COMPLETION GUARANTY COLLATERAL ACCOUNT AGREEMENT
This COMPLETION GUARANTY COLLATERAL ACCOUNT AGREEMENT (this
"Agreement") is dated as of November 14, 1997, and entered into by and between
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, an individual ("Pledgor"), and THE BANK OF NOVA SCOTIA, a
Canadian chartered bank through its New York agency, as Disbursement Agent under
the Disbursement Agreement (in such capacity herein called "Secured Party").
PRELIMINARY STATEMENTS
A. The Project. LVSI, VCR and Grand Canal Shops Mall Construction, LLC, a
Delaware limited liability company ("GCCLLC"), corporations directly or
indirectly wholly owned by Pledgor, propose to develop, construct and operate
the Venetian Casino Resort, a large scale Venetian-themed hotel, casino, retail,
meeting and entertainment complex, with related heating, ventilation and air
conditioning and power station facilities, as part of the redevelopment of the
site of the former Las Vegas Sands Hotel and Casino.
B. Bank Credit Agreement. Concurrently herewith, LVSI, VCR, the Bank Agent
and the Bank Lenders have entered into the Bank Credit Agreement pursuant to
which the Bank Lenders have agreed, subject to the terms thereof, to provide
certain loans to LVSI and VCR, jointly and severally, in an aggregate amount and
for purposes specified therein.
C. Interim Mall Credit Agreement. Concurrently herewith, LVSI, VCR,
GCCLLC, and the Interim Mall Lender have entered into the Interim Mall Credit
Agreement pursuant to which the Interim Mall Lender has agreed to provide loans
to LVSI, VCR and GCCLLC, jointly and severally, in an aggregate amount and for
purposes specified therein.
D. Mortgage Notes Indenture. Concurrently herewith, LVSI, VCR, certain
guarantors named therein, and the Mortgage Notes Indenture Trustee have entered
into the Mortgage Notes Indenture pursuant to which LVSI and VCR will issue
Mortgage Notes in an aggregate principal amount and for purposes specified
therein.
E. Subordinated Notes Indenture. Concurrently herewith, LVSI, VCR, certain
guarantors named therein, and the Subordinated Notes Indenture Trustee have
entered into the Subordinated Notes Indenture pursuant to which LVSI and VCR
will issue Subordinated Notes in an aggregate principal amount and for purposes
specified therein.
F. Intercreditor Agreement. Concurrently herewith, the Bank Agent (acting
on behalf of itself and the Bank Lenders), the Interim Mall Lender, the Mortgage
Notes Indenture Trustee (acting on behalf of itself and the Mortgage Note
Holders) and the Subordinated Notes Indenture Trustee (acting on behalf of
itself and the Subordinated Note Holders) have entered into that certain
Intercreditor Agreement pursuant to which the parties thereto have set forth
certain intercreditor provisions, including the method of voting and decision
making among the Bank Lenders, the Interim Mall Lender, the Mortgage Note
Holders and the Subordinated Note Holders, the arrangements applicable to joint
consultation and
1
actions in respect of approval rights and waivers, the limitations on rights of
enforcement upon default and the application of proceeds upon enforcement.
G. Funding Agents' Disbursement and Administration Agreement. Concurrently
herewith, Pledgor, GCCLLC, the Bank Agent (acting on behalf of itself and the
Bank Lenders), the Interim Mall Lender, the Mortgage Notes Indenture Trustee
(acting on behalf of itself and the Mortgage Note Holders), the HVAC Provider
and The Bank of Nova Scotia, New York Agency, as "Disbursement Agent" have
entered into that certain Funding Agents' Disbursement and Administration
Agreement ("Disbursement Agreement") for the purpose of setting forth, among
other things, (a) the mechanics for and allocation of the Company's requests for
Advances under the Facilities and from the Company's Funds Account, (b) the
conditions precedent to the initial Advance and conditions precedent to
subsequent Advances, (c) certain common representations, warranties and
covenants of the Company in favor of the Funding Agents, (d) the establishment
of the Collateral Accounts, (e) the pledge and management of the Collateral
Accounts, and (f) the common events of default and remedies.
H. Capacity and Obligations of Secured Party. Secured Party has entered
into this Agreement pursuant to the Disbursement Agreement and is obligated to
exercise its rights and perform its duties hereunder in accordance with the
Disbursement Agreement and the Intercreditor Agreement.
I. Condition. It is a condition precedent to the extensions or purchase of
the Mortgage Notes by the Mortgage Note Holders, the funding of the Bank Loans
by the Bank Lenders, and the funding of the Interim Mall Construction Loan by
the Interim Mall Lender that Pledgor shall have established the Collateral
Accounts, grant control to the Disbursement Agent (as Secured Party) of such
accounts, and undertaken the obligations contemplated by this Agreement.
NOW, THEREFORE, in consideration of the premises and in order to
induce the Mortgage Note Holders to purchase the Mortgage Notes under the
Mortgage Notes Indenture, the funding of the Bank Loans by the Bank Lenders, and
the funding of the Interim Mall Construction Loan by the Interim Mall Lender,
and other good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, Pledgor hereby agrees with Secured Party as follows:
SECTION 1. Certain Definitions.
(a) Specific Definitions. The following terms used in this
Agreement shall have the following meanings:
"Collateral" shall have the meaning given to that term in the
Third-Party Account Agreement.
2
"Collateral Accounts" shall have the meaning given to that term in
the Third-Party Account Agreement.
"Collateral Value" shall have the meaning given to that term in the
Third-Party Account Agreement.
"Investments" shall have the meaning given to that term in the
Third-Party Account Agreement.
"Secured Obligations" means all obligations and liabilities of every
nature of Pledgor now or hereafter existing under or arising out of or in
connection with the Completion Guaranty, whether for principal, interest
(including interest that, but for the filing of a petition in bankruptcy with
respect to Pledgor, would accrue on such obligations), fees, expenses,
indemnities or otherwise, whether voluntary or involuntary, direct or indirect,
absolute or contingent, liquidated or unliquidated, whether or not jointly owed
with others, and whether or not from time to time decreased or extinguished and
later increased, created or incurred, and all or any portion of such obligations
or liabilities that are paid, to the extent all or any part of such payment is
avoided or recovered directly or indirectly from Secured Party as a preference,
fraudulent transfer or otherwise, and all obligations of every nature of Pledgor
now or hereafter existing under this Agreement.
"Securities Intermediary" means ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co., identified as
the "Securities Intermediary" in the Third-Party Account Agreement.
"Third-Party Account Agreement" means the Completion Guaranty
Third-Party Account Agreement, substantially in the form of Annex A hereto,
entered into among Pledgor, Secured Party and Securities Intermediary, as such
agreement may be amended, supplemented or otherwise modified from time to time.
"Value" shall have the meaning given to that term in the Third-Party
Account Agreement.
(b) General Provisions. Capitalized terms used but not defined
herein or in the Third-Party Account Agreement shall have the meaning given to
such terms in Exhibit A to the Third-Party Account Agreement, although in the
event of a conflict, the meaning given to such term in the Third-Party Account
Agreement shall control. Unless otherwise defined herein, in the Third-Party
Account Agreement or in Exhibit A to the Third-Party Account Agreement, terms
used in Articles 8 and 9 of the Code are used herein as therein defined. Words
used herein, regardless of the number and gender specifically used, shall be
deemed and construed to include any other number, singular or plural, and any
other gender, masculine, feminine or neuter, as the context indicates is
appropriate. When a reference is made in this Agreement to an Appendix, Exhibit,
Introduction, Recital, Section or Schedule, such reference shall be to an
Appendix, an Exhibit, the Introduction, a Recital or a Section of, or a Schedule
to, this Agreement unless otherwise indicated. The headings contained in this
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement. Whenever the words "include,"
"includes"
3
or "including" are used in this Agreement, they shall be deemed to be followed
by the words "without limitation."
SECTION 2. Establishment and Operation of the Collateral Accounts.
(a) Establishment of Completion Guaranty Account. On the date
hereof, in accordance with the terms of the Third-Party Account Agreement,
Pledgor and Secured Party shall establish with Securities Intermediary at its
office at ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, as a securities account in
the name of Secured Party, a restricted securities account designated as "The
Bank of Nova Scotia Completion Guaranty Account".
(b) Compliance with Third-Party Account Agreement. The Collateral
Accounts shall be operated, and all Investments shall be purchased, registered
or held (as applicable), in accordance with the terms of the Third-Party Account
Agreement.
(c) Reasonable Reliance. Secured Party shall be fully protected
and shall suffer no liability in acting in accordance with any written
instructions reasonably believed by it to have been given by Pledgor with
respect to any aspect of the operation of the Collateral Accounts (including any
such instructions relating to any Investments of any amounts or Financial Assets
credited thereto).
SECTION 3. Pledge of Security for Secured Obligations. Pledgor
hereby pledges and assigns to Secured Party, and hereby grants to Secured Party,
a security interest in, all of Pledgor's right, title and interest in and to the
Collateral as collateral security for the prompt payment or performance in full
when due, whether at stated maturity, by required prepayment, declaration,
acceleration, demand or otherwise (including the payment of amounts that would
become due but for the operation of the automatic stay under Section 362(a) of
the United States Bankruptcy Code, 11 U.S.C. 362(a)), of all Secured
Obligations.
SECTION 4. Maintenance of Minimum Collateral Value Amount; Return of
Excess Collateral.
