Fill and Sign the Pledge Agreement Draft Form

PLEDGE AGREEMENT THIS PLEDGE AGREEMENT dated as of ______________ , by and among ______________ , a ______________ private, non-profit corporation and an institution of higher learning (the "College"), ______________ , as fiscal agent (the "Fiscal Agent"), and ______________ (the "Bank"). WHEREAS, the ______________ Corporation (the "Issuer") is to issue $ ______________ in aggregate principal amount of its Variable Rate Demand Revenue Bonds ( ______________ Project), Series ______________ , dated the date of issuance thereof (the "Bonds"), pursuant to a Trust Indenture, dated as of ______________ (the "Indenture") by and between the Issuer and ______________ as trustee (the "Trustee"), for the purpose of (i) constructing and equipping a new ___________________ , (ii) currently refunding the indebtedness incurred by the college to ______________ i to construct and improve the student center, (iii) renovate various buildings and (iv) demolish the existing ____________________ , all of which are located on the ______________ campus; and WHEREAS, pursuant to the terms of a Loan Agreement date as of ______________ (the "Loan Agreement") by and between the Issuer and the ______________ , the Issuer has loaned to the College the proceeds received by the Issuer from the issuance of the Bonds and the ______________ has agreed to pay amounts under the Loan Agreement to the Issuer at such times and in such amounts as necessary to provide for the payment of the principal of premium (if any) and interest on and the purchase price of the Bonds when due; and WHEREAS, in order to fulfill the requirements of the Indenture, the ______________ has requested that the Bank issue an irrevocable direct-pay letter of credit in the amount of $ ______________ (the "Letter of Credit") for the benefit of the Trustee and for the account of the College, to provide a credit facility for payment of the principal of and interest on the Bonds, on the scheduled due dates and upon redemption or acceleration and upon tender for purchase; and WHEREAS, the Bank is willing to issue the Letter of Credit subject to and on the terms and conditions of that certain Reimbursement Agreement dated as of ______________ (as the same may be amended, supplemented, restated or other modified from time to time in accordance with its terms, the "Reimbursement Agreement") by and between the Bank and ______________ ; WHEREAS, to secure its obligations to the Bank under the Reimbursement Agreement, the ______________ is willing to grant to the Bank a security interest in, among other things, the Pledged Bonds (as defined below); WHEREAS, it is a condition precedent to the effectiveness of the Reimbursement Agreement and the issuance by the Bank of the Letter of Credit that the ______________ and the Fiscal Agent execute and deliver this Agreement; NOW, THEREFORE, in consideration of the premises, in order to induce the Bank to issue the Letter of Credit and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by the parties hereto, the parties hereto agree as follows: Section 1. Grant of Security Interest. As security for the payment and performance of the Obligations, the College hereby grants to the Bank a security interest in, and pledges, assigns, transfers and delivers to the Bank, all of the ______________ right, title and interest in and to all of the following (collectively, the "Pledged Bonds): (a) any Bond during the period from and including the date of its purchase with amounts realized under the Letter of Credit to but excluding the date on which such Bond is remarketed to any Person other than the Bank, or the College reimburses the Bank for the amount drawn on the Letter of Credit to purchase such Bond, together with all proceeds thereof, and (b) all documents, books and records of the ______________ relating thereto. Section 2. Representations and Warranties of the ______________ . The ______________ hereby represents and warrants to the Fiscal Agent and the Bank that: The execution, delivery and performance of this Agreement by the ______________ in accordance with its terms do not and will not, by the passage of time, the giving of notice or otherwise; (a) require any Governmental Approval or violate any Applicable Law relating to the ______________ ; (b) conflict with, result in a breach of or constitute a default under the articles of incorporation or bylaws of the ______________ , or any indenture, lease, loan or credit agreement, instrument or other contract or agreement to which the ______________ is a party or by which the ______________ or any of its properties may be bound; (c) result in or require the creation or imposition of any Lien upon or with respect to any property now owned or hereafter acquired by the ______________ ; (d) no financing statement, mortgage, notice of lien, security agreement or any other agreement or instrument creating or giving notice of any Lien against any of the Pledged Bonds is in existence or on file in any public office; (e) on the date of delivery to the Bank or the Fiscal Agent, on behalf of the Bank, of any Pledged Bonds, neither the Issuer, the Remarketing Agent, nor the Fiscal Agent will have any right, title or interest in or to the Pledged Bonds; (f) the ______________ has, and on the date of delivery to the Bank or the Fiscal Agent, on behalf of the Bank, of any Pledged Bonds will have, full power, authority and legal right to grant to the Bank a security interest in all of the ______________ right, title and interest in and to the Pledged Bonds pursuant to this Pledge Agreement and the terms of the Reimbursement Agreement; and (g) the pledge, assignment, transfer and delivery of the Pledged Bonds pursuant to this Pledge Agreement and the Reimbursement Agreement will create a valid, perfected and first-priority security interest in favor of the Bank in all right, title and interest of the ______________ in and to the Pledged Bonds. Section 3. Covenants of the ______________ and the Fiscal Agent. The ______________ and the Fiscal Agent hereby covenant and agree that: (a) The ______________ will not create, assume, incur or permit or suffer to exist or to be created, assumed or incurred, any Lien on any of the Pledged Bonds other than the security interest herein granted, and will not sell, assign, transfer or otherwise dispose of any of the Pledged Bonds (or any interest therein). (b) The Fiscal Agent hereby covenants and agrees that it will at all times keep the Pledged Bonds separate and distinct from other property of the Fiscal Agent and shall keep accurate and complete records of the Pledged Bonds. (c) The ______________ will defend its right, title and interest in and to, and the Bank's security interest in, the Pledged Bonds against claims and demands of all Persons. Section 4. The Pledged Bonds. (a) Payments on the Pledged Bonds. If while this Pledge Agreement is in effect the ______________ shall become entitled to receive or shall receive any principal or interest payment in respect of any of the Pledged Bonds, the ______________ agrees to accept the same as the Bank's agent and to hold the same in trust on behalf of the Bank and to deliver the same forthwith to the Bank or to the Bank's nominee as directed by the Bank. All monies so paid in respect of the Pledged Bonds that are received by the ______________ and paid to the Bank or its nominee or received directly by the Bank or its nominee shall be credited against the ______________ Obligations under the Reimbursement Agreement in accordance with the Reimbursement Agreement. (b) Release of Pledged Bonds. If the ______________ makes or causes to be made a payment to the Bank in respect of its reimbursement obligations under the Reimbursement Agreement with respect to the Pledged Bonds, the Bank agrees to release its security interest under this Pledge Agreement to the extent, in the manner and under the terms and conditions set forth below and to treat such payment in the manner set forth herein and to take all such other actions required to be taken by the Bank hereunder. Pledged Bonds shall be released hereunder and shall be delivered to the ______________ or on its order upon (i) payment in full to the Bank by the ______________ , or from the proceeds of remarketing of Pledged Bonds, of the amount of the drawing made by the Fiscal Agent with respect to such Pledged Bonds plus interest as provided in the Reimbursement Agreement to and through the date of such payment to the Bank, and (ii) receipt by the Bank thereafter of a notice directing the Bank to deliver to the ______________ or on its order, on the date specified in such notice, a principal amount of such Pledged Bonds equal to the principal portion of the amount so paid and setting forth the particular Pledged Bonds to be delivered. The ______________ shall (x) receive a credit against its obligations to pay interest pursuant to the Reimbursement Agreement to the extent of any amounts received by the Bank or its nominee as interest on any Pledged Bonds, and (y) receive a credit against its payment obligations under the Reimbursement Agreement to the extent of any amounts received by the Bank or its nominee as the principal due on any Pledged Bonds. The Fiscal Agent and the Bank shall not release any Pledged Bonds unless the Letter of Credit has terminated and any and all amounts due to the Bank have been paid in full or unless the Principal Component (as defined in the Letter of Credit) of the Stated Amount is reinstated in an amount equivalent to the sum of the outstanding principal amount of the Pledged Bonds to be released or sold, and the Interest Component (as defined in the Letter of Credit) of the Stated Amount is reinstated in an amount equal to days' interest on such principal amount calculated at the rate of twelve percent (12%) per annum on the basis of a 365 or 366 day year, as applicable. Section 5. Remedies Upon Default. In addition to any right or remedy that the Bank may have under the Reimbursement Agreement, the other Related Documents or otherwise under Applicable Law, if an Event of Default shall have occurred, the Bank may exercise any and all the rights and remedies of a secured party under the Uniform Commercial Code as in effect in any applicable jurisdiction (the "Code") and may otherwise sell, assign, transfer, endorse and deliver the whole or, from time to time, any part of the Pledged Bonds at a public or private sale or on any securities exchange, for cash, upon credit or for other property, for immediate or future delivery, and for such price or prices and on such terms as the Bank in its discretion shall deem appropriate; provided, however, the Bank may only sell the Pledged Bonds to institutional investors who have knowledge that such Bonds can no longer be tendered.. The Bank shall be authorized at any sale (if it deems it advisable to do so) to restrict the prospective bidders or purchasers to Persons who will represent and agree that they are purchasing the Pledged Bonds for their own account in compliance with the Securities Act of 1933, as amended, and upon consummation of any such sale the Bank shall have the right to assign, transfer, endorse and deliver to the purchaser or purchasers thereof the Pledged Bonds so sold. Each purchaser at any sale of Pledged Bonds shall take and hold the property sold absolutely free from any claim or right on the part of the ______________ , and the ______________ hereby waives (to the fullest extent permitted by Applicable Law) all rights of redemption, stay and/or appraisal which the ______________ now has or may at any time in the future have under any Applicable Law now existing or hereafter enacted. The ______________ agrees that, to the extent notice of sale shall be required by Applicable Law, at least ten days' prior written notice to the ______________ 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, but notice given in any other reasonable manner or at any other reasonable time shall constitute reasonable notification. At any such sale, the Pledged Bonds, or portion thereof to be sold, may be sold in one lot as an entirety or in separate parcels, as the Bank may determine in its sole and absolute discretion. In addition to exercising the power of sale herein conferred upon it, the Bank shall also have the option to proceed by suit or suits at law or in equity to foreclose this Agreement and sell the Pledged Bonds or any portion thereof pursuant to judgment or decree of a court or courts having competent jurisdiction. Section 6. Application of Proceeds. The proceeds of any sale of the whole or any part of the Pledged Bonds shall be applied by the Bank in payment of any of the Obligations, in any order which the Bank may elect. The ______________ shall remain liable and will pay, on demand, any deficiency remaining in respect of the Obligations. Section 7. Bank Appointed Attorney-in-Fact. The ______________ hereby constitutes and appoints the Bank as the attorney-in-fact of the ______________ with full power of substitution either in the Bank's name or in the name of the ______________ to do any of the following: (a) to perform any obligation of the ______________ hereunder in the ______________ 's name or otherwise; (b) to ask for, demand, sue for, collect, receive, receipt and give acquittance for any and all moneys due or to become due under and by virtue of any Pledged Bonds; (c) to prepare, execute, file, record or deliver notices, assignments, financing statements, continuation statements or like papers to perfect, preserve or release the Bank's security interest in the Pledged Bonds or any of the documents, instruments, certificates and agreements described in Section 8; (d) to endorse checks, drafts, orders and other instruments for the payment of money payable to the ______________ , representing any interest or other distribution payable in respect of the Pledged Bonds or any part thereof or on account thereof and to give full discharge for the same; (e) to exercise all rights, powers and remedies which the ______________ would have, but for this Agreement, under the Pledged Bonds; and (f) to carry out the provisions of this Agreement and to take any action and execute any instrument which the Bank may deem necessary or advisable to accomplish the purposes hereof and to do all acts and things and execute all documents in the name of the ______________ or otherwise, deemed by the Bank as necessary, proper and convenient in connection with the preservation, perfection or enforcement of its rights hereunder. Nothing herein contained shall be construed as requiring or obligating the Bank to make any commitment or to make any inquiry as to the nature or sufficiency of any payment received by it, or to present or file any claim or notice, or to take any action with respect to the Pledged Bonds or any part thereof or the moneys due or to become due in respect thereof or any property covered thereby, and no action taken by the Bank or omitted to be taken with respect to the Pledged Bonds or any part thereof shall give rise to any defense, counterclaim or offset in favor of the ______________ or to any claim or action against the Bank. The power of attorney granted herein is irrevocable and coupled with an interest. Section S. Further Assurances. The ______________ shall, at its sole cost and expense, take all action that may be necessary or desirable in the Bank's opinion, or that the Bank may reasonably request, so as at all times to maintain the validity, perfection, enforceability and priority of the Bank's security interest in the Pledged Bonds, or to enable the Bank to exercise or enforce its rights hereunder, including without limitation, executing and delivering financing statements, pledges, designations, notices and assignments, in each case in form and substance satisfactory to the Bank, relating to the creation, validity, perfection, priority or continuation of the security interest granted hereunder. The ______________ agrees to take, and authorizes the Bank to take on the ______________ behalf any or all of the following actions with respect to any Pledged Bonds as the Bank shall deem reasonably necessary to perfect the security interest and pledge created hereby or to enable the Bank to enforce its rights and remedies hereunder: (a) to register in the name of the Bank any Pledged Bonds in certificated or uncertifcated form; (b) to endorse in the name of the Bank any Pledged Bonds issued in certificated form; and (c) by book entry or otherwise, identify as belonging to the Bank a quantity of securities that constitutes all or part of the Pledged Bonds registered in the name of the Bank. Notwithstanding the foregoing the ______________ agrees that a Pledged Bond which is not in certificated form or is otherwise in book-entry form shall be held for the account of the Bank. , The ______________ hereby authorizes the Bank to execute and file in all necessary and appropriate jurisdictions (as determined by the Bank) one or more financing or continuation statements in the name of the ______________ and to sign the ______________ name thereto. The ______________ v authorizes the Bank to file any such financing statement, document or instrument without the signature of the ______________ to the extent permitted by applicable law. Any property comprising part of the Pledged Bonds required to be delivered to the Bank pursuant to this Pledge Agreement shall be accompanied by proper instruments of assignment duly executed by the ______________ and by such other instruments or documents as the Bank or its counsel may request. Section 9. Rights Cumulative, Non-Waiver of Rights. The rights and remedies of the Bank under this Agreement are cumulative and not exclusive of any rights or remedies which it would otherwise have. No delay or failure on the part of the Bank in the exercise of any right or remedy shall operate as a waiver thereof no single or partial exercise by the Bank of any right or remedy shall preclude other or further exercise thereof or the exercise of any other right or remedy and no course of dealing between the parties shall operate as a waiver of any right or remedy of the Bank. Section 10. Indemnification. The ______________ agrees to indemnify and hold the Bank and the Fiscal Agent and any corporation controlling, controlled by, or under common control with, the Bank and the Fiscal Agent and any officer, attorney, director, shareholder, agent or employee of the Bank and the Fiscal Agent or any such corporation (each an "Indemnified Person"), harmless from and against any claim, loss, damage, action, cause of action, liability, cost and expense or suit of any kind or nature whatsoever (collectively, "Losses"), brought against or incurred. by an Indemnified Person, in any manner arising out of or, directly or indirectly, related to or connected with this Agreement, including without limitation, the exercise by the Bank or the Fiscal Agent of any of its rights and remedies under this Agreement or any other action taken by the Bank or the Fiscal Agent pursuant to the terms of this Agreement; provided, however, the ______________ shall not be liable to an Indemnified Person for any Losses to the extent that such Losses result from the gross negligence or willful misconduct of such Indemnified Person. The ______________ obligations under this section shall survive the termination of this Agreement and the payment in full of the Obligations. Section 11. Continuing Security Interest. This Agreement shall create a continuing security interest in the Pledged Bonds and shall remain in full force and effect until indefeasible payment and performance in full of the Obligations. The ______________ and the Bank hereby agree that the security interest created by this Agreement in the Pledged Bonds shall not terminate and shall continue and remain in full force and effect notwithstanding the transfer to the ______________ or any Person designated by it of all or any portion of the Pledged Bonds. Section 12. Notices. Notices, requests and other communications required or permitted hereunder shall be given in accordance with the applicable terms of the Reimbursement Agreement. Section 13. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF ________________ . Section 14. Amendments. No amendment or waiver of any provision of this Agreement nor consent to any departure by the ______________ herefrom shall in any event be effective unless the same shall be in writing and signed by the parties hereto, and then such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given. Section 15. Binding Agreement Assignment. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns, except that the ______________ shall not be permitted to assign this Agreement or any interest herein or in the Pledged Bonds, or any part thereof, or any cash or property held by the Bank as collateral under this Agreement. Section 16. Termination. Upon indefeasible payment and performance in full of all of the Obligations, this Agreement shall terminate. Upon termination of this Agreement in accordance with its terms the Bank agrees to take such actions as the ______________ may reasonably request, and at the sole cost and expense of the ______________ , (a) to return Pledged Bonds in the Bank's possession to the ______________ , and (b) to evidence the termination of this Agreement, including, without limitation, the fling of any releases or any termination statements under the Uniform Commercial Code. Section 17. Severability. Whenever possible, each provision of this Agreement shall be interpreted in such a manner as to be effective and valid under applicable law, but if any provision of this Agreement shall be prohibited by or invalid under applicable law, such provisions shall be ineffective only to the extent of such prohibition or invalidity, without invalidating the remainder of such provisions or the remaining provisions of this Agreement. Section 18. Headings. Section headings used herein are for convenience only and are not to affect the construction of or be taken into consideration in interpreting this Agreement. Section 19. Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original and all of which shall constitute but one agreement. Section 20. Definitions. All terms not otherwise defined herein shall have the respective meanings given them in, or by reference in, the Reimbursement Agreement. IN WITNESS WHEREOF, the parties hereto have executed and delivered under seal this Pledge Agreement as of the date first written above. ______________ By:       Title:       ______________ By:       Title:       ______________ By:       Title: