor, if any,
accompanied by undated stock powers duly executed in blank by such Pledgor in
the case of Pledged Stock, or such other instruments of transfer as are
reasonably acceptable to the Pledgee; (iii) assigns, transfers, hypothecates,
mortgages, charges and sets over to the Pledgee for the benefit of the Secured
Creditors all of such Pledgor's right, title and interest in and to such Pledged
Securities (and in and to all certificates or instruments evidencing such
Pledged Securities), to be held by the Pledgee upon the terms and conditions set
forth in this Agreement; (iv) transfers and assigns to the Pledgee for the
benefit of the Secured Creditors all of such Pledgor's Pledged Limited Liability
Company Interests (and delivers any certificates or instruments evidencing such
limited liability company or membership interests, duly endorsed in blank) and
all of such Pledgor's right, title and interest in each limited liability
company to which such interests relate, whether now existing or hereafter
acquired, including, without limitation:
(A) all the capital thereof and its interest in all profits, losses,
Limited Liability Company Assets (as defined below) and other distributions
to which such Pledgor shall at any time be entitled in respect of such
Pledged Limited Liability Company Interests;
(B) all other payments due or to become due such Pledgor in respect of
Pledged Limited Liability Company Interests, whether under any limited
liability company agreement or otherwise, whether as contractual
obligations, damages, insurance proceeds or otherwise;
(C) all of its claims, rights, powers, privileges, authority, options,
security interests, liens and remedies, if any, under any limited liability
company agreement or operating agreement, or at law or otherwise in respect
of such Pledged Limited Liability Company Interests (except any rights as
managing member of a limited liability company which is not a Wholly-Owned
Subsidiary, to the extent the applicable limited liability company
agreement or operating agreement contains an enforceable prohibition
against the creation of a security interest in such rights);
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(D) all present and future claims, if any, of such Pledgor against any
Pledged Limited Liability Company for moneys loaned or advanced, for
services rendered or otherwise;
(E) subject to Section 5 hereof, all of such Pledgor's rights under
any limited liability company agreement or operating agreement or at law to
exercise and enforce every right, power, remedy, authority, option and
privilege of such Pledgor relating to any Pledged Limited Liability Company
Interest (except any rights as managing member of a limited liability
company which is not a Wholly-Owned Subsidiary, to the extent the
applicable limited liability company agreement or operating agreement
contains an enforceable prohibition against the creation of a security
interest in such rights), including any power to terminate, cancel or
modify any limited liability company agreement or operating agreement, to
execute any instruments and to take any and all other action on behalf of
and in the name of such Pledgor in respect of such Pledged Limited
Liability Company Interest and any Pledged Limited Liability Company, to
make determinations, to exercise any election (including, but not limited
to, election of remedies) or option or to give or receive any notice,
consent, amendment, waiver or approval, together with full power and
authority to demand, receive, enforce, collect or receipt for any of the
foregoing or for any Limited Liability Company Assets, to enforce or
execute any checks, or other instruments or orders, to file any claims and
to take any action in connection with any of the foregoing;
(F) all other property hereafter delivered in substitution for or in
addition to any of the foregoing, all certificates and instruments
representing or evidencing such other property and all cash, securities,
interest, dividends, rights and other property at any time and from time to
time received, receivable or otherwise distributed in respect of or in
exchange for any or all of the foregoing; and
(G) to the extent not otherwise included, all proceeds of any or all
of the foregoing;
and (v) transfers and assigns to the Pledgee for the benefit of the Secured
Creditors such Pledgor's Pledged Partnership Interests (and delivers any
certificates or instruments evidencing such partnership interests, duly endorsed
in blank) and all of such Pledgor's right, title and interest in each Pledged
Partnership including, without limitation:
(A) all of the capital thereof and its interest in all profits,
losses, Partnership Assets (as defined below) and other distributions to
which such Pledgor shall at any time be entitled in respect of any such
Pledged Partnership Interests;
(B) all other payments due or to become due such Pledgor in respect of
any such Pledged Partnership Interests, whether under any partnership
agreement or otherwise, whether as contractual obligations, damages,
insurance proceeds or otherwise;
(C) all of its claims, rights, powers, privileges, authority, options,
security interests, liens and remedies, if any, under any partnership or
other agreement or at law or otherwise in respect of any such Pledged
Partnership Interests (except any rights as general partner of a limited
partnership which is not a Wholly-Owned Subsidiary, to the extent the
applicable partnership agreement contains an enforceable prohibition
against the creation of a security interest in such rights);
(D) all present and future claims, if any, of such Pledgor against any
Pledged Partnership for moneys loaned or advanced, for services rendered or
otherwise;
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(E) subject to Section 5 hereof, all of such Pledgor's rights under
any partnership agreement or at law to exercise and enforce every right,
power, remedy, authority, option and privilege of such Pledgor relating to
any Pledged Partnership Interest (except any rights as general partner of a
limited partnership which is not a Wholly-Owned Subsidiary, to the extent
the applicable partnership agreement contains an enforceable prohibition
against the creation of a security interest in such rights), including any
power, if any, to terminate, cancel or modify any general or limited
partnership agreement, to execute any instruments and to take any and all
other action on behalf of and in the name of such Pledgor in respect of
such Pledged Partnership Interest and any Pledged Partnership, to make
determinations, to exercise any election (including, but not limited to,
election of remedies) or option or to give or receive any notice, consent,
amendment, waiver or approval, together with full power and authority to
demand, receive, enforce, collect or receipt for any of the foregoing or
for any Partnership Assets, to enforce or execute any checks, or other
instruments or orders, to file any claims and to take any action in
connection with any of the foregoing;
(F) all other property hereafter delivered in substitution for or in
addition to any of the foregoing, all certificates and instruments
representing or evidencing such other property and all cash, securities,
interest, dividends, rights and other property at any time and from time to
time received, receivable or otherwise distributed in respect of or in
exchange for any or all thereof; and
(G) to the extent not otherwise included, all proceeds of any or all
of the foregoing.
(b) As used herein, the term "Limited Liability Company Assets"
shall mean all assets, whether tangible or intangible and whether real, personal
or mixed (including, without limitation, all limited liability company capital
and interests in other limited liability companies), at any time owned by any
Pledged Limited Liability Company.
(c) As used herein, the term "Partnership Assets" shall mean all
assets, whether tangible or intangible and whether real, personal or mixed
(including, without limitation, all partnership capital and interests in other
partnerships), at any time owned by any Pledged Partnership.
3.2 Subsequently Acquired Securities. Subject to Section 2(c) hereof,
if any Pledgor shall acquire (by purchase, stock dividend or otherwise) any
additional Pledged Securities at any time or from time to time after the date
hereof, such Securities shall automatically (and without any further action
being required to be taken) be subject to the pledge and security interests
created pursuant to Section 3.1(a) hereof and, furthermore, such Pledgor will
within the time periods set forth in Section 10.15(c) of the Credit Agreement
deliver to the Pledgee all certificates therefor or instruments thereof, if any,
accompanied by undated stock powers duly executed in blank in the case of
certificated Stock, Limited Liability Company Interests or Partnership Interests
or such other instruments of transfer as are reasonably acceptable to the
Pledgee.
3.3 Uncertificated Securities. If any Pledged Securities (whether now
owned or hereafter acquired) are uncertificated securities, the respective
Pledgor shall promptly notify the Pledgee thereof, and shall within the time
periods set forth in Section 10.15(c) of the Credit Agreement and Section 15(d)
of this Agreement take all actions required to perfect the security
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interest of the Pledgee granted hereby under applicable law (including, in any
event, under Sections 8-106, 9-106 and 9-312 of the New York UCC, if applicable,
or comparable provisions of other applicable law.
4. APPOINTMENT OF SUB-AGENTS; ENDORSEMENTS, ETC. The Pledgee shall
have the right to appoint one or more sub-agents for the purpose of retaining
physical possession of any Pledged Securities that are represented by
certificates, which may be held (in the discretion of the Pledgee) in the name
of such Pledgor, endorsed or assigned in blank or in favor of the Pledgee or any
nominee or nominees of the Pledgee or a sub-agent appointed by the Pledgee. The
Pledgee agrees to promptly notify the relevant Pledgor after the appointment of
any sub-agent; provided, however, that the failure to give such notice shall not
affect the validity of such appointment.
5. VOTING, ETC., WHILE NO EVENT OF DEFAULT. Unless and until an Event
of Default shall have occurred and be continuing, each Pledgor shall be entitled
to (i) exercise any and all voting and other consensual rights pertaining to the
Pledged Stock and to give all consents, waivers or ratifications in respect
thereof and (ii) exercise any and all voting, consent, administration,
management and other rights and remedies under (x) any limited liability company
agreement or operating agreement or otherwise with respect to the Pledged
Limited Liability Interests of such Pledgor and (y) any partnership agreement or
otherwise with respect to the Pledged Partnership Interests of such Pledgor, in
each case together with all other rights assigned pursuant to Sections
3.1(a)(iv)(E) and 3.1(a)(v)(E) hereof; provided, that no vote shall be cast or
any consent, waiver or ratification given or any other action taken which would
violate or be inconsistent with any of the terms of this Agreement or any other
Secured Debt Agreement (as defined in Section 7 hereof), or which would have the
effect of impairing the rights, priorities or remedies of the Pledgee or any
other Secured Creditor under this Agreement or any other Secured Debt Agreement.
All such rights of such Pledgor to vote and to give consents, waivers and
ratification's shall cease in case an Event of Default shall occur and be
continuing, and Section 7 hereof shall become applicable.
6. DIVIDENDS AND OTHER DISTRIBUTIONS. Unless an Event of Default shall
have occurred and be continuing and subject to the terms of the Secured Debt
Agreements, all cash dividends and other cash distributions payable in respect
of the Pledged Securities shall be paid to the respective Pledgor.
Nothing contained in this Section 6 shall limit or restrict in any way the
Pledgee's right to receive proceeds of the Collateral in any form in accordance
with Section 3 of this Agreement. All dividends, distributions or other payments
which are received by the Pledgor contrary to the provisions of this Section 6
and Section 7 below shall be received in trust for the benefit of the Pledgee
for the benefit of the Secured Creditors, shall be segregated from other
property or funds of the Pledgor and shall be forthwith paid over to the Pledgee
as Collateral in the same form as so received (with any necessary endorsement).
