PLEDGE AND SECURITY AGREEMENT (TNP Strategic Retail Operating Partnership, LP)
Exhibit 10.18
Execution Version
PLEDGE AND SECURITY AGREEMENT
(TNP Strategic Retail Operating Partnership, LP)
(TNP Strategic Retail Operating Partnership, LP)
This PLEDGE AND SECURITY AGREEMENT (this “Agreement”) is made and entered into as of
November 12, 2009 by and between TNP Strategic Retail Operating Partnership, LP, a Delaware limited
partnership having an address of ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
(“Grantor”), and KeyBank National Association, a national banking association having a
principal place of business at ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇, as agent (in such capacity, “Agent”) for itself and any other lenders who become
Lenders under the Credit Agreement (as hereinafter defined) collectively referred to as
“Lenders” and each individually referred to as a “Lender”).
1. Grant of Pledge and Security Agreement. Grantor does hereby pledge, assign,
transfer and deliver to Agent and does hereby grant to Agent a continuing security interest in the
Collateral to secure the Obligations (as each such term is hereinafter defined).
2. Credit Agreement and Defined Terms. This Agreement is delivered pursuant to the
terms of that certain Revolving Credit Agreement of even date herewith among Grantor, Agent and
Lenders, as may be amended from time to time (the “Credit Agreement”). Capitalized terms
used herein which are not otherwise specifically defined shall have the same meaning herein as in
the Credit Agreement.
3. Collateral. The term “Collateral” shall mean and include all of Grantor’s
right, title and interest in and to the following, whether now existing or hereafter coming into
existence:
(a) all Equity Interests (as defined in the Credit Agreement) of Grantor in and to the
Entities (as defined in the Credit Agreement), as a member, partner, owner or creditor thereof,
including, without limitation, all certificates (if any) representing or evidencing such Equity
Interests standing in Grantor’s name (all in suitable form for transfer by delivery or accompanied
by duly executed instruments of transfer or assignments in blank, and any required transfer tax
stamps), and all other rights of Grantor under any and all certificates of formation and
organization, articles of incorporation and organization, operating agreements, partnership
agreements, by-laws, shareholder agreements and any other agreement and document related to the
formation, creation, governance, management and/or operation of the applicable Entity
(collectively, the “Entity Governance Documents,” and individually, an “Entity
Governance Document”), including, without limitation, all right, title and interest (if any) of
Grantor as a member, shareholder, partner, manager or director, as the case may be, to participate
in the operation or management of the Entities and all rights of the Grantor to the property,
assets, ownership interests, dividends and distributions under the Entity Governance Documents, all
books, records and papers, accounts and general intangibles relating thereto, and all products and
proceeds, both cash and non-cash, arising out of or in respect of any of the foregoing;
(b) all income, money, cash flow, distributions, dividends, refinancing and sale proceeds paid
or to be paid to Grantor, other rights to payments of distributions, dividends, and other proceeds
(the “Rights to Proceeds”), and any and all property and amounts received by Grantor, in
each case only on account of Grantor being a member, partner, shareholder, owner or creditor of the
Entities and all products and proceeds, both cash and non-cash, arising out of or in respect of any
of the foregoing; and all substitutions, additions, interest, and other distributions arising out
of or in respect thereof, all deposit, lockbox and other accounts established by Grantor whether at
Agent or otherwise for the deposit of Net Proceeds and any cash collateral accounts established, in
each case, pursuant to the Credit Agreement (the “Accounts”) and general intangibles
relating thereto, and all products and proceeds, both cash and non-cash, arising out of or in
respect of any of the foregoing; and
(c) the Distribution Account (as defined in Section 6.13 of this Agreement).
Notwithstanding anything to the contrary herein, in the Credit Agreement, or any other Loan
Document, the term “Collateral” shall not include, and this Agreement shall not constitute a grant
of a security interest in: (i) Grantor’s right, title or interest in the Equity Interests of
Grantor in and to an Entity to the extent that this Agreement or such a grant of a security
interest is prohibited by, or under the terms thereof, constitutes a breach or default under or
directly or indirectly results in the termination of or requires any consent not obtained under,
the documents evidencing and securing Permitted Additional Debt or Property Level Debt (the
“Permitted Additional Debt Documents”) and/or the Entity Governance Documents for such
Entity, except to the extent that the provision in such documents providing for such prohibition,
breach, default or termination or requiring such consent is ineffective under Sections 9-406,
9-408, 9-409 of the UCC (as defined below) or other applicable provisions of the UCC of any
relevant jurisdiction or any other applicable law (including Title 11 of the United States Code
entitled “Bankruptcy,” as now and hereafter in effect, or any successor statute) or principles of
equity, provided that upon the ineffectiveness, lapse or termination of any such provision
of the Permitted Additional Debt Documents or Entity Governance Documents, the Collateral shall
include, and Grantor shall be deemed to have granted a security interest in, all such right, title
and interest as if such provision had never been in effect; and (ii) all voting rights in the
Collateral (the “Rights to Vote”) if and to the extent that the transfer or pledge thereof
is prohibited or limited by the Permitted Additional Debt Documents or the Entity Governance
Documents ((i) and (ii) being collectively, the “Excluded Rights”).
For purposes of clarification, the “Collateral” is not intended to include, and hereby
expressly excludes, any Equity Interests in an Entity owned or otherwise held by any Person that is
a third party joint venture partner of the Grantor (and is not an affiliate or Subsidiary of
Grantor).
Capitalized terms used in this Section and not defined in the Credit Agreement shall have the
same meaning herein as in the Uniform Commercial Code as adopted in the Commonwealth of
Massachusetts (the “UCC”).
4. Obligations. The term “Obligations” shall mean all obligations of Grantor
to Agent or any Lender, whether now existing or hereafter arising, direct or indirect, absolute or
contingent, under any one or more of: (i) this Agreement; (ii) the Credit Agreement; (iii) any
applicable Swap Contracts; (iv) any other Loan Document; (v) all indebtedness to Agent and
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Lenders incurred by Grantor, Borrower and any Obligor relating to the Loan Documents prior to,
during or following any proceedings in respect of a bankruptcy, reorganization or insolvency; and
(vi) each of the foregoing together with each amendment, extension, modification, replacement or
recasting of any one or more of such agreements.
5. Warranties and Representations. Grantor warrants and represents to, and agrees
with, Agent and Lenders that:
5.1 Grantor is and shall be (a) the sole owner of the Equity Interests (as set forth in the
Entity Governance Documents and as described on Exhibit A attached hereto and made a part
hereof) and the Collateral free and clear of all pledges, liens, security interests and other
encumbrances of every nature whatsoever, except in favor of Agent and (b) the owner of the Excluded
Rights, free and clear of all pledges, liens, security interests and other encumbrances of every
nature whatsoever, except in favor of Agent and except as set forth in the provisions of the
Permitted Additional Debt Documents and the Entity Governance Documents, copies of which provisions
have been delivered to Agent to the extent the same are in existence as of the date hereof.
5.2 Grantor has the limited partnership power and authority to pledge the Collateral and to
grant the security interest in the Collateral as herein provided.
5.3 Except as permitted by the Credit Agreement, there are no restrictions on the transfer of
the Collateral to Agent hereunder or with respect to any subsequent transfer thereof or realization
thereupon by Agent.
5.4 The execution, delivery and performance of this Agreement by Grantor does not and shall
not result in the violation of any mortgage, indenture, material contract, instrument, agreement,
judgment, decree, order, statute, rule or regulation to which Grantor is subject or by which it or
any of its Entities is bound; it being understood that only because the definition of Collateral
excludes the Excluded Rights, there is no violation of the applicable provisions of the Permitted
Additional Debt Documents and the Entity Governance Documents.
5.5 Grantor shall not suffer or permit any lien or encumbrance to exist on or with respect to
the Collateral except in favor of Agent or as may be permitted by the Credit Agreement.
5.6 This Agreement (i) has been duly authorized, executed and delivered by Grantor and (ii)
constitutes the legal, valid and binding obligation of Grantor enforceable in accordance with the
terms hereof, except as such enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, receivership, fraudulent conveyance, moratorium or similar laws affecting
creditors’ rights generally, and by general equitable principles (whether enforcement is sought by
proceedings in equity or at law).
5.7 As of the date hereof, none of the Grantor’s direct ownership interests constituting the
Collateral are certificated. None of the Collateral constitutes “securities” or “investment
property” as such terms are used in the UCC.
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5.8 To the extent requested by Agent, true and correct copies of the Entity Governance
Documents have been delivered by Grantor to Agent, and the same have not been amended or modified
except as disclosed to Agent in writing.
5.9 To the extent requested by Agent, true and correct copies of the Permitted Additional Debt
Documents in existence as of the date hereof have been delivered by Grantor to Agent, and the same
have not been amended or modified except as disclosed to Agent in writing.
5.10 Exhibit A is a complete and correct list of all Entities, and such
Exhibit A sets forth for each such Entity, (a) the jurisdiction of organization of such
Entity, (b) each Person holding any Equity Interests in such Entity, (c) the nature of the Equity
Interests held by each such Person, and (d) the percentage of ownership of such Entity represented
by such Equity Interests. Except as disclosed in such Exhibit A (x) all of the issued and
outstanding capital stock of each such Entity organized as a corporation is validly issued, fully
paid and nonassessable and (y) except as permitted, in writing, by the Agent, there are no
outstanding subscriptions, options, warrants, commitments, preemptive rights or agreements of any
kind (including, without limitation, any stockholders’ or voting trust agreements) for the
issuance, sale, registration or voting of, or outstanding securities convertible into, any
additional shares of capital stock of any class, or partnership or other ownership interests of any
type in, any such Entity.
5.11 Except for the filing of any UCC financing statements in connection with this Agreement,
Grantor is not required to obtain any consent, approval or authorization from, or to file any
declaration or statement with, any governmental instrumentality or other agency or any other Person
in connection with or as a condition to the execution, delivery or performance of this Agreement,
except such consents as have already been obtained, it being understood that only because the
definition of Collateral excludes the Excluded Rights, no consent, approval, or authorization is
needed by Grantor in connection with or as a condition to the execution, delivery or performance of
the Agreement.
5.12 Grantor’s correct legal name, state of organization and principal address are accurately
and completely set forth in the first paragraph of this Agreement.
6. Grantor’s Agreements. Grantor agrees so long as the Obligations remain outstanding
that:
6.1 Grantor shall execute all such instruments, documents and papers, and will do all such
acts as Agent may reasonably request (provided the same do not materially increase Grantor’s
liabilities or obligations) from time to time to carry into effect the provisions and intent of
this Agreement including, without limitation, the execution of notifications to obligors on the
Collateral, and will use good faith reasonable efforts to do all such other acts as Agent may
reasonably request with respect to the perfection and protection of the pledge and security
interest granted herein and the assignment effected hereby, to the extent the same are permitted by
the applicable Entity Governance Documents.
6.2 Grantor shall keep the Collateral and Excluded Rights free and clear of all liens,
encumbrances, attachments, security interest pledges and charges except for this Agreement and as
otherwise permitted by the Credit Agreement.
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6.3 Grantor shall not sell, assign, transfer or otherwise dispose of the Collateral or any
Excluded Rights or any interest therein to any other person, firm, corporation or entity, except
for Permitted Distributions and except as permitted under the Credit Agreement.