(a) Margin From Pledgor. Upon demand by Secured Party in
accordance with the Completion Guaranty, Pledgor shall promptly (and in any
event within two Business Days) transfer to the Completion Guaranty Collateral
Account, in accordance with Section 3(a) of the Third-Party Account Agreement,
any funds or Permitted Investments required in accordance with the Completion
Guaranty.
(b) Release of Excess Collateral. So long as no Potential Event of
Default or Event of Default shall have occurred and be continuing, upon written
demand by Pledgor in accordance with the Completion Guaranty, Secured Party
shall promptly (and in any event within two Business Days) instruct Securities
Intermediary pursuant to Section 4(e) of the Third-Party Account Agreement, to
transfer to Pledgor from the Completion Guaranty Account in accordance with such
written instructions as may have been delivered by Pledgor, cash and Financial
Assets designated by Pledgor (or in the absence of such a
4
designation, reasonably selected by Secured Party or Securities Intermediary)
having a total Value not exceeding the amount required to be released to Pledgor
in accordance with the Completion Guaranty.
SECTION 5. Investment of Amounts in the Collateral Accounts.
(a) Strict Compliance On Investment of Collateral. Credit balances
held by Securities Intermediary in the Collateral Accounts shall not be invested
or reinvested except as provided in this Section 5 and in the Third-Party
Account Agreement.
(b) Management by Pledgor. So long as no Potential Event of
Default or Event of Default shall have occurred and be continuing, Secured Party
shall instruct Securities Intermediary to follow, in accordance with the terms
of the Third-Party Account Agreement, any written instruction received by
Securities Intermediary from Pledgor (with a copy to Secured Party) (i) to
invest and reinvest funds held for the credit of the Collateral Accounts in
Permitted Investments for credit to the Collateral Accounts, (ii) to transfer
funds from the Collateral Accounts to the extent required for such investments,
against delivery of the related Financial Assets to Securities Intermediary for
credit to the Collateral Accounts, and (iii) to sell or redeem any Investment
against delivery of the proceeds to, or settlement to purchase an Permitted
Investment for credit of, the Collateral Accounts.
(c) Power of Secured Party to Sell. Pledgor agrees that Secured
Party may sell or cause the sale or redemption of any Investment and instruct
Securities Intermediary to transfer the proceeds of such sale or any other
credit in the Collateral Accounts to any third party or account, in either case
(i) if such sale or redemption is necessary to permit Secured Party to perform
its duties under this Agreement, the Disbursement Agreement or the Intercreditor
Agreement, or (ii) as provided in Section 10.
SECTION 6. Representations and Warranties. Pledgor represents and
warrants as follows:
(a) Ownership of Collateral; Security Interest; Perfection and
Priority. Except as specifically set forth in the Disbursement Agreement,
Pledgor is (or at the time of transfer thereof to Securities Intermediary will
be) the beneficial owner of the Collateral from time to time transferred by
Pledgor for the benefit of Pledgor to Securities Intermediary, as agent for
Secured Party, free and clear of any Lien except for the security interest
created by this Agreement and the Third-Party Account Agreement. The pledge and
assignment of the Collateral pursuant to this Agreement and the Third-Party
Account Agreement creates a valid security interest in the Collateral securing
the Payment of the Secured Obligations. Assuming compliance by Securities
Intermediary with the Third-Party Account Agreement, Secured Party will have a
perfected security interest in the Collateral Accounts senior in priority to any
other security interest created by Pledgor.
5
(b) Governmental Authorizations. Except as may be required under
Nevada gaming laws, no authorization, approval or other action by, and no notice
to or filing with, any governmental authority or regulatory body is required for
either (i) the grant by Pledgor of the security interest granted hereby or by
the Third-Party Account Agreement, (ii) the execution, delivery or performance
of this Agreement or the Third-Party Account Agreement by Pledgor, or (iii) the
perfection of or the exercise by Secured Party or Securities Intermediary of its
rights and remedies hereunder or under the Third-Party Account Agreement (except
as may have been taken by or at the direction of Pledgor).
(c) Other Information. All information heretofore, herein or
hereafter supplied to Secured Party or Securities Intermediary by or on behalf
of Pledgor with respect to the Collateral is accurate and complete in all
material respects.
SECTION 7. Further Assurances. Pledgor agrees that from time to
time, at the expense of Pledgor, Pledgor shall promptly execute and deliver all
further instruments and documents, and take all further action, that may be
necessary or reasonably desirable, or that Secured Party may reasonably request,
in order to perfect and protect any security interest granted or purported to be
granted hereby or by the Third-Party Account Agreement or to enable Secured
Party or Securities Intermediary to exercise and enforce its rights and remedies
hereunder or under the Third-Party Account Agreement with respect to any
Collateral. Without limiting the generality of the foregoing, Pledgor shall: (a)
execute and file such financing or continuation statements, or amendments
thereto, and such other instruments or notices, as may be necessary or
reasonably desirable, or as Secured Party may reasonably request, in order to
perfect and preserve the security interests granted or purported to be granted
hereby or by the Third-Party Account Agreement, and (b) at Secured Party's
request, appear in and defend any action or proceeding that may affect Pledgor's
title to or Secured Party's security interest in all or any part of the
Collateral.
SECTION 8. Transfers and other Liens. Pledgor agrees that, except as
permitted in Section 5(b), it shall not (a) sell, assign (by operation of law or
otherwise), redeem or otherwise dispose of any of the Collateral or (b) create
or suffer to exist any Lien upon or with respect to any of the Collateral,
except for the security interest created under this Agreement and the
Third-Party Account Agreement.
SECTION 9. Secured Party Appointed Attorney-in-Fact; Secured Party
Performance.
(a) Secured Party Appointed Attorney-in-Fact. Pledgor hereby
irrevocably appoints Secured Party as Pledgor's attorney-in-fact, with full
authority in the place and stead of Pledgor and in the name of Pledgor, Secured
Party or otherwise, from time to time in Secured Party's discretion to take any
action and to execute any instrument that Secured Party may deem necessary or
advisable to accomplish the purposes of this Agreement or the Third-Party
Account Agreement, including (a) to file one or more financing or continuation
statements, or amendments thereto, relative to all or any part of the Collateral
without the signature of Pledgor and (b) to receive, endorse and collect any
instruments or other
6
Investments made payable to Pledgor representing any dividend, principal or
interest payment or other distribution in respect of the Collateral or any part
thereof and to give full discharge for the same.
(b) Performance by Secured Party. If Pledgor fails to perform any
agreement contained herein, Secured Party may itself perform, or cause
performance of, such agreement, and the expenses of Secured Party incurred in
connection therewith shall be payable by Pledgor under Section 12.
SECTION 10. Remedies.
(a) Transfer or Sequestration of Collateral. If any Potential
Event of Default or Event of Default shall have occurred and be continuing,
Secured Party may instruct Securities Intermediary to (i) sell or redeem any of
the Collateral, (ii) transfer any or all of the Collateral to any account
designated by Secured Party, including account or accounts established in
Secured Party's name (whether with Secured Party or Securities Intermediary or
otherwise), (iii) register title to any Collateral in any name specified by
Secured Party, including the name of Secured Party or any of its nominees or
agents, without reference to any interest of Pledgor, or (iv) otherwise deal
with the Collateral as directed by Secured Party.
(b) Rights of Secured Party. If any Event of Default shall have
occurred and be continuing, Secured Party may exercise in respect of the
Collateral, in addition to all other rights and remedies provided for herein or
otherwise available to it, all the rights and remedies of a secured party on
default under the Uniform Commercial Code as in effect in any relevant
jurisdiction (the "UCC") (whether or not the UCC applies to the affected
Collateral), and Secured Party may also in its sole discretion sell the
Collateral or any part thereof in one or more parcels at public or private sale,
at any exchange or broker's board or at any of Secured Party's offices or
elsewhere, for cash, on credit or for future delivery, at such time or times and
at such price or prices and upon such other terms as Secured Party may deem
commercially reasonable, irrespective of the impact of any such sales on the
market price of the Collateral. Each purchaser at any such sale shall hold the
property sold absolutely free from any claim or right on the part of Pledgor,
and Pledgor hereby waives (to the extent permitted by applicable law) all rights
of redemption, stay or appraisal which it now has or may at any time in the
future have under any rule of law or statute now existing or hereafter enacted.
Secured Party shall not be obligated to make any sale of Collateral regardless
of notice of sale having been given. Secured Party may adjourn any public or
private sale from time to time by announcement at the time and place fixed
therefor, and such sale may, without further notice, be made at the time and
place to which it was so adjourned.
(c) Agreement as to Manner of Sale. Pledgor hereby agrees that the
Collateral is of a type customarily sold on recognized markets and, accordingly,
that no notice to any Person is required before any sale of any of the
Collateral pursuant to the terms of this Agreement; provided that, without
prejudice to the foregoing, Pledgor agrees that, to the extent notice of any
such sale shall be required by law, at least ten days' notice
7
to Pledgor of the time and place of any public sale or the time after which any
private sale is to be made shall constitute reasonable notification.
(d) Deficiency. If the proceeds of any sale or other disposition
of the Collateral are insufficient to pay all the Secured Obligations, Pledgor
shall be liable for the deficiency and the fees of any attorneys employed by
Secured Party to collect such deficiency.
