EXHIBIT 10.49
PLEDGE AGREEMENT
This Pledge Agreement (the "Agreement") is dated as of April 16, 1998, by
and among Fountain View, Inc., a Delaware corporation (the "Borrower"), and the
other parties executing this Agreement under the heading "Pledgors" (the
Borrower and such other parties, along with any parties who execute and deliver
to the Agent an agreement in the form attached hereto as Schedule C being
hereinafter referred to collectively as the "Pledgors" and individually as a
"Pledgor"), each with its mailing address as set forth on its signature page
hereto and Bank of Montreal, a chartered bank of Canada acting through its
Chicago branch ("BOM"), with its mailing address at 000 Xxxxx XxXxxxx Xxxxxx,
Xxxxxxx, Xxxxxxxx 00000, acting as agent hereunder for the Lenders and Letter of
Credit Issuers hereinafter identified and defined (BOM acting as such agent and
any successor or successors to BOM acting in such capacity being hereinafter
referred to as the "Agent");
PRELIMINARY STATEMENTS
A. The Borrower and BOM, individually and as agent, have entered into a
Credit Agreement dated as of April 16, 1998 (such Agreement as the same may be
amended, modified or restated from time to time being hereinafter referred to as
the "Credit Agreement"), pursuant to which BOM and other banks, financial
institutions and letter of credit issuers from time to time party to the Credit
Agreement (BOM, in its individual capacity, and such other banks and financial
institutions being hereinafter referred to collectively as the "Lenders" and
individually as a "Lender" and such letter of credit issuers being hereinafter
referred to collectively as the "Letter of Credit Issuers" and individually as a
"Letter of Credit Issuer") have agreed, subject to certain terms and conditions,
to extend credit and make certain other financial accommodations available to
the Borrower (the Agent, the Lenders and the Letter of Credit Issuers being
hereinafter referred to collectively as the "Secured Creditors" and individually
as a "Secured Creditor").
B. The Borrower may from time to time enter into one or more interest
rate exchange, cap, collar, floor or other agreements with one or more of the
Lenders party to the Credit Agreement, or their affiliates, for the purpose of
hedging or otherwise protecting the Borrower against changes in interest rates
(the liability of the Borrower in respect of such agreements with such Lenders
and their affiliates being hereinafter referred to as the "Hedging Liability").
C. As a condition to extending credit to the Borrower under the Credit
Agreement, the Secured Creditors have required, among other things, that each
Pledgor grant to the Agent for the benefit of the Secured Creditors a lien on
and security interest in certain personal property of such Pledgor described
herein subject to the terms and conditions hereof.
D. The Borrower owns, directly or indirectly, equity interests in each
other Pledgor and the Borrower provides each other Pledgor with financial,
management,
administrative, and technical support which enables such Pledgor to
conduct its business in an orderly and efficient manner in the ordinary course.
E. Each Pledgor will benefit, directly or indirectly, from credit and
other financial accommodations extended by the Secured Creditors to the
Borrower.
Now, Therefore, for and in consideration of the execution and
delivery by the Secured Creditors of the Credit Agreement, and other good and
valuable consideration, receipt whereof is hereby acknowledged, the parties
hereto hereby agree as follows :
Section 1. Terms Defined in Credit Agreement. All capitalized terms
used herein without definition shall have the same meanings herein as such terms
have in the Credit Agreement. The term "Pledgor" and "Pledgors" as used herein
shall mean and include the Pledgors collectively and also each individually,
with all grants, representations, warranties and covenants of and by the
Pledgors, or any of them, herein contained to constitute joint and several
grants, representations, warranties and covenants of and by the Pledgors;
provided, however, that unless the context in which the same is used shall
otherwise require, any grant, representation, warranty or covenant contained
herein related to the Collateral shall be made by each Pledgor only with respect
to the Collateral owned by it or represented by such Pledgor as owned by it.
Section 2. Grant of Security Interest in the Collateral. Each
Pledgor hereby grants to the Agent for the benefit of the Secured Creditors a
lien on and security interest in, and acknowledges and agrees that the Agent has
and shall continue to have for the benefit of the Secured Creditors a continuing
lien on and security interest in, any and all right, title and interest of each
Pledgor in all equity interests of each of its Subsidiaries, whether now owned
or existing or hereafter created, acquired or arising, and in whatever form,
including, without limitation, any and all right, title, and interest in and to
the following:
(a) Stock Collateral. (i) All shares of the capital stock of each
Subsidiary which is a corporation owned or held by such Pledgor, whether now
owned or hereafter formed or acquired (those shares delivered to and deposited
with the Agent on or prior to the date hereof being listed and described on
Schedule A attached hereto), and all substitutions and additions to such shares
(herein, the "Pledged Securities"), (ii) all dividends, distributions and sums
distributable or payable from, upon or in respect of the Pledged Securities and
(iii) all other rights and privileges incident to the Pledged Securities (all of
the foregoing being hereinafter referred to collectively as the "Stock
Collateral");
(b) Partnership Interest Collateral. (i) All partnership or other equity
interests in each Subsidiary which is a partnership (whether general or limited)
owned or held by such Pledgor, whether now owned or hereafter formed or acquired
(each of such equity interests existing on the date hereof being listed and
identified on Schedule B attached hereto) (such partnerships being hereinafter
referred to collectively as the "Partnerships" and individually as a
"Partnership"), (ii) any and all payments and distributions of whatever kind or
character, whether in cash or other
-2-
property, at any time made, owing or payable to such Pledgor in respect of
or on account of its present or hereafter acquired interests in each
Partnership, whether due or to become due and whether representing profits,
distributions pursuant to complete or partial liquidation or dissolution of
any such Partnership, distributions representing the complete or partial
redemption of such Pledgor's interest in any such Partnership or the
complete or partial withdrawal of such Pledgor from any such Partnership,
repayment of capital contributions, payment of management fees or
commissions, or otherwise, and the right to receive, receipt for, use and
enjoy all such payments and distributions, and (iii) all other rights and
privileges incident to such Pledgor's interest in each Partnership (all of
the foregoing being hereinafter collectively called the "Partnership
Interest Collateral");
(c) LLC Collateral. (i) All membership or other equity interests in each
Subsidiary which is a limited liability company owned or held by such
Pledgor, whether now owned or hereafter formed or acquired (each of such
equity interests existing on the date hereof being listed and identified on
Schedule C attached hereto (such limited liability companies being
hereinafter referred to collectively as the "LLCs" and individually as a
"LLC"), (ii) any and all payments and distributions of whatever kind or
character, whether in cash or other property, at any time made, owing or
payable to such Pledgor in respect of or on account of its present or
hereafter acquired interests in each LLC, whether due or to become due and
whether representing profits, distributions pursuant to complete or partial
liquidation or dissolution of any such LLC, distributions representing the
complete or partial redemption of such Pledgor's interest in such LLC or
the complete or partial withdrawal of such Pledgor from any such LLC,
repayment of capital contributions, payment of management fees or
commissions, or otherwise, and the right to receive, receipt for, use and
enjoy all such payments and distributions, and (iii) all other rights and
privileges incident to such Pledgor's interest in each LLC (all of the
foregoing being hereinafter referred to as the "LLC Collateral"); and
(d) Proceeds. All proceeds of the foregoing;
all of the foregoing being herein sometimes referred to as the "Collateral";
provided that, so long as the Borrower is in compliance with Section 4.1 of the
Credit Agreement, the Collateral shall not include any capital stock issued by
Alexandria Convalescent Hospital, Inc. All terms which are used in this
Agreement which are defined in the Uniform Commercial Code of the State of
Illinois ("UCC") shall have the same meanings herein as such terms are defined
in the UCC, unless this Agreement shall otherwise specifically provide.