7. REMEDIES IN CASE OF EVENT OF DEFAULT. In case an Event of Default
shall have occurred and be continuing, the Pledgee shall be entitled to exercise
all of its rights, powers and remedies (whether vested in it by this Agreement,
by any other Credit Document, by any HMH Note Document, by any Senior Note
Document or, to the extent then in effect and secured hereby, by any Secured
Hedging Agreement (with all of the documents listed
Page 10
above being herein collectively called the "Secured Debt Agreements") or by law)
for the protection and enforcement of its rights in respect of the Collateral,
and the Pledgee shall be entitled to exercise all the rights and remedies of a
secured party under the UCC and also shall be entitled, without limitation, to
exercise the following rights, which each Pledgor hereby agrees to be
commercially reasonable:
(i) to receive all amounts payable in respect of the Collateral
otherwise payable to such Pledgor under Section 6 hereof;
(ii) to transfer all or any part of the Pledged Securities into the
Pledgee's name or the name of its nominee or nominees;
(iii) to vote all or any part of the Pledged Stock, Pledged Limited
Liability Company Interests or Pledged Partnership Interests (whether or
not transferred into the name of the Pledgee) and give all consents,
waivers and ratifications in respect of the Collateral and otherwise act
with respect thereto as though it were the outright owner thereof; and
(iv) at any time or from time to time to sell, assign and deliver, or
grant options to purchase, all or any part of the Collateral, or any
interest therein, at any public or private sale, without demand of
performance, advertisement or notice of intention to sell or of the time or
place of sale or adjournment thereof or to redeem or otherwise (all of
which are hereby waived by each Pledgor), for cash, on credit or for other
property, for immediate or future delivery without any assumption of credit
risk, and for such price or prices and on such terms as the Pledgee in its
absolute discretion may determine; provided, that at least 10 Business
Days' notice of the time and place of any such sale shall be given to such
Pledgor. Every aspect of the disposition of the Collateral, including the
method, manner, time, place and other terms must be commercially
reasonable, it being agreed that to the extent such matters are addressed
by provisions of this Agreement such provisions are commercially
reasonable. Each Pledgor hereby waives and releases to the fullest extent
permitted by law any right or equity of redemption with respect to the
Collateral, whether before or after sale hereunder, and all rights, if any,
of marshalling the Collateral and any other security for the Obligations or
otherwise. At any such sale, unless prohibited by applicable law, the
Pledgee on behalf of the Secured Creditors may bid for and purchase all or
any part of the Collateral so sold free from any such right or equity of
redemption. Each purchaser at any such sale shall hold the property sold
absolutely free from any claim or right on the part of any Pledgor, and
each Pledgor hereby waives (to the extent permitted by law) all rights of
redemption, stay and/or appraisal which it now has or may at any time in
the future have under any rule of law or statute now existing or hereafter
enacted. The Pledgee may adjourn any public or private sale from time to
time by announcement at the time and place fixed therefor, and such sale
may, without further notice, be made at the time and place to which it was
so adjourned. Each Pledgor hereby waives any claims against the Pledgee
arising by reason of the fact that the price at which any Collateral may
have been sold at such a private sale was less than the price which might
have been obtained at a public sale, even if the Pledgee accepts the first
offer received and does not offer such Collateral to more than one offeree.
If the proceeds of any sale or other disposition of the Collateral are
insufficient to pay all the Obligations, the Pledgors shall be liable for
the deficiency and
Page 11
the fees of any attorneys employed by the Pledgee to collect such
deficiency. Neither the Pledgee nor any other Secured Creditor shall be
liable for failure to collect or realize upon any or all of the Collateral
or for any delay in so doing nor shall any of them be under any obligation
to take any action whatsoever with regard thereto.
8. REMEDIES, ETC., CUMULATIVE. Each right, power and remedy of the
Pledgee provided for in this Agreement or in any other Secured Debt Agreement or
now or hereafter existing at law or in equity or by statute shall be cumulative
and concurrent and shall be in addition to every other such right, power or
remedy. The exercise or beginning of the exercise by the Pledgee or any other
Secured Creditor of any one or more of the rights, powers or remedies provided
for in this Agreement or in any other Secured Debt Agreement or now or hereafter
existing at law or in equity or by statute or otherwise shall not preclude the
simultaneous or later exercise by the Pledgee or any other Secured Creditor of
all such other rights, powers or remedies, and no failure or delay on the part
of the Pledgee or any other Secured Creditor to exercise any such right, power
or remedy shall operate as a waiver thereof. The Secured Creditors agree that
this Agreement may be enforced only by the Pledgee acting upon the instructions
of the Required Secured Creditors (as defined in Section 4 of Annex G hereto)
and that no other Secured Creditor shall have any right individually to seek to
enforce or to enforce this Agreement or to realize upon the security to be
granted hereby, it being understood and agreed that such rights and remedies may
be exercised by the Pledgee for the benefit of the Secured Creditors upon the
terms of this Agreement.
9. APPLICATION OF PROCEEDS. (a) All moneys collected by the Pledgee
upon any sale or other disposition of the Collateral of each Pledgor, together
with all other moneys received by the Pledgee hereunder, shall be applied as
follows:
(i) first, to the payment of all Obligations owing to the Pledgee
and the Secured Creditors of the type provided in clauses (v), (vi) and
(vii) of the definition of Obligations in Section 1 hereof;
(ii) second, to the extent proceeds remain after the application
pursuant to the preceding clause (i), an amount equal to the outstanding
Primary Obligations (as defined in Section 9(b) below) shall be paid to the
Secured Creditors as provided in Section 9(e) hereof, with each Secured
Creditor receiving an amount equal to its outstanding Primary Obligations
of such Pledgor or, if the proceeds are insufficient to pay in full all
such Primary Obligations, its Pro Rata Share (as hereinafter defined) of
the amount remaining to be distributed;
(iii) third, to the extent proceeds remain after the application
pursuant to the preceding clauses (i) and (ii), an amount equal to the
outstanding Secondary Obligations (as defined in Section 9(b) below) shall
be paid to the Secured Creditors as provided in Section 9(e) hereof, with
each Secured Creditor receiving an amount equal to its outstanding
Secondary Obligations of such Pledgor or, if the proceeds are insufficient
to pay in full all such Secondary Obligations, its Pro Rata Share of the
amount remaining to be distributed; and
(iv) fourth, to the extent proceeds remain after the application
pursuant to the preceding clauses (i) through (iii), inclusive, and
following the termination of this
Page 12
Agreement pursuant to Section 18 hereof, to the relevant Pledgor or to
whomever may be lawfully entitled to receive such surplus.
(b) For purposes of this Agreement (x) "Pro Rata Share" shall mean,
when calculating a Secured Creditor's portion of any distribution or amount,
that amount (expressed as a percentage) equal to a fraction the numerator of
which is the then unpaid amount of such Secured Creditor's Primary Obligations
or Secondary Obligations, as the case may be, and the denominator of which is
the then outstanding amount of all Primary Obligations or Secondary Obligations,
as the case may be, (y) "Primary Obligations" shall mean (i) in the case of the
Credit Document Obligations, all Obligations arising out of or in connection
with (including, without limitation, as obligor or guarantor, as the case may
be) the principal of, and interest on, all Loans, all unreimbursed drawings or
payments in respect of any letters of credit (together with all interest accrued
thereon), and the aggregate stated amounts of all letters of credit issued under
the Credit Agreement, and all regularly accruing fees, (ii) in the case of the
HMH Note Obligations, all Obligations secured hereby arising out of or in
connection with (including, without limitation, as obligor or guarantor, as the
case may be) the principal of, and interest on, the HMH Notes, and all regularly
accruing fees, (iii) in the case of the Senior Note Obligations, all Obligations
secured hereby arising out of or in connection with (including, without
limitation, as obligor or guarantor, as the case may be) the principal of, and
interest on, the Senior Notes, and all regularly accruing fees, and (iv) in the
case of the Other Obligations, all Obligations arising out of or in connection
with (including, without limitation, as a direct obligor or a guarantor, as the
case may be) Secured Hedging Agreements secured hereby (other than indemnities,
fees (including, without limitation, attorneys' fees) and similar obligations
and liabilities), and (z) "Secondary Obligations" shall mean all Obligations of
such Pledgor secured hereby other than Primary Obligations.
(c) When payments to Secured Creditors are based upon their respective
Pro Rata Shares, the amounts received by such Secured Creditors hereunder shall
be deemed to be applied (for purposes of making determinations under this
Section 9 only) (i) first, to the Primary Obligations and (ii) second, to the
Secondary Obligations.
(d) If the Lender Creditors are to receive a distribution in
accordance with the procedures set forth above in this Section 9 on account of
undrawn amounts with respect to letters of credit issued under the Credit
Agreement, such amounts shall be paid to the Administrative Agent under the
Credit Agreement and held by it, for the equal and ratable benefit of the Lender
Creditors as such. If any amounts are held as cash security pursuant to the
immediately preceding sentence, then upon the termination of any outstanding
letter of credit, and after the application of all such cash security to the
repayment of all Obligations owing to the Lender Creditors after giving effect
to the termination of such letter of credit, if there remains any excess cash,
such excess cash shall be returned by the Administrative Agent to the Pledgee
for distribution in accordance with Section 9(a) hereof.
(e) Except as set forth in Section 9(d) hereof, all payments required
to be made hereunder shall be made (i) if to the Lender Creditors, to the
Administrative Agent under the Credit Agreement for the account of the Lender
Creditors, and (ii) if to any other Secured Creditors (other than the Pledgee),
to the trustee, paying agent or other similar representative (each a
"Representative") for such Secured Creditors or, in the absence of such a
Representative, directly to the other Secured Creditors.
Page 13
(f) For purposes of applying payments received in accordance with
this Section 9, the Pledgee shall be entitled to rely upon (i) the
Administrative Agent under the Credit Agreement and (ii) the Representative for
any other Secured Creditors or, in the absence of such a Representative, upon
the respective Secured Creditors for a determination (which the Administrative
Agent, each Representative for any other Secured Creditors and the Secured
Creditors agree (or shall agree) to provide upon request of the Pledgee) of the
outstanding Primary Obligations and Secondary Obligations owed to the Secured
Creditors. Unless it has actual knowledge (including by way of written notice
from a Representative for any Secured Creditor or directly from a Secured
Creditor) to the contrary, the Pledgee, in acting hereunder, shall be entitled
to assume that no Secured Hedging Agreements are in existence.
(g) It is understood and agreed that each Pledgor shall remain liable
to the extent of any deficiency between the amount of the proceeds of the
Collateral pledged by it hereunder and the aggregate amount of the Obligations
of such Pledgor.
10. PURCHASERS OF COLLATERAL. Upon any sale of the Collateral by the
Pledgee hereunder (whether by virtue of the power of sale herein granted,
pursuant to judicial process or otherwise), the receipt of the Pledgee or the
officer making the sale shall be a sufficient discharge to the purchaser or
purchasers of the Collateral so sold, and such purchaser or purchasers shall not
be obligated to see to the application of any part of the purchase money paid
over to the Pledgee or such officer or be answerable in any way for the
misapplication or nonapplication thereof.
11. INDEMNITY. Each Pledgor jointly and severally agrees (i) to
indemnify and hold harmless the Pledgee in such capacity, each Representative of
a Secured Creditor in its capacity as such and each other Secured Creditor that
is an indemnitor under Section 6 of Annex G hereto from and against any and all
claims, demands, losses, judgments and liabilities of whatsoever kind or nature,
and (ii) to reimburse the Pledgee in such capacity, each Representative of a
Secured Creditor in its capacity as such and each other Secured Creditor that is
an indemnitor under Section 6 of Annex G hereto for all reasonable costs and
expenses, including reasonable attorneys' fees, in each case to the extent
growing out of or resulting from the exercise by the Pledgee of any right or
remedy granted to it hereunder except, with respect to clauses (i) and (ii)
above, to the extent arising from the Pledgee's or such other Secured Creditor's
gross negligence or willful misconduct. In no event shall the Pledgee be liable,
in the absence of gross negligence or willful misconduct on its part, for any
matter or thing in connection with this Agreement other than to account for
moneys actually received by it in accordance with the terms hereof. If and to
the extent that the obligations of the Pledgors under this Section 11 are
unenforceable for any reason, each Pledgor hereby agrees to make the maximum
contribution to the payment and satisfaction of such obligations which is
permissible under applicable law.
12. FURTHER ASSURANCES; POWER OF ATTORNEY. (a) Each Pledgor agrees
that it will join with the Pledgee in executing and, at such Pledgor's own
expense, file and refile under the applicable UCC or such other law such
financing statements, continuation statements and other documents in such
offices as the Pledgee may reasonably deem necessary or appropriate and wherever
required or permitted by law in order to perfect and preserve the Pledgee's
security interest in the Collateral and hereby authorizes the Pledgee to file
financing statements and amendments thereto relative to all or any part of the
Collateral without the
Page 14
signature of such Pledgor where permitted by law, and agrees to do such further
acts and things and to execute and deliver to the Pledgee such additional
conveyances, assignments, agreements and instruments as the Pledgee may
reasonably deem necessary or advisable to carry into effect the purposes of this
Agreement or to further assure and confirm unto the Pledgee its rights, powers
and remedies hereunder.