6.4 Grantor shall cause the lien hereof to be registered in the books and records maintained
by the Entities and cause each such Entity to execute and deliver an Entity Consent acknowledging
the foregoing.
6.5 To the extent required by the Credit Agreement, Grantor shall deliver to Agent, if and
when received by Grantor, any item representing or constituting any of the Collateral received by
Grantor; and if, after the occurrence and during the continuance of an Event of Default, any of
such proceeds should be paid to or come into the hands of Grantor, Grantor shall hold the same in
trust for prompt delivery to Agent to be held as additional Collateral.
6.6 Grantor shall not exercise any right with respect to the Collateral or the Excluded Rights
which would dilute or materially adversely affect Agent’s rights in the Collateral unless otherwise
permitted by the terms of the Credit Agreement; provided that the foregoing shall not be deemed to
limit any actions reasonably taken by an Entity in connection with the operation, maintenance or
repair of a Property and which are otherwise in compliance with any applicable Property Loan
Documents.
6.7 Grantor shall, upon request from Agent, from time to time, use commercially reasonable
efforts to cause the issuer of any securities comprising any of the Collateral which may be, but
has not been, certificated, to issue certificates with respect thereto in the name of Grantor or,
if so requested by Agent after the occurrence and during the continuance of an Event of Default, in
the name of Agent or that of its nominee as secured party. Pursuant to Section 6.5, upon the
occurrence and during the continuance of an Event of Default, Agent may receive the income and any
distributions with regard to the Collateral and hold the same as Collateral for the Obligations, or
apply the same to any defaulted Obligation of Grantor owed to Lenders.
6.8 In the case of certificated securities, Grantor shall promptly pledge and deposit
hereunder with Agent, any equity securities, certificates or other rights to acquire a certificate
of Equity Interests of the Entities acquired by Grantor in evidence of the Collateral, whether by
new issuance or by declaration of a dividend or distribution with respect to, or a split of, or
conversion of, any securities now or hereafter held in pledge (all, if applicable and as reasonably
requested by Agent, in suitable form for transfer by delivery or accompanied by (a) duly executed
instruments of transfer or assignments in blank, and (b) any required transfer tax stamps).
6.9 Grantor shall not enter into or consent to any amendment, modification or termination of
or with respect to any organizational document or Entity Governance Document of any Entity to the
extent that such amendment, modification or termination could be materially adverse to the Agent or
Lenders without Agent’s prior written consent in each instance, which consent may be withheld,
granted or granted conditionally in the reasonable discretion of Agent.
6.10 Insofar as the same may be material or significant to Agent’s interests, Grantor shall
perform all of its obligations as an owner of an interest in an Entity owning any of the Funded
Properties. Additionally, Grantor shall, in Grantor’s good faith business judgment,
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enforce to the extent provided for in the organizational documents or other Entity Governance
Documents of the Entities, all of the material obligations of the other partners, owners or
members.
6.11 Except as may be permitted by the Credit Agreement, no Entity Governance Documents or
Permitted Additional Debt Documents executed after the date hereof shall contain any Excluded
Rights without the prior written consent of Agent, which consent shall not be unreasonably
withheld.
6.12 Grantor shall not permit any of the Equity Interests constituting the Collateral to be
certificated or to be a “security” or “investment property” as such terms are used in the UCC.
6.13 If requested by Agent, after the occurrence and during the continuance of an Event of
Default, Grantor shall deposit all cash and other Net Proceeds received as a direct or indirect
distribution from the Entities into a deposit account (the “Distribution Account”),
maintained with Key (as defined in the Credit Agreement), and which Distribution Account shall be
subject to the provisions of Section 9.11 of the Credit Agreement.
6.14 On the date of this Agreement, Grantor shall deliver to Agent the written consent of each
Entity, together with the written consent of any member, partner, shareholder or other holder of an
Equity Interest where the consent of such Person is required, under the applicable Entity
Governance Documents, for the transactions contemplated by this Agreement, all substantially in the
form of the Consent, Acknowledgement and Agreement attached hereto as Exhibit B (each, a
“Consent”). Grantor shall deliver a Consent with respect to any Entity in which Grantor
acquires an interest within the time period specified in the Credit Agreement (or if no time is so
specified, then within five (5) Business Days after acquisition of such Equity Interests).
6.15 Grantor will, upon obtaining ownership of any additional Equity Interests or Collateral
in an Entity, within the time periods specified in the Credit Agreement (or if no time is so
specified, then within five (5) Business Days after acquisition of such Equity Interests) deliver
to Agent an addendum to this Pledge Agreement in the form of Exhibit C attached hereto and
made a part hereof (each, a “Pledge Agreement Addendum”), duly executed by Grantor, in
respect of any such additional Equity Interests and Collateral, pursuant to which Grantor pledges,
assigns, transfers, delivers and grants a security interest to the Agent, for the benefit of the
Lenders, in and to such Equity Interests and Collateral. Grantor hereby authorizes Agent to attach
each Pledge Agreement Addendum to this Agreement and agrees that all Equity Interests listed on any
Pledge Agreement Addendum delivered to Agent shall for all purposes hereunder be considered
Collateral. In the event any such additional Equity Interests identified on a Pledge Agreement
Addendum are represented by certificated securities or other certificates, Grantor shall deliver,
together with such Pledge Agreement Addendum, all such certificates (if any) representing or
evidencing such Equity Interests standing in Grantor’s name (all in suitable form for transfer by
delivery or accompanied by duly executed instruments of transfer or assignments in blank, and any
required transfer tax stamps). Upon the execution and delivery of a Pledge Agreement Addendum,
Exhibit A hereto shall be deemed to be amended and modified to reflect such new or
additional Equity Interests of the Grantor.
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6.16 Subject to the provisions of Section 3 of this Agreement related to Excluded
Rights, in the event that Grantor currently holds or hereafter acquires any Equity Interests or
additional Equity Interests or other Collateral in an Entity (each, a “New Grantor”) and
such New Grantor, directly or indirectly, holds Equity Interests in and to an Entity owning a
Property (or having rights in and to such Property), Grantor shall cause such New Grantor to
execute and deliver to the Agent, for the benefit of the Lenders, a Joinder to Pledge and Security
Agreement (a “Joinder”), each in the form of Exhibit D attached hereto and made a
part hereof, pursuant to which such New Grantor pledges, assigns, transfers, delivers and grants a
security interest to the Agent, for the benefit of the Lenders, in and to any Equity Interests and
Collateral of such New Grantor in and to any Entity. Upon execution and delivery of any Joinder,
each New Grantor executing such Joinder shall be deemed a “Grantor” for purposes of this Agreement,
and Exhibit A hereto shall be deemed to be amended and modified to reflect such Equity
Interests of the New Grantor, all as if such New Grantor had been an original signatory to this
Agreement. Additionally, the Grantor shall comply with the provisions of Section 6.15 of this
Agreement with respect to the Equity Interests of Grantor in and to such New Grantor.
6.17 Grantor shall not, without the prior written consent of Agent in each instance, vote the
Collateral or the Excluded Rights in favor of or consent to any resolution or action which does or
might: (a) impose any restrictions upon the sale, transfer or disposition of the Collateral other
than restrictions, if any, the application of which is waived to the full satisfaction of Agent as
to the Collateral; (b) result in the issuance of any additional Equity Interest in an Entity, or of
any class of security, which issuance might adversely affect the value of the Collateral; (c) vest
additional powers, privileges, preferences or priorities to any other class of interest in an
Entity to the detriment of the value of or rights accruing to the Collateral; (d) permit any Entity
to sell, transfer, assign, pledge, mortgage, or otherwise encumber any property owned by such
Entity, or to incur any new indebtedness, unless Agent has given its prior written consent (which
consent shall not be unreasonably withheld) or unless permitted by the Credit Agreement; (e) have
the effect of impairing the position or interest of Agent with respect to the Collateral or Agent’s
rights and remedies under the Credit Agreement or any other Loan Document referred to therein,
except as otherwise permitted in the Credit Agreement, provided that the foregoing shall not be
deemed to limit any actions reasonably taken by an Entity in connection with the operation,
maintenance or repair of a Property and which are otherwise in compliance with any applicable
Property Loan Documents; (f) cause an Event of Default; (g) adversely affect the value of the
Collateral in the reasonable opinion of Agent, except otherwise permitted in the Credit Agreement,
provided that the foregoing shall not be deemed to limit any actions reasonably taken by an Entity
in connection with the operation, maintenance or repair of a Property and which are otherwise in
compliance with any applicable Property Loan Documents; or (h) authorize or effect any action then
prohibited by the Credit Agreement or any other Loan Document referred to therein.
6.18 Grantor shall not itself, or on behalf of any Entity, take any action or refrain from
taking any action which would cause or result in a violation of any provisions of the Loan
Documents.
6.19 Grantor shall take all such actions as may be necessary or desirable in order to insure
that all of the Obligations under the Loan Documents are punctually and faithfully paid and
performed in the manner provided for therein.
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7. Events of Default. Upon the occurrence of any one or more of the following events
(collectively, “Events of Default”) any and all of the Obligations of Grantor to Agent and
Lenders shall become immediately due and payable at the option of Agent, without further notice or
demand: (i) the occurrence of an uncured Event of Default as defined in the Credit Agreement; (ii)
the failure of Grantor to pay and perform all of Grantor’s obligations to Agent and Lenders
hereunder unless such failure is cured or remedied within the applicable grace or notice and cure
period, if any, set forth or referred to in the Credit Agreement; (iii) the making of any levy,
seizure, or attachment of any of the Collateral; (iv) the sale, transfer, pledge, or any
encumbrance on the Collateral (excluding transfers permitted under the Credit Agreement); or (v)
other than because of Agent’s gross negligence or willful misconduct, this Agreement shall at any
time for any reason cease to be in full force and effect or shall be determined to be null and
void, or the validity or enforceability thereof shall be contested by Grantor or Grantor shall deny
that it has any liability or obligation thereunder.
Upon any such uncured Event of Default, Agent may exercise any one or more of Agent’s rights
and remedies as hereinafter set forth or as set forth and provided for in each of the other Loan
Documents.
8. After Event of Default.
8.1 Upon the occurrence of any Event of Default, and during the continuance thereof, Agent
shall have all of the rights and remedies of a secured party upon default under the UCC, in
addition to which Agent may sell or otherwise dispose of the Collateral and/or enforce and collect
the Collateral (including, without limitation, the liquidation of debt instruments or securities
and the exercise of conversion rights with respect to convertible securities, whether or not such
instruments or securities have matured, and whether or not any penalties or other charges are
imposed on account of such action) for application towards (but not necessarily in complete
satisfaction of) the Obligations. Grantor shall remain liable to Agent for any deficiency
remaining following such application.
8.2 Unless the Collateral threatens to decline speedily in value or is of a type customarily
sold on a recognized market (in which event Agent shall give Grantor such notice as may be
practicable under the circumstances), Agent shall give Grantor at least the greater of the minimum
notice required by law or ten (10) days’ prior written notice of the date, time and place of any
public sale thereof, or of the time after which any private sale or any other intended disposition
is to be made.