SECTION 11. Application of Proceeds. If any Event of Default shall
have occurred and be continuing, all cash included as Collateral and all
proceeds received by Secured Party in respect of any sale or redemption of,
collection from, or other realization upon all or any part of the Collateral
may, in the discretion of Secured Party, be held by or for Secured Party as
Collateral for, or then, or at any other time thereafter, applied in full or in
part by Secured Party against, the Secured Obligations in the following order of
priority:
FIRST: To the payment of all costs and expenses of such sale,
collection or other realization, including reasonable compensation to
Secured Party and its agents and counsel, and all other expenses,
liabilities and advances made or incurred by Secured Party in connection
therewith, and all amounts for which Secured Party is entitled to
indemnification hereunder and all advances made by Secured Party hereunder
for the account of Pledgor, and to the payment of all costs and expenses
paid or incurred by Secured Party in connection with the exercise of any
right or remedy hereunder, all in accordance with Section 12;
SECOND: To the payment of all of the Secured Obligations in
accordance with the Disbursement Agreement and the Intercreditor
Agreement; and
THIRD: To the payment to or upon the order of Pledgor, or to
whosoever may be lawfully entitled to receive the same or as a court of
competent jurisdiction may direct, of any surplus then remaining from such
proceeds.
SECTION 12. Exculpation; Indemnity; Expenses.
(a) Exculpation. The powers conferred on Secured Party hereunder
are solely to protect its interest in the Collateral and shall not impose any
duty upon it to exercise any such powers. Except for the exercise of reasonable
care in the custody of any Collateral in its possession and the accounting for
moneys actually received by it hereunder, Secured Party shall have no duty as to
any Collateral, it being understood that Secured Party shall have no
responsibility for (a) ascertaining or taking action with respect to calls,
conversions, exchanges, maturities, tenders or other matters relating to any
Collateral, whether or not Secured Party has or is deemed to have knowledge of
such matters, (b) taking any necessary steps (other than steps taken in
accordance with the standard of care set forth above to maintain possession of
the Collateral) to preserve rights against any parties with respect to any
Collateral, (c) taking any necessary steps to collect or realize upon the
Secured Obligations or any guarantee therefor, or any part thereof, or any of
the
8
Collateral, (d) initiating any action to protect the Collateral against the
possibility of a decline in market value, (e) any loss resulting from
Investments made, held or sold pursuant to Section 5, except for a loss
resulting from Secured Party's gross negligence or wilful misconduct in
complying with Section 5, or (f) determining (i) the correctness of any
statement or calculation made by Pledgor in any written or telex (tested or
otherwise) instructions or (ii) whether any transfer to or from the Collateral
Accounts is proper. Secured Party shall be deemed to have exercised reasonable
care in the custody and preservation of Collateral in its possession if such
Collateral is accorded treatment substantially equal to that which Secured Party
accords its own property of like kind. In addition to the foregoing and without
limiting the generality thereof, Secured Party shall not be responsible for any
actions or omissions of Securities Intermediary.
(b) Indemnification. Pledgor agrees to indemnify Secured Party
from and against any and all claims, losses and liabilities in any way relating
to, growing out of or resulting from this Agreement and the transactions
contemplated hereby (including enforcement of this Agreement), except to the
extent such claims, losses or liabilities result solely from Secured Party's
gross negligence or wilful misconduct as finally determined by a court of
competent jurisdiction.
(c) Expenses. Pledgor shall pay to Secured Party upon demand the
amount of any and all costs and expenses, including the reasonable fees and
expenses of its counsel and of any experts and agents, that Secured Party may
reasonably incur in connection with (i) the administration of this Agreement,
(ii) the custody, preservation, use or operation of, or the sale of, collection
from, or other realization upon, any of the Collateral, (iii) the exercise or
enforcement of any of the rights of Secured Party hereunder, or (iv) the failure
by Pledgor to perform or observe any of the provisions hereof.
SECTION 13. Continuing Security Interest. This Agreement shall
create a continuing security interest in the Collateral and shall (a) remain in
full force and effect until the indefeasible payment in full of the Secured
Obligations, and the cancellation or termination of the commitments under the
Interim Mall Credit Agreement and the Bank Credit Agreement, and reimbursement
of amounts drawn under Letters of Credit issued under the Bank Credit Agreement,
(b) be binding upon Pledgor, its successors and assigns, and (c) inure, together
with the rights and remedies of Secured Party hereunder, for the benefit of the
Bank Lenders, the Mortgage Note Holders, the Interim Mall Lender and their
respective successors, transferees and assigns. Upon the indefeasible payment in
full of all Secured Obligations, the security interest granted hereby shall
terminate and all rights to the Collateral shall revert to Pledgor. Upon any
such termination Secured Party shall, at Pledgor's expense, execute and deliver
to Pledgor such documents as Pledgor shall reasonably request to evidence such
termination and Pledgor shall be entitled to the return, upon its request and at
its expense, against receipt and without recourse to Secured Party, of such of
the Collateral as shall not have been sold or otherwise applied pursuant to the
terms hereof.
SECTION 14. Secured Party as Disbursement Agent.
9
(a) Agency. Secured Party has been appointed to act as Secured
Party hereunder by Lenders pursuant to the Disbursement Agreement. Secured Party
shall be obligated, and shall have the right hereunder, to make demands, to give
notices, to exercise or refrain from exercising any rights, and to take or
refrain from taking any action (including, without limitation, the release or
substitution of Collateral), solely in accordance with this Agreement, the
Disbursement Agreement and the Intercreditor Agreement.
(b) Identity of Agent. Secured Party shall at all times be the
same Person that is Disbursement Agent under the Disbursement Agreement. Written
notice of resignation by Disbursement Agent pursuant to subsection 9.7 of the
Disbursement Agreement shall also constitute notice of resignation as Secured
Party under this Agreement; removal of Disbursement Agent pursuant to subsection
9.7 of the Disbursement Agreement shall also constitute removal as Secured Party
under this Agreement; and substitution of a successor disbursement agent
pursuant to subsection 9.7 of the Disbursement Agreement shall also constitute
substitution of a successor Secured Party under this Agreement. Upon the
acceptance of any appointment as Disbursement Agent under subsection 9.7 of the
Disbursement Agreement by a successor Disbursement Agent, that successor
Disbursement Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the retiring or removed Secured Party
under this Agreement, and the retiring or removed Secured Party under this
Agreement shall promptly (i) transfer to such successor Secured Party all items
of Collateral held by Secured Party together with all records and other
documents necessary or appropriate in connection with the performance of the
duties of the successor Secured Party under this Agreement, and (ii) execute and
deliver to such successor Secured Party such amendments to financing statements,
and take such other actions, as may be necessary or appropriate in connection
with the assignment to such successor Secured Party of the security interests
created hereunder, whereupon such retiring or removed Secured Party shall be
discharged from its duties and obligations under this Agreement. After any
retiring or removed Disbursement Agent's resignation or removal hereunder as
Secured Party, the provisions of this Agreement shall inure to its benefit as to
any actions taken or omitted to be taken by it under this Agreement while it was
Secured Party hereunder.
SECTION 15. Amendments; Etc. No amendment or waiver of any provision
of this Agreement, or consent to any departure by Pledgor herefrom, shall in any
event be effective unless the same shall be in writing and signed by Secured
Party, and then such waiver or consent shall be effective only in the specific
instance and for the specific purpose for which it was given.
SECTION 16. Notices. Any communications between the parties hereto
or notices provided herein to be given may be given to the address of the party
as set forth under such party's name on the signature pages hereof. All notices
or other communications required or permitted to be given hereunder shall be in
writing and shall be considered as properly given (a) if delivered in person,
(b) if sent by reputable overnight delivery service, (c) in the event overnight
delivery services are not readily available, if mailed by first class mail,
postage prepaid, registered or certified with return receipt requested or (d) if
sent by prepaid telex, or by telecopy with correct answer back received.
10
Notice so given shall be effective upon receipt by the addressee, except that
communication or notice so transmitted by telecopy or other direct written
electronic means shall be deemed to have been validly and effectively given on
the day (if a Business Day and, if not, on the next following Business Day) on
which it is validly transmitted if transmitted before 4 p.m., recipient's time,
and if transmitted after that time, on the next following Business Day;
provided, however, that if any notice is tendered to an addressee and the
delivery thereof is refused by such addressee, such notice shall be effective
upon such tender. Any party shall have the right to change its address for
notice hereunder to any other location by giving of no less than twenty (20)
days' notice to the other parties in the manner set forth hereinabove.
SECTION 17. Failure or Indulgence Not Waiver; Remedies Cumulative.
No failure or delay on the part of Secured Party in the exercise of any power,
right or privilege hereunder shall impair such power, right or privilege or be
construed to be a waiver of any default or acquiescence therein, nor shall any
single or partial exercise of any such power, right or privilege preclude any
other or further exercise thereof or of any other power, right or privilege. All
rights and remedies existing under this Agreement are cumulative to, and not
exclusive of, any rights or remedies otherwise available.
SECTION 18. Severability. In case any provision in or obligation
under this Agreement shall be invalid, illegal or unenforceable in any
jurisdiction, the validity, legality and enforceability of the remaining
provisions or obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired thereby.
SECTION 19. Headings. Section and subsection headings in this
Agreement are included herein for convenience of reference only and shall not
constitute a part of this Agreement for any other purpose or be given any
substantive effect.