(b) Each Pledgor hereby appoints the Pledgee such Pledgor's
attorney-in-fact, with full authority in the place and stead of such Pledgor and
in the name of such Pledgor or otherwise, to act from time to time after the
occurrence and during the continuance of an Event of Default in the Pledgee's
reasonable discretion to take any action and to execute any instrument which the
Pledgee may deem necessary or advisable to accomplish the purposes of this
Section 12. Such appointment is coupled with an interest and is irrevocable.
13. THE PLEDGEE AS AGENT. The Pledgee will hold in accordance with
this Agreement all items of the Collateral at any time received under this
Agreement. It is expressly understood and agreed that the obligations of the
Pledgee as holder of the Collateral and interests therein and with respect to
the disposition thereof, and otherwise under this Agreement, are only those
expressly set forth in this Agreement. The Pledgee shall act hereunder on the
terms and conditions set forth herein and in Annex G hereto, the terms of which
shall be deemed incorporated herein by reference as fully as if same were set
forth herein in their entirety.
14. TRANSFER BY PLEDGORS. No Pledgor will sell or otherwise dispose
of, grant any option with respect to, or mortgage, pledge or otherwise encumber
any of the Collateral or any interest therein (except in accordance with the
terms of this Agreement and as permitted by the terms of the Secured Debt
Agreements).
15. REPRESENTATIONS, WARRANTIES AND COVENANTS OF PLEDGORS. (a) Each
Pledgor represents, warrants and covenants that:
(i) it is the legal, record and beneficial owner of, and has good
title to, all Pledged Securities purported to be owned by such Pledgor
(including as shown on Annexes A, B and C hereto), subject to no Lien,
except the Liens created by this Agreement;
(ii) it has full power, authority and legal right to pledge all the
Pledged Securities;
(iii) this Agreement has been duly authorized, executed and delivered
by such Pledgor and constitutes the legal, valid and binding obligation of
such Pledgor enforceable in accordance with its terms, except to the extent
that the enforceability hereof may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting
creditors' rights generally and by equitable principles (regardless of
whether enforcement is sought in equity or at law); no consent of any other
party (including, without limitation, any stockholder or creditor of such
Pledgor or any of its Subsidiaries and any other partners or members of
such Pledgor's partnerships or limited liability companies) and no consent,
license, permit, approval or authorization of, exemption by, notice or
report to, or registration, filing (except any filings required under the
UCC, which filings have been made) or declaration with, any governmental
authority is required to be obtained by such Pledgor in connection with the
execution, delivery or performance of this Agreement, or in
Page 15
connection with the exercise of its rights and remedies pursuant to
this Agreement, in each case except (x) those which have been obtained
or made, (y) as may be required by laws affecting the offer and sale
of securities generally in connection with the exercise by the Pledgee
of certain of its remedies hereunder, or (z) as may be required to be
obtained or made in order to comply with the terms of or avoid
defaults under any contract of the U.S. Borrower or a Subsidiary of
the U.S. Borrower otherwise permitted under the Credit Agreement that
imposes restrictions upon the sale of, or foreclosure of liens upon,
any Securities of a Subsidiary pledged hereunder in connection with
the exercise by the Pledgee of its remedies hereunder;
(v) the execution, delivery and performance of this Agreement
by such Pledgor does not violate any provision of any applicable law
or regulation or of any order, judgment, writ, award or decree of any
court, arbitrator or governmental authority, domestic or foreign, or
of the certificate of incorporation or by-laws (or analogous
organizational documents) of such Pledgor or of any securities issued
by such Pledgor or any of its Subsidiaries, or of any mortgage,
indenture, lease, deed of trust, credit agreement or loan agreement,
or any other material agreement, contract or instrument to which such
Pledgor or any of its Subsidiaries is a party or which purports to be
binding upon such Pledgor or any of its Subsidiaries or upon any of
their respective assets and will not result in the creation or
imposition (or the obligation to create or impose) of any lien or
encumbrance on any of the assets of such Pledgor or any of its
Subsidiaries; except (x) as contemplated in this Agreement and (y) for
violations and defaults that may arise under contracts of the U.S.
Borrower or a Subsidiary thereof otherwise permitted under the Credit
Agreement as a result of the sale of, or foreclosure of a lien upon,
the Securities of Subsidiaries pledged hereunder to the extent that
the prior consent of other parties to such contracts have not been
obtained or other actions specified in such contracts have not been
taken in connection with any such sale or foreclosure;
(vi) all the shares of Stock have been duly and validly issued,
are fully paid and nonassessable and subject to no options to purchase
or similar rights;
(vii) the pledge, assignment and delivery (which delivery has
been made) to the Pledgee of the Pledged Stock creates a valid and
perfected first priority security interest in such Stock, subject to
no prior lien or encumbrance or to any agreement purporting to grant
to any third party (except the Secured Creditors) a lien or
encumbrance on the property or assets of such Pledgor which would
include the Securities;
(viii) each Pledged Partnership Interest and each Pledged Limited
Liability Company Interest has been validly acquired and is fully paid
for (to the extent applicable) and is duly and validly pledged
hereunder;
(ix) each partnership agreement and each limited liability
company or operating agreement is the legal, valid and binding
obligation of the applicable Pledgor, enforceable in accordance with
its terms;
(x) no Pledgor is in default in the payment of any portion of
any mandatory capital contribution, if any, required to be made under
any general or limited partnership agreement or any limited liability
company or operating agreement to which such Pledgor is a party, and
no Pledgor is in violation of any other material provisions of any
Page 16
partnership agreement or any limited liability company or operating
agreement to which such Pledgor is a party, or is otherwise in
default or violation thereunder in any material respect;
(xi) the pledge and assignment of the Pledged Partnership
Interests and/or Pledged Limited Liability Company Interests pursuant
to this Agreement, together with the relevant filings or recordings
under the UCC (or other steps described in any applicable version of
the UCC) (which filings, recordings or other steps have been made),
create a valid perfected and continuing first priority security
interest in such Partnership Interests and/or Limited Liability
Company Interests and the proceeds thereof, subject to no prior lien
or encumbrance or to any agreement purporting to grant to any third
party (except the Secured Creditors) a lien or encumbrance on the
property or assets of such Pledgee or which would include the
Securities;
(xii) except for financing statements in connection with the
Original Credit Agreement, there are no currently effective financing
statements under the UCC covering property which is now or hereafter
may be included in the Collateral and such Pledgor will not, without
the prior written consent of the Pledgee, execute and, until the
Termination Date (as hereinafter defined), there will not ever be on
file in any public office any enforceable financing statement or
statements covering any or all of the Collateral, except financing
statements filed or to be filed in favor of the Pledgee as secured
party;
(xiii) each Pledgor shall give the Pledgee prompt notice of any
written claim it receives relating to the Collateral; and
(xiv) each Pledgor shall deliver to the Pledgee a copy of each
other demand, notice or document received by it which could reasonably
be expected to adversely affect the Pledgee's interest in the
Collateral promptly upon, but in any event within 10 days after, such
Pledgor's receipt thereof.
Each Pledgor further represents and warrants that on the date
hereof (i) the Pledged Stock held by such Pledgor consists of the number and
type of shares of the stock of the corporations as described in Annex A hereto;
(ii) such Pledged Stock constitutes that percentage of the issued and
outstanding capital stock of the issuing corporation as is set forth in Annex A
hereto; (iii) the Pledged Limited Liability Company Interests held by such
Pledgor constitute that percentage of the issued and outstanding equity
interests of the respective issuing Pledged Limited Liability Company as is set
forth in Annex B hereto; and (iv) the Pledged Partnership Interests held by such
Pledgor constitute that percentage of the entire Partnership Interests of the
respective Pledged Partnership as is set forth in Annex C hereto.
Each Pledgor covenants and agrees that it will defend the
Pledgee's and the other Secured Creditors' right, title and security interest in
and to the Collateral and the proceeds thereof against the claims and demands of
all persons whomsoever; and such Pledgor covenants and agrees that it will have
like title to and right to pledge any other property at any time hereafter
pledged to the Pledgee as Collateral hereunder and will likewise defend the
right thereto and security interest therein of the Pledgee and the other Secured
Creditors.
Page 17
(b) Each Pledgor hereby further represents, warrants and
covenants that as of the date hereof, the jurisdiction of formation of such
Pledgor and its organizational ID number (as contemplated for use under Article
9 of the UCC) is as indicated on Annex F hereto for such Pledgor. Such Pledgor
will not change its jurisdiction of organization (by merger or otherwise) except
to such new location as such Pledgor may establish in accordance with the last
sentence of this Section 15(b). No Pledgor shall change its jurisdiction of
organization until (i) it shall have given to the Pledgee prior written notice
of its intention to do so, clearly describing such new jurisdiction and
providing such other information in connection therewith as the Pledgee may
reasonably request, (ii) it shall have delivered to the Pledgee a written
supplement in the form of Annex H-1 hereto as provided in clause (c) below
showing the new jurisdiction of organization and (iii) with respect to such new
location, it shall have taken all action, reasonably satisfactory to the
Pledgee, to maintain all security interests of the Pledgee in the Collateral
intended to be granted hereby at all times fully perfected on a first priority
basis and in full force and effect.
(c) Without in any way limiting Section 3.2 hereof, at any time
and from time to time that any Pledgor (x) determines that the information with
respect to it contained on Annex A, B, C and/or F, as the case may be, is
inaccurate or (y) acquires any additional Securities which have not already been
pledged hereunder and reflected on Annexes A through C, as appropriate, such
Pledgor shall deliver a supplement to this Agreement, substantially in the form
of Annex H-1 hereto (each a "Pledge and Security Agreement Supplement") adding
(or, in the case of any Securities released pursuant to Section 18 hereof,
deleting) such Securities to (or from) Annexes A through C hereto, as
appropriate. The execution and delivery of any such supplement shall not require
the consent of any Pledgor hereunder. It is understood and agreed that the
pledge and security interests granted hereunder shall apply to all Collateral as
provided in Section 3.1 hereof regardless of the failure of any Pledgor to
deliver, or any inaccurate information stated in, any Pledge and Security
Agreement Supplement as otherwise provided above.
(d) Each Pledgor hereby covenants and agrees that with respect to
all Partnership Interests or Limited Liability Company Interests, in each case
required to be pledged by it hereunder, such Pledgor will deliver to the
respective Pledged Partnerships or Pledged Limited Liability Companies, as the
case may be (with copies to the Pledgee) a notice (appropriately completed) in
the form of Annex D attached hereto (with such changes thereto as may be
acceptable to the Pledgee) and by this reference made a part hereof (each such
notice a "Partnership/LLC Notice") and such Pledgor will use its reasonable best
efforts to cause to be delivered to the Pledgee an acknowledgment in the form
set forth as Annex E attached hereto (with such changes thereto as may be
acceptable to the Pledgee) (each such acknowledgment, a "Pledge
Acknowledgment"), duly executed by the relevant Pledged Partnership and/or
Pledged Limited Liability Company, as the case may be, in each case within 45
days following the date of any pledge of any Pledged Partnership Interests or
Pledged Limited Liability Company Interests hereunder.
16. PLEDGORS' OBLIGATIONS ABSOLUTE, ETC. The obligations of each
Pledgor under this Agreement shall be absolute and unconditional and shall
remain in full force and effect without regard to, and shall not be released,
suspended, discharged, terminated or otherwise affected by, any circumstance or
occurrence whatsoever, including, without limitation: (i) any renewal,
extension, amendment or modification of or addition or supplement to or dele-
Page 18
tion from any Secured Debt Agreement or any other instrument or agreement
referred to therein, or any assignment or transfer of any thereof; (ii) any
waiver, consent, extension, indulgence or other action or inaction under or in
respect of any such agreement or instrument or this Agreement; (iii) any
furnishing of any additional security to the Pledgee or its assignee or any
acceptance thereof or any release of any security by the Pledgee or its
assignee; (iv) any limitation on any party's liability or obligations under any
such instrument or agreement or any invalidity or unenforceability, in whole or
in part, of any such instrument or agreement or any term thereof; (v) any
limitation on any other Pledgor's liability or obligations under this Agreement
or under any other Secured Debt Agreement or any invalidity or unenforceability,
in whole or in part, of this Agreement or any other Secured Debt Agreement or
any term thereof; or (vi) any bankruptcy, insolvency, reorganization,
composition, adjustment, dissolution, liquidation or other like proceeding
relating to such Pledgor or any Subsidiary of such Pledgor, or any action taken
with respect to this Agreement by any trustee or receiver, or by any court, in
any such proceeding, whether or not such Pledgor shall have notice or knowledge
of any of the foregoing.