8.3 Grantor acknowledges that any exercise by Agent of Agent’s rights upon an uncured Event of
Default will be subject to compliance by Agent with the applicable statutes, regulations,
ordinances, directives and orders of any federal, state, municipal or other governmental authority
including, without limitation, any of the foregoing which may restrict the sale or disposition of
securities. Agent in its sole discretion at any such sale or in connection with any such
disposition may restrict the prospective bidders or purchasers as to their number, nature of
business, investment intention, or otherwise, including, without limitation a requirement that the
persons making such purchases represent and agree to the satisfaction of Agent that they are
purchasing the Collateral, or some portion thereof, for their own account, for investment and not
with a view towards the distribution or a sale thereof, or that they otherwise fall within
some lawful exemption from registration under applicable laws.
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8.4 The proceeds of any collection or of any sale or disposition of the Collateral, or any
portion thereof, held pursuant to this Agreement shall be applied towards the Obligations in such
order and manner as Agent determines in its sole discretion, any statute, custom or usage to the
contrary notwithstanding. Grantor shall remain liable to Agent and Lenders for any deficiency
remaining following such application.
8.5 If at any time when Agent shall determine to exercise its right to sell all or any part of
the Collateral pursuant to this Section, and if such Collateral or the part thereof to be sold
shall not, for any reason whatsoever, be effectively registered under the Securities Act of 1933,
as from time to time in effect (the “Securities Act”) or the securities laws of any state,
Agent in its sole and absolute discretion, is hereby expressly authorized to sell such Collateral
or such part thereof by arm’s-length private sale in such manner and under such circumstances as
Agent may reasonably determine in order that such sale may legally be effected without such
registration. Agent may sell all or any part of the Collateral at any price which is commercially
reasonable under the circumstances, in its reasonable discretion. Grantor acknowledges that Agent
may resort to one or more private sales to a single purchaser or a restricted group of purchasers
who may be obligated to agree, among other things, to acquire such Collateral for their own
account, for investment and not with a view to the distribution or resale thereof. Grantor agrees
that private sales may be at prices and other terms less favorable to Grantor than if such
Collateral were sold at a public sale and that Agent shall have no obligation to delay the sale of
any such portion of the Collateral for the period of time necessary to permit the issuer of such
Collateral to register or qualify such Collateral, even if such issuer would, or should, proceed to
register or qualify such Collateral for public sale. Grantor agrees that private sales made under
the foregoing circumstances shall be deemed to have been made in a “commercially reasonable”
manner.
8.6 Except for its gross negligence or willful misconduct, Agent shall incur no liability as a
result of the sale of the Collateral, or any part thereof, at any arm’s-length private sale
pursuant to this Agreement. Grantor hereby waives any claims against Agent arising by reason of
the fact that the price at which the Collateral may have been sold at such private sale was less
than the price that might have been obtained at a public sale or was less than the aggregate amount
of the secured Obligations, even if Agent accepts the first offer received and does not offer the
Collateral to more than one offeree.
8.7 In connection with the exercise by Agent of any of its rights and remedies under this
Agreement, Grantor waives any rights that it may have under the Entity Governance Documents or
otherwise, including without limitation, rights of first refusal, and hereby consents to the
assignment of the Collateral (including any economic interest therein and all voting rights and
respect thereof) to any other person.
9. Payments on Account of Collateral. Upon the occurrence and during the continuance
of any Event of Default, all payments due on account of the Collateral, whether or not such
payments are ordinary and regular cash distributions, shall be paid to Agent or, at Agent’s option,
to Agent’s nominee.
10. Actions By Agent. Grantor hereby designates Agent, or any agent designated by
Agent, as the attorney-in-fact of Grantor, which power of attorney shall be exercisable during the
continuance of an Event of Default, to: (a) endorse in favor of Agent any of the Collateral; (b)
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cause the transfer of any of the Collateral in such name as Agent may from time to time determine;
(c) renew, extend or roll over any Collateral; and (d) make, demand and initiate actions to enforce
any of the Collateral or rights therein. Agent may take such action with respect to the Collateral
as Agent may reasonably determine to be necessary to protect and preserve its interest in the
Collateral. Agent shall also have and may exercise at any time all rights, remedies, powers,
privileges and discretions of Grantor with respect to and under the Collateral; provided,
however, Agent shall have no right to exercise any voting rights available to holders of
the Collateral at any time the Collateral is held by Agent solely as secured party hereunder unless
an uncured Event of Default has occurred and is continuing (and has not been waived by Agent), and
then only to the extent such voting rights are not part of the Excluded Rights. The within
designation and grant of power of attorney is coupled with an interest, is irrevocable until this
Agreement is terminated by a written instrument executed by a duly authorized officer of Agent. The
power of attorney shall not be affected by subsequent disability or incapacity of Grantor. Agent
shall not be liable for any act or omission to act pursuant to this Section 10, except for any act
or omission to act which is in actual bad faith is grossly negligent or resulting from willful
misconduct.
11. Rights and Remedies. The rights, remedies, powers, privileges and discretions of
Agent hereunder (hereinafter, the “Rights and Remedies”) shall be cumulative and not
exclusive of any rights, remedies, powers, privileges or discretions which it may otherwise have.
No delay or omission by Agent in exercising or enforcing any of the rights and remedies shall
operate as, or constitute, a waiver thereof. No waiver by Agent of any default or any Event of
Default or of any default under any other agreement shall operate as a waiver of any other default
hereunder or under the Loan Documents. No exercise of any of the Rights and Remedies and no other
agreement or transaction of whatever nature entered into between Agent and Grantor at any time
shall preclude any other exercise of the Rights and Remedies. No waiver by Agent of any of the
Rights and Remedies on any one occasion shall be deemed a waiver on any subsequent occasion nor
shall it be deemed a continuing waiver. All of the Rights and Remedies and all of Agent’s rights,
remedies, powers, privileges and discretions under any other agreement or transaction are
cumulative and not alternative or exclusive and may be exercised by Agent at such time or times in
such order of preference as Agent in its sole and absolute discretion may determine.
12. Grantor’s Consent and Waiver. Grantor hereby consents to the extension, renewal,
amendment, modification or recasting from time to time of the Obligations or of any instrument,
document or agreement evidencing or securing any of the same, and Grantor specifically waives any
notice of the creation or existence of any of such Obligations and of any such extension, renewal,
amendment, modification or recasting. Grantor also agrees that Agent may enforce its rights as
against Grantor, the Collateral, or as against any other party liable for the Obligations, or as
against any other collateral given for any of the Obligations, in any order or in such combination
as Agent may in its sole discretion determine, and Grantor hereby expressly waives all suretyship
defenses and defenses in the nature thereof, agrees to the release or substitution of any
collateral hereunder or otherwise, and consents to each and all of the terms, provisions and
conditions of the other Loan Documents. Grantor agrees that it shall not have any right of
subrogation under any of the Loan Documents or any right to participate in any security for the
Obligations or any right to reimbursement, exoneration, contribution, indemnification or
any similar rights, and Grantor hereby waives all of such rights. Upon the
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occurrence and
during the continuance of an Event of Default, Grantor hereby irrevocably authorizes the Entities
to accept and act upon all instructions and directions given by Agent to the Entities with respect
to the Collateral, without the necessity of further authorization or consent from, or notice to,
Grantor. Grantor further: (a) waives presentment, demand, notice and protest with respect to the
Obligations and the Collateral; (b) waives any delay on the part of Agent; (c) assents to any
indulgence or waiver which Agent may grant or give any other Person liable or obliged to Agent for
or on account of the Obligations; (d) authorizes Agent to alter, amend, cancel, waive or modify any
term or condition of the obligations of any other Person liable or obligated to Agent for or on
account of the Obligations without notice to or further consent from Grantor; (e) agrees that no
release of any Entities securing the Obligations shall affect the rights of Agent with respect to
the Collateral hereunder which is not so released; and (f) to the fullest extent that it is not
unlawful to do so, waives the right to notice and/or hearing, if it might otherwise be entitled
thereto, prior to Agent’s exercising the Rights and Remedies upon and during the continuance of an
Event of Default.
13. Agent May Assign. Grantor agrees that upon any sale or transfer by Agent of the
Note and the indebtedness evidenced thereby, subject to the requirements of the Credit Agreement,
Agent may assign or transfer its rights and interest under this Agreement in whole or in part to
the purchaser or transferee, who shall thereupon become vested with all powers and rights given to
Agent in respect thereto, and Agent and Lenders shall be thereafter forever relieved and fully
discharged from any liability or responsibility in connection therewith occurring after such
delivery.
14. Limits on Agent’s Duties. Agent shall have no duty as to the collection or
protection of the Collateral, or any portion thereof, or any income or distribution thereon, beyond
the safe custody of such of the Collateral as may come into the actual possession of Agent, and
Agent shall have no duty as to the preservation of rights against prior parties or any other rights
pertaining thereto.
15. WAIVER OF JURY TRIAL. EACH OF GRANTOR, LENDERS AND AGENT HEREBY KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVES THE RIGHT TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION
BASED HEREON ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR THE CREDIT AGREEMENT OR
ANY OTHER DOCUMENTS CONTEMPLATED TO BE EXECUTED IN CONNECTION HEREWITH, OR ANY COURSE OF CONDUCT,
COURSE OF DEALINGS, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ANY PARTY. THIS WAIVER
CONSTITUTES A MATERIAL INDUCEMENT FOR LENDERS AND AGENT TO ACCEPT THIS AGREEMENT AND ENTER THE
CREDIT AGREEMENT.
16. Miscellaneous.
16.1 Agent’s Rights and Remedies may be exercised without resort to or regard to any other
source of satisfaction of the Obligations.
16.2 All of the agreements, obligations, undertakings, representations and warranties herein
made by Grantor shall inure to the benefit of Agent and Agent’s successors and assigns and shall
bind Grantor and its successors and assigns.
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16.3 This Agreement and all other instruments executed in connection herewith incorporate all
discussions and negotiations between Grantor and Agent concerning the matters included herein and
in such other instruments. No such discussions or negotiations shall limit, modify or otherwise
affect the provisions hereof. No modification, amendment or waiver of any provisions of the within
Agreement or of any provision of any other agreement between the Grantor and Agent shall be
effective unless executed in writing by the party to be charged with such modification, amendment
and waiver and, if such party be Agent or Agent, then by a duly authorized officer thereof.
16.4 This Agreement and all other documents in Agent’s possession which relate to the
Obligations may be reproduced by Agent by any photographic, photostatic microfilm, microcard,
miniature photographic, xerographic, PDF or similar process. Any such reproduction shall be
admissible in evidence as the original itself in any judicial or administrative proceeding (whether
or not the original is in existence and whether or not such reproduction was made in the regular
course of business) and any enlargement, facsimile or further reproduction shall be likewise
admissible in evidence.
16.5 Captions in this Agreement are intended solely for convenience and shall not have any
affect on the meaning or interest of any provisions hereof.
16.6 Each provision hereof shall be enforceable to the fullest extent not prohibited by
applicable law. The invalidity and unenforceability of any provision(s) hereof shall not impair or
affect any other provision(s) hereof which are valid and enforceable.
16.7 This Agreement may be executed in several counterparts, each of which when executed and
delivered is an original, but all of which together shall constitute one instrument. In making
proof of this Agreement, it shall not be necessary to produce or account for more than one such
counterpart which is executed by the party against whom enforcement of such agreement is sought.
16.8 Notwithstanding anything to the contrary contained herein or in any other document or
agreement, the Collateral is conditionally assigned and transferred to the Agent as collateral
security for the Obligations it being understood and agreed that the Agent’s entry into this
Agreement shall not be deemed to be an assumption by the Agent of any obligations or liabilities
which the Grantor may have under any such document or agreement or on account of the Grantor unless
and until the Agent expressly and specifically assumes in writing such obligations and liabilities
and then only to the extent such obligations and liabilities, if any, arise after such written
assumption.
16.9 Any notice or other communication in connection with this Agreement shall be given as set
forth in the Credit Agreement.
16.10 This Agreement shall in all respects be governed, construed, applied and enforced in
accordance with the internal laws of the Commonwealth of Massachusetts without regard to principles
of conflicts of law, other than as expressly set forth herein.
16.11 Neither Agent nor any Lender shall, by virtue of this Agreement or its receipt of any
distributions with respect to the Collateral, be deemed to be a member, partner or owner of
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the
Entities or have any liability for the debts, obligations or liabilities of the Entities or any of
the partners thereof unless and until Agent expressly and specifically assumes in writing such
obligations and liabilities and then only to the extent such obligations and liabilities, if any,
arise after such written assumption. Grantor hereby covenants and agrees to indemnify and hold
harmless Agent from and against any and all liability, loss, or damage which it may suffer or incur
and which arises out of or results from this Agreement, or acceptance of distributions pursuant
hereto, or any claim of any alleged obligation, liability, or duty on the part of Grantor to
perform or discharge any of the terms, covenants, or provisions of with respect to the Entities or
any liability or obligation of the Entities, excluding in each case any such liability caused by
the gross negligence or willful misconduct of Agent, together with all costs and expenses
(including, without limitation, court costs and reasonable attorneys’ fees) paid or incurred in
connection therewith.
16.12 Within five (5) Business Days of a sale, transfer or other disposal of a portion of the
Collateral that has been approved by Agent in accordance with the Credit Agreement, Agent shall
deliver any releases or terminations reasonably requested by Grantor with respect to the sold
Collateral.
16.13 For the purpose of enforcing payment and performance of this Agreement, or in any other
matter relating to, or arising out of, the Loan Documents, Grantor hereby consents to the
jurisdiction and venue of the courts of the Commonwealth of Massachusetts and the State of Delaware
or of any federal court located in such state, waives personal service of any and all process upon
it and consents that all such service of process be made by certified or registered mail directed
to such at the address provided for above and service so made shall be deemed to be completed upon
actual receipt or execution by a receipt by Grantor such address. Grantor hereby waives the right
to contest the jurisdiction and venue of the courts located in the Commonwealth of Massachusetts
and the State of Delaware on the ground of inconvenience or otherwise and, further, waives any
right to bring any action or proceeding against Agent or any Lender in any court outside the
Commonwealth of Massachusetts and the State of Delaware. For the purpose of enforcing the
performance of obligations by Agent under the Loan Documents, or in any other matter relating to,
or arising out of the Loan Documents, Agent hereby consents to the jurisdiction and venue of the
courts of the Commonwealth of Massachusetts and the State of Delaware or of any federal court
located in such state, waives personal service of any and all process upon it and consents that all
such service of process may be made by certified or registered mail directed to Agent at the
address provided for above and service so made shall be deemed to be completed upon actual receipt
or execution of a receipt by any Person at such address. The provisions of this subsection shall
not limit or otherwise affect the right of Agent to institute and conduct an action in any other
appropriate manner, jurisdiction or court.
17. Termination and Release. Upon the payment and performance of the Obligations in
full, the pledge of the Collateral contained in this Agreement shall terminate and
Agent, at the request and reasonable expense of Grantor, will execute and deliver to Grantor
an instrument or instruments, reasonably satisfactory to Grantor, acknowledging the satisfaction
and termination of such pledge, and will duly assign, transfer and deliver to Grantor such of the
Collateral as may be in the possession of Agent and as has not theretofore been sold or otherwise
applied or released pursuant to this Agreement, together with any monies relating to the Collateral
at the time held by Agent hereunder.
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18. Member Consent and Agreement. Grantor as the holder of Equity Interests in the
Entities, hereby (a) instructs each Entity to register the rights of Agent created hereunder in the
Collateral in the books and records maintained by such Entity, (b) in connection with the exercise
by Agent of its rights and remedies under this Agreement, consents to the foreclosure or other
disposition or assignment of the Collateral to any person or entity (an “Assignee”) and the
substitution of such Assignee as a new holder of such Equity Interests and Collateral, and (c)
agrees that no such assignment or substitution and no foreclosure under this Agreement or other
remedies in respect thereof shall effect a termination or dissolution of such Entity. Without
limiting the generality of the foregoing and notwithstanding the provisions of the applicable
Entity Governance Documents, Grantor, as holder of the Equity Interests in such Entity, hereby
agrees that if any Collateral is assigned to an Assignee upon the exercise by Agent of its rights
and remedies pursuant to this Agreement: (x) such Assignee shall be deemed a member, manager,
partner, limited partner, general partner, shareholder or other owner of such Equity Interests and
Collateral, with all rights of an owner of such Equity Interests and Collateral under the
applicable Entity Governance Documents, all with no further action or consent by any other Person
being necessary; and (y) on and after the admission of an Assignee as a member, manager, partner,
limited partner, general partner, shareholder or other owner of such Equity Interests and
Collateral of the applicable Entity, such Assignee shall have all powers, statutory and otherwise,
possessed by, and all obligations (to the extent such obligations first arise, and relate to events
occurring, after the date that such Assignee is substituted as the new holder of the Equity
Interests) of, a member, manager, partner, limited partner, general partner, shareholder or other
owner of Equity Interests and Collateral under all applicable laws. Grantor hereby covenants and
agrees to indemnify, defend and hold harmless Assignee from and against any claim, cause of action,
expense or liability which arises out of, or otherwise results from, Grantor’s acts or omissions in
its capacity as a member, manager, partner, limited partner, general partner, shareholder or other
owner of such Equity Interests and Collateral of the applicable Entity, regardless of whether any
such claim, cause of action, expense or liability is asserted before or after an Assignee is
substituted as the new holder of the Equity Interests.
19. Authorization. Grantor authorizes the filing by Agent, of any financing or
continuation statements, or amendments thereto, describing any of the Collateral and Grantor will
execute and deliver to Agent such other instruments or notices, as may be necessary or as Agent may
reasonably request, in order to perfect and preserve the security interest granted or purported to
be granted hereby, by any Pledge Agreement Addendum and/or any Joinder. Grantor also hereby
ratifies and confirms any and all financing statements or amendments previously or hereafter filed,
by Agent, in any jurisdiction. Upon request of the Grantor, Agent will endeavor to deliver to
Grantor, copies of any such continuation statements and amendments filed by the Agent.
20. Additional Provisions Related to New Grantors. In addition to the foregoing
provisions, each New Grantor hereby agrees as follows:
(a) Waivers. To the maximum extent permitted by applicable law, New Grantor expressly
waives any and all defenses now or hereafter arising or asserted by reason of (i) any disability or
other defense of Borrower or any other Obligor with respect to the obligations evidenced hereby,
(ii) the unenforceability or invalidity of any security or guaranty for the obligations evidenced
hereby or the lack of perfection or continuing perfection or failure
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of priority of any security
for the obligations evidenced hereby, (iii) the cessation for any cause whatsoever of the liability
of Borrower or any other Obligor (other than by reason of the full payment and performance of all
Obligations), (iv) any failure of Agent or any Lender to comply with applicable law in connection
with the sale or other disposition of any Collateral, (v) any act or omission of Agent or any
Lender or others that directly or indirectly results in or aids the discharge or release of
Borrower, any Obligor or the Obligations evidenced hereby or any security or guaranty therefor by
operation of law or otherwise, (vi) the avoidance of any lien in favor of Agent or any Lender for
any reason, (vii) the filing of any bankruptcy, reorganization or other insolvency proceeding
against Borrower or any Obligor, or (viii) any action taken by Agent or any Lender that is
authorized by this Section or any other provision hereof or of any Loan Document. New Grantor
assumes all responsibility for being and keeping itself informed of Borrower’s financial condition
and assets, and all other circumstances bearing upon the risk of nonpayment of the Obligations and
the nature, scope and extent of the risks which New Grantor assumes and incurs hereunder, and
agrees that neither Agent nor any Lender shall have any duty to advise New Grantor of information
known to it regarding such circumstances or risks.
(b) Subordination. Except as may be otherwise specifically provided for in the Credit
Agreement with respect to Permitted Distributions and repayment of Permitted Additional Debt, any
indebtedness of Borrower to New Grantor now or hereafter existing together with any interest
thereon shall be, and such indebtedness is, hereby deferred, postponed and subordinated to the
prior, full and Non-Contestable Payment and satisfaction of all Obligations of Borrower to the
Lenders. Payment and satisfaction of Obligations shall be deemed “Non-Contestable Payment”
only upon such payment and satisfaction and the expiration of all periods of time within which a
claim for the recovery of a preferential payment, or fraudulent conveyance, or fraudulent transfer,
in respect of payments received by Agent as to the Obligations could be filed or asserted with:
(A) no such claim having been filed or asserted, or (B) if so filed or asserted, the final,
non-appealable decision of a court of competent jurisdiction denying the claim or assertion.
Except as may be otherwise specifically provided for in the Credit Agreement with respect to
Permitted Distributions and repayment of Permitted Additional Debt, at all times until the full and
Non-Contestable Payment and satisfaction of the Obligations of Borrower to Lenders with respect to
the Obligations (and including interest accruing on the Note after the commencement of a case by or
against Borrower under the Bankruptcy Code now or hereafter in effect, which interest the parties
agree shall remain a claim that is prior and superior to any claim of New Grantor notwithstanding
any contrary practice, custom or ruling in cases under the Bankruptcy Code, as now or hereafter in
effect, generally), New Grantor agrees not to accept any payment or satisfaction for any kind of
indebtedness of Borrower to New Grantor and hereby assigns such indebtedness to Lenders including,
but not limited to, the right to file proofs of claim and to vote thereon in connection with any
such case under the Bankruptcy Code, as now or hereafter in effect, and the right to vote on any
plan of reorganization. Further, New Grantor hereby agrees
that any and all security interests heretofore or hereafter granted to New Grantor by Borrower
in the Collateral shall be junior and subordinate to the collateral assignment and security
interests in favor of the Agent hereunder.
(Signature on next page)
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This Agreement has been executed and delivered as an instrument under seal as of the date and
year first above written.
| GRANTOR: | ||||||||
| TNP Strategic Retail Operating Partnership, LP, a Delaware limited partnership |
||||||||
| By: | /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ | |||||||
| Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ | ||||||||
| Title: Chief Executive Officer | ||||||||
| AGENT: | ||||||||
| KeyBank National Association | ||||||||
| By: | /s/ ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇ | |||||||
| Name: ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇ | ||||||||
| Title: Senior Relationship Manager | ||||||||
[Pledge and Security Agreement (Borrower)]