SECTION 20. Governing Law; Terms. THIS AGREEMENT SHALL BE GOVERNED
BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF
THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES, EXCEPT TO
THE EXTENT THAT THE UCC PROVIDES THAT THE VALIDITY OR PERFECTION OF THE SECURITY
INTEREST HEREUNDER, OR REMEDIES HEREUNDER, IN RESPECT OF ANY PARTICULAR
COLLATERAL ARE GOVERNED BY THE LAWS OF A JURISDICTION OTHER THAN THE STATE OF
NEW YORK.
SECTION 21. Consent to Jurisdiction and Service of Process. ALL
JUDICIAL PROCEEDINGS BROUGHT AGAINST PLEDGOR ARISING OUT OF OR RELATING TO THIS
AGREEMENT MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT JURISDICTION
IN THE STATE OF NEW YORK, AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT
PLEDGOR ACCEPTS FOR ITSELF AND IN CONNECTION WITH ITS PROPERTIES, GENERALLY AND
UNCONDITIONALLY, THE NONEXCLUSIVE JURISDICTION OF THE AFORESAID COURTS AND
WAIVES ANY DEFENSE OF FORUM NON CONVENIENS AND IRREVOCABLY AGREES TO BE BOUND BY
ANY JUDGMENT RENDERED THEREBY IN CONNECTION WITH THIS
11
AGREEMENT. Pledgor hereby agrees that service of all process in any such
proceeding in any such court may be made by registered or certified mail, return
receipt requested, to Pledgor at its address as provided in Section 16, such
service being hereby acknowledged by Pledgor to be sufficient for personal
jurisdiction in any action against Pledgor in any such court and to be otherwise
effective and binding service in every respect. Nothing herein shall affect the
right to serve process in any other manner permitted by law or shall limit the
right of Secured Party to bring proceedings against Pledgor in the courts of any
other jurisdiction.
SECTION 22. Waiver of Jury Trial. PLEDGOR AND SECURED PARTY HEREBY
AGREE TO WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF
ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT OR THE THIRD-PARTY ACCOUNT
AGREEMENT. The scope of this waiver is intended to be all-encompassing of any
and all disputes that may be filed in any court and that relate to the subject
matter of this transaction, including contract claims, tort claims, breach of
duty claims, and all other common law and statutory claims. Pledgor and Secured
Party each acknowledge that this waiver is a material inducement for Pledgor and
Secured Party to enter into a business relationship, that Pledgor and Secured
Party have already relied on this waiver in entering into this Agreement and
that each will continue to rely on this waiver in their related future dealings.
Pledgor and Secured Party further warrant and represent that each has reviewed
this waiver with its legal counsel, and that each knowingly and voluntarily
waives its jury trial rights following consultation with legal counsel. THIS
WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN
WRITING, AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS,
SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT OR THE THIRD-PARTY ACCOUNT
AGREEMENT. In the event of litigation, this Agreement may be filed as a written
consent to a trial by the court.
SECTION 23. Counterparts. This Agreement may be executed in one or
more counterparts and by different parties hereto in separate counterparts, each
of which when so executed and delivered shall be deemed an original, but all
such counterparts together shall constitute but one and the same instrument;
signature pages may be detached from multiple separate counterparts and attached
to a single counterpart so that all signature pages are physically attached to
the same document.
[Remainder of page intentionally left blank]
12
IN WITNESS WHEREOF, Pledgor and Secured Party have caused this
Agreement to be duly executed and delivered by their respective officers
thereunto duly authorized as of the date first written above.
PLEDGOR: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Notice Address: ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ 8909
SECURED PARTY:
THE BANK OF NOVA SCOTIA, a
Canadian chartered bank, as
Disbursement Agent under
the Disbursement Agreement
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
----------------------
Title: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Relationship Manager
Notice Address: The Bank of Nova Scotia
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Relationship Manager
Facsimile Number: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to: The Bank of Nova Scotia
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Facsimile Number: (▇▇▇) ▇▇▇-▇▇▇▇
S-1
ANNEX A
[FORM OF COMPLETION GUARANTY THIRD-PARTY ACCOUNT AGREEMENT]
This COMPLETION GUARANTY THIRD-PARTY ACCOUNT AGREEMENT (this
"Agreement") is dated as of November 14, 1997 and entered into by and among
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, an individual ("Pledgor"), THE BANK OF NOVA SCOTIA, a
Canadian chartered bank through its New York agency, as Disbursement Agent under
the Disbursement Agreement (in such capacity herein called "Secured Party") and
▇▇▇▇▇▇▇, SACHS & CO., a Broker-Dealer ("Securities Intermediary").
PRELIMINARY STATEMENTS
A. The Project. LVSI, VCR and Grand Canal Shops Mall Construction, LLC, a
Delaware limited liability company ("GCCLLC"), propose to develop, construct and
operate the Venetian Casino Resort, a large scale Venetian-themed hotel, casino,
retail, meeting and entertainment complex, with related heating, ventilation and
air conditioning and power station facilities, as part of the redevelopment of
the site of the former Las Vegas Sands Hotel and Casino.
B. Bank Credit Agreement. Concurrently herewith, LVSI, VCR, the Bank Agent
and the Bank Lenders have entered into the Bank Credit Agreement pursuant to
which the Bank Lenders have agreed, subject to the terms thereof, to provide
certain loans to LVSI and VCR, jointly and severally, in an aggregate amount and
for purposes specified therein.
C. Interim Mall Credit Agreement. Concurrently herewith, LVSI, VCR,
GCCLLC, and the Interim Mall Lender have entered into the Interim Mall Credit
Agreement pursuant to which the Interim Mall Lender has agreed to provide loans
to LVSI, VCR and GCCLLC, jointly and severally, in an aggregate amount and for
purposes specified therein.
D. Mortgage Notes Indenture. Concurrently herewith, LVSI, VCR, certain
guarantors named therein, and the Mortgage Notes Indenture Trustee have entered
into the Mortgage Notes Indenture pursuant to which LVSI and VCR will issue
Mortgage Notes in an aggregate principal amount and for purposes specified
therein.
E. Subordinated Notes Indenture. Concurrently herewith, LVSI, VCR and the
Subordinated Notes Indenture Trustee have entered into the Subordinated Notes
Indenture pursuant to which LVSI and VCR will issue Subordinated Notes in an
aggregate principal amount and for purposes specified therein.
F. HVAC Services Agreement. Concurrently herewith, VCR and the HVAC
Provider have entered into the HVAC Services Agreement pursuant to which the
HVAC Provider has agreed to advance, for the acquisition, construction, testing
and installation of that certain HVAC Component of the Project, an aggregate
amount specified therein.
G. Intercreditor Agreement. Concurrently herewith, the Bank Agent (acting
on behalf of
ANNEX A-1
itself and the Bank Lenders), the Interim Mall Lender, the Mortgage Notes
Indenture Trustee (acting on behalf of itself and the Mortgage Note Holders) and
the Subordinated Notes Indenture Trustee (acting on behalf of itself and the
Subordinated Note Holders) have entered into that certain Intercreditor
Agreement pursuant to which the parties thereto have set forth certain
intercreditor provisions, including the method of voting and decision making
among the Bank Lenders, the Interim Mall Lender, the Mortgage Note Holders and
the Subordinated Note Holders, the arrangements applicable to joint consultation
and actions in respect of approval rights and waivers, the limitations on rights
of enforcement upon default and the application of proceeds upon enforcement.
H. Funding Agents' Disbursement and Administration Agreement. Concurrently
herewith, Pledgor, GCCLLC, the Bank Agent (acting on behalf of itself and the
Bank Lenders), the Interim Mall Lender, the Mortgage Notes Indenture Trustee
(acting on behalf of itself and the Mortgage Note Holders), the HVAC Provider
and The Bank of Nova Scotia, New York Agency, as "Disbursement Agent" have
entered into that certain Funding Agents' Disbursement and Administration
Agreement ("Disbursement Agreement") for the purpose of setting forth, among
other things, (a) the mechanics for and allocation of the Company's requests for
Advances under the Facilities and from the Company's Funds Account, (b) the
conditions precedent to the initial Advance and conditions precedent to
subsequent Advances, (c) certain common representations, warranties and
covenants of the Company in favor of the Funding Agents, (d) the establishment
of the Collateral Accounts, (e) the pledge and management of the Collateral
Accounts, and (f) the common events of default and remedies.
I. Condition. It is a condition precedent to the extensions or purchase of
the Mortgage Notes by the Mortgage Note Holders, the funding of the Bank Loans
by the Bank Lenders and the funding of the Interim Mall Construction Loan by the
Interim Mall Lender that Pledgor shall have established the Collateral Accounts,
grant control to the Disbursement Agent (as Secured Party) of such accounts, and
undertaken the obligations contemplated by this Agreement.
NOW, THEREFORE, in consideration of the premises and in order to
induce the Lenders to purchase the Mortgage Notes under the Mortgage Notes
Indenture, the funding of the Bank Loans by the Bank Lenders and the funding of
the Interim Mall Construction Loan by the Interim Mall Lender and for other good
consideration, the receipt and adequacy of which are hereby acknowledged,
Pledgor, Securities Intermediary and Secured Party hereby agree as follows:
ANNEX A-2
SECTION 1. Definitions.
(a) Specific Definitions. The following terms used in this
Agreement shall have the following meanings:
"Broker-Dealer" means a person registered as a broker or dealer
under the Securities Exchange Act of 1934, as amended.