17. REGISTRATION, ETC. If at any time when the Pledgee shall
determine to exercise its right to sell all or any part of the Pledged
Securities pursuant to Section 7 hereof, such Pledged Securities or the part
thereof to be sold shall not, for any reason whatsoever, be effectively
registered under the Securities Act, as then in effect, the Pledgee may, in its
sole and absolute discretion, sell such Pledged Securities or part thereof by
private sale in such manner and under such circumstances as the Pledgee may deem
necessary or advisable in order that such sale may legally be effected without
such registration; provided, that at least 10 Business Days' notice of the time
and place of any such sale shall be given to such Pledgor. Without limiting the
generality of the foregoing, in any such event the Pledgee, in its sole and
absolute discretion: (i) may proceed to make such private sale notwithstanding
that a registration statement for the purpose of registering such Pledged
Securities or part thereof shall have been filed under such Securities Act; (ii)
may approach and negotiate with a single possible purchaser to effect such sale;
and (iii) may restrict such sale to a purchaser who will represent and agree
that such purchaser is purchasing for its own account, for investment, and not
with a view to the distribution or sale of such Pledged Securities or part
thereof. In the event of any such sale, the Pledgee shall incur no
responsibility or liability for selling all or any part of the Pledged
Securities at a price which the Pledgee, in its sole and absolute discretion,
may in good ▇▇▇▇▇ ▇▇▇▇ reasonable under the circumstances, notwithstanding the
possibility that a substantially higher price might be realized if the sale were
deferred until after registration as aforesaid so long as such disposition is
otherwise commercially reasonable.
18. TERMINATION, RELEASE. (a) After the Termination Date (as
defined below), this Agreement shall terminate (provided that all indemnities
set forth herein including, without limitation, in Section 11 hereof shall
survive any such termination) and the Pledgee, at the request and expense of the
respective Pledgor, will promptly execute and deliver to such Pledgor a proper
instrument or instruments acknowledging the satisfaction and termination of this
Agreement, and will duly assign, transfer and deliver to such Pledgor (without
recourse and without any representation or warranty) such of the Collateral as
may be in the possession of the Pledgee and as has not theretofore been sold or
otherwise applied or released pursuant to this Agreement. As used in this
Agreement, "Termination Date" shall mean the earliest of (i) the date upon which
the Total Revolving Loan Commitment has been terminated, and all Credit Document
Obligations (excluding normal continuing indemnity obligations which survive in
Page 19
accordance with their terms, so long as no amounts are then due and payable in
respect thereof) have been indefeasibly paid in full (provided the terms of the
Secured Hedging Agreements and the other Secured Debt Agreements do not
otherwise prohibit the termination hereof), (ii) the Collateral Release Date as
defined in Section 10.15(d) of the Credit Agreement (but subject to the
provisions thereof that certain Collateral shall remain subject to the
provisions hereof), (iii) the date upon which the Collateral Agent releases the
Collateral in accordance with Section 14.20 of the Credit Agreement and (iv) the
date upon which the Credit Documents are amended to release all Collateral
subject to this Agreement.
(b) In the event that any part of the Collateral is sold (other
than to any Credit Party) in connection with a sale permitted by the Secured
Debt Agreements or is otherwise released in accordance with the terms of Section
10.15(a)(2) of the Credit Agreement or at the direction of the Required Secured
Creditors (and, to the extent required by the Credit Agreement, all of the
Lenders)), the Pledgee, at the request and expense of such Pledgor will promptly
execute and deliver to such Pledgor (or authorize such Pledgor to file, as
applicable) a proper instrument or instruments acknowledging such release
(including any UCC termination statements and any Pledge and Security Supplement
that may be appropriate to evidence such release), and will duly assign,
transfer and deliver to such Pledgor (without recourse and without any
representation or warranty) such of the Collateral as is then being (or has
been) so sold, distributed or released and as may be in possession of the
Pledgee and has not theretofore been released pursuant to this Agreement. Any
proceeds of Collateral sold as contemplated by the immediately preceding
sentence shall be applied in accordance with, and to the extent required by, the
requirements of the applicable Secured Debt Agreements.
(c) At any time that a Pledgor desires that Collateral be
released as provided in the foregoing Section 18(a) or (b), it shall deliver to
the Pledgee a certificate signed by an Authorized Officer of such Pledgor
stating that the release of the respective Collateral is permitted pursuant to
Section 18(a) or (b) hereof and does not violate the terms of any Secured Debt
Agreement then in effect, and the Pledgee shall be entitled (but not required)
to conclusively rely thereon.
19. NOTICES, ETC. Except as otherwise specified herein, all
notices, requests, demands or other communications to or upon the respective
parties hereto shall be deemed to have been given or made when delivered to the
party to which such notice, request, demand or other communication is required
or permitted to be given or made under this Agreement, addressed as follows:
(a) if to any Pledgor c/o the U.S. Borrower at the address of the
U.S. Borrower specified under Section 14.02 of the Credit Agreement;
(b) if to the Pledgee, at the address of the Administrative Agent
determined under Section 14.02 of the Credit Agreement;
(c) if to any Lender Creditor (other than the Pledgee), (x) to
the Administrative Agent, at the address of the Administrative Agent specified
in the Credit Agreement or (y) at such address as such Lender Creditor shall
have specified in the Credit Agreement;
Page 20
(d) if to any other Secured Creditor, (x) to the Representative
for such Secured Creditor or (y) if there is no such Representative, at such
address as such Secured Creditor shall have specified in writing to each Pledgor
and the Pledgee;
or at such other address as shall have been furnished in writing by any Person
described above to the party required to give notice hereunder.
20. WAIVER; AMENDMENT. None of the terms and conditions of this
Agreement may be changed, waived, modified or varied in any manner whatsoever
unless in writing duly signed by each Pledgor directly affected thereby (it
being understood that additional Pledgors may be added as parties hereto from
time to time in accordance with Section 22 hereof, the Collateral may be
modified as contemplated by Section 10.15(a)(2) and (d) of the Credit Agreement
and Section 18 hereof, and Pledgors may be released as parties hereto in
accordance with Sections 18 and 21 hereof and that no consent of any other
Pledgor or of the Secured Creditors shall be required in connection therewith)
and the Pledgee (with the written consent of (x) the Required Lenders (or all
the Lenders if required by Section 14.11 of the Credit Agreement) at all times
prior to the Termination Date and (y) thereafter, to the extent expressly
required under any Secured Hedging Agreement, the holders of at least a majority
of the outstanding Other Obligations; provided, that (with respect to preceding
clauses (x) and (y)) the U.S. Borrower certifies that any such change, waiver,
modification or variance is otherwise permitted by the terms of the respective
Secured Debt Agreements or, if not so permitted, that the requisite consents
therefor have been obtained. Notwithstanding anything to the contrary contained
above, it is understood and agreed that the Required Lenders may agree to
modifications to this Agreement for the purpose, among other things, of securing
additional extensions of credit (including, without limitation, pursuant to the
Credit Agreement or any refinancing or extension thereof) and that the Pledgors
and the Pledgee may take any actions necessary to implement the recreation of
this Agreement and the pledge hereunder without the consent of the Required
Lenders or any other Secured Creditor under the circumstances contemplated by
Section 10.15 of the Credit Agreement, with such changes and recreation not
being subject to the proviso to the immediately preceding sentence. Furthermore,
the proviso to the second preceding sentence shall not apply to any release of
Collateral effected in accordance with the requirements of Section 18 of this
Agreement, or any other release of Collateral or termination of this Agreement
so long as the U.S. Borrower certifies that such actions will not violate the
terms of any Secured Debt Agreement then in effect.
21. RELEASE OF PLEDGORS. In the event that any Pledgor is
permitted to be released from this Agreement as, and to the extent, provided in
Section 10.15(a)(2) or (d) of the Credit Agreement, such Pledgor (so long as
such Pledgor is not the U.S. Borrower) shall be released from this Agreement and
this Agreement shall, as to such Pledgor only, have no further force or effect.
22. ADDITIONAL PLEDGORS. Pursuant to Section 10.15 of the Credit
Agreement, certain Subsidiaries of the U.S. Borrower may after the date hereof
be required to enter into this Agreement as a Pledgor. Upon execution and
delivery, after the date hereof, by the Pledgee and such Subsidiary of a New
Pledgor Supplement in the form of Annex H-2 hereto (a "New Pledgor Supplement"),
such Subsidiary shall become a Pledgor hereunder with the same force and effect
as if originally named as a Pledgor hereunder. Each Subsidiary which is required
to become a party to this Agreement shall so execute and deliver a copy of the
New
Page 21
Pledgor Supplement to the Pledgee and, at such time, shall execute a Pledge
and Security Agreement Supplement in the form of Annex H-1 hereto with respect
to all Collateral of such Pledgor required to be pledged hereunder. The
execution and delivery of any such instrument shall not require the consent of
any other Pledgor hereunder. Upon the execution and delivery by the Pledgee and
such Subsidiary of a New Pledgor Supplement, it is understood and agreed that
the pledge and security interests hereunder shall apply to all Collateral of
such additional Pledgor as provided in Section 3.1 hereof regardless of any
failure of any additional Pledgor to deliver, or any inaccurate information
stated in, the Pledge and Security Agreement Supplement.
23. RECOURSE. Subject to Section 14.17 of the Credit Agreement, this
Agreement is made with full recourse to the Pledgors and pursuant to and upon
all representations, warranties, covenants and agreements on the part of the
Pledgors contained herein and otherwise in writing in connection herewith.
24. PLEDGEE NOT BOUND. (a) Nothing herein shall be construed to make
the Pledgee or any other Secured Creditor liable as a member of any limited
liability company or a partner of any partnership and the Pledgee or any other
Secured Creditor by virtue of this Agreement or otherwise (except as referred to
in the following sentence) shall not have any of the duties, obligations or
liabilities of a member of any limited liability company or partner of any
partnership. The parties hereto expressly agree that, unless the Pledgee shall
become the absolute owner of the respective Pledged Limited Liability Company
Interest or Pledged Partnership Interest pursuant hereto, this Agreement shall
not be construed as creating a partnership or joint venture among the Pledgee,
any other Secured Creditor and/or any Pledgor.
(b) Except as provided in the last sentence of paragraph (a) of this
Section 24, the Pledgee, by accepting this Agreement, and the other Secured
Creditors did not intend to become a member of any limited liability company or
partner of any partnership or otherwise be deemed to be a co-venturer with
respect to any Pledgor or any limited liability company or partnership either
before or after an Event of Default shall have occurred. The Pledgee shall have
only those powers set forth herein and the Secured Creditors shall assume none
of the duties, obligations or liabilities of a member of any limited liability
company or partnership or any Pledgor.
(c) The Pledgee and the other Secured Creditors shall not be obligated
to perform or discharge any obligation of any Pledgor as a result of the
collateral assignment hereby effected.
(d) The acceptance by the Pledgee of this Agreement, with all the
rights, powers, privileges and authority so created, shall not at any time or in
any event obligate the Pledgee or any other Secured Creditor to appear in or
defend any action or proceeding relating to the Collateral to which it is not a
party, or to take any action hereunder or thereunder, or to expend any money or
incur any expenses or perform or discharge any obligation, duty or liability
under the Collateral.
25. CONTINUING PLEDGORS. The rights and obligations of each Pledgor
(other than the respective released Pledgor in the case of following clause (y))
hereunder shall remain in full force and effect notwithstanding (x) the addition
of any new Pledgor as a party to this Agreement as contemplated by Section 22
hereof or otherwise and/or (y) the release of any Pledgor under this Agreement
as contemplated by Section 21 hereof or otherwise.
Page 22
26. NO FRAUDULENT CONVEYANCE. Each Pledgor hereby confirms that it is
its intention that this Agreement not constitute a fraudulent transfer or
conveyance for purposes of any bankruptcy, insolvency or similar law, the
Uniform Fraudulent Conveyance Act or any similar Federal, state or foreign law.
To effectuate the foregoing intention, each Pledgor hereby irrevocably agrees
that its obligations and liabilities hereunder shall be limited to the maximum
amount as will, after giving effect to such maximum amount and all other
(contingent or otherwise) liabilities of such Pledgor that are relevant under
such laws, result in the obligations and liabilities of such Pledgor hereunder
in respect of such maximum amount not constituting a fraudulent transfer or
conveyance.
27. CANADIAN REVOLVING LOAN BORROWERS. The Pledgors hereby acknowledge
that pursuant to the terms of the Credit Agreement various Canadian Revolving
Loan Borrowers may become a party to the Credit Agreement from time to time and
incur Loans thereunder. The Pledgors further acknowledge and agree that all
obligations and liabilities of any Canadian Revolving Loan Borrower under the
Credit Agreement shall be fully secured hereunder and no consent of the Pledgors
is required to effect the same.
28. MISCELLANEOUS. This Agreement shall be binding upon the successors
and assigns of each Pledgor and shall inure to the benefit of and be enforceable
by the Pledgee and its successors and assigns; provided that no Pledgor may
assign any of its rights or obligations hereunder without the prior written
consent of the Pledgee (with the consent of the Required Lenders and, if
required by Section 14.11 of the Credit Agreement, all Lenders) and any such
assignment without such consent shall be null and void. THIS AGREEMENT SHALL BE
CONSTRUED AND ENFORCED IN ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE STATE
OF NEW YORK (WITHOUT REGARD TO PRINCIPLES OF CONFLICT OF LAWS). The headings in
this Agreement are for purposes of reference only and shall not limit or define
the meaning hereof. This Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which shall
constitute one instrument.
29. WAIVER OF TRIAL BY JURY. EACH PLEDGOR AND EACH SECURED CREDITOR
(BY ITS ACCEPTANCE OF THE BENEFITS OF THIS AGREEMENT) HEREBY IRREVOCABLY WAIVES
ALL RIGHTS TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING
OUT OF OR RELATING TO THIS AGREEMENT, THE OTHER CREDIT DOCUMENTS TO WHICH SUCH
PLEDGOR IS A PARTY OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
30. SEVERABILITY. Any provision of this Agreement held to be invalid,
illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such invalidity, illegality or unenforceability
without affecting the validity, legality and enforceability of the remaining
provisions hereof; and the invalidity of a particular provision in a particular
jurisdiction shall not invalidate such provision in any other jurisdiction.
* * *
IN WITNESS WHEREOF, each Pledgor has caused this Agreement to be duly
executed and delivered by its duly authorized officer on the date first above
written.
THE PLEDGORS SET FORTH ON SCHEDULE 1
HERETO
/s/ ▇▇▇▇ ▇ ▇▇▇▇▇▇▇▇
--------------------------------------------------
By: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Senior Vice President of Host Marriott
Corporation and Vice President of the
remaining signatories listed on Schedule 1
[Signature Page to Pledge and Security Agreement]
Accepted and Agreed to:
DEUTSCHE BANK TRUST COMPANY AMERICAS,
as Collateral Agent and Pledgee
By: /s/ ▇▇▇▇▇ ▇▇▇▇
------------------------
Name: ▇▇▇▇▇ ▇▇▇▇
Title: Vice President
[Signature Page to Pledge and Security Agreement]
SCHEDULE 1
TO
PLEDGE AND SECURITY AGREEMENT
PLEDGORS:
HOST MARRIOTT, L.P.
By: HOST MARRIOTT CORPORATION,
its General Partner
HMC CAPITAL LLC
HMC CAPITAL RESOURCES LLC
HMC MEXPARK LLC
HMC RETIREMENT PROPERTIES, L.P.
By: ▇▇▇▇▇▇ LLC,
its General Partner
HMC PALM DESERT LLC
HOST LA JOLLA LLC
HMC ▇▇▇▇▇▇ I LLC
HMC ▇▇▇▇▇▇ ▇▇ LLC
HMC PLP LLC
HMC OLS I LLC
HMC OLS I L.P.,
By: HMC OLS I LLC,
its General Partner
CITY CENTER INTERSTATE PARTNERSHIP LLC
AIRPORT HOTELS LLC
HOST OF HOUSTON, LTD.
By: AIRPORT HOTELS LLC,
its General Partner
HMC SUITES LLC
PM FINANCIAL LLC
HOST PARK RIDGE LLC
PRM LLC
HMH RIVERS LLC
ANNEX A
to
PLEDGE AND SECURITY AGREEMENT
LIST OF PLEDGED STOCK OF CORPORATIONS
None.
ANNEX B
to
PLEDGE AND SECURITY AGREEMENT
LIST OF PLEDGED LIMITED LIABILITY COMPANY INTERESTS
-------------------------------------------------------------------------------
Pledged Limited
Pledgor Liability Company Percentage Owned
Interests
-------------------------------------------------------------------------------
Host Marriott, L.P. Airport Hotels LLC 100
-------------------------------------------------------------------------------
Host Marriott, L.P. Chesapeake Financial Services 100
LLC
-------------------------------------------------------------------------------
City Center Interstate
Host Marriott, L.P. Partnership LLC 100
-------------------------------------------------------------------------------
Host Marriott, ▇.▇. ▇▇▇▇▇▇ LLC 100
-------------------------------------------------------------------------------
▇▇▇▇▇▇▇'▇ Ice Cream Parlour
Host Marriott, L.P. Restaurants LLC 100
-------------------------------------------------------------------------------
Host Marriott, L.P. Fernwood Hotel LLC 100
-------------------------------------------------------------------------------
Host Marriott, L.P. HMC ▇▇▇▇▇▇ I LLC 100
-------------------------------------------------------------------------------
Host Marriott, L.P. HMC ▇▇▇▇▇▇ ▇▇ LLC 100
-------------------------------------------------------------------------------
Host Marriott, L.P. HMC Atlanta LLC 100
-------------------------------------------------------------------------------
Host Marriott, L.P. HMC California Leasing LLC 100
-------------------------------------------------------------------------------
Host Marriott, L.P. HMC Capital LLC 100
-------------------------------------------------------------------------------
Host Marriott, L.P. 90
HMC Capital Resources LLC
HMC Capital LLC 10
-------------------------------------------------------------------------------
Host Marriott, L.P. HMC Chicago LLC 100
-------------------------------------------------------------------------------
Host Marriott, L.P. HMC Desert LLC 100
-------------------------------------------------------------------------------
Host Marriott, L.P. HMC Diversified LLC 100
-------------------------------------------------------------------------------
Host Marriott, L.P. HMC East Side II LLC 100
+------------------------------------------------------------------------------
Host Marriott, L.P. HMC Georgia LLC 100
-------------------------------------------------------------------------------
Annex B
Page 2
--------------------------------------------------------------------------------
Pledged Limited
Pledgor Liability Company Percentage Owned
Interests
-------------------------------------------------------------------------------
Host Marriott, L.P. HMC Grand LLC 100
-------------------------------------------------------------------------------
Host Marriott, L.P. HMC Hartford LLC 100
-------------------------------------------------------------------------------
Host Marriott, L.P. HMC Host Restaurants LLC 100
-------------------------------------------------------------------------------
Host Marriott, L.P. HMC Hotel Development LLC 100
-------------------------------------------------------------------------------
Host Marriott, L.P. HMC HPP LLC 100
-------------------------------------------------------------------------------
Host Marriott, L.P. HMC HT LLC 100
-------------------------------------------------------------------------------
Host Marriott, L.P. HMC IHP Holdings LLC 100
-------------------------------------------------------------------------------
Host Marriott, L.P. HMC JWDC LLC 100
-------------------------------------------------------------------------------
Host Marriott, L.P. HMC Manhattan Beach LLC 100
-------------------------------------------------------------------------------
Host Marriott, L.P. HMC Mexpark LLC 100
-------------------------------------------------------------------------------
Host Marriott, L.P. HMC NGL LLC 100
-------------------------------------------------------------------------------
Host Marriott, L.P. HMC OLS I LLC 100
-------------------------------------------------------------------------------
Host Marriott, L.P. HMC Palm Desert LLC 100
-------------------------------------------------------------------------------
HMC Capital Resources LLC HMC Park Ridge LLC 100
-------------------------------------------------------------------------------
HMC Capital Resources LLC HMC Partnership Holdings LLC 100
-------------------------------------------------------------------------------
Host Marriott, L.P. HMC PLP LLC 100
-------------------------------------------------------------------------------
HMC Mexpark LLC HMC ▇▇▇▇▇▇▇ LLC 100
-------------------------------------------------------------------------------
Host Marriott, L.P. HMC Potomac LLC 100
-------------------------------------------------------------------------------
Host Marriott, L.P. HMC Properties I LLC 100
-------------------------------------------------------------------------------
Host Marriott, L.P. HMC Properties II LLC 100
-------------------------------------------------------------------------------
Host Marriott, L.P. HMC Property Leasing LLC 100
-------------------------------------------------------------------------------
Host Marriott, L.P. HMC SBM Two LLC 100
-------------------------------------------------------------------------------
Host Marriott, L.P. HMC Seattle LLC 100
-------------------------------------------------------------------------------
Host Marriott, L.P. HMC SFO LLC 100
-------------------------------------------------------------------------------
Annex B
Page 3
--------------------------------------------------------------------------------
Pledged Limited
--------------
Pledgor Liability Company Percentage Owned
------- ----------------- ----------------
Interests
---------
--------------------------------------------------------------------------------
HMC Capital Resources LLC HMC Suites LLC 100
--------------------------------------------------------------------------------
Host Marriott, L.P. HMC Swiss Holdings LLC 100
--------------------------------------------------------------------------------
Host Marriott, L.P. HMC Waterford LLC 100
--------------------------------------------------------------------------------
Host Marriott, L.P. HMH General Partner Holdings 100
LLC
--------------------------------------------------------------------------------
HMC Retirement Properties, L.P. HMH Marina LLC 100
--------------------------------------------------------------------------------
Host Marriott, L.P. HMH Norfolk LLC 100
--------------------------------------------------------------------------------
Host Marriott, L.P. HMH Pentagon LLC 100
--------------------------------------------------------------------------------
Host Marriott, L.P. HMH Restaurants LLC 100
--------------------------------------------------------------------------------
Host Marriott, L.P. HMH WTC LLC 100
--------------------------------------------------------------------------------
Host Marriott, L.P. HMP Capital Ventures LLC 100
--------------------------------------------------------------------------------
Host Marriott, L.P. HMP Financial Services LLC 100
--------------------------------------------------------------------------------
Host Marriott, L.P. HMT Lessee Parent LLC 100
--------------------------------------------------------------------------------
Host Marriott, L.P. Host La Jolla LLC 100
--------------------------------------------------------------------------------
HMC Capital Resources LLC Host Park Ridge LLC 100
--------------------------------------------------------------------------------
Host Marriott, ▇.▇. ▇▇▇ Street LLC 100
--------------------------------------------------------------------------------
HMC Palm Desert LLC MDSM Finance LLC 100
--------------------------------------------------------------------------------
Host Marriott, L.P. MFR of Illinois LLC 100
--------------------------------------------------------------------------------
Host Marriott, L.P. MFR of Vermont LLC 100
--------------------------------------------------------------------------------
Host Marriott, L.P. MFR of Wisconsin LLC 100
--------------------------------------------------------------------------------
Host Marriott, L.P. Philadelphia Airport Hotel LLC 100
--------------------------------------------------------------------------------
Host Marriott, L.P. PM Financial LLC 100
--------------------------------------------------------------------------------
HMC Capital Resources LLC PRM LLC 100
--------------------------------------------------------------------------------
Host Marriott, L.P. Rockledge Hotel LLC 100
--------------------------------------------------------------------------------
Annex B
Page 4
--------------------------------------------------------------------------------
Pledged Limited
--------------
Pledgor Liability Company Percentage Owned
------- ----------------- ----------------
Interests
---------
--------------------------------------------------------------------------------
Host Marriott, L.P. Santa ▇▇▇▇▇ HMC LLC 100
--------------------------------------------------------------------------------
Host La Jolla LLC Times Square LLC 100
--------------------------------------------------------------------------------
HMC Capital Resources LLC YBG Associates LLC 100
--------------------------------------------------------------------------------
Host Marriott, L.P. HMC Headhouse Funding LLC 100
--------------------------------------------------------------------------------
Host Marriott, L.P. HMH Rivers LLC 100
--------------------------------------------------------------------------------
Host Marriott, ▇.▇. ▇▇▇ Street Hopewell LLC 100
--------------------------------------------------------------------------------
ANNEX C
to
PLEDGE AND SECURITY AGREEMENT
LIST OF PLEDGED PARTNERSHIP INTERESTS
--------------------------------------------------------------------------------
Pledged Partnership Pledged Partnership
------------------- -------------------
Interest Pledgor Percentage
-------- ------- ----------
--------------------------------------------------------------------------------
Ameliatel, a Florida GP HMC ▇▇▇▇▇▇ I LLC 99
.............................................
