Exhibit 10.5
PLEDGE AGREEMENT
THIS PLEDGE AGREEMENT
, dated as of April 24, 2009
(this “ Pledge Agreement ”) is made Government
Properties Income Trust, a Maryland real estate investment trust (a
“ Pledgor ” and collectively with such of its
Subsidiaries which execute a joinder to this Agreement, the “
Pledgors ”), in favor of Bank of America, N.A., in its
capacity as Administrative Agent (in such capacity, the “
Administrative Agent ”) for the benefit of the
Administrative Agent, the L/C Issuer, the Swing Line Lender, the
Lenders (in each case, as defined in the Credit Agreement described
below; collectively, the Administrative Agent, the L/C Issuer, the
Swing Line Lender and the Lenders shall be referred to herein as
the “ Secured Parties ” and each, individually,
may be referred to as a “ Secured Party
”).
RECITALS
WHEREAS , pursuant to that certain Credit Agreement
dated as of the date hereof (as amended, modified, extended,
renewed or replaced from time to time, the “ Credit
Agreement ”) among Government Properties Income Trust
(the “ Principal Borrower ”), each of its
Subsidiaries which, from time to time, qualifies as a Borrowing
Base Subsidiary thereunder (collectively, with the Principal
Borrower, the “ Borrowers ” and each a “
Borrower ”), the Lenders from time to time party
thereto, and Bank of America, N.A., as Administrative Agent, L/C
Issuer and Swing Line Lender, the Secured Parties have agreed to
make Loans and certain other extensions of credit upon the terms
and subject to the conditions set forth therein; and
WHEREAS , it is a condition precedent to the
effectiveness of the Credit Agreement and the obligations of the
Secured Parties to make their respective Loans and other extensions
of credit under the Credit Agreement that the Pledgors shall have
executed and delivered this Pledge Agreement to the Administrative
Agent for the ratable benefit of the Secured Parties.
NOW, THEREFORE
, in consideration of these premises
and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto
agree as follows:
1.
Definitions
.
Capitalized terms used herein but not otherwise defined shall have
the meanings ascribed to such terms in the Credit Agreement and the
following terms which are defined in the Uniform Commercial Code
(the “ UCC ”) in effect in the State of New York
on the date hereof are used herein as so defined: Control,
Entitlement Order, Securities Account, Security Entitlement, and
Securities Intermediary. For purposes of this Pledge
Agreement, the term “Lender” shall include any
Affiliate of any Lender which has entered into a Swap Contract with
any Borrower (to the extent the obligations of such Borrower
thereunder constitute Obligations).
2.
Pledge and
Grant of Security Interest . To secure the prompt
payment and performance in full when due, whether by lapse of time
or otherwise, of the Pledgor Obligations (as defined in
Section 3 hereof), each Pledgor hereby pledges and assigns to
the Administrative Agent, for the benefit of the Secured Parties,
and grants to the Administrative Agent, for the benefit of the
Secured Parties, a continuing security interest in, and a right to
set off against, any
and all right, title and
interest of such Pledgor in and to the following, whether now owned
or existing or owned, acquired, or arising hereafter (collectively,
the “ Pledged Collateral ”):
(a)
Pledged Equity
Interests . 100% of the issued
and outstanding Equity Interests owned by such Pledgor of each
other Borrower and each other Person that, pursuant to the terms of
the Credit Agreement, is required to become a Borrower (a list of
Borrowers and the Equity Interests thereof owned by the respective
Pledgors as of the Closing Date is set forth on Schedule
2(a) attached hereto) together with the certificates (or
other agreements or instruments), if any, representing such Equity
Interests and all options and other rights, contractual or
otherwise, with respect thereto (collectively, together with the
Equity Interests described in Sections 2(b) and
2(c) below, the “ Pledged Equity Interests
”), including, but not limited to, the following:
(i)
all shares,
securities, partnership interests, membership interests or other
equity interests representing a dividend on any of the Pledged
Equity Interests, or representing a distribution or return of
capital upon or in respect of the Pledged Equity Interests, or
resulting from a stock split, revision, reclassification or other
exchange therefor, and any subscriptions, warrants, rights or
options issued to the holder of, or otherwise in respect of, the
Pledged Equity Interests; and
(ii)
without affecting the obligations of
the Pledgors under any provision prohibiting such action hereunder
or under the Credit Agreement, in the event of any consolidation or
merger involving the issuer of any Pledged Equity Interests and in
which such issuer is not the surviving entity, the Equity Interests
(in the applicable percentage specified in
Section 2(a) above) of the successor entity formed by or
resulting from such consolidation or merger.
(b)
Additional
Shares . 100% (or, if less,
the full amount owned by such Pledgor) of the issued and
outstanding Equity Interests of any Borrower which hereafter
directly or indirectly owns another Borrower (or any Person that
should, pursuant to the terms of the Credit Agreement, have been
made a Borrower) together with the certificates (or other
agreements or instruments), if any, representing such Equity
Interests.
(c)
Proceeds
. All
proceeds and products of the foregoing, however and whenever
acquired and in whatever form.
Without limiting the generality of
the foregoing, it is hereby specifically understood and agreed that
each Pledgor may from time to time hereafter deliver additional
shares of Equity Interests to the Administrative Agent as
collateral security for the Pledgor Obligations. Upon
delivery to the Administrative Agent, such additional Equity
Interests shall be deemed to be part of the Pledged Collateral and
shall be subject to the terms of this Pledge Agreement whether or
not Schedule 2(a) is amended to refer to such
additional Equity Interests.
3.
Security for
Pledgor Obligations . The security interest
created hereby in the Pledged Collateral constitutes continuing
collateral security for all of the following, whether
now
existing or hereafter
incurred (the “ Pledgor Obligations ”), subject,
in the case of each Pledgor, to the terms of Section 26
hereof:
(a)
The prompt
performance and observance by the Borrowers of all obligations of
the Borrowers under the Credit Agreement, the Notes, this Pledge
Agreement and the other Loan Documents to which the Borrowers are a
party; and
(b)
All other
indebtedness, liabilities, obligations and expenses of any kind or
nature owing from any Borrower to any Secured Party in connection
with (i) this Pledge Agreement or any other Loan Document,
whether now existing or hereafter arising, due or to become due,
direct or indirect, absolute or contingent, and howsoever
evidenced, held or acquired, together with any and all
modifications, extensions, renewals and/or substitutions of any of
the foregoing, (ii) collecting and enforcing the Obligations
and (iii) all liabilities and obligations owing from any
Borrower to any Secured Party.
4.
Delivery of
the Pledged Collateral; Perfection of Security Interest
. Each
Pledgor hereby agrees that:
(a)
Delivery of
Certificates . Each Pledgor shall
deliver to the Administrative Agent (i) simultaneously with or
prior to the execution and delivery of this Pledge Agreement, all
certificates representing the Pledged Equity Interests issued to
such Pledgor and (ii) promptly upon the receipt thereof by or
on behalf of a Pledgor, all other certificates and instruments
constituting Pledged Collateral issued to a Pledgor. Prior to
delivery to the Administrative Agent, all such certificates and
instruments constituting Pledged Collateral of a Pledgor shall be
held in trust by such Pledgor in favor of the Administrative Agent
pursuant hereto (and for the benefit of the Secured Parties).
All such certificates shall be delivered in suitable form for
transfer by delivery or shall be accompanied by duly executed
instruments of transfer or assignment in blank, substantially in
the form provided in Exhibit 4(a) attached
hereto.
(b)
Additional
Securities . If such Pledgor shall
receive by virtue of its being, becoming or having been the owner
of any Pledged Collateral, any (i) certificate, including
without limitation, any certificate representing a dividend or
distribution in connection with any increase or reduction of
capital, reclassification, merger, consolidation, sale of assets,
combination of shares or membership or equity interests, stock
splits, spin-off or split-off, promissory notes or other
instrument; (ii) option or right, whether as an addition to,
substitution for, or an exchange for, any Pledged Collateral or
otherwise; (iii) dividends payable in securities; or
(iv) distributions of securities or other equity interests in
connection with a partial or total liquidation, dissolution or
reduction of capital, capital surplus or paid-in surplus, such
Pledgor shall receive such certificate, instrument, option, right
or distribution in trust in favor of the Administrative Agent (for
the benefit of the Secured Parties), shall segregate it from such
Pledgor’s other property and shall deliver it forthwith to
the Administrative Agent in the exact form received together with
any necessary endorsement and/or appropriate stock power duly
executed in blank, substantially in the form provided in
Exhibit 4(a) , to be held by the Administrative Agent
as Pledged Collateral and as further collateral security for the
Pledgor Obligations.
(c)
Financing
Statements . Pledgor hereby
irrevocably authorizes Administrative Agent at any time and from
time to time to file any initial financing statements, amendments
thereto and continuation statements as authorized by applicable law
or reasonably required by Administrative Agent to establish or
maintain the validity, perfection and priority of the security
interests granted in this Pledge Agreement.
(d)
Provisions
Relating to Security Entitlements and Securities
Accounts . With respect to any
Pledged Collateral consisting of a Security Entitlement or held in
a Securities Account, (i) the applicable Pledgor and the
applicable Securities Intermediary shall enter into an agreement
with the Administrative Agent granting Control to the
Administrative Agent over such Pledged Collateral, such agreement
to be in form and substance reasonably satisfactory to the
Administrative Agent and (ii) the Administrative Agent shall
be entitled, upon the occurrence and during the continuance of a
Default or an Event of Default, to notify the applicable Securities
Intermediary that it should follow the Entitlement Orders of the
Administrative Agent and no longer follow the Entitlement Orders of
the applicable Pledgor. Upon receipt by a Pledgor of notice
from a Securities Intermediary of its intent to terminate any such
Securities Account of such Pledgor held by such Securities
Intermediary, prior to the termination of such Securities Account
the Pledged Collateral in such Securities Account shall be
(A) transferred to a new Securities Account which is subject
to a control agreement as provided above or (B) transferred to
an account held by the Administrative Agent (in which it will be
held until a new Securities Account is established).
5.
Representations and
Warranties . Each Pledgor hereby
represents and warrants to the Administrative Agent, for the
benefit of the Secured Parties, that so long as any of the Pledgor
Obligations remain outstanding (other than any such obligations
which by the terms thereof are stated to survive termination of the
Loan Documents) or any Loan Document is in effect:
(a)
Authorization
of Pledged Equity Interests . The Pledged Equity
Interests are all duly authorized and validly issued, fully paid
and, with respect any Pledged Equity Interests consisting of stock
of a corporation, nonassessable and are not subject to the
preemptive rights of any Person. All other shares of Equity
Interests constituting Pledged Collateral will be duly authorized
and validly issued, fully paid and, with respect any Pledged Equity
Interests consisting of stock of a corporation, nonassessable and
not subject to the preemptive rights of any Person.
(b)
Title . Each Pledgor has good
and indefeasible title to the Pledged Collateral of such Pledgor
and will at all times be the holder of record and beneficial owner
of such Pledged Collateral free and clear of any Lien, other than
Permitted Liens as defined in the Credit Agreement. There
exists no “adverse claim” within the meaning of
Section 8-102 of the Uniform Commercial Code as in effect in
the State of New York (the “ UCC ”) with respect
to the Pledged Equity Interests of such Pledgor.
(c)
Exercising of
Rights . The exercise by the
Administrative Agent of its rights and remedies hereunder will not
violate any applicable law or governmental
regulation or any
Material Contractual Obligation binding on or affecting a Pledgor
or any of its property.
(d)
Pledgor’s
Authority . No authorization,
approval or action by, and no notice or filing with any
Governmental Authority or with the issuer of any Pledged Equity
Interests, in any case that has not been made or obtained by the
applicable Pledgor, is required either (i) for the pledge made
by a Pledgor or for the granting of the security interest by a
Pledgor pursuant to this Pledge Agreement or (ii) for the
exercise by the Administrative Agent (on behalf of the Secured
Parties) of its rights and remedies hereunder (except as may be
required by Laws affecting the offering and sale of
securities).
(e)
Security
Interest/Priority . This Pledge Agreement
creates a valid security interest in favor of the Administrative
Agent, for the benefit of the Secured Parties, in the Pledged
Collateral. The taking possession by the Administrative Agent
of the certificates, if any, representing the Pledged Equity
Interests and all other certificates and instruments constituting
Pledged Collateral will perfect and establish the first priority of
the Administrative Agent’s security interest in all
certificated Pledged Equity Interests and such certificates and
instruments and, upon the filing of UCC financing statements in the
appropriate filing office in the location of each Pledgor’s
state of formation, the Administrative Agent shall have a first
priority perfected security interest in all uncertificated Pledged
Equity Interests consisting of partnership or limited liability
company interests that do not constitute a security pursuant to
Section 8-103(c) of the UCC. With respect to any
Pledged Collateral consisting of a Security Entitlement or held in
a Securities Account, upon execution and delivery by the applicable
Pledgor, the applicable Securities Intermediary and the
Administrative Agent of an agreement granting Control to the
Administrative Agent over such Pledged Collateral, the
Administrative Agent shall have a first priority perfected security
interest in such Pledged Collateral. Except as set forth in
this Section 5(e ), no action is necessary to perfect
or otherwise protect each security interest granted
hereby
(f)
No Other
Equity Interests . As of the Closing
Date, no Pledgor owns any Equity Interests of any other Borrower
(or Person that should, pursuant to the terms of the Credit
Agreement, have been made a Borrower) other than as set forth on
Schedule 2(a) attached hereto.
(g)
Partnership
and Limited Liability Company Interests . Except as previously
disclosed to the Administrative Agent, none of the Pledged Equity
Interests consisting of partnership or limited liability company
interests (i) is dealt in or traded on a securities exchange
or in a securities market, (ii) by its terms expressly
provides that it is a security governed by Article 8 of the
UCC, (iii) is an investment company security, (iv) is
held in a securities account or (v) constitutes a
“security” or a “financial asset” as such
terms are defined in Article 8 of the UCC.
6.
Covenants
. Each
Pledgor hereby covenants, that so long as any of the Pledgor
Obligations remain outstanding (other than any such obligations
which by the terms thereof are
stated to survive
termination of the Loan Documents) or any Loan Document is in
effect, such Pledgor shall:
(a)
Books and
Records . Mark its books and
records (and shall cause the issuer of the Pledged Equity Interests
issued to such Pledgor to mark its books and records) to reflect
the security interest granted to the Administrative Agent, for the
benefit of the Secured Parties, pursuant to this Pledge
Agreement.
(b)
Defense of
Title . Warrant and defend
title to and ownership of the Pledged Collateral issued to such
Pledgor at its own expense against the claims and demands of all
other parties claiming an interest therein, keep the Pledged
Collateral free from all Liens, and not sell, exchange, transfer,
assign, lease or otherwise dispose of Pledged Collateral of such
Pledgor or any interest therein, except as permitted under the
Credit Agreement and the other Loan Documents.
(c)
Further
Assurances . Promptly execute and
deliver at its expense all further instruments and documents and
take all further action that the Administrative Agent may
reasonably request in order to (i) perfect and protect the
security interest created hereby in the Pledged Collateral of such
Pledgor (including, without limitation, the authorization to file
UCC financing statements and any and all action necessary to
satisfy the Administrative Agent that the Administrative Agent has
obtained a first priority perfected security interest in all
Pledged Equity Interests); (ii) enable the Administrative
Agent to exercise and enforce its rights and remedies hereunder in
respect of the Pledged Collateral of such Pledgor; and
(iii) otherwise effect the purposes of this Pledge Agreement,
including, without limitation and if requested by the
Administrative Agent, delivering to the Administrative Agent
irrevocable proxies in respect of the Pledged Collateral of such
Pledgor.
(d)
Amendments;
Modifications; Changes in Corporate Status . Not make or consent
to any amendment or other modification or waiver with respect to
any of the Pledged Collateral issued to such Pledgor or enter into
any agreement or allow to exist any restriction with respect to any
of the Pledged Collateral issued to such Pledgor other than
pursuant hereto or as may be permitted under the Credit Agreement
and not cause or permit without the prior written consent of the
Administrative Agent any change in the organizational documents,
name or corporate status or jurisdiction of organization of such
Pledgor that could reasonably be expected to, in any manner, cause
any security interest granted herein or any filing made in
connection herewith to lapse, terminate or otherwise become
ineffective (whether immediately or as a result of the passage of
time) with respect to any of the Pledged Collateral; provided,
however, that the Administrative Agent shall grant such consent
upon 30 days advance request and each Pledgor’s compliance
with Section 6(c), as applicable, to Administrative
Agent’s reasonable satisfaction.
(e)
Compliance
with Securities Laws . File all reports and
other information now or hereafter required to be filed by such
Pledgor with the United States Securities and Exchange Commission
and any other state, federal or foreign agency in connection with
the ownership of the Pledged Collateral issued to such
Pledgor.
7.
Performance of
Obligations and Advances by Administrative Agent or
Lenders . On failure of any
Pledgor to perform any of the covenants and agreements contained
herein, the Administrative Agent may, upon the occurrence and
during the continuation of an Event of Default, at its sole option
and in its reasonable discretion, perform or cause to be performed
the same and in so doing may expend such sums as the Administrative
Agent may reasonably deem advisable in the performance thereof,
including, without limitation, the payment of any insurance
premiums, the payment of any taxes, a payment to obtain a release
of a Lien or potential Lien, expenditures made in defending against
any adverse claim and all other expenditures which the
Administrative Agent may make for the protection of the security
hereof or which may be compelled to make by operation of law.
All such sums and amounts so expended shall be repayable by the
Pledgors on a joint and several basis promptly upon timely notice
thereof and demand therefor, shall constitute additional Pledgor
Obligations and shall bear interest from the date said amounts are
expended at the default rate specified in the Credit Agreement for
Loans that are Base Rate Loans (including the appropriate
Applicable Rate). No such performance of any covenant or
agreement by the Administrative Agent on behalf of any Pledgor, and
no such advance or expenditure therefor, shall relieve the Pledgors
of any default under the terms of this Pledge Agreement or the
other Loan Documents. The Administrative Agent may make any
payment hereby authorized in accordance with any bill, statement or
estimate procured from the appropriate public office or holder of
the claim to be discharged without inquiry into the accuracy of
such bill, statement or estimate or into the validity of any tax
assessment, sale, forfeiture, tax lien, title or claim except to
the extent such payment is being contested in good faith by a
Pledgor in appropriate proceedings and against which adequate
reserves are being maintained in accordance with GAAP.
8.
Events of
Default . The occurrence of an
event which under the Credit Agreement or any other Loan Document
would constitute an Event of Default shall be an event of default
hereunder (an “ Event of Default ”).
9.
Remedies
.
(a)
General
Remedies . Upon the occurrence
of an Event of Default and during the continuation thereof, the
Administrative Agent (on behalf of the Secured Parties) shall have,
in respect of the Pledged Collateral of any Pledgor, in addition to
the rights and remedies provided herein, in the Loan Documents or
by law, the rights and remedies of a secured party under the UCC or
any other applicable law.
(b)
Sale of
Pledged Collateral . Upon the occurrence
of an Event of Default and during the continuation thereof, without
limiting the generality of this Section and without
not
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