"Business Day" means any day excluding Saturday, Sunday and any day
which is a legal holiday under the laws of the States of New York or Nevada or
is a day on which banking institutions located in such states are authorized or
required by law or other governmental action to close, or a day on which the New
York Stock Exchange is closed.
"Code" shall mean the Uniform Commercial Code as in effect in New
York.
"Collateral" means (i) the Completion Guaranty Account, (ii) all
amounts held from time to time in the Completion Guaranty Account, (iii) all
Investments, including all Financial Assets, security entitlements, securities
(whether certificated or uncertificated), instruments, accounts, general
intangibles and deposits representing or evidencing any Investments, (iv) all
interest, dividends, cash, instruments, securities and other property from time
to time received, receivable or otherwise distributed in respect of or in
exchange for any or all of the Collateral, and (v) to the extent not covered by
clauses (i) through (iv) above, all proceeds of any or all of the foregoing
Collateral.
"Collateral Accounts" means the Completion Guaranty Account and any
other accounts in which Investments may be held or registered.
"Collateral Value" means, as at any date of determination, the Value
of all Collateral (other than Investments which are not Permitted Investments)
as of such date.
"Investments" means any Financial Assets credited to the Completion
Guaranty Account, and any other property acquired by Securities Intermediary as
securities intermediary hereunder in exchange for, with proceeds from or
distributions on, or otherwise in respect of any Investments.
"Overnight Investments" means Investments of the kind described in
subdivision (a)(v), (b) or (c) of the definition of "Permitted Investments."
ANNEX ▇-▇
▇▇▇▇▇ ▇-▇
"Permitted Investments" means (a) (i) direct obligations of the
United States of America (including obligations issued or held in book-entry
form on the books of the Department of the Treasury of the United States of
America) or obligations fully guaranteed by the United States of America, (ii)
obligations, debentures, notes or other evidence of indebtedness issued or
guaranteed by any other agency or instrumentality of the United States, (iii)
interest-bearing demand or time deposits (which may be represented by
certificates of deposit) issued by banks having general obligations rated (on
the date of acquisition thereof) at least "A" or the equivalent by any Rating
Agency or, if not so rated, secured at all times, in the manner and to the
extent provided by law, by collateral security in clause (i) or (ii) of this
definition, of a market value of no less than the amount of monies so invested,
(iv) commercial paper rated (on the date of acquisition thereof) at least "A-1"
or "P-1" or the equivalent by any Rating Agency issued by any Person, (v)
repurchase obligations for underlying securities of the types described in
clause (i) or (ii) above, entered into with any commercial bank or any other
financial institution having long-term unsecured debt securities rated at least
"A" or "A2" or the equivalent by any Rating Agency in connection with which such
underlying securities are held in trust or by a third-party custodian, (vi)
guaranteed investment contracts of any financial institution which has a
long-term debt rated (on the date of acquisition thereof) at least "A" or "A2"
or the equivalent by any Rating Agency, (vii) obligations (including both
taxable and nontaxable municipal securities) issued or guaranteed by, and any
other obligations the interest on which is excluded from income for Federal
income tax purposes issued by, any state of the United States of America or the
District of Columbia or the Commonwealth of Puerto Rico or any political
subdivision, agency, authority or instrumentality thereof, which issuer or
guarantor has (A) a short-term debt rated (on the date of acquisition thereof)
at least "A-1" or "P-1" or the equivalent by any Rating Agency and (B) a
long-term debt rated (on the date of acquisition thereof) at least "A" or "A2"
or the equivalent by any Rating Agency, (viii) investment contracts of any
financial institution either (A) fully secured by (1) direct obligations of the
United States, (2) obligations of a Person controlled or supervised by and
acting as an agency or instrumentality of the United States or (3) securities or
receipts evidencing ownership interest in obligations or specified portions
thereof described in clause (1) or (2), in each case guaranteed as full faith
and credit obligations of the United States of America, having a market value at
least equal to 102% of the amount deposited thereunder, or (B) with long-term
debt rated at least "A" or "A2" or the equivalent by any Rating Agency and
short-term debt rated at least "A-1" or "P-1" or the equivalent by any Rating
Agency, (ix) a contract or investment agreement with a provider or guarantor (A)
which provider or guarantor is rated (on the date of acquisition thereof) at
least "A" or "A2" or the equivalent by any Rating Agency (provided that if a
guarantor is party to the rating, the guaranty must be unconditional and must be
confirmed in writing prior to any assignment by the provider to another
subsidiary of such guarantor,) (B) providing that monies invested shall be
payable without condition (other than notice) and without brokerage fee or other
penalty, upon not more than two Business Days' notice for application when and
as required or permitted under the Collateral Documents, and (C) stating that
such contract or agreement is unconditional, expressly disclaiming any right of
setoff and providing for immediate termination in the event of insolvency of the
provider and termination upon demand of the Disbursement Agent if prior to
Completion (which demand shall only be made at the direction of Pledgor) after
payment or other covenant default by the provider, or (x) any debt instruments
of any Person which instruments are rated (on the date of acquisition thereof)
at least "A," "A2," "A-1" or "P- 1" or the equivalent by any Rating Agency;
provided that in each case of clauses (i) through (x), such
ANNEX A-5
investments are denominated in United States dollars and maturing not more than
13 months from the date of acquisition thereof; (b) investments in any money
market fund which is rated (on the date of acquisition thereof) at least "A" or
"A2" or the equivalent by any Rating Agency; (c) investments in mutual funds
sponsored by any securities broker-dealer of recognized national standing having
an investment policy that requires substantially all the invested assets of such
fund to be invested in investments described in any one or more of the foregoing
clauses and having a rating of at least "A" or "A2" or the equivalent by any
Rating Agency or (d) investments in both taxable and nontaxable (i) periodic
auction reset securities ("PARS") which have final maturities between one and 30
years from the date of issuance and are repriced through a dutch auction or
other similar method every 35 days or (ii) auction preferred shares ("APS")
which are senior securities of leveraged closed end municipal bond funds and are
repriced pursuant to a variety of rate reset periods, in each case having rating
of at least "A" or "A2" or the equivalent by any Rating Agency.
"Suspension Period" means the period (i) beginning promptly after
receipt by Securities Intermediary of written notice from Secured Party,
substantially in the form of the Prohibition Notice attached to this Agreement
as Attachment 1, suspending Pledgor's right to direct the investment of funds
held for the credit of the Collateral Accounts, and (ii) ending promptly after
receipt by Securities Intermediary of written notice from Secured Party,
substantially in the form of the Rescission of Prohibition Notice attached to
this Agreement as Attachment 2, rescinding the preceding Prohibition Notice.
"Valuation Date" means (i) the date hereof and (ii) the first
Business Day of each calendar month thereafter.
"Value" means the value in U.S. Dollars of any Financial Asset as
determined by Secured Party in its reasonable judgment based on pricing
information supplied by Securities Intermediary on a basis consistent with its
usual practice, including values obtained from a generally recognized source
(including any pricing service regularly utilized by Securities Intermediary).
Any information supplied by Securities Intermediary shall be conclusive absent
manifest error.
(b) General Provisions. Capitalized terms used but not defined
herein shall have the meaning given to such terms in Exhibit A. Unless otherwise
defined herein or in Exhibit A, terms used in Articles 8 and 9 of the Code are
used herein as therein defined. Words used herein, regardless of the number and
gender specifically used, shall be deemed and construed to include any other
number, singular or plural, and any other gender, masculine, feminine or neuter,
as the context indicates is appropriate. When a reference is made in this
Agreement to an Appendix, Exhibit, Introduction, Recital, Section or Schedule,
such reference shall be to an Appendix, an Exhibit, the Introduction, a Recital
or a Section of, or a Schedule to, this Agreement unless otherwise indicated.
The headings contained in this Agreement are for reference purposes only and
shall not affect in any way the meaning or interpretation of this Agreement.
Whenever the words "include," "includes" or "including" are used in this
Agreement, they shall be deemed to be followed by the words "without
limitation."
ANNEX A-6
SECTION 2. Establishment and Operation of Collateral Accounts.
(a) Establishment of Completion Guaranty Account. Pledgor and
Secured Party hereby authorize and direct Securities Intermediary to establish
and maintain at its office at ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, a
securities account in the name of Secured Party and under the sole dominion and
control of Secured Party, designated as "Bank of Nova Scotia Completion Guaranty
Account." Securities Intermediary hereby undertakes to treat Secured Party as
the person entitled to exercise the rights that comprise any Financial Asset
credited to the Completion Guaranty Account. Secured Party and Pledgor agree
that this account shall be the "Completion Guaranty Account."
(b) Acknowledgement of Receipt of Investments. Securities
Intermediary acknowledges the transfer by Pledgor, and the acquisition by
Securities Intermediary, of Financial Assets that are Permitted Investments that
have a Value of $25,000,000 for the credit of the Completion Guaranty Account.
(c) Operations of the Collateral Accounts. The Collateral Accounts
shall be operated, and all Investments shall be acquired and registered or held
(as applicable), in accordance with the terms of this Agreement.
(d) Account Statements. Securities Intermediary shall send Secured
Party and Pledgor written account statements with respect to the Collateral
Accounts not less frequently than monthly. Reports or confirmation of the
execution of orders and statements of account shall be conclusive if not
objected to in writing within 30 days after delivery pursuant to Section 12.