HMC ▇▇▇▇▇▇ ▇▇ LLC 1
--------------------------------------------------------------------------------
Chesapeake Hotel Limited HMC PLP LLC 1
Partnership
.............................................
Host Marriott, L.P. 99
--------------------------------------------------------------------------------
City Center Hotel Limited Host Marriott, L.P. 97.2
Partnership
.............................................
Host La Jolla LLC 2.8
--------------------------------------------------------------------------------
HMC OLS I L.P. HMC OLS I LLC 0.1
.............................................
Host Marriott, L.P. 99.9
--------------------------------------------------------------------------------
HMC OLS II L.P. HMC OLS I L.P. 99.9
.............................................
HMC OLS I LLC 0.1
--------------------------------------------------------------------------------
Host/Interstate Partnership, L.P. City Center Interstate
Partnership LLC 95
.............................................
Host Marriott, L.P. 5
--------------------------------------------------------------------------------
Host of Boston, Ltd. Airport Hotels LLC 1
.............................................
Host Marriott, L.P. 99
--------------------------------------------------------------------------------
Host of Houston 1979 Airport Hotels LLC 99
.............................................
Host of Houston, Ltd. 1
--------------------------------------------------------------------------------
Host of Houston, Ltd. Airport Hotels LLC 1
.............................................
Host Marriott, L.P. 99
--------------------------------------------------------------------------------
HMC Suites Limited Partnership HMC Suites LLC 1
.............................................
HMC Capital Resources LLC 99
--------------------------------------------------------------------------------
Annex C
Page 2
--------------------------------------------------------------------------------
Pledged Partnership Pledged Partnership
------------------- -------------------
Interest Pledgor Percentage
-------- ------- ----------
--------------------------------------------------------------------------------
PM Financial LP PM Financial LLC 1
.............................................
Host Marriott, L.P. 99
--------------------------------------------------------------------------------
Wellsford-Park Ridge HMC Hotel Host Park Ridge LLC 99
Limited Partnership
.............................................
PRM LLC 1
--------------------------------------------------------------------------------
HMH Rivers, L.P. HMH Rivers LLC 1
.............................................
Host Marriott, L.P. 99
------------------------------------------------------------------- ------------
ANNEX D
to
PLEDGE AND SECURITY AGREEMENT
FORM OF PARTNERSHIP/LLC NOTICE/1/
[Letterhead of Pledgor]
___________, ____
TO: [Name of Pledged Partnership/Limited Liability Company]
Notice is hereby given that pursuant to a Pledge and Security
Agreement (a true and correct copy of which is attached hereto) dated as of June
6, 2002 (as amended, modified or supplemented from time to time in accordance
with the terms thereof, the "Pledge Agreement"), among [NAME OF PLEDGOR] (the
"Pledgor"), the other pledgors from time to time party thereto and Deutsche Bank
Trust Company Americas (the "Pledgee"), as Collateral Agent on behalf of the
Secured Creditors described therein, the Pledgor has pledged and assigned to the
Pledgee for the benefit of the Secured Creditors, and granted to the Pledgee for
the benefit of the Secured Creditors, a continuing security interest in, all
right, title and interest of the Pledgor, whether now existing or hereafter
arising or acquired, [as a [limited] [general] partner in [NAME OF PLEDGED
PARTNERSHIP] (the "Partnership"), and in, to and under the [TITLE OF APPLICABLE
PARTNERSHIP AGREEMENT] (the "Partnership Agreement"),] [as a member in [NAME OF
PLEDGED LIMITED LIABILITY COMPANY] (the "LLC"), and into and under its Limited
Liability Company Agreement (the "Articles")] including, without limitation:
(i) the Pledgor's interest in all of the capital of the
Partnership/LLC and the Pledgor's interest in all profits, losses, (as
defined in the Pledge Agreement) and other distributions to which the
Pledgor shall at any time be entitled in respect of such
partnership/limited liability company interest;
(ii) all other payments due or to become due to the Pledgor
in respect of such partnership/limited liability company interest,
whether under the Partnership Agreement/Articles or otherwise, whether
as contractual obligations, damages, insurance proceeds or otherwise;
(iii) all of the Pledgor's claims, rights, powers, privileges,
authority, options, security interests, liens and remedies, if any,
under the Partnership Agreement/Articles or at law or otherwise in
respect of such partnership/limited liability company interest;
(iv) all present and future claims, if any, of the Pledgor
against the Partnership/LLC for moneys loaned or advanced, for
services rendered or otherwise;
________________________
/1/This form and Annex E may be changed to cover multiple pledgors and issuers
of the Securities in a single form.
Annex D
Page 2
(v) all of the Pledgor's rights under the Partnership
Agreement/Articles or at law to exercise and enforce every right,
power, remedy, authority, option and privilege of the Pledgor relating
to the partnership/limited liability company interest, including any
power to terminate, cancel or modify the Partnership
Agreement/Articles, to execute any instruments and to take any and all
other action on behalf of and in the name of the Pledgor in respect of
the partnership/limited liability company interest and the
Partnership/LLC, to make determinations, to exercise any election
(including, but not limited to, election of remedies) or option or to
give or receive any notice, consent, amendment, waiver or approval,
together with full power and authority to demand, receive, enforce,
collect or receipt for any of the foregoing, to enforce or execute any
checks, or other instruments or orders, to file any claims and to take
any action in connection with any of the foregoing;
(vi) all other property hereafter delivered to the Pledgor in
substitution for or in addition to any of the foregoing, all
certificates and instruments representing or evidencing such other
property and all cash, securities, interest, dividends, distributions,
rights and other property at any time and from time to time received,
receivable or otherwise distributed in respect of or in exchange for
any or all of the foregoing; and
(vii) to the extent not otherwise included, all proceeds of
any or all of the foregoing.
Pursuant to the Pledge Agreement, the Partnership/LLC is
hereby authorized and directed to register the Pledgor's pledge to the Pledgee
on behalf of the Secured Creditors of the interest of the Pledgor on the
Partnership's/LLC's books.
The Pledgor hereby irrevocably agrees and authorizes and
directs the Partnership/LLC that instructions originated by the Pledgee on
behalf of the Secured Creditors with respect to the Pledgor's claims, rights,
interests, powers, remedies, authorities, options and privileges set forth above
shall, unless written notice to the contrary is given by the Pledgee to the
Partnership/LLC, be complied with by the Partnership/LLC, without further
consent by the Pledgor. This notice and related confirmation are intended to
give the Pledgee "control" of the Pledgor's interests in the Partnership/LLC as
such term is used in Section 8-106 of the New York Uniform Commercial Code.
The Pledgor hereby requests the Partnership/LLC to indicate
its acceptance of this Notice and consent to and confirmation of its terms and
provisions by signing a copy of the attached Acknowledgment and Agreement and
returning the same to the Pledgee on behalf of the Secured Creditors.
[NAME OF PLEDGOR]
By:_____________________
Name:
Title:
ANNEX E
to
PLEDGE AND SECURITY AGREEMENT
FORM OF ACKNOWLEDGMENT AND AGREEMENT
[NAME OF PLEDGED PARTNERSHIP/LIMITED LIABILITY COMPANY] (the
"Partnership"/"LLC") hereby acknowledges receipt of a copy of the assignment by
[NAME OF PLEDGOR] ("Pledgor") of its interest under the [TITLE OF APPLICABLE
PARTNERSHIP AGREEMENT/ARTICLES OF ORGANIZATION] (the "Partnership
Agreement"/"Articles") pursuant to the terms of Pledge and Security Agreement,
dated as of June 6, 2002 (as amended, modified or supplemented from time to time
in accordance with the terms thereof, the "Pledge Agreement"), among the
Pledgor, the other pledgors from time to time party thereto and Deutsche Bank
Trust Company Americas (the "Pledgee"), as Collateral Agent on behalf of the
Secured Creditors described therein. The undersigned hereby further confirms the
registration of the Pledgor's pledge of its interest to the Pledgee on behalf of
the Secured Creditors on the Partnership's/LLC's books.
The Partnership/LLC hereby acknowledges the rights of and
remedies available to the Secured Creditors under the Pledge Agreement.
The Partnership/LLC hereby irrevocably agrees to comply with
the instructions originated by the Pledgee, on behalf of the Secured Creditors,
of the type referred to in the penultimate paragraph of the Partnership/LLC
Notice dated ___________ __, ____ signed by the Pledgor, without further consent
by the Pledgor. The undersigned further hereby irrevocably agrees, except upon
the prior written consent of the Pledgee, not to honor any such instructions
given by any other person or entity. This acknowledgment and agreement and
related notice to the undersigned Partnership/LLC by the Pledgor are intended to
provide "control" to the Pledgee of the Pledgor's interest in the
Partnership/LLC as such term is defined in Section 8-106 of the New York Uniform
Commercial Code.