Section 3. Obligations Hereby Secured. This Agreement is made and given
to secure, and shall secure, the prompt payment and performance when due of (i)
any and all indebtedness, obligations and liabilities of the Pledgors, and of
any of them individually, to the Secured Creditors, and to any of them
individually, under or in connection with or evidenced by the Credit Agreement,
the Notes of the Borrower heretofore or hereafter issued under the Credit
Agreement and the obligations of the Borrower to reimburse the Secured Creditors
for the amount of all drawings on all Letters of Credit issued pursuant to
-3-
the Credit Agreement, and all other obligations of the Borrower under any and
all applications for Letters of Credit, and any and all liability of the
Pledgors, and of any of them individually, arising under or in connection with
or otherwise evidenced by agreements with any one or more of the Secured
Creditors or their affiliates with respect to any Hedging Liability, and any and
all liability of the Pledgors, and of any of them individually, arising under
any guaranty issued by it relating to the foregoing or any part thereof, in each
case whether now existing or hereafter arising (and whether arising before or
after the filing of a petition in bankruptcy and including all interest accrued
after the petition date), due or to become due, direct or indirect, absolute or
contingent, and howsoever evidenced, held or acquired and (ii) any and all
expenses and charges, legal or otherwise, suffered or incurred by the Secured
Creditors, and any of them individually, in collecting or enforcing any of such
indebtedness, obligations and liabilities or in realizing on or protecting or
preserving any security therefor, including, without limitation, the lien and
security interest granted hereby (all of the indebtedness, obligations,
liabilities, expenses and charges described above being hereinafter referred to
as the "Obligations"). Notwithstanding anything in this Agreement to the
contrary, the right of recovery against any Pledgor (other than the Borrower to
which this limitation shall not apply) under this Agreement shall not exceed
$1.00 less than the amount which would render such Pledgor's obligations under
this Agreement void or voidable under applicable law, including fraudulent
conveyance law.
Section 4. Covenants, Agreements, Representations and Warranties.
Each Pledgor hereby covenants and agrees with, and represents and warrants to,
the Secured Creditors that:
(a) Each Pledgor is and shall be the sole and lawful legal, record and
beneficial owner of its Collateral. Each Pledgor's chief executive office
is at the address listed under such Pledgor's name on Schedule A, Schedule
B and Schedule C hereto, as applicable. Each Pledgor agrees that it will
not change any location set forth on the applicable Schedule hereto without
30 days prior written notice to the Agent (provided in all cases such
locations shall be within the United States of America). No Pledgor shall,
without the Agent's prior written consent, sell, assign, or otherwise
dispose of the Collateral or any interest therein, except to the extent
permitted by Section 8.10 of the Credit Agreement. The Collateral, and
every part thereof, is and shall be free and clear of all security
interests, liens, rights, claims, attachments, levies and encumbrances of
every kind, nature and description and whether voluntary or involuntary,
except for the security interest of the Agent hereunder and for other Liens
permitted by Section 8.8 of the Credit Agreement. Each Pledgor shall
warrant and defend the Collateral against any claims and demands of all
persons at any time claiming the same or any interest in the Collateral
adverse to any Secured Creditor.
(b) Each Pledgor agrees to execute and deliver to the Agent such further
agreements, assignments, instruments and documents and to do all such other
things as the Agent may deem necessary or appropriate to assure the Agent
its lien and security interest hereunder, including such assignments,
acknowledgments (including acknowledgments of collateral assignment in the
form attached hereto as Schedule D),
-4-
stock powers, financing statements, instruments and documents as the Agent
may from time to time require in order to comply with the UCC. Each Pledgor
hereby agrees that a carbon, photographic or other reproduction of this
Agreement or any such financing statement is sufficient for filing as a
financing statement by the Agent without prior notice thereof to such
Pledgor wherever the Agent in its discretion desires to file the same. In
the event for any reason the law of any jurisdiction other than Illinois
becomes or is applicable to the Collateral or any part thereof, or to any
of the Obligations, each Pledgor agrees to execute and deliver all such
agreements, assignments, instruments and documents and to do all such other
things as the Agent in its discretion deems necessary or appropriate to
preserve, protect and enforce the lien and security interest of the Agent
under the law of such other jurisdiction.
(c) If, as and when any Pledgor (x) delivers any securities for pledge
hereunder in addition to those listed on Schedule A hereto or (y) pledges
interests in any partnership in addition to those listed on Schedule B
hereto or (z) pledges interests in any limited liability company in
addition to those listed on Schedule C hereto, the Pledgors shall furnish
to the Agent a duly completed and executed amendment to such Schedule in
substantially the form (with appropriate insertions) of Schedule E hereto
reflecting the additional securities, partnership interests or limited
liability company interests pledged hereunder after giving effect to such
addition.
(d) None of the Collateral constitutes margin stock (within the meaning
of Regulation U of the Board of Governors of the Federal Reserve System).
(e) On failure of any Pledgor to perform when due any of the agreements
and covenants herein contained, the Agent may, at its option, perform the
same and in so doing may expend such sums as the Agent reasonably deems
advisable in the performance thereof, including, without limitation, the
payment of any taxes, liens and encumbrances, expenditures made in
defending against any adverse claim, and all other expenditures which the
Agent may be compelled to make by operation of law or which Agent may make
by agreement or otherwise for the protection of the security hereof. All
such sums and amounts so expended shall be repayable by the Pledgors upon
demand, shall constitute additional Obligations secured hereunder and shall
bear interest from the date said amounts are expended at the rate per annum
(computed on the basis of a year of 360 days, for the actual number of days
elapsed) determined by adding 2% to the Base Rate from time to time in
effect plus the Applicable Margin for Base Rate Loans (such rate per annum
as so determined being hereinafter referred to as the "Default Rate"). No
such performance of any covenant or agreement by the Agent on behalf of
such Pledgor, and no such advancement or expenditure therefor, shall
relieve such Pledgor of any default under the terms of this Agreement or in
any way obligate any Secured Creditor to take any further or future action
with respect thereto. The Agent, in making any payment hereby authorized,
may do so according to any xxxx, statement or estimate procured from the
appropriate public office or holder of the claim to be discharged without
inquiry into the accuracy of such xxxx, statement or estimate, or into the
validity of any tax assessment, sale, forfeiture, tax lien or title or
claim. The Agent, in performing any act hereunder, shall be the sole
-5-
judge of whether the relevant Pledgor is required to perform the same under
the terms of this Agreement. The Agent is hereby authorized to charge any
depository or other account of any Pledgor maintained with any Secured
Creditor for the amount of such sums and amounts so expended.
Section 5. Special Provisions Re: Stock Collateral.
(a) Each Pledgor has the right to vote the Pledged Securities and there
are no restrictions upon the voting rights associated with, or the transfer
of, any of the Pledged Securities, except as provided by federal and state
laws applicable to the sale of securities generally and the terms of this
Agreement.
(b) The certificates for all shares of the Pledged Securities shall be
delivered by the relevant Pledgor to the Agent duly endorsed in blank for
transfer or accompanied by an appropriate assignment or assignments or an
appropriate undated stock power or powers, in every case sufficient to
transfer title thereto. The Agent may, at any time after the occurrence of
an Event of Default at any time when the Obligations are, or have been
declared to be, due and payable in full, cause to be transferred into its
name or into the name of its nominee or nominees any and all of the Pledged
Securities. The Agent shall at all times have the right to exchange the
certificates representing the Pledged Securities for certificates of
smaller or larger denominations.
(c) The Pledged Securities have been validly issued and, except as
described on Schedule A, are fully paid and non-assessable. Except as set
forth on Schedule A, there are no outstanding commitments or other
obligations of the issuers of any of the Pledged Securities to issue, and
no options, warrants or other rights of any individual or entity to
acquire, any share of any class or series of capital stock of such issuers.
The Pledged Securities listed and described on Schedule A attached hereto
constitute the percentage of the issued and outstanding capital stock of
each series and class of the issuers thereof as set forth thereon owned by
the relevant Pledgor. Each Pledgor further agrees that in the event any
such issuer shall issue any additional capital stock of any series or class
(whether or not entitled to vote) to such Pledgor or otherwise on account
of its ownership interest therein, each Pledgor will forthwith pledge and
deposit hereunder, or cause to be pledged and deposited hereunder, all such
additional shares of such capital stock.
Section 6. Special Provisions Re: Partnership Interest Collateral and LLC
Collateral.