SECTION 3. Mechanics of Deposits of Funds or Investments to the
Collateral Account.
(a) Transfers to the Completion Guaranty Account. All transfers of
funds to the Completion Guaranty Account shall be made by wire transfer (or, if
applicable, intra-bank transfer) of immediately available funds addressed as
follows:
The Chase Manhattan Bank, New York, New York
ABA No.: ▇▇▇-▇▇▇▇-▇▇
Reference: A/C ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co.
A/C# ▇▇▇-▇-▇▇▇▇▇▇
FFC A/C: BANK OF NOVA SCOTIA COMPLETION GUARANTY
ACCOUNT
A/C#: ▇▇▇-▇▇▇▇▇-▇
Transfers of Financial Assets to the Completion Guaranty Account shall be
permitted by book-entry from securities accounts maintained with Securities
Intermediary.
ANNEX A-7
(b) Notice of Transfers. In the event of any transfer of funds or
Financial Assets to the Collateral Accounts pursuant to any provision of Section
3, Pledgor, Secured Party, as the case may be, shall promptly after initiating
or sending out written instructions with respect to such transfer, give notice
to the other such party by facsimile of the date and amount of such transfer.
SECTION 4. Permitted Investments and Transfers of Amounts in the
Collateral Accounts.
(a) Strict Compliance. Credit balances held by Securities
Intermediary in the Collateral Accounts shall not be (i) invested or reinvested,
(ii) sold or redeemed, or (iii) transferred from the Collateral Accounts, in
either case except as provided in this Section 4.
(b) Pledgor's Right to Direct Investment. Except during any
Suspension Period, Securities Intermediary shall, in accordance with Pledgor's
written Entitlement Orders given to Securities Intermediary from time to time,
sell or redeem Investments, and apply amounts transferred to or held for the
credit of the Collateral Accounts to make investments for credit to the
Collateral Accounts, in Securities Intermediary's name and as custodian under
this Agreement, in Permitted Investments denominated and payable in United
States dollars. During any Suspension Period, Pledgor's right to direct such
investments under this Section 4(b) shall be suspended, and Securities
Intermediary shall not accept Entitlement Orders with respect to the Collateral
Accounts from any person other than Secured Party; and (ii) any credit balances
shall be invested and reinvested only as provided in Section 4(c).
(c) Overnight Investments. To the extent that, as of 12:00 noon,
New York time on any Business Day, there are credit balances expected to remain
after settlement of all pending transactions in any of the Collateral Accounts,
unless otherwise instructed by Secured Party, Securities Intermediary shall
apply the expected credit balances to acquire Overnight Investments. Any
Overnight Investments shall be held for the credit of the Collateral Accounts
from which the proceeds for acquisition was derived. If for any reason
Securities Intermediary fails to invest credit balances in Overnight Investments
as provided in this Section, Securities Intermediary shall credit the Mortgage
Construction Guaranty Account with daily interest on the uninvested free credit
balance in accordance with its usual practice.
(d) Actions of Securities Intermediary on Purchase of Investments.
Promptly upon the purchase, acquisition or transfer for credit of the Collateral
Accounts of any Investment, Securities Intermediary shall take all steps that it
customarily takes in the ordinary course of its business to ensure that such
Investment is credited on its books to the Collateral Accounts. Without limiting
the generality of the foregoing, Securities Intermediary shall promptly (i) send
to Pledgor and Secured Party a written confirmation of the acquisition of such
Investment, and (ii) indicate by book entry in its records that such Investment
has been credited to, and is held for the credit of, the Collateral Accounts.
Securities Intermediary agrees with Pledgor and Secured Party that any credit
balances or property credited to, or held for the credit of, the Collateral
Accounts shall be treated as "Financial Assets" as that term is defined in
Section 8-103(a)(9)(iii) of the Code.
ANNEX A-8
(e) Control Agreement. Anything contained herein to the contrary
notwithstanding, Securities Intermediary shall, if and as directed in writing by
Secured Party, without the consent of Pledgor, (i) comply with Entitlement
Orders originated by Secured Party with respect to the Collateral Accounts and
any Security Entitlements therein, (ii) transfer, sell or redeem any of the
Collateral, (iii) transfer any or all of the Collateral to any account or
accounts designated by Secured Party, including an account established in
Secured Party's name (whether at Secured Party or Securities Intermediary or
otherwise), (iv) register title to any Collateral in any name specified by
Secured Party consistent with the policies or practices of the applicable
depository, including the name of Secured Party or any of its nominees or
agents, without reference to any interest of Pledgor, or (v) otherwise deal with
the Collateral as directed by Secured Party. Nothing contained in this paragraph
shall constitute a waiver of by Pledgor of any rights or remedies it may have
against Secured Party under this Agreement or any other agreement.
(f) Deposit of Proceeds. Any interest, cash dividends or other
cash distributions received in respect of any Investments and the net proceeds
of any sale or payment of any Investments shall be promptly credited to, and
held for the credit of, the Collateral Accounts. Any distribution of property
other than cash in respect of any Investment shall be credited to, and held for
the credit of, the Collateral Accounts.
(g) Valuation of Collateral. Securities Intermediary shall provide
access to its systems to Secured Party and Pledgor for the purpose of
communicating data as to the Collateral Accounts as of that date.
SECTION 5. Acknowledgement of Security Interest in Favor of Secured
Party; Covenant Against Creation of other Interests.
(a) Acknowledgement of Security Interest. Securities Intermediary
acknowledges the security interest granted by Pledgor in favor of Secured Party
in the Collateral.
(b) Acknowledgement of Securities Intermediary's Role. Securities
Intermediary hereby further acknowledges that it holds the Collateral Accounts,
and all Security Entitlements therein, as custodian for, for the benefit of, and
subject to the control of, Secured Party. Securities Intermediary shall, by book
entry or otherwise, indicate that the Collateral Accounts, and all Security
Entitlements registered to or held therein, are subject to the control of
Secured Party as provided in Section 4(e).
(c) Securities Intermediary Has No Notice of Adverse Claims.
Securities Intermediary represents and warrants that (i) it has no notice of any
Adverse Claim against any of the Collateral other than the claim of Secured
Party under this Agreement; and (ii) it is not party to any agreement other than
this Agreement that governs its rights or duties, or limits or conflicts with
the rights of Secured Party, including the exclusive right of Secured Party to
control as provided in Section 4(e), with respect to the Collateral Accounts.
(d) Securities Intermediary Shall Not Acknowledge Other Claims.
Securities
ANNEX A-9
Intermediary agrees that, except as expressly provided in this Agreement
(including Section 6(d)) or with the written consent of Secured Party, it shall
not agree to or acknowledge (i) any right by any Person other than Secured Party
to originate Entitlement Orders or control with respect to the Collateral
Accounts; or (ii) any limitation on the right of Secured Party to originate
Entitlement Orders with respect to or direct the transfer of any Investments or
cash credited to the Collateral Accounts.
SECTION 6. Securities Intermediary Maintenance of the Collateral
Accounts.
(a) Transactions Shall Comply With Rules. The parties acknowledge
that all transactions in Financial Assets under this Agreement shall be in
accordance with the rules and customs of the exchange, market or clearing
organization, if any, in which the transactions are executed or settled and in
conformity with applicable law and regulations of governmental authorities and
future amendments or supplements thereto.
(b) Fees and Charges of Securities Intermediary. Pledgor shall
promptly pay Securities Intermediary, in accordance with Securities
Intermediary's usual schedule of charges or any written agreement between
Securities Intermediary and Pledgor, any reasonable fees or charges imposed by
Securities Intermediary with respect to the establishment, maintenance or
transactions in or affecting the Collateral Accounts.
(c) Securities Intermediary Shall Not Permit Leverage of
Investments. Securities Intermediary shall not execute any transaction to
acquire Financial Assets under Section 4(b) unless (A) there are sufficient
funds in the Collateral Accounts to settle such transactions or (B) it is
reasonably anticipated that such funds may be generated through the liquidation
of Financial Assets then credited to the Collateral Accounts, or to sell or
redeem any Financial Asset which is not held, or reasonably expected to be
acquired in pending transactions, for the credit of the Collateral Accounts.
Notwithstanding the foregoing sentence, in the event that Securities
Intermediary executes a transaction without adequate funds to settle the
transaction, Pledgor shall be liable to Securities Intermediary for any
deficiency and shall promptly reimburse Securities Intermediary for any loss or
expense incurred thereby, including losses sustained by reason of Securities
Intermediary's inability to borrow any securities or other property sold for the
Collateral Accounts. Pledgor agrees to pay interest charges which may be imposed
by Securities Intermediary in accordance with its usual custom, with respect to
late payments for securities or Financial Assets purchased for the Collateral
Accounts and prepayments in the Collateral Accounts (i.e., the crediting of the
proceeds of sale before the settlement date or receipt by Securities
Intermediary of the items sold in good deliverable form). Pledgor agrees to pay
promptly any amount which may become due in order to satisfy demands for
additional margin or marks to market with respect to any security purchased or
sold on instruction from Pledgor.
(d) Risk of Investments and Transactions. It is not the intention
of the parties that Securities Intermediary should bear any investment risk
associated with Permitted Investments or Overnight Investments acquired for the
credit of the Collateral Accounts in accordance with Section 4. Any losses or
gains realized on such Investments shall be charged or credited to the
Collateral
ANNEX A-10
Accounts, as appropriate. On committing to a transaction for the credit of the
Collateral Accounts pursuant to an instruction permitted in accordance with
Section 4, Securities Intermediary may, (i) pending settlement, block (A) the
Investments to be sold or (B) credit balances sufficient to settle any
acquisition, or Investment the liquidation of which will yield funds sufficient
to settle any acquisition and, (ii) at the time of settlement, deliver such
Investments or funds in accordance with the rules, custom or practice of the
particular market.
(e) Use of Intermediaries and Nominees. Securities Intermediary is
authorized, subject to Secured Party's written instructions, to register any
Financial Assets acquired by Securities Intermediary pursuant to this Agreement
in the name of Securities Intermediary or in the name of its nominee, or to
cause such securities to be registered in the name of a Federal reserve bank or
a recognized securities intermediary or clearing corporation, or any nominee
thereof. Securities Intermediary may at any time and from time to time appoint,
and may at any time remove, any bank, trust company, clearing corporation, or
Broker-Dealer as its agent to carry out such of the provisions of this
Agreement. The appointment or use of any intermediary, or the appointment of any
such agent, shall not relieve Securities Intermediary of any responsibility or
liability under this Agreement.
(f) Corporate Actions. Except as otherwise set forth herein,
Pledgor and Secured Party agree that Securities Intermediary shall have no
responsibility for ascertaining or acting upon any calls, conversions, exchange
offers, tenders, interest rate changes or similar matters relating to any
Financial Assets credited to or held for the credit of the Collateral Accounts
(except based on written instructions originated by Pledgor or Secured Party),
or for informing Pledgor or Secured Party with respect thereto, whether or not
Securities Intermediary has, or is deemed to have, knowledge of any of the
aforesaid. Securities Intermediary is authorized to withdraw securities sold or
otherwise disposed of, and to credit the Completion Guaranty Account with the
proceeds thereof or make such other disposition thereof as may be directed in
accordance with this Agreement. Securities Intermediary is further authorized to
collect all income and other payments which may become due on Financial Assets
credited to the Collateral Accounts, to surrender for payment maturing
obligations and those called for redemption and to exchange certificates in
temporary form for like certificates in definitive form, or, if the par value of
any shares is changed, to effect the exchange for new certificates. It is
understood and agreed by Pledgor and Secured Party that, although Securities
Intermediary will use reasonable efforts to effect the transactions set forth in
the preceding sentence, Securities Intermediary shall incur no liability for its
failure to effect the same unless its failure is the result of wilful
misconduct.
(g) Disclosure of Account Relationships. Pledgor and Secured Party
acknowledge that Securities Intermediary may be required to disclose to
securities issuers the name, address and securities positions with respect to
Financial Assets credited to the Collateral Accounts, and hereby consent to such
disclosures.
(h) Forwarding of Documents. Securities Intermediary shall forward
to Pledgor and, if requested, Secured Party, or notify Pledgor and, if
requested, Secured Party by telephone of, all written communications received by
Securities Intermediary as owner of any Financial Assets credited to the
Collateral Accounts and which are intended to be transmitted to the beneficial
owner thereof.
ANNEX A-11
(i) Direction of Secured Party Controls in Disputes. Pledgor,
Securities Intermediary and Secured Party hereby agree that in the event any
dispute arises with respect to the payment, ownership or right to possession of
the Collateral Accounts or any other Collateral credited to or held therein,
Securities Intermediary shall take such actions and shall refrain from taking
such actions with respect thereto as may be directed by Secured Party.
(j) No Setoff, etc. Securities Intermediary shall not exercise on
its own behalf any claim, right of set-off, banker's lien, clearing lien,
counterclaim or similar right against any of the Collateral; provided that
Securities Intermediary may deduct, from any credit balances, any usual and
ordinary transaction and administration fees payable in connection with the
administration and operation of the Collateral Accounts. Except for claims for
deductions permitted in the preceding sentence, Securities Intermediary agrees
that any security interest it may have in the Collateral Accounts or any
security entitlement carried therein shall be subordinate and junior to the
interest of Secured Party.
(k) Only Agreement. This Agreement shall govern the actions,
rights and obligations of Securities Intermediary, and shall determine the
governing law, with respect to the Collateral Accounts and the Collateral
notwithstanding any term or condition in any agreement other than this Agreement
as it may be amended, supplemented or otherwise modified in writing.
(l) Care of Financial Assets. Securities Intermediary shall
maintain possession or control of all Financial Assets credited to the
Collateral Accounts by segregating such Financial Assets from its proprietary
assets and keeping them free of any lien, charge or claim of any third party
granted or created by Securities Intermediary. Securities Intermediary shall
take such other steps to ensure that Financial Assets credited to the Collateral
Accounts are identified as being held for customers of Securities Intermediary
as may required under applicable law or in accordance with custom and practice
in the industry.
(m) Further Actions. Securities Intermediary shall take such
further actions as Secured Party shall reasonably request as being necessary or
desirable to maintain or achieve perfection or priority of Secured Party's
security interest with respect to the Collateral and to permit Secured Party to
exercise its rights with respect to the Collateral.
SECTION 7. Limitations on Duties, and Exculpation and
Indemnification, of Securities Intermediary.
(a) Limitation on Duty of Care; Exculpation. Securities
Intermediary's duties hereunder are only those specifically provided herein, and
Securities Intermediary shall incur no liability whatsoever for any actions or
omissions hereunder except for any such liability arising out of or in
connection with Securities Intermediary's gross negligence or wilful misconduct.
Securities Intermediary has no obligation to ensure the sufficiency of this
Agreement or the arrangements described hereunder to satisfy any objectives of
Secured Party or Pledgor. Securities Intermediary shall have no duty to
supervise or to provide investment counseling or advice to Pledgor or Secured
Party with respect to the purchase, sale, retention or other disposition of any
Financial Assets held
ANNEX A-12
hereunder. Except as specifically otherwise provided in this Agreement,
Securities Intermediary shall not be responsible for enforcing compliance by the
other parties to this Agreement with their respective duties and obligations to
each other under this or any other Agreement.
(b) Consultation with Counsel. Securities Intermediary may consult
with, and obtain advice from, legal counsel as to the construction of any of the
provisions of this Agreement, and shall incur no liability in acting in good
faith in accordance with the reasonable advice and opinion of such counsel.
(c) Reasonable Reliance. Securities Intermediary shall be fully
protected and shall suffer no liability in acting in accordance with any written
instructions reasonably believed by it to have been given (i) by Secured Party
with respect to any aspect of the operation of the Collateral Accounts
(including any such instructions relating to any investment or transfer of any
amounts held therein), (ii) by Pledgor, to the extent provided in Section 4(b),
with respect to the Collateral Accounts, or (iii) by Secured Party originally
named herein until such time as Securities Intermediary receives notice of the
substitution of Secured Party pursuant to Section 11.
(d) Indemnification. Pledgor agrees to indemnify Securities
Intermediary from and against any and all claims, losses, liabilities and
expenses (including reasonable attorneys' fees and expenses) in any way relating
to, growing out of or resulting from this Agreement or the performance of its
obligations hereunder, except to the extent arising out of or in connection with
Securities Intermediary's gross negligence or wilful misconduct.
SECTION 8. Representations and Warranties By Securities
Intermediary. Securities Intermediary hereby represents and warrants to Pledgor
and Secured Party as follows:
(a) Corporate Power. Securities Intermediary has all necessary
corporate power and authority to enter into and perform this Agreement.
(b) Execution Authorized. The execution, delivery and performance
of this Agreement by Securities Intermediary have been duly authorized by all
necessary corporate action on the part of Securities Intermediary.
(c) Securities Intermediary. Securities Intermediary is a
"securities intermediary" (as that term is defined in Section 8-102(a)(14) of
the Code) and is acting in such capacity with respect to the Collateral
Accounts. Securities Intermediary is not a "clearing corporation" (as that term
is defined in Section 8-102(a)(5) of the Code).
ANNEX A-13
SECTION 9. Termination. This Agreement shall terminate, and all
rights to the Collateral Accounts and all other Collateral registered to or held
therein shall revert to Pledgor, upon Securities Intermediary's receipt of
written notice, signed by an authorized officer of Secured Party, that the
Completion Guaranty Collateral Account Agreement has terminated.
SECTION 10. Resignation and Removal of Securities Intermediary.
(a) Removal. Securities Intermediary may be removed at any time by
written notice given by Secured Party to Securities Intermediary and Pledgor,
but such removal shall not become effective until a successor Securities
Intermediary shall have been appointed by Secured Party and shall have accepted
such appointment in writing.
(b) Resignation. Securities Intermediary may resign at any time by
giving not less than thirty days' written notice to Secured Party and Pledgor,
but such removal shall not become effective until a successor Securities
Intermediary shall have been appointed by Secured Party and shall have accepted
such appointment in writing. If an instrument of acceptance by a successor
Securities Intermediary shall not have been delivered to the resigning
Securities Intermediary within sixty days after the giving of any such notice of
resignation, the resigning Securities Intermediary may, at the expense of
Pledgor, petition any court of competent jurisdiction for the appointment of a
successor Securities Intermediary.
(c) Successor Securities Intermediary. Any successor Securities
Intermediary shall be a bank or trust company, having capital and surplus of at
least $100 million, located in the State of New York.
(d) Process of Succession. Upon the appointment of a successor
Securities Intermediary and its acceptance of such appointment, the resigning or
removed Securities Intermediary shall transfer all items of Collateral held by
it to such successor (which items of Collateral shall be transferred to new
Collateral Accounts established and maintained by such successor). Following
such appointment all references herein to Securities Intermediary shall be
deemed a reference to such successor; provided that the provisions of Section 7
hereof shall continue to inure to the benefit of the resigning or removed
Securities Intermediary with respect to any actions taken or omitted to be taken
by it under this Agreement while it was Securities Intermediary hereunder.
SECTION 11. Secured Party as Disbursement Agent. Secured Party has
been appointed to act as Secured Party hereunder by Lenders pursuant to the
Disbursement Agreement. Secured Party shall at all times be the same Person that
is Disbursement Agent under the Disbursement Agreement. Written notice of
resignation by Disbursement Agent pursuant to subsection 9.7 of the Disbursement
Agreement shall also constitute notice of resignation as Secured Party under
this Agreement; removal of Disbursement Agent pursuant to subsection 9.7 of the
Disbursement Agreement shall also constitute removal as Secured Party under this
Agreement; and substitution of a successor disbursement agent pursuant to
subsection 9.7 of the Disbursement Agreement shall also constitute substitution
of a successor Secured Party under this Agreement.
ANNEX A-14
Upon the acceptance of any appointment as Disbursement Agent under subsection
9.7 of the Disbursement Agreement by a successor Disbursement Agent, that
successor Disbursement Agent shall thereupon succeed to and become vested with
all the rights, powers, privileges and duties of the retiring or removed Secured
Party under this Agreement, and the retiring or removed Secured Party under this
Agreement shall promptly (i) transfer to such successor Secured Party all items
of Collateral held by Secured Party, together with all records and other
documents necessary or appropriate in connection with the performance of the
duties of the successor Secured Party under this Agreement, and (ii) execute and
deliver to such successor Secured Party such documents and take such other
actions, as may be necessary or appropriate in connection with the assignment to
such successor Secured Party of the security interests created hereunder,
whereupon such retiring or removed Secured Party shall be discharged from its
duties and obligations under this Agreement.
SECTION 12. Notices. Any communications between the parties hereto
or notices provided herein to be given may be given to the address of the party
as set forth under such party's name on the signature pages hereof. All notices
or other communications required or permitted to be given hereunder shall be in
writing and shall be considered as properly given (a) if delivered in person,
(b) if sent by reputable overnight delivery service, (c) in the event overnight
delivery services are not readily available, if mailed by first class mail,
postage prepaid, registered or certified with return receipt requested or (d) if
sent by prepaid telex, or by telecopy with correct answer back received. Notice
so given shall be effective upon receipt by the addressee, except that
communication or notice so transmitted by telecopy or other direct written
electronic means shall be deemed to have been validly and effectively given on
the day (if a Business Day and, if not, on the next following Business Day) on
which it is validly transmitted if transmitted before 4 p.m., recipient's time,
and if transmitted after that time, on the next following Business Day;
provided, however, that if any notice is tendered to an addressee and the
delivery thereof is refused by such addressee, such notice shall be effective
upon such tender. Any party shall have the right to change its address for
notice hereunder to any other location by giving of no less than twenty (20)
days' notice to the other parties in the manner set forth hereinabove.
SECTION 13. Amendments; Etc. No amendment or waiver of any provision
of this Agreement, or consent to any departure by any party herefrom, shall in
any event be effective unless the same shall be in writing and signed by the
other parties, and then such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which it was given.
SECTION 14. Severability. In case any provision in or obligation
under this Agreement shall be invalid, illegal or unenforceable in any
jurisdiction, the validity, legality and enforceability of the remaining
provisions or obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired thereby.
SECTION 15. Headings. Section and subsection headings in this
Agreement are included herein for convenience of reference only and shall not
constitute a part of this Agreement for any other purpose or be given any
substantive effect.
ANNEX A-15
SECTION 16. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND
SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE
STATE OF NEW YORK, WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES. Securities
Intermediary's Jurisdiction shall be New York.
SECTION 17. Waiver of Jury Trial. PLEDGOR, SECURED PARTY AND
SECURITIES INTERMEDIARY HEREBY AGREE TO WAIVE THEIR RESPECTIVE RIGHTS TO A JURY
TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS
AGREEMENT. The scope of this waiver is intended to be all-encompassing of any
and all disputes that may be filed in any court and that relate to the subject
matter of this transaction, including contract claims, tort claims, breach of
duty claims, and all other common law and statutory claims. Pledgor, Secured
Party and Securities Intermediary each acknowledge that this waiver is a
material inducement for Pledgor and Secured Party to enter into a business
relationship, that Pledgor, Secured Party and Securities Intermediary have
already relied on this waiver in entering into this Agreement and that each will
continue to rely on this waiver in their related future dealings. Pledgor,
Secured Party and Securities Intermediary further warrant and represent that
each has reviewed this waiver with its legal counsel, and that each knowingly
and voluntarily waives its jury trial rights following consultation with legal
counsel. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER
ORALLY OR IN WRITING, AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT. In the event of
litigation, this Agreement may be filed as a written consent to a trial by the
court.
SECTION 18. Counterparts. This Agreement may be executed in one or
more counterparts and by different parties hereto in separate counterparts, each
of which when so executed and delivered shall be deemed an original, but all
such counterparts together shall constitute but one and the same instrument;
signature pages may be detached from multiple separate counterparts and attached
to a single counterpart so that all signature pages are physically attached to
the same document.
[Remainder of page intentionally left blank]
ANNEX A-16
IN WITNESS WHEREOF, the undersigned have executed this Agreement as
of the date first set forth above.
PLEDGOR:
------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Notice Address: ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
SECURED PARTY:
THE BANK OF NOVA SCOTIA, a
Canadian chartered bank, as
Disbursement Agent under
the Disbursement Agreement
By: __________________________________
Title:
Notice Address: The Bank of Nova Scotia
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Relationship Manager
Facsimile Number: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to: The Bank of Nova Scotia
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Facsimile Number: (▇▇▇) ▇▇▇-▇▇▇▇
ANNEX A-S-1
SECURITIES INTERMEDIARY:
▇▇▇▇▇▇▇, SACHS & CO., as Securities Intermediary
By: __________________________________
Title:
Notice Address: ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co.
▇▇▇▇▇▇ Street Tower
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile Number: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to: ▇▇▇▇▇▇▇, Sachs & Co.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
Facsimile Number: (▇▇▇) ▇▇▇-▇▇▇▇
ANNEX A-S-2
ATTACHMENT 1
[FORM OF PROHIBITION NOTICE]
[Letterhead of Secured Party]
[date of notice]
TO: [Securities Intermediary]
-------------------------------
-------------------------------
-------------------------------
Attn:
--------------------------
Facsimile no.
------------------
CC: [Pledgor]
---------------------
-------------------------------
-------------------------------
-------------------------------
Attn:
--------------------------
Facsimile no.
------------------
Re: Prohibition Notice under that Certain Completion Guaranty Third-Party
Account Agreement/Collateral Accounts Numbers ▇▇▇-▇▇▇▇▇-▇ ___________
Ladies and Gentlemen:
Pursuant to the Completion Guaranty Third-Party Account Agreement dated November
14, 1997 ("Third-Party Account Agreement") among The Bank of Nova Scotia, as
Secured Party, certain Pledgors, and Securities Intermediary, we hereby give you
this Prohibition Notice and notify you of the commencement of a Suspension
Period. Until further notice from the undersigned substantially in the form of
Attachment 2 to the Third-Party Account Agreement, [Securities Intermediary]
shall not accept or follow instructions from Pledgor pursuant to Section 4(b) of
the Third-Party Account Agreement.
Capitalized terms used and not otherwise defined in this notice are used with
their respective meanings in the Third-Party Account Agreement.
Yours truly,
[Secured Party]
By:
-------------------------
Its:
-------------------------
ANNEX A/ATTACHMENT 1-1
ATTACHMENT 2
[FORM OF RESCISSION OF PROHIBITION NOTICE]
[Letterhead of Secured Party]
[date of notice]
TO: [Securities Intermediary]
-------------------------------
-------------------------------
-------------------------------
Attn:
--------------------------
Facsimile no.
------------------
CC: [Pledgor]
---------------------
-------------------------------
-------------------------------
-------------------------------
Attn:
--------------------------
Facsimile no.
------------------
Re: Rescission of Prohibition Notice under that Certain Completion Guaranty
Third-Party Account Agreement/Completion Guaranty Account Number
▇▇▇-▇▇▇▇▇-▇ ___________________________________________________________
Ladies and Gentlemen:
Pursuant to the Completion Guaranty Third-Party Account Agreement dated November
14, 1997 ("Third-Party Account Agreement") among The Bank of Nova Scotia, as
Secured Party, certain Pledgors and Securities Intermediary, we hereby notify
you of the rescission by [Secured Party] of the Prohibition Notice dated [date
of Prohibition Notice] and the end of the related Suspension Period. You are
hereby instructed that, until receipt of a new Prohibition Notice, you shall
accept and follow written instructions from Pledgor pursuant to Section 4(b) of
the Third-Party Account Agreement.
Capitalized terms used and not otherwise defined in this notice are used with
their respective meanings in the Third-Party Account Agreement.
Yours truly,
[Secured Party]
By:
-------------------------
Its:
-------------------------
ANNEX A/ATTACHMENT 2-1