Dated: ___________ __, ____
[NAME OF PLEDGED PARTNERSHIP/LLC]
By:_____________________
Name:
Title:
ANNEX F
to
PLEDGE AND SECURITY AGREEMENT
JURISDICTION OF FORMATION AND ORGANIZATIONAL ID NUMBER
-------------------------------------------------------------------------------
Entity Jurisdiction of Organization
(Organized in Delaware unless ID Numbers
indicated)
-------------------------------------------------------------------------------
Host Marriott, L.P. 2885265
-------------------------------------------------------------------------------
Airport Hotels LLC 2965003
-------------------------------------------------------------------------------
City Center Interstate
Partnership LLC 2965529
-------------------------------------------------------------------------------
HMC ▇▇▇▇▇▇ I LLC 2968536
-------------------------------------------------------------------------------
HMC ▇▇▇▇▇▇ ▇▇ LLC 2968544
-------------------------------------------------------------------------------
HMC Capital LLC 2918979
-------------------------------------------------------------------------------
HMC Capital Resources LLC 2964934
-------------------------------------------------------------------------------
HMC Mexpark LLC 2965194
-------------------------------------------------------------------------------
HMC OLS I L.P. 2977959
-------------------------------------------------------------------------------
HMC OLS I LLC 2977953
-------------------------------------------------------------------------------
HMC Palm Desert LLC 2965133
-------------------------------------------------------------------------------
HMC PLP LLC 2976968
-------------------------------------------------------------------------------
HMC Retirement Properties,
L.P. 2927547
-------------------------------------------------------------------------------
HMC Suites LLC 2971324
-------------------------------------------------------------------------------
HMH Rivers LLC 2966576
-------------------------------------------------------------------------------
Host La Jolla LLC 2976960
-------------------------------------------------------------------------------
Host of Houston, Ltd. Texas 558810
-------------------------------------------------------------------------------
Host Park Ridge LLC 2965142
-------------------------------------------------------------------------------
PM Financial LLC 2965198
-------------------------------------------------------------------------------
Annex F
Page 2
------------------------ ------------------------------------------------
Entity Jurisdiction of Organization
(Organized in Delaware unless ID Numbers
indicated)
-------------------------------------------------------------------------
PRM LLC 2965138
-------------------------------------------------------------------------
ANNEX G
to
PLEDGE AND SECURITY AGREEMENT
THE PLEDGEE
1. Appointment. The Secured Creditors, by their acceptance of
the benefits of the Pledge and Security Agreement to which this Annex G is
attached (the "Pledge Agreement") hereby irrevocably designate Deutsche Bank
Trust Company Americas (and any successor Pledgee) to act as specified herein
and therein and to be bound by the terms of this Annex G. Unless otherwise
defined herein, all capitalized terms used herein (x) and defined in the Pledge
Agreement, are used herein as therein defined and (y) not defined in the Pledge
Agreement, are used herein as defined in the Credit Agreement referenced in the
Pledge Agreement. Each Secured Creditor hereby irrevocably authorizes, and each
holder of any Obligation by the acceptance of such Obligation and by the
acceptance of the benefits of the Pledge Agreement shall be deemed irrevocably
to authorize, the Pledgee to take such action on its behalf under the provisions
of the Pledge Agreement and any instruments and agreements referred to therein
and to exercise such powers and to perform such duties thereunder as are
specifically delegated to or required of the Pledge Agreement by the terms
thereof and such other powers as are reasonably incidental thereto. The Pledgee
may perform any of its duties hereunder or thereunder by or through its
authorized agents, sub-agents or employees.
2. Nature of Duties. (a) The Pledgee shall have no duties or
responsibilities except those expressly set forth herein or in the Pledge
Agreement. The duties of the Pledgee shall be mechanical and administrative in
nature; the Pledgee shall not have by reason of the Pledge Agreement or any
other Secured Debt Agreement a fiduciary relationship in respect of any Secured
Creditor; and nothing in the Pledge Agreement or any other Secured Debt
Agreement, expressed or implied, is intended to or shall be so construed as to
impose upon the Pledgee any obligations in respect of the Pledge Agreement
except as expressly set forth herein and therein.
(b) The Pledgee shall not be responsible for insuring the
Collateral or for the payment of taxes, charges or assessments or discharging of
Liens upon the Collateral or otherwise as to the maintenance of the Collateral.
(c) The Pledgee shall not be required to ascertain or inquire
as to the performance by any Pledgor of any of the covenants or agreements
contained in the Pledge Agreement or any other Secured Debt Agreement.
(d) The Pledgee shall be under no obligation or duty to take
any action under, or with respect to, the Pledge Agreement if taking such action
(i) would subject the Pledgee to a tax in any jurisdiction where it is not then
subject to a tax or (ii) would require the Pledgee to qualify to do business, or
obtain any license, in any jurisdiction where it is not then so qualified or
licensed or (iii) would subject the Pledgee to in personam jurisdiction in any
locations where it is not then so subject.
(e) Notwithstanding any other provision of this Annex G,
neither the Pledgee nor any of its officers, directors, employees, affiliates or
agents shall, in its individual capacity, be personally liable for any action
taken or omitted to be taken by it in accordance with, or pursuant
ANNEX G
Page 2
to this Annex G or the Pledge Agreement except for its own gross negligence or
willful misconduct.
3. Lack of Reliance on the Pledgee. Independently and without
reliance upon the Pledgee, each Secured Creditor, to the extent it deems
appropriate, has made and shall continue to make (i) its own independent
investigation of the financial condition and affairs of each Pledgor and its
Subsidiaries in connection with the making and the continuance of the
Obligations and the taking or not taking of any action in connection therewith,
and (ii) its own appraisal of the creditworthiness of each Pledgor and its
Subsidiaries, and the Pledgee shall have no duty or responsibility, either
initially or on a continuing basis, to provide any Secured Creditor with any
credit or other information with respect thereto, whether coming into its
possession before the extension of any Obligations or the purchase of any notes
or at any time or times thereafter. The Pledgee shall not be responsible in any
manner whatsoever to any Secured Creditor for the correctness of any recitals,
statements, information, representations or warranties herein or in any
document, certificate or other writing delivered in connection herewith or for
the execution, effectiveness, genuineness, validity, enforceability, perfection,
collectibility, priority or sufficiency of the Pledge Agreement or the security
interests granted hereunder or the financial condition of any Pledgor or any
Subsidiary of any Pledgor or be required to make any inquiry concerning either
the performance or observance of any of the terms, provisions or conditions of
the Pledge Agreement, or the financial condition of any Pledgor or any
Subsidiary of any Pledgor, or the existence or possible existence of any Default
or Event of Default. The Pledgee makes no representations as to the value or
condition of the Collateral or any part thereof, or as to the title of any
Pledgor thereto or as to the security afforded by the Pledge Agreement.
4. Certain Rights of the Pledgee. (a) No Secured Creditor
shall have the right to cause the Pledgee to take any action with respect to the
Collateral, with only the Required Secured Creditors (or all of the Secured
Creditors in the case of the release of all or substantially all of the
Collateral) having the right to direct the Pledgee to take any such action. If
the Pledgee shall request instructions from the Required Secured Creditors, with
respect to any act or action (including failure to act) in connection with the
Pledge Agreement, the Pledgee shall be entitled to refrain from such act or
taking such action unless and until it shall have received instructions from the
Required Secured Creditors and to the extent requested, appropriate
indemnification in respect of actions to be taken, and the Pledgee shall not
incur liability to any Person by reason of so refraining. Without limiting the
foregoing, no Secured Creditor shall have any right of action whatsoever against
the Pledgee as a result of the Pledgee acting or refraining from acting
hereunder in accordance with the instructions of the Required Secured Creditors.
As used herein, the term "Required Secured Creditors" shall mean (i) at all
times prior to the occurrence of the Termination Date (as defined in the Pledge
Agreement), the holders of at least a majority of the then outstanding Credit
Document Obligations and HMH Note Obligations (acting together as one class) and
(ii) at all times after the Credit Document Obligations Termination Date, the
holders of at least a majority of the then outstanding Obligations entitled to
be secured hereby; provided, however, that if the pledge in favor of the Lenders
shall be recreated under Section 10.15 of the Credit Agreement, the provisions
of clause (i) shall apply notwithstanding there shall be a period when clause
(ii) shall have applied. Notwithstanding anything to the contrary contained in
clause (i) or (ii) of the immediately preceding sentence, if at any time the
principal of any Obligations secured hereby has been accelerated, or the final
maturity date with
ANNEX G
Page 3
respect to any such principal Obligations has occurred, and as a result thereof
one or more payment Events of Default (where the aggregate principal amount of
such Obligations accelerated or not paid at final maturity equals or exceeds
$50,000,000), which payment Events of Default shall have continued in existence
for at least 60 consecutive days after the date of such acceleration or final
maturity, and the Required Secured Creditors (or the Representative thereof) at
such time (determined without regard to this sentence) have not directed the
Pledgee to commence enforcement proceedings pursuant to the Pledge Agreement,
then so long as such payment Event of Default is continuing the Secured
Creditors (or the Representative thereof) holding at least a majority of the
outstanding Obligations secured hereby subject to such payment Event of Default
shall constitute the Required Secured Creditors for purposes of causing the
Pledgee to commence enforcement proceedings pursuant to the Pledge Agreement,
provided that in such event the Secured Creditors who would constitute the
Required Secured Creditors in the absence of this sentence shall have the right
to direct the manner and method of enforcement so long as such directions do not
materially delay or impair the taking of enforcement action.
(b) Notwithstanding anything to the contrary contained herein,
the Pledgee is authorized, but not obligated, (i) to take any action reasonably
required to perfect or continue the perfection of the liens on the Collateral
for the benefit of the Secured Creditors and (ii) when instructions from the
Required Secured Creditors have been requested by the Pledgee but have not yet
been received, to take any action which the Pledgee, in good faith, believes to
be reasonably required to promote and protect the interests of the Secured
Creditors in the Collateral; provided that once instructions have been received,
the actions of the Pledgee shall be governed thereby and the Pledgee shall not
take any further action which would be contrary thereto.
(c) Notwithstanding anything to the contrary contained herein
or in the Pledge Agreement, the Pledgee shall not be required to take any action
that exposes or, in the good faith judgment of the Pledgee may expose, the
Pledgee or its officers, directors, agents or employees to personal liability,
unless the Pledgee shall be adequately indemnified as provided herein, or that
is, or in the good faith judgment of the Pledgee may be, contrary to the Pledge
Agreement, any Secured Debt Agreement or applicable law.
5. Reliance. The Pledgee shall be entitled to rely, and shall
be fully protected in relying, upon, any note, writing, resolution, notice,
statement, certificate, telex, teletype or telescopes message, cablegram,
radiogram, order or other document or telephone message signed, sent or made by
the proper Person or entity, and, with respect to all legal matters pertaining
hereto or to the Pledge Agreement and its duties thereunder and hereunder, upon
advice of counsel selected by it.
6. Indemnification. To the extent the Pledgee is not
reimbursed and indemnified by the Pledgors under the Pledge Agreement, the
Secured Creditors (other than the HMH Noteholders and the Senior Noteholders)
will reimburse and indemnify the Pledgee, in proportion to their respective
outstanding principal amounts (including, for this purpose, any unpaid Primary
Obligations in respect of Secured Hedging Agreements, as outstanding principal)
of Obligations, for and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind or nature whatsoever which may be imposed on, incurred by or
asserted against the Pledgee in performing its duties hereunder, or in any way
relating to or arising out of its actions as Pledgee in respect of the
ANNEX G
Page 4
Pledge Agreement except for those resulting solely from the Pledgee's own gross
negligence or willful misconduct. The indemnities set forth in this Section 6
shall survive the repayment of all Obligations, with the respective
indemnification at such time to be based upon the outstanding principal amounts
(determined as described above) of Obligations at the time of the respective
occurrence upon which the claim against the Pledgee is based or, if same is not
reasonably determinable, based upon the outstanding principal amounts
(determined as described above) of Obligations as in effect immediately prior to
the termination of the Pledge Agreement. The indemnities set forth in this
Section 6 are in addition to any indemnities provided by the Lenders to the
Pledgee pursuant to the Credit Agreement, with the effect being that the Lenders
shall be responsible for indemnifying the Pledgee to the extent the Pledgee does
not receive payments pursuant to this Section 6 from the Secured Creditors
(although in such event, and upon the payment in full of all such amounts owing
to the Pledgee by the Lenders, the Lenders shall be subrogated to the rights of
the Pledgee to receive payment from the Secured Creditors).
