Exhibit 10.5
SENIOR MEZZANINE PLEDGE AND
SECURITY AGREEMENT
THIS SENIOR MEZZANINE PLEDGE AND
SECURITY AGREEMENT (this “ Agreement ”), dated
as of September 29, 2006, made by SW 109 Wagon Wheel SM LLC, a
Delaware limited liability company (“ Pledgor
”), and Behringer Harvard Alexan Nevada, LLC, a Delaware
limited liability company (together with its successors and
assigns, “ Lender ”).
RECITALS
A.
Lender has agreed to make a loan
(the “ Loan ”) to Pledgor in the original
principal amount of Six Million Nine Hundred Thousand Dollars
($6,900,000) pursuant to the terms of that certain Loan Agreement,
dated of even date herewith, between Pledgor and Lender (herein, as
the same may be amended or restated from time to time, the “
Loan Agreement ”); and
B.
Pledgor is the sole member and the
legal and beneficial owner of one hundred percent (100%) of the
membership interests in SW 106 Wagon Wheel Holdings LLC, a Delaware
limited liability company (the “ Mortgagor ”),
which is the owner in fee simple of the Property (as defined in the
Loan Agreement); and
C.
One of the conditions precedent to
the Lender’s making of the Loan under the Loan Agreement is
Pledgor’s execution and delivery of this Agreement;
and
D.
Pledgor and Mortgagor shall derive
substantial direct and indirect benefits from the Loan.
NOW, THEREFORE, for and in
consideration of the foregoing and for other good and valuable
consideration, the receipt of which is hereby acknowledged, the
parties agree as follows:
1.
Recitals; Definitions
. The recitals set forth above are
true and correct and are incorporated herein by reference.
Capitalized terms not defined herein but which are defined in the
Uniform Commercial Code as in effect from time to time in the State
of Nevada (the “ UCC ”) shall have the meanings
given them in Article 8 or Article 9, as applicable, thereof. Other
capitalized terms used but not defined herein shall have the
meaning ascribed to such term in the Loan Agreement, in each case
unless the context clearly requires otherwise.
2.
Pledge .
(a)
Grant of Security
Interest . As collateral
security for the Indebtedness and the performance of all
obligations under the Loan Documents, Pledgor presently and
irrevocably pledges, hypothecates, assigns, delivers and transfers
to the Lender, and grants to the Lender a continuing first priority
security interest in, all of its right, title and interest in and
under the following property (collectively, the “
Collateral ”) whether now owned or hereafter acquired
or coming into existence:
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(i)
all of Pledgor’s right, title
and interest, whether direct or indirect, whether legal, beneficial
or economic, and whether fixed or contingent, (i) as the sole
member in and to the Mortgagor, including, without limitation,
Pledgor’s right to vote on Mortgagor matters and
Pledgor’s rights, now existing or hereafter arising or
acquired, to receive from time to time its share of profits,
losses, income surplus, return of capital, proceeds, fees,
preferences, payments or distributions from Mortgagor ( Pledged
Interest ”);
(ii)
all Instruments, certificates, or
other writings evidencing Pledgor’s Pledged
Interest;
(iii)
all of Pledgor’s right, title
and interest in, to and under that certain Operating Agreement,
dated as of August 28, 2006, executed by Pledgor (as amended in
accordance with the terms of the Loan Agreement, the “
Operating Agreement ”) and the other organizational
documents of Mortgagor;
(iv)
all of Pledgor’s right, title
and interest in, to and under all General Intangibles relating to
or arising out of any of the foregoing; and
(v)
all Proceeds of any of the
foregoing.
(b)
Security for
Obligations . This
Agreement secures (i) the Indebtedness and (ii) all obligations of
Pledgor under the Loan Agreement, the Note and all of the other
Loan Documents (collectively, the “ Secured
Obligations ”).
(c)
Perfection of Security
Interest . In furtherance
of the grant of the pledge and security interest pursuant to
Section 2(a) above, Pledgor hereby agrees with Lender as
follows:
(i)
If the Pledged Interest is not
currently represented or evidenced by certificates or Instruments,
Pledgor shall, upon the execution of this Agreement (A) cause the
Mortgagor to create a registration book for the registration of all
ownership interests in Mortgagor and cause Mortgagor to register in
such book Pledgor’s pledge of the Pledged Interest to Lender
together with the notation that all distributions are to be
disbursed to Lender as required under this Agreement, and
(B) cause the Mortgagor to agree to comply with any and all
unilateral directions and other Instructions from Lender concerning
such Pledged Interest given in accordance with this Agreement,
without any further consent of (or regardless of contrary
instructions of) Pledgor or any other person.
(ii)
Concurrently with the execution and
delivery of this Agreement, Pledgor is delivering to Lender an
assignment of membership interest in blank (the “
Assignment of Interest ”), in the form set
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forth on Exhibit A hereto,
for the Pledged Interest, transferring all of the Pledged Interest
in blank, duly executed by Pledgor and undated. Lender shall have
the right, at any time in its discretion upon the occurrence and
during the continuance of an Event of Default pursuant to
Section 6(a) below, to transfer to, and to designate on the
Assignment of Interest, any Person to whom the Pledged Interest is
sold in accordance with the provisions hereof.
(iii)
To the extent the Pledged Interest
hereafter is represented or evidenced by certificates, Instruments
or other writings (other than the Operating Agreement) whether in
bearer or registered form, Pledgor shall within three (3) days of
receipt of any such certificates, Instruments or other writings
(A) deliver to Lender such certificates, Instruments or other
writings, as applicable and (B) deliver to Lender all
necessary powers, instruments of transfer or assignment, each
undated and duly executed in blank.
(iv)
Regardless of whether the Collateral
is represented or evidenced by certificates, Instruments or other
writings, Pledgor shall do all other acts and deliver such other
documents, and cause Mortgagor to do the same, as Lender reasonably
deems necessary or desirable (or as are otherwise required by the
laws of the jurisdiction governing perfection, the effect of
perfection or nonperfection or the priority of Lender’s
security interest) in order to perfect such security interest in
the Collateral. In furtherance of the foregoing, Pledgor hereby
authorizes Lender to file such UCC financing statements against
Pledgor as Lender shall deem necessary or desirable containing a
description of the Collateral pledged by Pledgor sufficient to
satisfy the requirements of Article 9 of the UCC (the “
UCC Financing Statements ”).
(d)
Continuing Security
Interest . This Agreement
shall create a continuing security interest in the Collateral and
shall remain in full force and effect until payment in full of all
Indebtedness. Upon the payment in full of all Indebtedness, the
security interests granted herein shall terminate and all rights to
the Collateral shall revert to Pledgor. Upon any such termination,
the Lender shall, at Pledgor’s sole expense, deliver to
Pledgor, without any representations, warranties or recourse of any
kind whatsoever, all certificates, Instruments and other writings
representing or evidencing all Collateral then held by the Lender
hereunder, if any, and execute and deliver to Pledgor such
documents as Pledgor shall reasonably request to evidence such
termination.
3.
Representations and
Warranties . As of the
date hereof Pledgor represents and warrants as follows:
(a)
Organization;
Authorization . Pledgor
is a limited liability company which has been duly formed and is
validly existing and in good standing under the laws of the State
of Delaware and is qualified to do business in the State of Nevada.
Pledgor has full
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limited liability company power and
authority to execute this Agreement and to undertake and consummate
the transactions contemplated hereby. This Agreement has been duly
and validly executed by or on behalf of Pledgor and constitutes the
legal, valid and binding obligation of Pledgor and is enforceable
against Pledgor in accordance with its terms, subject, as to
enforceability, to the effect of applicable bankruptcy, insolvency
and other similar laws limiting the enforcement of creditors’
rights generally and to general principles of equity.
(b)
Agreement Will Cause No
Defaults . The execution,
delivery and performance of this Agreement by Pledgor does not and
will not violate, or contravene (i) any term or provision of the
organizational documents of Pledgor or any resolution or vote of
Pledgor, (ii) any existing license, indenture or other material
contract or agreement binding upon Pledgor or (iii) any existing
law, statute, regulation, order, decree or judgment applicable to
Pledgor or its property.
(c)
Ownership, No Liens,
etc . Pledgor is the
legal, record and beneficial owner of, and has good and marketable
title to the Collateral in which it grants a security interest to
Lender under this Agreement, free and clear of all liens, security
interests, options or other charges or encumbrances, other than the
security interest granted pursuant hereto. Pledgor is the sole
member of Mortgagor.
(d)
As to Pledged Interest
. The Pledged Interest is duly
authorized and validly issued, and are fully paid and
non-assessable and constitute all of the issued and outstanding
membership interests in Mortgagor. The Pledged Interest (i) is not
“financial assets” (within the meaning of Section
8-102(a)(9) of the UCC) and (ii) is not credited to a
“securities account” within the meaning of
Section 8-501(a) of the UCC.
(e)
Perfection
. Upon the filing of the UCC
Financing Statements referred to in Section 2(c)(iv), the security
interest granted pursuant to this Agreement will constitute a
valid, perfected first priority security interest in the Collateral
and related proceeds, enforceable against all creditors of Pledgor
and any persons purporting to purchase any Collateral or receive
any related proceeds from Pledgor, subject to the limitations in
the UCC.
(f)
Authorization, Approval,
etc . No authorization,
approval, or other action by, and no notice to or filing with, any
governmental authority, regulatory body or any other person is
required either:
(i)
for the execution, delivery, and
performance of this Agreement by Pledgor (other than any
authorizations and approvals that have already been received or
actions that have already been taken), or
(ii)
for the exercise by the Lender of
(1) the voting and other rights provided for in this Agreement or
(2) except as may be required in connection with a disposition of
the Pledged Interest by laws relating to the offering and sale of
securities generally, the
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remedies provided for in respect of
the Collateral pursuant to this Agreement.
4.
Covenants .
(a)
Protect Collateral
. Pledgor agrees that it will own at
all times during the term of the Loan one hundred percent (100%) of
the ownership interests in Mortgagor. Pledgor agrees that it shall
not sell, assign, transfer, pledge or encumber in any other manner
the Collateral (except for the pledge to Lender hereunder or an
assignment to Lender or its designee pursuant to the Assignment of
Membership Interests). Pledgor shall warrant and, at
Pledgor’s expense, defend the right and title herein granted
unto the Lender in and to the Collateral (and all right, title and
interest represented by the Collateral) against the claims and
demands of all persons whomsoever.
(b)
Further Assurances
. Pledgor shall, at Pledgor’s
expense (i) promptly execute and deliver, and cause the Mortgagor
to promptly execute and deliver, all further writings (including
instruments of transfer or control) reasonably requested by Lender,
and (ii) promptly take all further action, and cause the Mortgagor
to promptly take all further action, that the Lender may reasonably
request; in each case, in order to perfect and protect and maintain
the perfection and priority of any security interest granted or
purported to be granted hereby or to enable the Lender to exercise
and enforce its rights and remedies hereunder with respect to any
Collateral, including the rights and remedies under Section
7(b) .
(c)
Organizational
Documents . Pledgor
agrees that it shall not amend or restate the operating agreement
or certificate of formation of Mortgagor without Lender’s
consent including but not limited to changing the location of its
principal place of business or chief executive office, its name or
reorganizing under the laws of another jurisdiction.
(d)
Consents . Pledgor shall execute and deliver to Lender,
upon its request at the time Lender exercises its remedies, any
document required under the organizational documents of Pledgor or
otherwise reasonably deemed necessary by Lender in order to
evidence Pledgor’s consent to the Lender’s exercising
of its remedies under this Agreement, including those set forth in
Section 7(a) hereof wherein Lender becomes the record, legal
and beneficial owner of the Collateral pledged under this
Agreement.
(e)
Pledged Interest
. The Pledged Interest (i) will not
become “financial assets” (within the meaning of
Section 8-101(a)(9) of the UCC) and (ii) will not be credited to a
“securities account” (within the meaning of Section
8-501(a) of the UCC). The parties agree that the Pledged Interest
constitutes “general