(a) Each Pledgor further represents and warrants to, and agrees with, the
Secured Creditors as follows:
(i) each Partnership is a valid and existing entity of the type
listed on Schedule B and is duly organized and existing under applicable
law; and each LLC is duly organized and existing under applicable law;
-6-
(ii) the Partnership Interest Collateral listed and described on
Schedule B attached hereto constitutes the percentage of the equity
interest in each Partnership set forth thereon owned by the relevant
Pledgor; and the LLC Collateral listed and described on Schedule C
attached hereto constitutes the percentage of the equity interest in
each LLC set forth thereon owned by the relevant Pledgor; and
(iii) the copies of the partnership agreements of each Partnership
and the articles of association and operating agreements of each LLC (each
such agreement being hereinafter referred to as "Organizational Agreement")
heretofore delivered to the Agent are true and correct copies thereof and
have not been amended or modified in any respect.
(b) Each Pledgor agrees that it shall not, without the prior written
consent of the Agent, agree to any amendment or modification to any of the
Organizational Agreements which would in any manner adversely affect or impair
the Partnership Interest Collateral or LLC Collateral or reduce or dilute the
rights of such Pledgor with respect to any Partnership or LLC, any of such done
without such prior written consent to be null and void. The Pledgors shall
promptly send to the Agent copies of all notices and communications with respect
to each Partnership and each LLC alleging the existence of a default by any
Pledgor in the performance of any of its obligations under any Organizational
Agreement. Each Pledgor agrees that it will promptly notify the Agent of any
litigation which is reasonably likely to have a Material Adverse Effect or is
reasonably likely to materially and adversely affect a Partnership or a LLC or
any of their respective properties and of any material adverse change in the
operations, business properties, assets or conditions, financial or otherwise,
of any Pledgor or any Partnership or any LLC. Each Pledgor shall perform when
due all of its obligations under each Organizational Agreement. In the event
any Pledgor fails to pay or perform any obligation arising under any
Organizational Agreement or otherwise related to any Partnership or any LLC, the
Agent may, but need not, pay or perform such obligation at the expense and for
the account of the Pledgors and all funds expended for such purposes shall
constitute Obligations secured hereby which the Pledgors promise to pay to the
Agent together with interest thereon at the Default Rate.
(c) The certificates, if any, at any time evidencing any Pledgor's
interest in any Partnership or LLC shall be delivered to the Agent duly endorsed
in blank for transfer or accompanied by an appropriate assignment or assignments
or an appropriate undated stock power or powers, in every case sufficient to
transfer title thereto. The Agent may, at any time after the occurrence of an
Event of Default at any time when the Obligations are, or have been declared to
be, due and payable in full, cause to be transferred into its name or the name
of its nominee or nominees, any and all of such Collateral. The Agent shall at
all times have the right to exchange the certificates representing such
Collateral for certificates of smaller or larger denominations.
-7-
(d) Each Pledgor has the right to vote its interest in each
Partnership and LLC (except as set forth herein) and there are no
restrictions upon the voting rights associated with, or the transfer of,
any of the Partnership Interest Collateral or LLC Collateral, except as
provided by federal and state laws applicable to the sale of securities
generally, the terms of any Organizational Agreement under which such
person is organized and the terms of this Agreement.
(e) Except as set forth on Schedule C, there are no outstanding
commitments or other obligations of any LLC to issue, and no options,
warrants or other rights of any individual or entity to acquire, any
interest in such LLC.
(f) Each Pledgor further agrees that in the event it shall acquire
any additional interests in any Partnership or LLC, such Pledgor will
forthwith pledge and deposit hereunder or cause to be pledged and deposited
hereunder, all such additional interests.
Section 7. Voting Rights and Dividends. Unless and until an Event of
Default hereunder has occurred and is continuing and thereafter until notified
by the Agent pursuant to Section 9(b) hereof:
(a) Each Pledgor shall be entitled to exercise all voting and/or
consensual powers pertaining to the Collateral of such Pledgor, or any part
thereof, for all purposes not inconsistent with the terms of this Agreement
or any other document evidencing or otherwise relating to any of the
Obligations.
(b) Each Pledgor shall be entitled to receive and retain all
dividends and distributions in respect of the Collateral which are paid in
cash of whatsoever nature; provided, however, that such dividends and
distributions representing:
(i) stock or liquidating dividends or a distribution or return
of capital upon or in respect of the Pledged Securities or any part
thereof or resulting from a split-up, revision or reclassification of
the Pledged Securities or any part thereof or received in addition to,
in substitution of or in exchange for the Pledged Securities or any
part thereof as a result of a merger, consolidation or otherwise; or
(ii) distributions in complete or partial liquidation of any
Partnership or LLC or the interest of such Pledgor therein;
in each case, shall be paid, delivered or transferred, as appropriate,
directly to the Agent immediately upon the receipt thereof by such Pledgor
and may, in the case of cash, be applied by the Agent to the Obligations in
accordance with the terms of the Credit Agreement, whether or not the same
may then be due or otherwise adequately secured and shall, in the case of
all other property, together with any cash received by the Agent and not
applied as aforesaid, be held by the Agent pursuant hereto as part of the
Collateral pledged under and subject to the terms of this Agreement.
-8-
(c) In order to permit each Pledgor to exercise such voting and/or
consensual powers which it is entitled to exercise under subsection (a)
above and to receive such distributions which such Pledgor is entitled to
receive and retain under subsection (b) above, the Agent will, if
necessary, upon the written request of such Pledgor, from time to time
execute and deliver to such Pledgor appropriate proxies and dividend
orders.
Section 8. Power of Attorney. Each Pledgor hereby appoints the Agent, its
nominee, or any other person whom the Agent may designate as such Pledgor's
attorney-in-fact, with full power and authority upon the occurrence and during
the continuation of any Event of Default to ask, demand, collect, receive,
receipt for, xxx for, compound and give acquittance for any and all sums or
properties which may be or become due, payable or distributable in respect of
the Collateral or any part thereof, with full power to settle, adjust or
compromise any claim thereunder or therefor as fully as such Pledgor could
itself do, to endorse or sign the Pledgor's name on any assignments, stock
powers, or other instruments of transfer and on any checks, notes, acceptances,
money orders, drafts, and any other forms of payment or security that may come
into the Agent's possession and on all documents of satisfaction, discharge or
receipt required or requested in connection therewith, and, in its discretion,
to file any claim or take any other action or proceeding, either in its own name
or in the name of such Pledgor, or otherwise, which the Agent deems necessary or
appropriate to collect or otherwise realize upon all or any part of the
Collateral, or effect a transfer thereof, or which may be necessary or
appropriate to protect and preserve the right, title and interest of the Agent
in and to such Collateral and the security intended to be afforded hereby. Each
Pledgor hereby ratifies and approves all acts of any such attorney and agrees
that neither the Agent nor any such attorney will be liable for any such acts or
omissions nor for any error of judgment or mistake of fact or law other than
such person's gross negligence or willful misconduct. The Agent may file one or
more financing statements disclosing its security interest in all or any part of
the Collateral without any Pledgor's signature appearing thereon, and each
Pledgor also hereby grants the Agent a power of attorney to execute any such
financing statements, and any amendments or supplements thereto, on behalf of
such Pledgor without notice thereof to such Pledgor. The foregoing powers of
attorney, being coupled with an interest, are irrevocable until the Obligations
have been fully satisfied and all commitments of the Lenders to extend credit to
or for the account of the Borrower under the Credit Agreement have expired or
otherwise terminated.
Section 9. Defaults and Remedies. (a) The occurrence of any event or the
existence of any condition which is specified as an "Event of Default" under the
Credit Agreement shall constitute an "Event of Default" hereunder.
(b) Upon the occurrence and during the continuation of any Event of
Default at any time when the Obligations are, or have been declared to be, due
and payable in full, all rights of the Pledgors to receive and retain the
distributions which they are entitled to receive and retain pursuant to Section
7(b) hereof shall, at the option of the Agent cease and thereupon become vested
in the Agent which, in addition to all other rights provided herein or by law,
shall then be entitled solely and exclusively to receive and retain the
distributions
-9-
which the Pledgors would otherwise have been authorized to retain pursuant to
Section 7(b) hereof and all rights of the Pledgors to exercise the voting and/or
consensual powers which they are entitled to exercise pursuant to Section 7(a)
hereof shall, at the option of the Agent, cease and thereupon become vested in
the Agent which, in addition to all other rights provided herein or by law,
shall then be entitled solely and exclusively to exercise all voting and other
consensual powers pertaining to the Collateral and to exercise any and all
rights of conversion, exchange or subscription and any other rights, privileges
or options pertaining thereto as if the Agent were the absolute owner thereof
including, without limitation, the right to exchange, at its discretion, the
Collateral or any part thereof upon the merger, consolidation, reorganization,
recapitalization or other readjustment of the respective issuer thereof or upon
the exercise by or on behalf of any such issuer or the Agent of any right,
privilege or option pertaining to the Collateral or any part thereof and, in
connection therewith, to deposit and deliver the Collateral or any part thereof
with any committee, depositary, transfer agent, registrar or other designated
agency upon such terms and conditions as the Agent may determine. In the event
the Agent in good faith believes any of the Collateral constitutes restricted
securities within the meaning of any applicable securities law, any disposition
thereof in compliance with such laws shall not render the disposition
commercially unreasonable.
(c) Upon the occurrence and during the continuation of any Event of
Default, the Agent shall have, in addition to all other rights provided herein
or by law, the rights and remedies of a secured party under the UCC (regardless
of whether the UCC is the law of the jurisdiction where the rights or remedies
are asserted and regardless of whether the UCC applies to the affected
Collateral), and further the Agent may, without demand and without
advertisement, notice, hearing or process of law to the extent permitted by
applicable law, all of which each Pledgor hereby waives to the extent permitted
by applicable law, at any time or times, sell and deliver any or all of the
Collateral held by or for it at public or private sale, at any securities
exchange or broker's board or at any of the Agent's offices or elsewhere, for
cash, upon credit or otherwise, at such prices and upon such terms as the Agent
deems advisable, in its sole discretion. In the exercise of any such remedies,
the Agent may sell the Collateral as a unit even though the sales price thereof
may be in excess of the amount remaining unpaid on the Obligations. Also, if
less than all the Collateral is sold, the Agent shall have no duty to marshal or
apportion the part of the Collateral so sold as between the Pledgors, or any of
them, but may sell and deliver any or all of the Collateral without regard to
which of the Pledgors are the owners thereof. In addition to all other sums due
any Secured Creditor hereunder, each Pledgor shall pay the Secured Creditors all
costs and expenses incurred by the Secured Creditors, including reasonable
attorneys' fees and court costs, in obtaining, liquidating or enforcing payment
of Collateral or the Obligations or in the prosecution or defense of any action
or proceeding by or against any Secured Creditor or any Pledgor concerning any
matter arising out of or connected with this Agreement or the Collateral or the
Obligations including, without limitation, any of the foregoing arising in,
arising under or related to a case under the United States Bankruptcy Code (or
any successor statute). Any requirement of reasonable notice shall be met if
such notice is personally served on or mailed, postage prepaid, to the Pledgors
in accordance with Section 14(b) hereof at least 10 days before the time of sale
or other event giving rise to the requirement of such notice; provided, however,
no notification need be given to a Pledgor if
-10-
such Pledgor has signed, after an Event of Default has occurred, a statement
renouncing any right to notification of sale or other intended disposition. The
Agent shall not be obligated to make any sale or other disposition of the
Collateral regardless of notice having been given. Any Secured Creditor may be
the purchaser at any such sale. Each Pledgor hereby waives all of its rights of
redemption from any such sale. The Agent may postpone or cause the postponement
of the sale of all or any portion of the Collateral by announcement at the time
and place of such sale, and such sale may, without further notice, be made at
the time and place to which the sale was postponed or the Agent may further
postpone such sale by announcement made at such time and place.
EACH PLEDGOR AGREES THAT IF ANY PART OF THE COLLATERAL IS SOLD AT ANY
PUBLIC OR PRIVATE SALE, THE AGENT MAY ELECT TO SELL ONLY TO A BUYER WHO WILL
GIVE FURTHER ASSURANCES, SATISFACTORY IN FORM AND SUBSTANCE TO THE AGENT,
RESPECTING COMPLIANCE WITH THE REQUIREMENTS OF THE FEDERAL SECURITIES ACT OF
1933, AS AMENDED, AND APPLICABLE STATE SECURITIES LAWS, AND A SALE SUBJECT TO
SUCH CONDITION SHALL BE DEEMED COMMERCIALLY REASONABLE.
EACH PLEDGOR FURTHER AGREES THAT IN ANY SALE OF ANY PART OF THE COLLATERAL,
THE AGENT IS HEREBY AUTHORIZED TO COMPLY WITH ANY LIMITATION OR RESTRICTION IN
CONNECTION WITH SUCH SALE AS IT MAY BE ADVISED BY COUNSEL IS NECESSARY IN ORDER
TO AVOID ANY VIOLATION OF APPLICABLE LAW (INCLUDING, WITHOUT LIMITATION,
COMPLIANCE WITH SUCH PROCEDURES AS MAY RESTRICT THE NUMBER OF PROSPECTIVE
BIDDERS AND PURCHASERS AND/OR FURTHER RESTRICT SUCH PROSPECTIVE BIDDERS OR
PURCHASERS TO PERSONS WHO WILL REPRESENT AND AGREE THAT THEY ARE PURCHASING FOR
THEIR OWN ACCOUNT FOR INVESTMENT AND NOT WITH A VIEW TO THE DISTRIBUTION OR
RESALE OF SUCH COLLATERAL ), OR IN ORDER TO OBTAIN ANY REQUIRED APPROVAL OF THE
SALE OR OF THE PURCHASER BY ANY GOVERNMENTAL REGULATORY AUTHORITY OR OFFICIAL,
AND EACH PLEDGOR FURTHER AGREES THAT SUCH COMPLIANCE SHALL NOT RESULT IN SUCH
SALE BEING CONSIDERED OR DEEMED NOT TO HAVE BEEN MADE IN A COMMERCIALLY
REASONABLE MANNER, NOR SHALL THE AGENT BE LIABLE OR ACCOUNTABLE TO ANY PLEDGOR
FOR ANY DISCOUNT ALLOWED BY REASON OF THE FACT THAT SUCH COLLATERAL IS SOLD IN
COMPLIANCE WITH ANY SUCH LIMITATION OR RESTRICTION.
(d) In the event the Agent shall sell or otherwise dispose of all or any
part of the Partnership Interest Collateral or LLC Collateral, each Pledgor
hereby grants the purchaser of such portion of the Partnership Interest
Collateral or LLC Collateral to the fullest extent of its capacity, the ability
(but not the obligation) to become a partner or member in the relevant
Partnership or LLC, as the case may be (subject to the approval of the relevant
Partnership or LLC, as the case may be, in the exercise of its discretion in
accordance with its Organizational Agreement and subject to any requirements of
applicable law), in the place and stead of such Pledgor. To exercise such
right, the purchaser shall give written notice to the relevant Partnership or
LLC, as the case may be, of its election to become a partner or member in such
Partnership or LLC. Following such election and giving of consent by all
necessary partners or members of the relevant Partnership or LLC as to the
purchaser becoming a partner or member, the purchaser shall have the right and
powers and be subject
-11-
to the liabilities of a partner or member under the relevant Organizational
Agreement and the partnership or limited liability company act governing the
Partnership or LLC.
(e) Upon the occurrence and during the continuation of any Event of
Default, in addition to all other rights provided herein or by law, the Agent
shall have the right to cause all or any part of the Partnership Interest
Collateral or LLC Collateral of any of the Pledgors in any one or more of the
Partnerships or LLCs to be redeemed and to cause a withdrawal, in whole or in
part, of any Pledgor from any Partnership or LLC or any of its interest therein.
(f) The powers conferred upon the Agent hereunder are solely to protect
its interest in the Collateral and shall not impose on it any duties to exercise
such powers. The Agent shall be deemed to have exercised reasonable care in the
custody and preservation of the Collateral in its possession if the Collateral
is accorded treatment substantially equivalent to that which the Agent accords
its own property, consisting of similar types securities, it being understood,
however, that the Agent shall have no responsibility for (i) ascertaining or
taking any action with respect to calls, conversions, exchanges, maturities,
tenders or other matters relating to any Collateral, whether or not the Agent
has or is deemed to have knowledge of such matters, (ii) taking any necessary
steps to preserve rights against any parties with respect to any Collateral, or
(iii) initiating any action to protect the Collateral or any part thereof
against the possibility of a decline in market value. This Agreement constitutes
an assignment of rights only and not an assignment of any duties or obligations
of the Pledgors in any way related to the Collateral, and the Agent shall have
no duty or obligation to discharge any such duty or obligation. By its
acceptance hereof, the Agent does not undertake to perform or discharge and
shall not be responsible or liable for the performance or discharge of any such
duties or responsibilities and shall not in any event become a "Substituted
Limited Partner" or words of like import (as defined in the relevant
Organizational Agreement) in the relevant Partnership. Neither any Secured
Creditor, nor any party acting as attorney for any Secured Creditor, shall be
liable hereunder for any acts or omissions or for any error of judgment or
mistake of fact or law other than such person's gross negligence or willful
misconduct.
(g) Failure by the Agent to exercise any right, remedy or option under
this Agreement or any other agreement between any Pledgor and the Agent or
provided by law, or delay by the Agent in exercising the same, shall not operate
as a waiver; and no waiver shall be effective unless it is in writing, signed by
the party against whom such waiver is sought to be enforced and then only to the
extent specifically stated. The rights and remedies of the Secured Creditors
under this Agreement shall be cumulative and not exclusive of any other right or
remedy which the any Secured Creditor may have.
Section 10. Application of Proceeds. The proceeds and avails of the
Collateral at any time received by the Agent upon the occurrence and during the
continuation of any Event of Default shall, when received by the Agent in cash
or its equivalent, be applied by the Agent in reduction of, or held as
collateral security for, the Obligations in accordance with the terms of the
Credit Agreement. The Pledgors shall remain liable to the Secured Creditors for
any deficiency. Any surplus remaining after the full payment and satisfaction
-12-
of the Obligations shall be returned to the Borrower, as agent for Pledgors, or
to whomsoever the Agent reasonably determines is lawfully entitled thereto.
Section 11. Continuing Agreement. This Agreement shall be a
continuing agreement in every respect and shall remain in full force and effect
until all of the Obligations, both for principal and interest, have been fully
paid and satisfied and the commitments of the Secured Creditors to extend credit
to or for the account of the Borrower under the Credit Agreement shall have
expired or otherwise terminated. Upon such termination of this Agreement, the
Agent shall, upon the request and at the expense of the Pledgors, forthwith
release all its liens and security interests hereunder.
Section 12. Primary Security; Obligations Absolute. The lien and
security herein created and provided for stand as direct and primary security
for the Obligations. No application of any sums received by the Agent in
respect of the Collateral or any disposition thereof to the reduction of the
Obligations or any portion thereof shall in any manner entitle any Pledgor to
any right, title or interest in or to the Obligations or any collateral security
therefor, whether by subrogation or otherwise, unless and until all Obligations
have been fully paid and satisfied and all commitments to extend credit
constituting Obligations to the Borrower shall have expired or otherwise
terminated. Each Pledgor acknowledges and agrees that the lien and security
hereby created and provided for are absolute and unconditional and shall not in
any manner be affected or impaired by any acts or omissions whatsoever of any
Secured Creditor or any other holder of any of the Obligations, and without
limiting the generality of the foregoing, the lien and security hereof shall not
be impaired by any acceptance by any Secured Creditor or any other holder of any
of the Obligations of any other security for or guarantors upon any Obligations
or by any failure, neglect or omission on the part of any Secured Creditor or
any other holder of any of the Obligations to realize upon or protect any of the
Obligations or any collateral security therefor. The lien and security hereof
shall not in any manner be impaired or affected by (and the Secured Creditors,
without notice to anyone, are hereby authorized to make from time to time) any
sale, pledge, surrender, compromise, settlement, release, renewal, extension,
indulgence, alteration, substitution, exchange, change in, modification or
disposition of any of the Obligations, or of any collateral security therefor,
or of any guaranty thereof, or of any instrument or agreement setting forth the
terms and conditions pertaining to any of the foregoing. The Secured Creditors
may at their discretion at any time grant credit to the Borrower without notice
to the other Pledgors in such amounts and on such terms as the Secured Creditors
may elect without in any manner impairing the lien and security hereby created
and provided for. In order to realize hereon and to exercise the rights granted
the Secured Creditors hereunder and under applicable law, there shall be no
obligation on the part of any Secured Creditor or any other holder of any of the
Obligations at any time to first resort for payment to the Borrower or any other
Pledgor or to any guaranty of the Obligations or any portion thereof or to
resort to any other collateral security, property, liens or any other rights or
remedies whatsoever, and the Secured Creditors shall have the right to enforce
this Agreement as against any Pledgor or any of its Collateral irrespective of
whether or not other proceedings or steps seeking resort to or realization upon
or from any of the foregoing are pending.
-13-
Section 13. The Agent. In acting under or by virtue of this
Agreement, Agent shall be entitled to all the rights, authority, privileges and
immunities provided in Section 11 of the Credit Agreement, all of which
provisions of said Section 11 are incorporated by reference herein with the same
force and effect as if set forth herein in their entirety. The Agent hereby
disclaims any representation or warranty to the other Secured Creditors or any
other holders of the Obligations concerning the perfection of the liens and
security interests granted hereunder or in the value of the Collateral.
Section 14. Miscellaneous. (a) This Agreement cannot be changed or
terminated orally. This Agreement shall create a continuing lien on and
security interest in the Collateral and shall be binding upon each Pledgor, its
successors and permitted assigns, and shall inure, together with the rights and
remedies of the Secured Creditors hereunder, to the benefit of the Secured
Creditors, and their successors and assigns; provided, however, that no Pledgor
may assign its rights or delegate its duties hereunder without the Agent's prior
written consent. Without limiting the generality of the foregoing, and subject
to the provisions of the Credit Agreement, any Lender may assign or otherwise
transfer any indebtedness held by it secured by this Agreement to any other
person, and such other person shall thereupon become vested with all the
benefits in respect thereof granted to such Lender herein or otherwise.
(b) All communications provided for herein shall be in writing, except as
otherwise specifically provided for hereinabove, and shall be deemed to have
been given or made, if to any Pledgor when given to the Borrower in accordance
with Section 12.8 of the Credit Agreement, or if to any Secured Creditor, when
given to such party in accordance with Section 12.8 of the Credit Agreement.
(c) No Lender or Letter of Credit Issuer shall have the right to
institute any suit, action or proceeding in equity or at law for the foreclosure
or other realization upon any Collateral subject to this Agreement or for the
execution of any trust or power hereof or for the appointment of a receiver, or
for the enforcement of any other remedy under or upon this Agreement; it being
understood and intended that no one or more of the Lenders or Letter of Credit
Issuers shall have any right in any manner whatsoever to affect, disturb or
prejudice the lien and security interest of this Agreement by its or their
action or to enforce any right hereunder, and that all proceedings at law or in
equity shall be instituted, had and maintained by the Agent in the manner herein
provided for the benefit of the Secured Creditors.
(d) In the event that any provision hereof shall be deemed to be invalid
or unenforceable by reason of the operation of any law or by reason of the
interpretation placed thereon by any court, this Agreement shall be construed as
not containing such provision, but only as to such jurisdictions where such law
or interpretation is operative, and the invalidity or unenforceability of such
provision shall not affect the validity of any remaining provision hereof, and
any and all other provisions hereof which are otherwise lawful and valid shall
remain in full force and effect. Without limiting the generality of the
foregoing, in the event that this Agreement shall be deemed to be invalid or
otherwise
-14-
unenforceable with respect to any Pledgor, such invalidity or
unenforceability shall not affect the validity of this Agreement with respect to
the other Pledgors.
(e) In the event the Secured Creditors shall at any time in their
discretion permit a substitution of Pledgors hereunder or a party shall wish to
become a Pledgor hereunder, such substituted or additional Pledgor shall, upon
executing an agreement in the form attached hereto as Schedule F, become a party
hereto and be bound by all the terms and conditions hereof to the same extent as
though such Pledgor had originally executed this Agreement and, in the case of a
substitution, in lieu of the Pledgor being replaced. Any such agreement shall
contain information as to such Pledgor necessary to update Schedules A, B and C
with respect to it. No such substitution shall be effective absent the written
consent of Agent nor shall it in any manner affect the obligations of the other
Pledgors hereunder.
(f) Each Pledgor hereby submits to the non-exclusive jurisdiction of the
United States District Court for the Northern District of Illinois and of any
Illinois state court sitting in Xxxx County, Illinois for purposes of all legal
proceedings arising out of or relating to this Agreement or the transactions
contemplated hereby. Each Pledgor irrevocably waives, to the fullest extent
permitted by law, any objection which it may now or hereafter have to the laying
of the venue of any such proceeding brought in such a court and any claim that
any such proceeding brought in such a court has been brought in an inconvenient
form. Each Pledgor and, by accepting the benefits of this Agreement, each
Secured Creditor hereby irrevocably waives any and all right to trial by jury in
any legal proceeding arising out of or relating to this Agreement or the
transactions contemplated hereby.
(g) This Agreement shall be deemed to have been made in the State of
Illinois and shall be governed by, and construed in accordance with, the laws of
the State of Illinois. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning of any
provision hereof.
(h) This Agreement may be executed in any number of counterparts and by
different parties hereto on separate counterpart signature pages, each
constituting an original, but all together one and the same instrument.
[Signature Pages to Follow]
-15-
IN WITNESS WHEREOF, each Pledgor has caused this Agreement to be duly
executed and delivered as of the date first above written.
"PLEDGORS"
FOUNTAIN VIEW, INC.
FOUNTAIN VIEW HOLDINGS, INC.
LOCOMOTION HOLDINGS, INC.
FOUNTAIN VIEW MANAGEMENT, INC.
SYCAMORE PARK CONVALESCENT HOSPITAL
AIB CORP.
ELMCREST CONVALESCENT HOSPITAL
BRIER OAK CONVALESCENT, INC.
BIA HOTEL CORP.
RIO HONDO NURSING CENTER
FOUNTAINVIEW CONVALESCENT HOSPITAL
ALEXANDRIA CONVALESCENT HOSPITAL, INC.
I.'N O., INC.
SUMMIT CARE CORPORATION
SUMMIT CARE-CALIFORNIA, INC.
SUMMIT CARE-TEXAS NO. 2, INC.
SUMMIT CARE-TEXAS NO. 3, INC.
SUMMIT CARE PHARMACY, INC.
SKILLED CARE NETWORK
SUMMIT CARE TEXAS EQUITY, INC.
SUMMIT CARE MANAGEMENT TEXAS, INC.
SNF PHARMACY, INC.
FV-SCC ACQUISITION CORP.
By /s/ Xxxxxx X. Xxxxxx
----------------------------
Name: Xxxxxx X. Xxxxxx
Title: President
Address:
00000 Xxxx Xxxxxxx Xxxx., Xxxxx 000
Xxx Xxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
-16-
LOCOMOTION THERAPY, INC.
ON-TRACK THERAPY CENTER, INC.
By /s/ Xxxxxx X. Xxxxxx
-------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Chief Executive Officer
Address:
00000 Xxxx Xxxxxxx Xxxx., Xxxxx 000
Xxx Xxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
SUMMIT CARE TEXAS, L.P.
By: Summit Care Management Texas, Inc.,
in its capacity as general partner
By /s/ Xxxxxx Xxxxxx
---------------------------
Xxxxxx Xxxxxx, President
By: Summit Care Texas Equity, Inc.,
in its capacity as limited partner
By /s/ Xxxxxx Xxxxxx
---------------------------
Xxxxxx Xxxxxx, President
Address:
00000 Xxxx Xxxxxxx Xxxx., Xxxxx 000
Xxx Xxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
-17-
Acknowledged and agreed to in Chicago, Illinois as of the date first above
written.
BANK OF MONTREAL, AS AGENT
By /s/ Xxxx X. Xxxxxxx
-----------------------------
Name XXXX X. XXXXXXX
----------------------
Title MANAGING DIRECTOR
----------------------
Address:
000 Xxxxx Xxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxx, XX 00000
Attention: Xxxxxx Xxxxxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
-18-
SCHEDULE A TO PLEDGE AGREEMENT
THE PLEDGED SECURITIES
Percentage
Jurisdiction of No. of Certificate of Issuer's
Name of Pledgor Name of Issuer Incorporation Shares No. Stock
Fountain View, Inc. FV-SCC Acquisition Delaware 100 #1 100%
Corp. (Pre-Merger)
Fountain View, Inc. Summit Care California 100 ____ 100%
Corporation (Post-Merger)
Fountain View, Inc. Locomotion Delaware 1,000 #1 100%
Holdings, Inc.
Fountain View, Inc. Fountain View Delaware 1,000 #1 100%
Holdings, Inc.
Fountain View, Inc. I.'n O., Inc. California 5,000 #2 100%
Fountain View, Inc. On-Track Therapy California 5,000 #2 100%
Center, Inc.
Fountain View, Inc. Sycamore Park California 625 #9 100%
Convalescent Hospital
Fountain View Rio Hondo California 10,000 #4 100%
Holdings, Inc. Nursing Center
Fountain View Fountainview California 30 #3 100%
Holdings, Inc. Convalescent Hospital
Fountain View Fountain View California 2,000 #4 100%
Holdings, Inc. Management, Inc.
Fountain View AIB Corp. California 1,000 #22 100%
Holdings, Inc.
Fountain View Brier Oak California 10,000 #4 100%
Holdings, Inc. Convalescent, Inc.
Fountain View Elmcrest Convalescent California 10,000 #4 100%
Holdings, Inc. Hospital
Fountain View BIA Hotel Corp. California 1,000 #22 100%
Holdings, Inc.
Locomotion Locomotion Delaware 1,000 #1 100%
Holdings, Inc. Therapy, Inc.
FV-SCC Acquisition Summit Care California 6,751,038 #L 0288 99%
Corp. Corporation
(Pre-Merger)
Summit Care Summit Care- California 2,011.53 #19 100%
Corporation California, Inc.
Summit Care Summit Care- Texas 1,000 #2 100%
Corporation Texas No. 2, Inc.
Summit Care Summit Care- Texas 1,000 #1 100%
Corporation Texas No. 3, Inc.
Summit Care Summit Care California 1,000 #3 100%
Corporation Pharmacy, Inc.
Summit Care Summit Care California 1,000 #1 100%
Corporation Texas Equity, Inc.
Summit Care Summit Care Texas 1,000 #1 100%
Corporation Management Texas,
Inc.
SCHEDULE B TO PLEDGE AGREEMENT
PARTNERSHIP INTEREST COLLATERAL
Name of Type of Jurisdiction Percent of
Name of Pledgor Partnership Organization of Organization Ownership
Summit Care Summit Care Texas, L.P. Limited Partnership Texas 1%
Management Texas,
Inc.
Summit Care Texas Summit Care Texas, L.P. Limited Partnership California 99%
Equity, Inc.
SCHEDULE C TO PLEDGE AGREEMENT
LLC COLLATERAL
Percentage of
Equity
Jurisdiction of Interest Owned
Name of Pledgor Name of LLC Organization by Pledgor
SCHEDULE D TO PLEDGE AGREEMENT
ACKNOWLEDGMENT TO COLLATERAL ASSIGNMENT
____________, 199__
_________________________________
_________________________________
_________________________________
_________________________________
Attention:_______________________
Ladies and Gentlemen:
_________________________ ("Pledgor") is a party to that certain Pledge
Agreement dated as of April 16, 1998 (the "Pledge Agreement") in favor of Bank
of Montreal (the "Agent"), a copy of which you have received. Pursuant to the
Pledge Agreement, Pledgor assigned its equity interests in ___________________
(the "Partnership/LLC") as collateral security for, among other things,
indebtedness and obligations of Fountain View, Inc. (the "Borrower") now or from
time to time owing pursuant to that certain Credit Agreement dated as of April
16, 1998 (such Credit Agreement as the same may be amended, modified or restated
from time to time being hereinafter referred to as the "Credit Agreement") among
the Borrower, the Agent, and various other lenders party thereto.
We ask you, by accepting this letter below on behalf of the Partnership/LLC
and as its general partner/manager, to confirm the following:
1. Pledgor is a partner/member in the Partnership/LLC.
2. You consent to the collateral assignment of Pledgor's interest in
the Partnership/LLC to the Agent, notwithstanding anything to the contrary
contained in the Partnership Agreement/Limited Liability Company Articles
of Association and Operating Agreement. This letter will serve to evidence
the consent to this collateral assignment from the Partnership/LLC and its
general partner/manager.
3. All parties required by the terms of the Partnership
Agreement/Limited Liability Company Articles of Association and Operating
Agreement to approve the collateral assignment made by the Pledge Agreement
have done so, and the interest of the Agent by virtue of that assignment
has been reflected on the books and records of the Partnership/LLC.
4. The Partnership/LLC has been formed under the Partnership
Agreement dated as of ______________, 19__/the Articles of Association
dated ______________,
19__, and the Operating Agreement dated as of ________________, 19___ (the
"Organizational Documents"), and the Organizational Documents have not
subsequently been modified or amended and continue in full force and
effect. The Organizational Documents shall not be amended without the
consent of the Agent. The Agent agrees with the Partnership/LLC that the
Agent will not unreasonably withhold its consent to modifications or
amendments to the Organizational Documents which do not adversely affect
the interests of the Secured Creditors identified and defined in the Pledge
Agreement.
5. All payments and distributions due and to become due to Pledgor
pursuant to the Organizational Documents shall continue to be paid directly
to such Pledgor, unless and until the Agent notifies the Partnership/LLC in
writing to do otherwise. If the Agent so notifies the Partnership/LLC, the
Partnership/LLC will immediately cease making such payments and
distributions to the Pledgor and will as soon as possible, but in any event
within 5 days after receiving such notice, remit all such payments and
distributions directly to the Agent at 000 Xxxxx XxXxxxx Xxxxxx, Xxxxxxx,
Xxxxxxxx 00000.
6. By virtue of the Pledge Agreement, the Agent has the right, upon
the occurrence and during the continuation of any Event of Default under
the Credit Agreement, at its option to exercise Pledgor's right (if any) to
withdraw all or any part of such Pledgor's interest in the Partnership/LLC
by so notifying the Partnership/LLC in writing no less than 10 days prior
to the proposed withdrawal date. All payments and distributions due or to
become due under the Organizational Documents to the Pledgor as a result of
such withdrawal shall be remitted directly to the Agent as stated above. If
given at all, the notice provided pursuant to this paragraph may (but need
not) be given concurrently with any notice provided pursuant to the
immediately preceding paragraph.
7. The Pledgor agrees that any such payment to the Agent shall be a
good receipt and acquittance as against it -- that is to say, the
Partnership/LLC should make the payment directly to the Agent and in so
doing, the Partnership/LLC discharges any liability to such Pledgor for
that payment.
8. The terms of the Pledge Agreement prohibit Pledgor from making
any transfer of its interest in the Partnership/LLC without the Agent's
prior written consent. You agree not to honor any such transfer of
Pledgor's interest without the Agent's prior written consent.
The agreements in this letter shall be modified only in a writing signed by
the Agent, the Pledgor and the Partnership/LLC. We acknowledge that the
Partnership/LLC shall be entitled to assume that the Pledge Agreement continues
in full force and effect unless and until the Partnership/LLC receives actual
written notice of a termination of same from the Agent.
Very truly yours,
[Pledgor]
By_________________________________
Its______________________________
Bank of Montreal, as Agent
By_________________________________
Its______________________________
The undersigned, both as the general partner/manager of the Partnership/LLC
and on behalf of the Partnership/LLC, join in this letter to evidence their
acknowledgment and agreement to the same.
[Partnership/LLC]
By_________________________________
Its______________________________
[General Partner/Manager of Partnership]
By_________________________________
Its______________________________
SCHEDULE E TO PLEDGE AGREEMENT
AMENDMENT TO PLEDGE AGREEMENT
Reference is hereby made to that certain Pledge Agreement dated as of April
16, 1998 (as the same may be amended, the "Pledge Agreement"), from Fountain
View, Inc. and the other Pledgors which are signatories thereto to and Bank of
Montreal, as Agent. Capitalized terms not otherwise defined herein shall have
the meaning set forth in the Pledge Agreement.
Subsequent to the Pledgors' delivery of the Pledge Agreement, certain
shares of stock, partnership interests or limited liability company interests
have been added as Collateral under the Pledge Agreement. As a result of such
addition, Schedule A of the Pledge Agreement does not accurately describe the
shares of capital stock and/or Schedule B does not accurately describe the
partnership interests and/or Schedule C does not accurately describe the limited
liability company interests, currently held by the Agent as collateral under the
Pledge Agreement.
The Pledgors now desire to amend Schedule A and/or Schedule B and/or
Schedule C to the Pledge Agreement to reflect such addition, and this instrument
shall constitute an agreement between the Pledgors and the Agent amending the
Pledge Agreement in the respects, but only in the respects, hereinafter set
forth:
1. If an Annex A is attached hereto, Schedule A of the Pledge
Agreement shall be and hereby is amended and as so amended shall be
restated in its entirety to read as Annex A attached hereto.
2. If an Annex B is attached hereto, Schedule B of the Pledge
Agreement shall be and hereby is amended and as so amended shall be
restated in its entirety to read as Annex B attached hereto.
3. If an Annex C is attached hereto, Schedule C of the Pledge
Agreement shall be and hereby is amended and as so amended shall be
restated in its entirety to read as Annex C attached hereto.
4. As collateral security for the Obligations, each Pledgor hereby
grants to the Agent a continuing lien on and security interest in, and
acknowledges and agrees that the Agent has and shall continue to have a
continuing lien on and security interest in, all the shares of capital
stock of each issuer listed and described on Annex A attached hereto (if
attached), all of the partnership interests listed and described on Annex B
attached hereto (if attached), all of the limited liability company
interests listed and described on Annex C attached hereto (if attached) and
all the other properties, rights, interests and privileges comprising the
Collateral (as such term is defined in the Pledge Agreement after giving
effect to this Amendment), to the same extent and with the same force and
effect as if (i) the shares of stock described on
Annex A had originally been included on Schedule A to the Pledge Agreement,
(ii) the partnership interests described on Annex B had been originally
included on Schedule B to the Pledge Agreement and (iii) the limited
liability company interests described on Annex C had been originally
included on Schedule C to the Pledge Agreement. The foregoing granting
clause is in addition to and supplemental of and not in substitution for
the granting clause contained in the Pledge Agreement. Neither the Pledgors
nor the Agent intends by this Amendment to in any way impair or otherwise
affect the lien of the Pledge Agreement on such of the Collateral which was
subject to the Pledge Agreement prior to giving effect to this Amendment.
5. Each Pledgor hereby repeats and reaffirms all of its covenants,
agreements, representations and warranties contained in the Pledge
Agreement, each and all of which shall be applicable to all of the
properties, rights, interests and privileges subject to the lien of the
Pledge Agreement after giving effect to this Amendment. Each Pledgor hereby
certifies that no Event of Default or event which, with notice or lapse of
time or both, would constitute an Event of Default exists under the Pledge
Agreement after giving effect to this Amendment.
6. No reference to this Amendment need be made in any note,
instrument or other document at any time referring to the Pledge Agreement,
any reference in any of such to the Pledge Agreement to be deemed to
reference to the Pledge Agreement as modified hereby.
7. Except as specifically modified hereby, all the terms and
conditions of the Pledge Agreement shall stand and remain unchanged and in
full force and effect.
Pledgor(s):
[NAME OF PLEDGORS]
By_________________________________
Its______________________________
Acknowledged and agreed to as of the date first above written.
Bank of Montreal, as Agent
By_________________________________
Its______________________________
ANNEX A
TO AMENDMENT TO PLEDGE AGREEMENT
THE PLEDGED SECURITIES
Percentage
Jurisdiction of No. of Certificate of Issuer's
Name of Pledgor Name of Issuer Incorporation Shares No. Stock
Fountain View, Inc. FV-SCC Acquisition Delaware 100 #1 100%
Corp. (Pre-Merger)
Fountain View, Inc. Summit Care California 100 ____ 100%
Corporation (Post-
Merger)
Fountain View, Inc. Locomotion Delaware 1,000 #1 100%
Holdings, Inc.
Fountain View, Inc. Fountain View Delaware 1,000 #1 100%
Holdings, Inc.
Fountain View, Inc. I.'n O., Inc. California 5,000 #2 100%
Fountain View, Inc. On-Track Therapy California 5,000 #2 100%
Center, Inc.
Fountain View, Inc. Sycamore Park California 625 #9 100%
Convalescent Hospital
Fountain View Rio Hondo California 10,000 #4 100%
Holdings, Inc. Nursing Center
Fountain View Fountainview California 30 #3 100%
Holdings, Inc. Convalescent Hospital
Fountain View Fountain View California 2,000 #4 100%
Holdings, Inc. Management, Inc.
Fountain View AIB Corp. California 1,000 #22 100%
Holdings, Inc.
Fountain View Brier Oak California 10,000 #4 100%
Holdings, Inc. Convalescent, Inc.
Fountain View Elmcrest Convalescent California 10,000 #4 100%
Holdings, Inc. Hospital
Fountain View BIA Hotel Corp. California 1,000 #22 100%
Holdings, Inc.
Locomotion Holdings, Locomotion Therapy, Delaware 1,000 #1 100%
Inc. Inc.
FV-SCC Acquisition Summit Care California 6,751,038 #L 0288 99%
Corp. Corporation (Pre-
Merger)
Summit Care Summit Care- California 2,011.53 #19 100%
Corporation California, Inc.
Summit Care Summit Care-Texas Texas 1,000 #2 100%
Corporation No. 2, Inc.
Summit Care Summit Care-Texas Texas 1,000 #1 100%
Corporation No. 3, Inc.
Summit Care Summit Care California 1,000 #3 100%
Corporation Pharmacy, Inc.
Summit Care Summit Care Texas California 1,000 #1 100%
Corporation Equity, Inc.
Summit Care Summit Care Texas 1,000 #1 100%
Corporation Management Texas,
Inc.
_______________ ________________ __________ ______ _______ ________
_______________ ________________ __________ ______ _______ ________
ANNEX B
TO AMENDMENT TO PLEDGE AGREEMENT
PARTNERSHIP INTERESTS
Jurisdiction
Name of Type of of Percent of
Name of Pledgor Partnership Organization Organization Ownership
Summit Care Summit Care Texas, L.P. Limited Partnership Texas 1%
Management Texas,
Inc.
Summit Care Texas Summit Care Texas, L.P. Limited Partnership California 99%
Equity, Inc.
_________________ ______________________ _________________ ___________ ________
_________________ ______________________ _________________ ___________ ________
ANNEX C
TO AMENDMENT TO PLEDGE AGREEMENT
Jurisdiction of Percentage of Equity
Name of Pledgor Name of LLC Organization Interest Owned by Pledgor
SCHEDULE F TO PLEDGE AGREEMENT
ASSUMPTION AND SUPPLEMENTAL PLEDGE AGREEMENT
This Agreement dated as of this _____ day of ______________, 199___ from
[NEW PLEDGOR], a __________ corporation/partnership/limited liability company
(the "New Pledgor"), to Bank of Montreal ("BOM") as agent for the Secured
Creditors (defined in the Pledge Agreement hereinafter identified and defined)
(BOM acting as such agent and any successor or successors to BOM in such
capacity being hereinafter referred to as the "Agent");
PRELIMINARY STATEMENTS
X. Xxxxxxxx View, Inc. (the "Borrower") and certain other Pledgors have
executed and delivered to the Agent that certain Pledge Agreement dated as of
April 16, 1998 (such Pledge Agreement, as the same may from time to time be
modified or amended, including supplements thereto which add additional parties
as Pledgors thereunder, being hereinafter referred to as the "Pledge Agreement")
pursuant to which such parties (the "Existing Pledgors") have granted to the
Agent for the benefit of the Secured Creditors a lien on and security interest
in such Existing Pledgors' Collateral (as such term is defined in the Pledge
Agreement) to secure the Obligations (as such term is defined in the Pledge
Agreement);
B. Each Pledgor will benefit, directly and indirectly, from credit and
other financial accommodations extended by the Secured Creditors to the
Borrower.
Now, therefore, for value received, and in consideration of advances made
or to be made, or credit accommodations given or to be given, to the Borrower by
the Secured Creditors from time to time, the New Pledgor hereby agrees as
follows:
1. The New Pledgor acknowledges and agrees that it shall become a
"Pledgor" party to the Pledge Agreement effective upon the date the New
Pledgor's execution of this Agreement and the delivery of this Agreement to the
Agent, and that upon such execution and delivery, all references in the Pledge
Agreement to the terms "Pledgor" or "Pledgors" shall be deemed to include the
New Pledgor. Without limiting the generality of the foregoing, the New Pledgor
hereby repeats and reaffirms all grants (including the grant of a lien and
security interest), covenants, agreements, representations and warranties
contained in the Pledge Agreement as amended hereby, each and all of which are
and shall remain applicable to the Collateral from time to time owned by the New
Pledgor or in which the New Pledgor from time to time has any rights. Without
limiting the foregoing, in order to secure payment of the Obligations, whether
now existing or hereafter arising, the New Pledgor does hereby grant to the
Agent for the benefit of the Secured Creditors, and hereby agrees that the Agent
has and shall continue to have for the benefit of the Secured Creditors a
continuing security interest in, among other things, all of the New Pledgor's
Collateral (as such term is defined in the Pledge Agreement) described in
Section 2 of the Pledge Agreement, each and all of such granting clauses being
incorporated herein by reference
with the same force and effect as if set forth in their entirety except that all
references in such clauses to the Existing Pledgor or any of them shall be
deemed to include references to the New Pledgor. Nothing contained herein shall
in any manner impair the priority of the liens and security interests heretofore
granted in favor of the Agent under the Pledge Agreement.
2. The following information shall be added to Schedules A, B and/or
C to the Pledge Agreement, as applicable:
SCHEDULE A
THE PLEDGED SECURITIES
Percentage
Name and Name of Jurisdiction of No. of Certificate of Issuer's
Location of Issuer Incorporation Shares Class No. Stock
Pledgor
OR
SCHEDULE B
PARTNERSHIP INTEREST COLLATERAL
Name and Location of Name of Type of Jurisdiction Percent of
Pledgor Partnership Organization of Organization Ownership
OR
SCHEDULE C
LLC COLLATERAL
Percentage of Equity
Name and Location of Jurisdiction of Interest Owned by
Pledgor Name of LLC Organization Pledgor
3. The New Pledgor hereby acknowledges and agrees that the Obligations
are secured by all of the Collateral according to, and otherwise on and subject
to, the terms and conditions of the Pledge Agreement to the same extent and with
the same force and effect as if the New Pledgor had originally been one of the
Existing Pledgors under the Pledge Agreement and had originally executed the
same as such an Existing Pledgor.
4. All capitalized terms used in this Agreement without definition shall
have the same meaning herein as such terms have in the Pledge Agreement, except
that any reference to the term "Pledgor" or "Pledgors" and any provision of the
Pledge Agreement providing meaning to such term shall be deemed a reference to
the Existing Pledgors and the New Pledgor. Except as specifically modified
hereby, all of the terms and conditions of the Pledge Agreement shall stand and
remain unchanged and in full force and effect.
5. The New Pledgor agrees to execute and deliver such further instruments
and documents and do such further acts and things as the Agent may deem
necessary or proper to carry out more effectively the purposes of this
Agreement.
6. No reference to this Agreement need be made in the Pledge Agreement or
in any other document or instrument making reference to the Pledge Agreement,
any reference to the Pledge Agreement in any of such to be deemed a reference to
the Pledge Agreement as modified hereby.
7. This Agreement shall be governed by and construed in accordance with
the State of Illinois (without regard to principles of conflicts of law).
[NEW PLEDGOR]
By______________________________
Its___________________________
Acknowledged and agreed to as of the date first above written.
Bank of Montreal, as Agent
By______________________________
Its___________________________