7. The Pledgee in its Individual Capacity. With respect to
its obligations as a lender under the Credit Agreement and any other Credit
Documents to which the Pledgee is a party, and to act as agent under one or more
of such Credit Documents, the Person serving as Pledgee shall have the rights
and powers specified therein and herein for a "Lender", or the "Administrative
Agent", as the case may be, and may exercise the same rights and powers as
though it were not performing the duties specified herein; and the terms
"Lenders," "Required Lenders," "holders of Notes," or any similar terms shall,
unless the context clearly otherwise indicates, include the Person serving as
Pledgee in its individual capacity. The Person serving as Pledgee and its
affiliates may accept deposits from, lend money to, and generally engage in any
kind of banking, investment banking, trust or other business with any Pledgor or
any Affiliate or Subsidiary of any Pledgor as if it were not performing the
duties specified herein or in the other Credit Documents, and may accept fees
and other consideration from the Pledgors for services in connection with the
Credit Agreement, the other Credit Documents and otherwise without having to
account for the same to the Secured Creditors.
8. Holders. The Pledgee may deem and treat the payee of any
note as the owner thereof for all purposes hereof unless and until written
notice of the assignment, transfer or endorsement thereof, as the case may be,
shall have been filed with the Pledgee. Any request, authority or consent of any
person or entity who, at the time of making such request or giving such
authority or consent, is the holder of any note, shall be final and conclusive
and binding on any subsequent holder, transferee, assignee or endorsee, as the
case may be, of such note or of any note or notes issued in exchange therefor.
9. Resignation by the Pledgee. (a) The Pledgee may resign
from the performance of all of its functions and duties hereunder and under the
Pledge Agreement at any time by giving 15 Business Days' prior or written notice
to the U.S. Borrower, the Lenders and the Representatives for the other Secured
Creditors or, if there is no such Representative, directly to such Secured
Creditors. Such resignation shall take effect upon the appointment of a
successor Pledgee pursuant to clause (b) or (c) below.
(b) Upon any notice of resignation by the Pledgee, the
Required Secured Creditors shall appoint a successor Pledgee in accordance with
Section 13.09(b) of the Credit Agreement. If a successor Pledgee shall not have
been appointed within said 15 Business Day
ANNEX G
Page 5
period by the Required Secured Creditors, the Pledgee, with the consent of the
U.S. Borrower, which consent shall not be unreasonably withheld or delayed,
shall then appoint a successor Pledgee who shall serve as Pledgee hereunder or
thereunder until such time, if any, as the Required Secured Creditors appoint a
successor Pledgee as provided above.
(c) If no successor Pledgee has been appointed pursuant to
clause (b) above by the 20th Business Day after the date of such notice of
resignation was given by the Pledgee, as a result of a failure by the U.S.
Borrower to consent to the appointment of such a successor Pledgee, the Required
Secured Creditors shall then appoint a successor Pledgee who shall serve as
Pledgee hereunder or thereunder until such time, if any, as the Required Secured
Creditors appoint a successor Pledgee as provided above.
ANNEX H-1
to
PLEDGE AND SECURITY AGREEMENT
-----------------------------
FORM OF
PLEDGE AND SECURITY AGREEMENT SUPPLEMENT
PLEDGE AND SECURITY SUPPLEMENT No. _____, dated as of_________
__________ (this "Supplement"), made by __________ , a _____________ (the
"Pledgor"), in favor of DEUTSCHE BANK TRUST COMPANY AMERICAS, as pledgee and as
collateral agent (in such capacities, the "Pledgee") for the Secured Creditors
(such term and each other capitalized term used but not defined having the
meaning given in the Pledge and Security Agreement referred to below).
1. Reference is hereby made to that certain Pledge and
Security Agreement, dated as of June 6, 2002 (as amended, supplemented or
otherwise modified as of the date hereof, the "Pledge Agreement"), made by the
Pledgors party thereto in favor of the Pledgee for the benefit of the Secured
Creditors described therein.
2. The Pledgor hereby confirms and reaffirms the security
interest in the Collateral granted to the Pledgee for the benefit of the Secured
Creditors under the Pledge Agreement, and, as additional collateral security for
the prompt and complete payment when due (whether at stated maturity, by
acceleration or otherwise) of the Obligations and in order to induce the Secured
Creditors to make and continue or maintain loans and other extensions of credit
constituting Obligations, the Pledgor hereby delivers to the Pledgee, for the
benefit of the Secured Creditors, [(i) all of the issued and outstanding shares
of capital stock listed in Schedule I hereto, together with all stock
certificates, options, or rights of any nature whatsoever which may be issued or
granted in respect of such stock while the Pledge Agreement, as supplemented
hereby, is in force (the "Additional Pledged Stock"; as used in the Pledge
Agreement as supplemented by this Supplement, "Pledged Stock" shall be deemed to
include the Additional Pledged Stock)], [(ii) all limited liability company
interests listed on Schedule II hereto (the "Additional Pledged Limited
Liability Company Interests"; as used in the Pledge Agreement as supplemented by
this Supplement, "Pledged Limited Liability Company Interests" shall be deemed
to include the Additional Pledged Limited Liability Company Interests)], [(iii)
all partnership interests listed on Schedule III hereto (the "Additional Pledged
Partnership Interests"; as used in the Pledge Agreement as supplemented by this
Supplement, "Pledged Partnership Interests" shall be deemed to include
Additional Pledged Partnership Interests)], and hereby grants to the Pledgee,
for the benefit of the Secured Creditors, a first priority security interest in
the Additional Pledged Stock, Additional Pledged Partnership Interests and/or
Additional Pledged Limited Liability Company Interests, as the case may be, and
all proceeds thereof.
3. The Pledgor hereby represents and warrants that the
representations and warranties contained in Section 15 of the Pledge Agreement
are true and correct on the date of this Supplement [with references therein to
the "Pledged Stock" to include the Additional Pledged Stock,] [with references
therein to the "Pledged Partnership Interests" to include the Additional Pledged
Partnership Interests,] [with references therein to the "Pledged Limited
Liability Company Interests" to include the Additional Pledged Limited Liability
Company Interests,] and with references therein to the "Pledge Agreement" to
mean the Pledge Agreement as supplemented by this Supplement.
ANNEX H-1
Page 2
4. The Pledgor hereby represents and warrants that, as of the
date hereof, the jurisdiction of formation of the Pledgor is as indicated on
Schedule IV hereto.
5. This Supplement is supplemental to the Pledge Agreement,
forms a part thereof and is subject to the terms thereof and the Pledge
Agreement is hereby supplemented as provided herein. Without limiting the
foregoing, Annex A to the Pledge Agreement shall hereby be deemed to include
each item listed on Schedule I to this Supplement, Annex B to the Pledge
Agreement shall hereby be deemed to include each item listed on Schedule II to
this Supplement, Annex C to the Pledge Agreement shall hereby be deemed to
include each term listed on Schedule III to this Supplement and Annex F to the
Pledge Agreement shall be deemed to include the jurisdiction of formation listed
on Schedule IV to this Supplement.
* * *
ANNEX H-1
Page 3
IN WITNESS WHEREOF, the Pledgor and the Pledgee have caused
this Supplement to be duly executed and delivered on the date first set forth
above.
[PLEDGOR]
By:_______________________
Name:
Title:
DEUTSCHE BANK TRUST COMPANY AMERICAS, as
Pledgee
By:________________________
Name:
Title:
SCHEDULE 1
to
PLEDGE AND SECURITY AGREEMENT
SUPPLEMENT
PLEDGED STOCK
Pledgor Issuer Pledged Stock Ownership
Interest
SCHEDULE II
to
PLEDGE AND SECURITY AGREEMENT
SUPPLEMENT
PLEDGED LIMITED LIABILITY COMPANY INTERESTS
Pledged Limited Percentage Owned
Liability Company Interests
SCHEDULE III
to
PLEDGE AND SECURITY AGREEMENT
SUPPLEMENT
PLEDGED PARTNERSHIP INTERESTS
Pledged Partnership Percentage Owned Type of Partnership
SCHEDULE IV
to
PLEDGE AND SECURITY AGREEMENT
SUPPLEMENT
JURISDICTION OF FORMATION AND ORGANIZATIONAL ID NUMBER
ANNEX H-2
to
PLEDGE AND SECURITY AGREEMENT
FORM OF
NEW PLEDGOR SUPPLEMENT
SUPPLEMENT NO. dated as of ________ , to the Pledge and Security
Agreement dated as of June 6, 2002 (as amended, supplemented or otherwise
modified as of the date hereof, the "Pledge Agreement"), among the Pledgors
party thereto (immediately before giving effect to this Supplement) and DEUTSCHE
BANK TRUST COMPANY AMERICAS as collateral agent and as pledgee (in such
capacities, the "Pledgee") for the Secured Creditors (such term and each other
capitalized term used but not defined having the meaning given it in the Pledge
Agreement).
A. The Pledgors have entered into the Pledge Agreement in order to
induce the Secured Creditors to make loans and other extensions of credit
constituting Obligations as defined in the Pledge Agreement. Pursuant to Section
10.15 of the Credit Agreement, certain Subsidiaries of the U.S. Borrower are,
after the date of the Pledge Agreement, required to enter into the Pledge
Agreement as a Pledgor. Section 22 of the Pledge Agreement provides that
additional Subsidiaries may become Pledgors under the Pledge Agreement by
execution and delivery of an instrument in the form of this Supplement. The
undersigned (the "New Pledgor") is a Subsidiary of the U.S. Borrower and is
executing this Supplement in accordance with the requirements of the Credit
Agreement and/or the Pledge Agreement to become a Pledgor under the Pledge
Agreement in order to induce the Secured Creditors to extend, or maintain,
Obligations.
Accordingly, the Pledgee and the New Pledgor agree as follows:
SECTION 1. The New Pledgor by its signature below becomes a Pledgor
under the Pledge Agreement with the same force and effect as if originally named
therein as a Pledgor and the New Pledgor hereby agrees to all the terms and
provisions of the Pledge Agreement applicable to it as a Pledgor thereunder.
Each reference to a "Pledgor" in the Pledge Agreement shall be deemed to include
the New Pledgor. The Pledge Agreement is hereby incorporated herein by
reference.
SECTION 2. The New Pledgor represents and warrants to the Secured
Creditors that this Supplement has been duly authorized, executed and delivered
by it and constitutes its legal, valid and binding obligation, enforceable
against it in accordance with its terms, subject to the effects of applicable
bankruptcy, insolvency or similar laws affecting creditors' rights generally and
equitable principles of general applicability.
SECTION 3. This Supplement may be executed in two or more
counterparts, each of which shall constitute an original, but all of which, when
taken together, shall constitute but one instrument. This Supplement shall
become effective when the Pledgee shall have received counterparts of this
Supplement that, when taken together, bear the signatures of the New Pledgor and
the Pledgee.
SECTION 4. Except as expressly supplemented hereby, the Pledge
Agreement shall remain in full force and effect.
ANNEX H-2
Page 2
SECTION 5. THIS SUPPLEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
SECTION 6. In case any one or more of the provisions contained in this
Supplement should be held invalid, illegal or unenforceable in any respect,
neither party hereto shall be required to comply with such provision for so long
as such provision is held to be invalid, illegal or unenforceable, but the
validity, legality and enforceability of the remaining provisions contained
herein and in the Pledge Agreement shall not in any way be affected or impaired.
The parties hereto shall endeavor in good-faith negotiations to replace the
invalid, illegal or unenforceable provisions with valid provisions the economic
effect of which comes as close as possible to that of the invalid, illegal or
unenforceable provisions.
SECTION 7. All communications and notices hereunder shall be in
writing and given as provided in the Pledge Agreement. All communications and
notices hereunder to the New Pledgor shall be given to it at the address set
forth under its signature, with a copy to the U.S. Borrower.
* * *
ANNEX H-2
Page 3
IN WITNESS WHEREOF, the New Pledgor and the Pledgee have duly executed
this Supplement to the Pledge Agreement as of the day and year first above
written.
[NAME OF NEW PLEDGOR]
By:_______________________
Name:
Title:
Address:
DEUTSCHE BANK TRUST COMPANY AMERICAS,
as Pledgee
By:_______________________
Name:
Title: