PLEDGE AGREEMENT
THIS PLEDGE AGREEMENT (together with all amendments, supplements and
other modifications made from time to time, this "Pledge Agreement"), dated as
of July 1, 1998, made by THE XXXXXXXXX BUSINESS TRUST, S.T. a Delaware business
trust (the "Pledgor") in favor of BANK HAPOALIM B.M., a bank chartered under the
laws of Israel, acting through its San Xxxxxxxxx Xxxxxx (the "Pledgee").
W I T N E S S E T H:
WHEREAS, as a condition to the effectiveness of the Loan Agreement
dated as of July 1, 1998 (together with all amendments and other modifications,
if any, from time to time thereafter made thereto, the "Loan Agreement"),
between the Pledgee, as Lender and the Pledgor, as Borrower, the Pledgor is
required to execute and deliver this Pledge Agreement;
WHEREAS, the Pledgor is a party to the Certificate A Pledge Agreement
(the "Xxxxxxxxx Pledge Agreement") dated as of July 1, 1998, among the Pledgor,
as Pledgee, Brookdale Living Communities of Connecticut - WH, Inc.
("Brookdale"), as Pledgor, Wilmington Trust Company, as Valuation Agent and
LaSalle National Bank, as Custodian, pursuant to which Brookdale pledged to the
Pledgor and granted the Pledgor a first priority security interest in, inter
alia, the Collateral (as hereinafter defined);
WHEREAS, the Pledgor has duly authorized the execution, delivery and
performance of this Pledge Agreement; and
WHEREAS, it is in the best interests of the Pledgor to execute this
Pledge Agreement inasmuch as the Pledgor will derive substantial benefits from
the transactions contemplated by the Loan Agreement;
NOW, THEREFORE, for good and valuable consideration the receipt of
which is hereby acknowledged, the parties hereto agree as follows:
-1-
Pledge Agreement
ARTICLE I
DEFINITIONS
SECTION 1.1 Certain Terms. Capitalized terms used but not otherwise
defined in this Pledge Agreement have the respective meanings specified in the
Loan Agreement; and the rules of interpretation set forth in the Loan Agreement
shall apply to this Pledge Agreement.
ARTICLE II
PLEDGE
SECTION 2.1 Grant of Security Interest.
(a) The Pledgor hereby pledges, hypothecates, assigns, charges,
mortgages, delivers, and transfers to the Pledgee and hereby grants to the
Pledgee a continuing security interest in, all of its right, title and interest
in, to and under the following property (the "Certificate Collateral"):
(i) Certificate A, a copy of which is annexed hereto as
Schedule I, and any replacement Certificate A to be provided to the
Pledgor in accordance with the terms of the Xxxxxxxxx Pledge Agreement;
(ii) all payments made with respect to and all proceeds (as
such term is defined in the Uniform Commercial Code as in effect in the
State of California (the "U.C.C.")) of Certificate A.
(b) The Pledgor hereby further pledges, hypothecates, assigns, charges,
mortgages, delivers, and transfers to the Pledgee and hereby grants to the
Pledgee a continuing security interest, pursuant to the Uniform Commercial Code
as in effect in the State of Illinois (including Section 9-302 thereof), in all
of its right, title and interest in, to and under the Collateral Account (as
defined in the Xxxxxxxxx Pledge Agreement) and all moneys, funds, instruments,
and securities, from time to time credited to or on deposit in the Collateral
Account held by the Custodian under the Xxxxxxxxx Pledge Agreement the foregoing
being referred to herein as the "Account Funds"). The Certificate Collateral and
the Account Funds are hereinafter collectively referred to as the "Collateral".
-2-
Pledge Agreement
SECTION 2.2 Security for Obligations. The security interest granted by
the Pledgor hereunder secures the payment and performance in full of all the
Pledgor's obligations under the Loan Agreement, including, without limitation,
the obligation to pay the B Loan (the "Obligations").
SECTION 2.3 Delivery of Certificate Collateral. All certificates or
instruments representing or evidencing any Certificate Collateral, shall be
delivered to and held by or on behalf of the Pledgee pursuant hereto, shall be
in suitable form for transfer by delivery, and shall be accompanied by all
necessary instruments of transfer or assignment, duly executed in blank, all in
form and substance satisfactory to the Pledgee.
SECTION 2.4 Continuing Security Interest. This Pledge Agreement shall
create a
continuing security interest in the Collateral and shall
(a) remain in full force and effect until payment in full of
all Obligations, the earlier termination of the Xxxxxxxxx Pledge
Agreement or the Pledgee realizes on the Collateral in accordance with
Section 6.1,
(b) be binding upon the Pledgor and its successors,
transferees and assigns, and
(c) inure to the benefit of the Pledgee.
Upon the payment in full of all Obligations or the earlier termination of the
Xxxxxxxxx Pledge Agreement, the security interest granted herein shall terminate
and all rights to the Collateral (including all interest or income paid in
respect thereto) shall revert to the Pledgor. Upon any such termination, the
Pledgee will, at the sole expense of the Pledgor, and upon written instruction
of the Pledgor, deliver or cause to be delivered to the Pledgor, without any
representations, warranties or recourse of any kind whatsoever, all certificates
and instruments representing or evidencing all Collateral owned by the Pledgor
(including all such interest or income), together with all other Collateral held
by the Pledgee hereunder or held by the Custodian and execute and deliver to the
Pledgor such documents as the Pledgor shall reasonably request to evidence such
termination.
SECTION 2.5 Security Interest Absolute. All rights of the Pledgee and
the security interests granted to the Pledgee hereunder, and all obligations of
the Pledgor hereunder, shall be absolute and unconditional, irrespective of
(a) any lack of validity or enforceability of the Pledge
Agreement or any other Operative Document (other than the Xxxxxxxxx
Pledge Agreement),
-3-
Pledge Agreement
(b) the failure of the Pledgee to assert any claim or demand
or to enforce any right or remedy against the Pledgor or any other
Person under the provisions of any Operative Document or otherwise,
(c) any change in the time, manner or place of payment of, or
in any other term of, all or any of obligations the Obligations or any
other extension, compromise or renewal of any Obligation,
(d) any reduction, limitation, impairment or termination of
any Obligations for any reason, including any claim of waiver, release,
surrender, alteration or compromise, and shall not be subject to (and
the Pledgor hereby waives any right to or claim of) any defense or
setoff, counterclaim, recoupment or termination whatsoever by reason of
the invalidity, illegality, nongenuineness, irregularity, compromise,
unenforceability of, or any other event or occurrence affecting, the
Pledgee or otherwise,
(e) any amendment to, rescission, waiver, or other
modification of, or any consent to departure from, any of the terms of
the any Operative Document,
(f) any addition, exchange, release, surrender or
non-perfection of any Collateral, or any amendment to or waiver or
release of or addition to or consent to departure from any guaranty,
for any of the Obligations, or
(g) any other circumstances which might otherwise constitute a
defense available to, or a legal or equitable discharge of, the Pledgor
or Pledgee or any other Person.
SECTION 2.6 Waiver of Subrogation. The Pledgor hereby irrevocably
waives any claim or other rights which it may now or hereafter acquire against
the Pledgee or any other Person that arise from the existence, payment,
performance or enforcement of the Pledgor's obligations under this Pledge
Agreement or any other Operative Document, including any right of subrogation,
reimbursement, exoneration, or indemnification, any right to participate in any
claim or remedy against the Pledgee or any other Person or any collateral which
the Pledgee now has or hereafter acquires, whether or not such claim, remedy or
right arises in equity, or under contract, statute or common law, including the
right to take or receive from the Pledgee or any other Person, directly or
indirectly, in cash or other property or by set-off or in any manner, payment or
security on account of such claim or other rights. If any amount shall be paid
to the Pledgor in violation of the preceding sentence and the Obligations shall
not have been paid in cash in full, such amount shall be deemed to have been
paid to the Pledgor for the benefit of, and held in trust for, the Pledgee, and
shall forthwith be paid to the Pledgee to be credited and applied upon the
Obligations, whether matured or unmatured. The Pledgor acknowledges that it will
receive direct and indirect benefits from the financing arrangements
contemplated by the Pledge
-4-
Pledge Agreement
Agreement and that the waiver set forth in this Section is knowingly made in
contemplation of such benefits.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.1 Warranties, etc. The Pledgor represents and warrants for
itself unto the Pledgee as at the date of each pledge and delivery hereunder by
the Pledgor to the Pledgee of any Collateral pledged by the Pledgor pursuant to
this Pledge Agreement as follows:
(a) Rights to Collateral. The Pledgor has all rights, title
and interest in the Collateral transferred and granted to it pursuant
to the terms of the Xxxxxxxxx Pledge Agreement, free and clear of all
Liens, security interests, options, or other charges or encumbrances,
except any Lien or security interest granted pursuant hereto or
pursuant to the Xxxxxxxxx Pledge Agreement.
(b) Valid Security Interest. The delivery of the Certificate
Collateral to the Pledgee and the Custodian's possession of the Account
Funds on behalf of the Pledgee are effective to create a valid,
perfected, first priority security interest in such Collateral and all
proceeds thereof, securing the Obligations. No filing or other action
will be necessary to perfect or protect such security interest.
(c) 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 pledge by the Pledgor of any Collateral
pursuant to this Pledge Agreement or for the execution,
delivery, and performance of this Pledge Agreement by the
Pledgor, or
(ii) for the exercise by the Pledgee of any of the
rights provided for in this Pledge Agreement, or, except as
may be required in connection with a disposition of any
Collateral by laws affecting the offering and sale of
securities generally, the remedies in respect of the
Collateral pursuant to this Pledge Agreement.
-5-
Pledge Agreement
ARTICLE IV
COVENANTS
SECTION 4.1 Certain Covenants. The Pledgor covenants and agrees that,
so long as any portion of the Obligations shall remain unpaid or unfulfilled:
(a) except as permitted by the Operative Documents, it will
not sell, assign, transfer, pledge, or encumber in any other manner the
Collateral owned by it (except in favor of the Pledgee hereunder);
(b) the Pledgor will warrant and defend the right and title
herein granted unto the Pledgee in and to the Collateral (and all
right, title, and interest represented by the Collateral) against the
claims and demands of all Persons whomsoever;
(c) at any time, and from time to time, at the expense of the
Pledgor, the Pledgor will promptly execute and deliver all further
instruments, and take all further action, that the Pledgee may
reasonably request, in order to perfect and protect any security
interest granted or purported to be granted hereby or to enable the
Pledgee to exercise and enforce its rights and remedies hereunder with
respect to any Collateral.
ARTICLE V
THE PLEDGEE
SECTION 5.1 Pledgee Appointed Attorney-in-Fact. The Pledgor hereby
irrevocably appoints the Pledgee the Pledgor's attorney-in-fact, with full
authority in the place and stead of the Pledgor and in the name of the Pledgor
or otherwise, from time to time upon the occurrence and during the continuance
of any Loan Agreement Event of Default, to take any action and to execute any
instrument which the Pledgee may deem necessary or advisable to accomplish the
purposes of this Pledge Agreement, including without limitation:
(a) to ask, demand, collect, xxx for, recover, compromise,
receive and give acquittance and receipts for moneys due and to become
due under or in respect of any of the Collateral;
(b) to receive, endorse, and collect any drafts or other
instruments, documents and chattel paper, in connection with clause (a)
above; and
-6-
Pledge Agreement
(c) to file any claims or take any action or institute any
proceedings which the Pledgee may deem necessary or desirable for the
collection of any of the Collateral or otherwise to enforce the rights
of the Pledgee with respect to any of the Collateral.
The Pledgor hereby acknowledges, consents and agrees that the power of attorney
granted pursuant to this Section is irrevocable and coupled with an interest.
SECTION 5.2 Pledgee May Perform. If the Pledgor fails to perform any
agreement contained herein, the Pledgee may itself perform, or cause performance
of, such agreement, and the expenses of the Pledgee incurred in connection
therewith shall be payable by the Pledgor pursuant to Section 6.3.
ARTICLE VI
REMEDIES
SECTION 6.1 Certain Remedies. If any Loan Agreement Event of Default
exists:
(a) The Pledgee may exercise in respect of the Collateral, in
addition to other rights and remedies provided for herein or otherwise
available to it, all the rights and remedies of a secured party on
default under the U.C.C. (whether or not the U.C.C. applies to the
affected Collateral) (with the exception of rights and remedies of a
secured party regarding the Account Funds, for which the Uniform
Commercial Code as in effect in the State of Illinois shall apply) and
also may, without notice except as specified below, sell or redeem, as
applicable, the Collateral or any part thereof (to the extent the
Collateral can be used to satisfy the obligations of the Pledgor
pursuant to Section 2.2 of this Pledge Agreement), for cash, on credit
or for future delivery, and upon such other terms as the Pledgee may
deem commercially reasonable.
(b) The Pledgee may (to the extent the Collateral is necessary
to satisfy the Pledgor's obligations pursuant to Section 2.2 hereof):
(i) transfer all or any part of the Collateral into
the name of its nominee, with or without disclosing that such
Collateral is subject to the lien and security interest
hereunder,
(ii) notify the parties obligated on any of the
Collateral to make payment to the Pledgee of any amount due or
to become due thereunder,
-7-
Pledge Agreement
(iii) enforce collection of any of the Collateral by
suit or otherwise, and surrender, release or exchange all or
any part thereof, or compromise or extend or renew for any
period (whether or not longer than the original period) any
obligations of any nature of any party with respect thereto,
(iv) endorse any checks, drafts, or other writings in
the Pledgor's name to allow collection of the Collateral,
(v) take control of any proceeds of the Collateral,
and
(vi) execute (in the name, place and stead of the
Pledgor) endorsements, assignments, instruments of conveyance
or transfer with respect to all or any of the Collateral.
SECTION 6.2 Securities Laws. If the Pledgee shall exercise its right to
sell all or any of the Collateral pursuant to Section 6.1, the Pledgor agrees
that, upon request of the Pledgee, the Pledgor will, at its own expense do or
cause to be done all such acts and things as may be necessary to make such sale
of the Collateral owned by the Pledgor or any part thereof valid and binding and
in compliance with applicable law.
SECTION 6.3 Indemnity and Expenses. The Pledgor hereby indemnifies and
holds harmless the Pledgee from and against any and all claims, losses, and
liabilities arising out of or resulting from this Pledge Agreement (including
enforcement of this Pledge Agreement). Upon demand, the Pledgor will pay to the
Pledgee the amount of any and all reasonable expenses, including the reasonable
fees and disbursements of its counsel and of any experts and agents, which the
Pledgee may reasonably incur in connection with:
(a) the administration of this Pledge Agreement;
(b) the custody, preservation, use, or operation of, or the
sale of, collection from, or other realization upon, any of the
Collateral;
(c) the exercise or enforcement of any of its rights
hereunder; or
(d) the failure by the Pledgor to perform or observe any of
the provisions hereof.
-8-
Pledge Agreement
ARTICLE VII
MISCELLANEOUS PROVISIONS
SECTION 7.1 Loan Agreement. This Pledge Agreement shall (unless
expressly indicated herein) be construed, administered and applied in accordance
with the terms and provisions of the Loan Agreement.
SECTION 7.2 Successors, Transferees and Assigns. This Pledge Agreement
shall be binding upon the Pledgor and its successors, transferees and assigns
and shall inure to the benefit of and be enforceable by the Pledgee and its
successors and assigns. The Pledgee may, at any time, freely assign its interest
in this Pledge Agreement, the Account Funds and the Certificate A to an
Institutional Lender.
SECTION 7.3 Amendments, etc. No amendment to or waiver of any provision
of this Pledge Agreement, nor consent to any departure by the Pledgor herefrom,
shall in any event be effective unless the same shall be in writing and signed
by the Pledgee, and then such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given.
SECTION 7.4 Protection of Collateral. The Pledgee may from time to
time, at its option, perform any act which the Pledgor agrees hereunder to
perform and which the Pledgor shall fail to perform after being requested in
writing so to perform (it being understood that no such request need be given
after the occurrence and during the continuance of a Loan Agreement Event of
Default) and the Pledgee may from time to time take any other action which the
Pledgee reasonably deems necessary for the maintenance, preservation or
protection of any of the Collateral or of its security interest therein.
SECTION 7.5 Addresses for Notices. All notices, demands, requests,
consents, approvals and other communications hereunder shall be in writing
(including by facsimile) and directed to the address or facsimile number
described in, and deemed received in accordance with the provisions of, Section
6.2 of the Loan Agreement.
SECTION 7.6 No Waiver; Remedies. No failure on the part of the Pledgee
to exercise, and no delay in exercising, any right hereunder shall operate as a
waiver thereof; nor shall any single or partial exercise of any right hereunder
preclude any other or further exercise thereof or the exercise of any other
right. The remedies herein provided are cumulative and not exclusive of any
remedies provided by law.
SECTION 7.7 Section Captions. Section captions used in this Pledge
Agreement are for convenience of reference only, and shall not affect the
construction of this Pledge Agreement.
-9-
Pledge Agreement
SECTION 7.8 Severability. Wherever possible each provision of this
Pledge Agreement shall be interpreted in such manner as to be effective and
valid under applicable law, but if any provision of this Pledge Agreement shall
be prohibited by or invalid under such law, such provision shall be ineffective
to the extent of such prohibition or invalidity, without invalidating the
remainder of such provision or the remaining provisions of this Pledge
Agreement.
SECTION 7.9 Governing Law. THIS PLEDGE AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK. FOR
PURPOSES OF THE CREATION AND PERFECTION OF THE SECURITY INTEREST GRANTED UNDER
THIS PLEDGE AGREEMENT WITH RESPECT TO THE CERTIFICATE COLLATERAL AND ACCOUNT
FUNDS, SUCH MATTERS SHALL BE GOVERNED AND CONSTRUED IN ACCORDANCE WITH THE
INTERNAL LAWS OF THE STATE OF CALIFORNIA AND THE STATE OF ILLINOIS,
RESPECTIVELY.
SECTION 7.10 Waiver of Jury Trial. THE PLEDGOR HEREBY KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHTS IT MAY HAVE TO A TRIAL BY JURY
IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN
CONNECTION WITH, THIS PLEDGE AGREEMENT. THE PLEDGOR ACKNOWLEDGES AND AGREES THAT
IT HAS RECEIVED FULL AND SUFFICIENT CONSIDERATION FOR THIS PROVISION AND THAT
THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE PLEDGEE ENTERING INTO THE LOAN
AGREEMENT.
SECTION 7.11 Execution in Counterparts. This Pledge Agreement may be
executed by the parties hereto in several counterparts, each of which shall be
deemed to be an original and all of which shall constitute together but one and
the same agreement.
SECTION 7.12 Replacement of Certificate A. The parties hereto hereby
agree that (a) upon receipt by the Pledgor of a replacement Certificate A in
accordance with Section 9.13(b) of the Xxxxxxxxx Pledge Agreement, the Pledgor
shall deliver such replacement Certificate A to the Pledgee, (b) all security
interests and rights granted hereunder with respect to the original Certificate
A shall apply to any replacement Certificate A and (c) all references in this
Pledge Agreement to the Certificate A shall include any replacement thereof in
accordance with the terms hereof. Upon receipt by the Pledgee of the replacement
Certificate A, the Pledgee shall transfer to the Pledgor the original
Certificate A in the manner so instructed.
-10-
Pledge Agreement
IN WITNESS WHEREOF, the parties hereto have caused this Pledge
Agreement to be duly executed and delivered by their respective officers
thereunto duly authorized as of the day and year first above written.
THE XXXXXXXXX BUSINESS TRUST, S.T.,
as Pledgor
By Wilmington Trust Company, not in its
individual capacity but solely as trustee
under the Trust Agreement
By _____________________________
Name:
Title:
BANK HAPOALIM B.M.,
SAN XXXXXXXXX XXXXXX, as Pledgee
By _____________________________
Name:
Title:
ACKNOWLEDGED AND AGREED TO BY:
BROOKDALE LIVING COMMUNITIES
OF CONNECTICUT - WH, INC.
By _____________________________
Name:
Title:
LASALLE NATIONAL BANK
By _____________________________
Name:
-00-
Xxxxxx Xxxxxxxxx
Title:
-12-
Pledge Agreement
SCHEDULE I
TO PLEDGE AGREEMENT
[Copy of Certificate A]
