EXECUTION COPY
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AMENDED AND RESTATED
GUARANTEE AND PLEDGE AGREEMENT
made by
BROOKDALE SENIOR LIVING INC.
and certain of its Subsidiaries
in favor of
XXXXXX COMMERCIAL PAPER INC.,
as Administrative Agent
Dated as of November 15, 2006
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TABLE OF CONTENTS
Page
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SECTION 1 . DEFINED TERMS.....................................................2
1.1 Definitions.....................................................2
1.2 Other Definitional Provisions...................................4
SECTION 2 . GUARANTEE.........................................................5
2.1 Guarantee.......................................................5
2.2 Right of Contribution...........................................6
2.3 Subrogation.....................................................6
2.4 Amendments, etc. with respect to the Borrower Obligations.......7
2.5 Guarantee Absolute and Unconditional............................7
2.6 Reinstatement...................................................9
2.7 Payments........................................................9
SECTION 3 . GRANT OF SECURITY INTEREST........................................9
SECTION 4 . REPRESENTATIONS AND WARRANTIES....................................9
4.1 Representations in Credit Agreement............................10
4.2 Title; No Other Liens..........................................10
4.3 Perfected First Priority Liens.................................10
4.4 Jurisdiction of Organization; Chief Executive Office...........10
4.5 Pledged Equity.................................................10
SECTION 5 . COVENANTS........................................................10
5.1 Delivery of Certificated Securities............................11
5.2 Maintenance of Perfected Security Interest;
Further Documentation..........................................11
5.3 Changes in Name, etc...........................................11
5.4 Notices........................................................11
5.5 Pledged Equity.................................................12
SECTION 6 . REMEDIAL PROVISIONS..............................................13
6.1 Pledged Equity.................................................13
6.2 Proceeds to be Turned Over To Administrative Agent.............14
6.3 Application of Proceeds........................................14
6.4 Code and Other Remedies........................................14
6.5 Private Sale...................................................15
6.6 Deficiency.....................................................15
SECTION 7 . THE ADMINISTRATIVE AGENT.........................................15
7.1 Administrative Agent's Appointment as Attorney-in-Fact, etc....15
7.2 Duty of Administrative Agent...................................17
7.3 Authorization to File Financing Statements.....................17
7.4 Authority of Administrative Agent..............................17
SECTION 8 . MISCELLANEOUS....................................................18
8.1 Amendments in Writing..........................................18
8.2 Notices........................................................18
8.3 No Waiver by Course of Conduct; Cumulative Remedies............18
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8.4 Enforcement Expenses; Indemnification..........................18
8.5 Successors and Assigns.........................................18
8.6 Set-Off........................................................19
8.7 Counterparts...................................................19
8.8 Severability...................................................19
8.9 Section Headings...............................................19
8.10 Integration....................................................19
8.11 GOVERNING LAW..................................................19
8.12 Submission To Jurisdiction; Waivers............................19
8.13 Acknowledgments................................................20
8.14 Additional Pledgors or Guarantors..............................20
8.15 Releases.......................................................20
8.16 WAIVER OF JURY TRIAL...........................................21
Schedules
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Schedule 1 Guarantors
Schedule 2 Pledgors and Description of Pledged Equity
Schedule 3 Notice Addresses of Grantors
Schedule 4 Filings and Other Actions Required to Perfect Security Interests
Schedule 5 Jurisdiction of Organization, Identification Number and Location
of Chief Executive Office
Annexes
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Annex I Assumption Agreement
Annex II Acknowledgment and Consent
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AMENDED AND RESTATED GUARANTEE AND PLEDGE AGREEMENT, dated as of
November 15, 2006, made by each of the signatories hereto (together with any
other entity that may become a party hereto as provided herein, each, a
"Grantor" and collectively, the "Grantors"), in favor of XXXXXX COMMERCIAL PAPER
INC., as administrative agent (in such capacity, the "Administrative Agent") for
the banks and other financial institutions (the "Lenders") from time to time
parties to the Amended and Restated Credit Agreement, dated as of the date
hereof (as amended, supplemented or otherwise modified from time to time, the
"Credit Agreement"), among BROOKDALE SENIOR LIVING INC., a Delaware corporation
(the "Borrower"), the several banks and other financial institutions or entities
from time to time parties to the Credit Agreement (the "Lenders"), XXXXXX
BROTHERS INC. and CITIGROUP GLOBAL MARKETS INC., as joint lead arrangers and as
joint bookrunners (in such capacity, the "Joint Lead Arrangers"), XXXXXXX XXXXX
CREDIT PARTNERS L.P., LASALLE BANK NATIONAL ASSOCIATION and BANC OF AMERICA
SECURITIES LLC, as co-arrangers (the "Co-Arrangers"), LASALLE BANK NATIONAL
ASSOCIATION and BANK OF AMERICA, N.A., as co-syndication agents (in such
capacity, the "Co-Syndication Agents"), XXXXXXX SACHS CREDIT PARTNERS L.P. and
CITICORP NORTH AMERICA, INC., as co-documentation agents (in such capacity, the
"Co-Documentation Agents") and the Administrative Agent.
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, pursuant to the Credit Agreement, the Lenders have severally
agreed to make extensions of credit to the Borrower upon the terms and subject
to the conditions set forth therein;
WHEREAS, the Borrower is a member of an affiliated group of companies
that includes each other Grantor;
WHEREAS, the proceeds of the extensions of credit under the Credit
Agreement will be used in part to enable the Borrower to make valuable transfers
to one or more of the other Grantors in connection with the operation of their
respective businesses;
WHEREAS, certain of the Qualified Counterparties may enter into
Specified Hedge Agreements with one or more of the Grantors;
WHEREAS, the Borrower and the other Grantors are engaged in related
businesses, and each Grantor will derive substantial direct and indirect benefit
from the extensions of credit under the Credit Agreement and from the Specified
Hedge Agreements;
WHEREAS, it is a condition precedent to the obligation of the Lenders
to make their respective extensions of credit to the Borrower under the Credit
Agreement that each of the Subsidiaries of the Borrower listed on Schedule 1
(each, a "Guarantor") guarantee the obligations and liabilities of the Borrower
under the Credit Agreement and the other Loan Documents; and
WHEREAS, it is a condition precedent to the obligation of the Lenders
to make their respective extensions of credit to the Borrower under the Credit
Agreement that each of the Subsidiaries of the Borrower listed on Schedule 2
pledge in favor of the Administrative Agent for the benefit of the Secured
Parties the Pledged Equity (as hereinafter defined) in accordance with the terms
and conditions hereof to secure the obligations and liabilities of the Borrower
under the Credit Agreement and the other Loan Documents;
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NOW, THEREFORE, in consideration of the premises and to induce the
Administrative Agent and the Lenders to enter into the Credit Agreement and to
induce the Lenders to make their respective extensions of credit to the Borrower
thereunder, each Grantor hereby agrees with the Administrative Agent, for the
benefit of the Secured Parties, as follows:
SECTION 1 . DEFINED TERMS
1.1 Definitions. Unless otherwise defined herein, terms defined in the
Credit Agreement and used herein shall have the meanings given to them in the
Credit Agreement and the following terms are used herein as defined in the New
York UCC: Certificated Security, Instrument and Supporting Obligations.
(b) The following terms shall have the following meanings:
"Agreement": this Amended and Restated Guarantee and Pledge Agreement,
as the same may be amended, supplemented or otherwise modified from time to
time.
"Borrower Credit Agreement Obligations": the collective reference to
the unpaid principal of and interest on the Loans and Reimbursement Obligations
and all other obligations and liabilities of the Borrower (including, without
limitation, interest accruing at the then applicable rate provided in the Credit
Agreement after the maturity of the Loans and Reimbursement Obligations and
interest accruing at the then applicable rate provided in the Credit Agreement
after the filing of any petition in bankruptcy, or the commencement of any
insolvency, reorganization or like proceeding, relating to the Borrower, whether
or not a claim for post-filing or post-petition interest is allowed in such
proceeding) to the Administrative Agent or any Lender, whether direct or
indirect, absolute or contingent, due or to become due, or now existing or
hereafter incurred, which may arise under, out of, or in connection with, the
Credit Agreement, this Agreement, or the other Loan Documents, or any Letter of
Credit, or any other document made, delivered or given in connection therewith,
in each case whether on account of principal, interest, reimbursement
obligations, fees, indemnities, costs, expenses or otherwise (including, without
limitation, all fees and disbursements of counsel to the Administrative Agent or
to the Lenders that are required to be paid by the Borrower pursuant to the
terms of any of the foregoing agreements).
"Borrower Hedge Agreement Obligations": the collective reference to all
obligations and liabilities of the Borrower (including, without limitation,
interest accruing at the then applicable rate provided in any Specified Hedge
Agreement after the filing of any petition in bankruptcy, or the commencement of
any insolvency, reorganization or like proceeding, relating to the Borrower,
whether or not a claim for post-filing or post-petition interest is allowed in
such proceeding) to any Qualified Counterparty, whether direct or indirect,
absolute or contingent, due or to become due, or now existing or hereafter
incurred, which may arise under, out of, or in connection with, any Specified
Hedge Agreement or any other document made, delivered or given in connection
therewith, in each case whether on account of principal, interest, reimbursement
obligations, fees, indemnities, costs, expenses or otherwise (including, without
limitation, all fees and disbursements of counsel to the relevant Qualified
Counterparty that are required to be paid by the Borrower pursuant to the terms
of any Specified Hedge Agreement).
"Borrower Obligations": the collective reference to (i) the Borrower
Credit Agreement Obligations, (ii) the Borrower Hedge Agreement Obligations, but
only to the extent that, and only so long as, the Borrower Credit Agreement
Obligations are secured and guaranteed pursuant hereto, and (iii) all other
obligations and liabilities of the Borrower, whether direct or indirect,
absolute or contingent, due or to become due, or now existing or hereafter
incurred, which may arise under, out of, or in connection
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with, this Agreement (including, without limitation, all fees and disbursements
of counsel to the Administrative Agent or to the Secured Parties that are
required to be paid by the Borrower pursuant to the terms of this Agreement).
"Collateral": as defined in Section 3.
"Collateral Account": any collateral account established by the
Administrative Agent as provided in Section 6.2.
"Excluded Assets": the Capital Stock of any Issuer in excess of the
Pledged Equity Percentage of the Capital Stock of such Issuer.
"Foreign Subsidiary": with respect to any Pledgor, any Subsidiary
organized under the laws of any jurisdiction outside the United States of
America.
"Foreign Subsidiary Voting Stock": the voting Capital Stock of any
Foreign Subsidiary.
"Guarantor Hedge Agreement Obligations": the collective reference to
all obligations and liabilities of a Guarantor (including, without limitation,
interest accruing at the then applicable rate provided in any Specified Hedge
Agreement after the filing of any petition in bankruptcy, or the commencement of
any insolvency, reorganization or like proceeding, relating to such Guarantor,
whether or not a claim for post-filing or post-petition interest is allowed in
such proceeding) to any Qualified Counterparty, whether direct or indirect,
absolute or contingent, due or to become due, or now existing or hereafter
incurred, which may arise under, out of, or in connection with, any Specified
Hedge Agreement or any other document made, delivered or given in connection
therewith, in each case whether on account of principal, interest, reimbursement
obligations, fees, indemnities, costs, expenses or otherwise (including, without
limitation, all fees and disbursements of counsel to the relevant Qualified
Counterparty that are required to be paid by such Guarantor pursuant to the
terms of any Specified Hedge Agreement).
"Guarantor Obligations": with respect to any Guarantor, the collective
reference to (i) any Guarantor Hedge Agreement Obligations of such Guarantor,
but only to the extent that, and only so long as, the other Obligations of such
Guarantor are secured and guaranteed pursuant hereto, and (ii) to all
obligations and liabilities of such Guarantor which may arise under or in
connection with this Agreement (including, without limitation, Section 2) or any
other Loan Document to which such Guarantor is a party, in each case whether on
account of guarantee obligations, reimbursement obligations, fees, indemnities,
costs, expenses or otherwise (including, without limitation, all fees and
disbursements of counsel to the Administrative Agent or to any Secured Party
that are required to be paid by such Guarantor pursuant to the terms of this
Agreement or any other Loan Document).
"Guarantors": the collective reference to each Subsidiary of the
Borrower listed on Schedule 1, together with any other entity that may become a
guarantor hereto in accordance with the Credit Agreement.
"Hedge Agreements": as to any Person, all interest rate swaps, currency
exchange agreements, commodity swaps, caps or collar agreements or similar
arrangements entered into by such Person providing for protection against
fluctuations in interest rates, currency exchange rates or commodity prices or
the exchange of nominal interest obligations, either generally or under specific
contingencies. For avoidance of doubt, Hedge Agreements shall include any
interest rate swap or similar agreement that provides for the payment by the
Borrower or any of its Subsidiaries of amounts based
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upon a floating rate in exchange for receipt by the Borrower or such
Subsidiary of amounts based upon a fixed rate.
"Issuers": the collective reference to each issuer of any Pledged
Equity.
"New York UCC": the Uniform Commercial Code as from time to time in
effect in the State of New York.
"Obligations": (i) in the case of the Borrower, the Borrower
Obligations, and (ii) in the case of each Guarantor, its Guarantor Obligations.
"Pledged Equity": with respect to each Pledgor, the Capital Stock
listed opposite such Pledgor's name on Schedule 2, together with any other
shares, certificates, options or rights of any nature whatsoever in the Issuers
that may be issued or granted to, or held by, such Pledgor while this Agreement
is in effect; provided that in no event shall Capital Stock in excess of the
Pledged Equity Percentage of the total outstanding Capital Stock of such Issuer
be pledged hereunder or be included in the term "Pledged Equity".
"Pledged Equity Percentage": the percentage listed opposite each Issuer
on Schedule 2.
"Pledgors": the collective reference to the Borrower, FEBC-ALT
Investors LLC and FEBC-ALT Holdings Inc., together with any other entity that
may become a pledgor hereunder in accordance with the Credit Agreement.
"Proceeds": all "proceeds" as such term is defined in Section
9-102(a)(64) of the Uniform Commercial Code in effect in the State of New York
on the date hereof.
"Qualified Counterparty": with respect to any Specified Hedge
Agreement, any counterparty thereto that, at the time such Specified Hedge
Agreement was entered into, was a Lender or an affiliate of a Lender.
"Secured Parties": the collective reference to the Administrative
Agent, the Joint Lead Arrangers, the Co-Arrangers, the Co-Syndication Agents,
the Co-Documentation Agents, the Lenders (including any Issuing Lender in its
capacity as Issuing Lender) and any Qualified Counterparties; provided that,
solely for the purposes of Section 8.6, "Secured Parties" shall also include any
Affiliate of a Lender.
"Securities Act": the Securities Act of 1933, as amended.
"Specified Hedge Agreement": any Hedge Agreement entered into by (i)
the Borrower or any Guarantor and (ii) any Qualified Counterparty.
1.2 Other Definitional Provisions. (a) The words "hereof," "herein",
"hereto" and "hereunder" and words of similar import when used in this Agreement
shall refer to this Agreement as a whole and not to any particular provision of
this Agreement, and Section and Schedule references are to this Agreement unless
otherwise specified.
(b) The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.
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(c) Where the context requires, terms relating to the Collateral or any
part thereof, when used in relation to a Pledgor, shall refer to such Pledgor's
Collateral or the relevant part thereof.
SECTION 2. GUARANTEE
2.1 Guarantee. (i) The Guarantors hereby, jointly and severally,
unconditionally and irrevocably, guarantee to the Administrative Agent, for the
ratable benefit of the Secured Parties and their respective successors,
indorsees, transferees and assigns, the prompt and complete payment and
performance by the Borrower when due (whether at stated maturity, by
acceleration or otherwise) of the Borrower Obligations (other than, in the case
of each Guarantor, Borrower Obligations arising pursuant to clause (ii) of this
Section 2.1(a) in respect of Guarantor Hedge Agreement Obligations in respect of
which such Guarantor is a primary obligor).
(ii) The Borrower hereby unconditionally and irrevocably
guarantees to the Administrative Agent, for the ratable benefit of the
Secured Parties and their respective successors, endorsees,
transferees and assigns, the prompt and complete payment and
performance by each Guarantor when due (whether at stated maturity, by
acceleration or otherwise) of the Guarantor Hedge Agreement
Obligations of such Guarantor.
(b) Anything herein or in any other Loan Document to the contrary
notwithstanding, (i) the maximum liability of each Guarantor hereunder and under
the other Loan Documents shall in no event exceed the amount which can be
guaranteed by such Guarantor under applicable federal and state laws relating to
fraudulent conveyances or transfers or the insolvency of debtors (after giving
effect to the right of contribution established in Section 2.2) and (ii) the
maximum liability of the Borrower under this Section 2 shall in no event exceed
the amount which can be guaranteed by the Borrower under applicable federal and
state laws relating to fraudulent conveyances or transfers or the insolvency of
debtors (after giving effect to the right of contribution established in Section
2.2).
(c) (i) Each Guarantor agrees that the Borrower Obligations may at any
time and from time to time exceed the amount of the liability of such Guarantor
hereunder without impairing the guarantee of such Guarantor contained in this
Section 2 or affecting the rights and remedies of the Administrative Agent or
any Secured Party hereunder.
(ii) The Borrower agrees that the Guarantor Hedge Agreement
Obligations may at any time and from time to time exceed the amount of
the liability of the Borrower under this Section 2 without impairing
the guarantee of the Borrower contained in this Section 2 or affecting
the rights and remedies of the Administrative Agent or any Secured
Party hereunder.
(d) Subject to Section 8.15 hereof, the guarantee contained in this
Section 2 shall remain in full force and effect until all the Borrower
Obligations (other than Borrower Obligations arising under Section 2.1(a)(ii)
hereof) and the obligations of each Guarantor under the guarantee contained in
this Section 2 (other than Guarantor Obligations in respect of Borrower
Obligations arising under Section 2.1(a)(ii) hereof) shall have been fully and
finally paid in cash, no Letter of Credit shall be outstanding (except to the
extent the same is cash collateralized in accordance with the terms of the
Credit Agreement) and the Commitments shall be terminated, notwithstanding that
from time to time during the term of the Credit Agreement the Borrower may be
free from any Borrower Obligations and any or all of the Guarantors may be free
from their respective Guarantor Hedge Agreement Obligations
(e) No payment made by the Borrower, any of the Guarantors, any other
guarantor or any other Person or received or collected by the Administrative
Agent or any Secured Party from the Borrower, any of the Guarantors, any other
guarantor or any other Person by virtue of any action or
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proceeding or any set-off or appropriation or application at any time or from
time to time in reduction of or in payment of the Borrower Obligations or the
Guarantor Hedge Agreement Obligations shall be deemed to modify, reduce,
release or otherwise affect the liability of the Borrower or any Guarantor
under this Section 2 which shall, notwithstanding any such payment (other than
any payment made by the Borrower or such Guarantor in respect of the Borrower
Obligations or the Guarantor Hedge Agreement Obligations or any payment
received or collected from the Borrower or such Guarantor in respect of the
Borrower Obligations or the Guarantor Hedge Agreement Obligations), remain
liable for the Borrower Obligations and the Guarantor Hedge Agreement
Obligations up to the maximum liability of the Borrower or such Guarantor
hereunder until the Borrower Obligations and the Guarantor Hedge Agreement
Obligations are fully and finally paid in cash, no Letter of Credit shall be
outstanding (except to the extent the same is cash collateralized in
accordance with the terms of the Credit Agreement) and the Commitments are
terminated.
2.2 Right of Contribution. (a) Each Guarantor hereby agrees that to the
extent that a Guarantor shall have paid more than its proportionate share of any
payment made hereunder or the Guarantor Hedge Agreement Obligations, such
Guarantor shall be entitled to seek and receive contribution from and against
any other Guarantor hereunder which has not paid its proportionate share of such
payment.
(b) The Borrower and each Guarantor agrees that to the extent that the
Borrower or any Guarantor shall have paid more than its proportionate share of
any payment made hereunder in respect of any Guarantor Hedge Agreement
Obligation of any other Guarantor, the Borrower or such Guarantor, as the case
may be, shall be entitled to seek and receive contribution from and against the
Borrower and any other Guarantor which has not paid its proportionate share of
such payment.
(c) The Borrower's and each Guarantor's right of contribution under
this Section 2.2 shall be subject to the terms and conditions of Section 2.3.
The provisions of this Section 2.2 shall in no respect limit the obligations and
liabilities of the Borrower or any Guarantor to the Administrative Agent and the
Secured Parties, and the Borrower and each Guarantor shall remain liable to the
Administrative Agent and the Secured Parties for the full amount guaranteed by
the Borrower or such Guarantor hereunder.
2.3 Subrogation. Notwithstanding any payment made by the Borrower or
any Guarantor hereunder or any set-off or application of funds of the Borrower
or any Guarantor by the Administrative Agent or any Secured Party, neither the
Borrower nor any Guarantor shall be entitled to be subrogated to any of the
rights of the Administrative Agent or any Secured Party against the Borrower or
any other Guarantor or any collateral security or guarantee or right of offset
held by the Administrative Agent or any Secured Party for the payment of the
Borrower Obligations or the Guarantor Hedge Agreement Obligations, nor shall the
Borrower or any Guarantor seek or be entitled to seek any contribution or
reimbursement from the Borrower or any other Guarantor in respect of payments
made by the Borrower or such Guarantor hereunder, until all amounts owing to the
Administrative Agent and the Secured Parties by the Borrower on account of the
Borrower Obligations are fully and finally paid in cash, no Letter of Credit
shall be outstanding (except to the extent the same is cash collateralized in
accordance with the terms of the Credit Agreement) and the Commitments are
terminated. If any amount shall be paid to the Borrower or any Guarantor on
account of such subrogation rights at any time when all of the Borrower
Obligations shall not have been fully and finally paid in cash, such amount
shall be held by the Borrower or such Guarantor in trust for the Administrative
Agent and the Secured Parties, segregated from other funds of the Borrower or
such Guarantor, and shall, forthwith upon receipt by the Borrower or such
Guarantor, be turned over to the Administrative Agent in the exact form received
by the Borrower or such Guarantor (duly indorsed by the Borrower or such
Guarantor to the Administrative
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Agent, if required), to be applied against the Borrower Obligations or the
Guarantor Hedge Agreement Obligations, whether matured or unmatured, in
accordance with Section 6.3.
2.4 Amendments, etc. with Respect to the Borrower Obligations. The
Borrower and each Guarantor shall remain obligated hereunder notwithstanding
that, without any reservation of rights against the Borrower or any Guarantor
and without notice to or further assent by the Borrower or any Guarantor, any
demand for payment of any of the Borrower Obligations or Guarantor Hedge
Agreement Obligations made by the Administrative Agent or any Secured Party may
be rescinded by the Administrative Agent or such Secured Party and any of the
Borrower Obligations or Guarantor Hedge Agreement Obligations continued, and the
Borrower Obligations or Guarantor Hedge Agreement Obligations, or the liability
of any other Person upon or for any part thereof, or any collateral security or
guarantee therefor or right of offset with respect thereto, may, from time to
time, in whole or in part, be renewed, extended, amended, modified, accelerated,
compromised, waived, surrendered or released by the Administrative Agent or any
Secured Party (with the consent of such of the Borrower and the Guarantor as
shall be required thereunder), and the Specified Hedge Agreements, the Credit
Agreement and the other Loan Documents and any other documents executed and
delivered in connection therewith may be amended, modified, supplemented or
terminated, in whole or in part, as the Administrative Agent (or the Required
Lenders or all Lenders, as the case may be) may (with the consent of such of the
Borrower and the Guarantor as shall be required thereunder) deem advisable from
time to time, and any collateral security, guarantee or right of offset at any
time held by the Administrative Agent or any Secured Party for the payment of
the Borrower Obligations or Guarantor Hedge Agreement Obligations may (with the
consent of such of the Borrower and the Guarantor as shall be required
thereunder) be sold, exchanged, waived, surrendered or released. Neither the
Administrative Agent nor any Secured Party shall, except to the extent set forth
in, and for the benefit of the parties to, the agreements and instruments
governing such Lien or guarantee, have any obligation to protect, secure,
perfect or insure any Lien at any time held by it as security for the Borrower
Obligations or Guarantor Hedge Agreement Obligations or for the guarantees
contained in this Section 2 or any property subject thereto.
2.5 Guarantee Absolute and Unconditional. (a) Each Guarantor waives any
and all notice of the creation, renewal, extension or accrual of any of the
Borrower Obligations (other than any notice with respect to any Guarantor Hedge
Agreement Obligation with respect to which such Guarantor is a primary obligor
and to which it is entitled pursuant to the applicable Specified Hedge
Agreement) and notice of or proof of reliance by the Administrative Agent or any
Secured Party upon the guarantee contained in this Section 2 or acceptance of
the guarantee contained in this Section 2; the Borrower Obligations, and any of
them, shall conclusively be deemed to have been created, contracted or incurred,
or renewed, extended, amended or waived, in reliance upon the guarantee
contained in this Section 2; and all dealings between the Borrower and any of
the Guarantors, on the one hand, and the Administrative Agent and the Secured
Parties, on the other hand, likewise shall be conclusively presumed to have been
had or consummated in reliance upon the guarantee contained in this Section 2.
Each Guarantor waives diligence, presentment, protest, demand for payment and
notice of default or nonpayment to or upon the Borrower or any of the Guarantors
with respect to the Borrower Obligations (other than any diligence, presentment,
protest, demand or notice with respect to any Guarantor Hedge Agreement
Obligation with respect to which such Guarantor is a primary obligor and to
which it is entitled pursuant to the applicable Specified Hedge Agreement). Each
Guarantor understands and agrees that the guarantee of such Guarantor contained
in this Section 2 shall be construed as a continuing, absolute and unconditional
guarantee of payment without regard to (a) the validity or enforceability of the
Credit Agreement or any other Loan Document, any of the Borrower Obligations or
any collateral security therefor or guarantee or right of offset with respect
thereto at any time or from time to time held by the Administrative Agent or any
Secured Party, (b) any defense, set-off or counterclaim (other than a defense of
payment or performance) which may at any time be available to or be asserted by
the Borrower or any other Person against the Administrative Agent or any Secured
Party, (c) any law or regulation of any jurisdiction, or
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any other event, affecting any term of any Borrower Obligation or the
Administrative Agent's or any Secured Party's rights with respect thereto or
(d) any other circumstance whatsoever (with or without notice to or knowledge
of the Borrower or such Guarantor) which constitutes, or might be construed to
constitute, an equitable or legal discharge of the Borrower for the Borrower
Obligations, or of such Guarantor under the guarantee of such Guarantor
contained in this Section 2, in bankruptcy or in any other instance. When
making any demand hereunder or otherwise pursuing its rights and remedies
hereunder against any Guarantor, the Administrative Agent or any Secured Party
may, but shall be under no obligation to, make a similar demand on or
otherwise pursue such rights and remedies as it may have against the Borrower,
any other Guarantor or any other Person or against any collateral security or
guarantee for the Borrower Obligations or any right of offset with respect
thereto, and any failure by the Administrative Agent or any Secured Party to
make any such demand, to pursue such other rights or remedies or to collect
any payments from the Borrower, any other Guarantor or any other Person or to
realize upon any such collateral security or guarantee or to exercise any such
right of offset, or any release of the Borrower, any other Guarantor or any
other Person or any such collateral security, guarantee or right of offset,
shall not relieve any Guarantor of any obligation or liability under this
Section 2, and shall not impair or affect the rights and remedies, whether
express, implied or available as a matter of applicable law, of the
Administrative Agent or any Secured Party against any Guarantor. For the
purposes hereof "demand" shall include the commencement and continuance of any
legal proceedings.
(b) The Borrower waives any and all notice of the creation, renewal,
extension or accrual of any of the Guarantor Hedge Agreement Obligations and
notice of or proof of reliance by the Administrative Agent or any Secured Party
upon the guarantee by the Borrower contained in this Section 2 or acceptance of
the guarantee by the Borrower contained in this Section 2; the Guarantor Hedge
Obligations, and any of them, shall conclusively be deemed to have been created,
contracted or incurred, or renewed, extended, amended or waived, in reliance
upon the guarantee by the Borrower contained in this Section 2; and all dealings
between the Borrower and any of the Guarantors, on the one hand and the
Administrative Agent and the Secured Parties, on the other hand, with respect to
any Guarantor Hedge Agreement Obligations likewise shall be conclusively
presumed to have been had or consummated in reliance upon the guarantee by the
Borrower contained in this Section 2. The Borrower waives diligence,
presentment, protest, demand for payment and notice of default or nonpayment to
or upon the Borrower with respect to the Guarantor Hedge Agreement Obligations.
The Borrower understands and agrees that the guarantee by the Borrower contained
in this Section 2 shall be construed as a continuing, absolute and unconditional
guarantee of payment without regard to (a) the validity or enforceability of the
Guarantor Hedge Agreement Obligations or any other collateral security therefor
or guarantee or right of offset with respect thereto at any time or from time to
time held by the Administrative Agent or any Secured Party, (b) any defense,
set-off or counterclaim (other than a defense of payment or performance) which
may at any time be available to or be asserted by any Person against the
Administrative Agent or any Secured Party, (c) any law or regulation of any
jurisdiction, or any other event, affecting any term of any Guarantor Hedge
Agreement Obligation or the Administrative Agent's or any Secured Party's rights
with respect thereto or (d) any other circumstance whatsoever (with or without
notice to or knowledge of the Borrower or any Guarantor) which constitutes, or
might be construed to constitute, an equitable or legal discharge of the
applicable Guarantor for the applicable Guarantor Hedge Agreement Obligations,
or of the Borrower under its guarantee contained in this Section 2, in
bankruptcy or in any other instance. When making any demand under this Section 2
or otherwise pursuing its rights and remedies under this Section 2 against the
Borrower, the Administrative Agent or any Secured Party may, but shall be under
no obligation to, make a similar demand on or otherwise pursue such rights and
remedies as it may have against any Guarantor or any other Person or against any
collateral security or guarantee for the Guarantor Hedge Agreement Obligations
or any right of offset with respect thereto, and any failure by the
Administrative Agent or any Secured Party to make any such demand, to pursue
such other rights or remedies or to collect any payments from any Guarantor or
any other Person or to realize upon any such collateral security or guarantee or
to exercise any such right of offset, or any release of any
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Guarantor or any other Person or any such collateral security, guarantee or
right of offset, shall not relieve the Borrower of any obligation or liability
under this Section 2, and shall not impair or affect the rights and remedies,
whether express, implied or available as a matter of applicable law, of the
Administrative Agent or any Secured Party against the Borrower under this
Section 2. For the purposes hereof "demand" shall include the commencement and
continuance of any legal proceedings.
2.6 Reinstatement. The guarantee contained in this Section 2 shall
continue to be effective, or be reinstated, as the case may be and as
applicable, if at any time payment, or any part thereof, of any of the Borrower
Obligations or Guarantor Hedge Agreement Obligations is rescinded or must
otherwise be restored or returned by the Administrative Agent or any Secured
Party upon the insolvency, bankruptcy, dissolution, liquidation or
reorganization of the Borrower or any Guarantor, or upon or as a result of the
appointment of a receiver, intervenor or conservator of, or trustee or similar
officer for, the Borrower or any Guarantor or any substantial part of its
property, or otherwise, all as though such payments had not been made.
2.7 Payments. The Borrower and each Guarantor hereby guarantees that
payments by it hereunder will be paid to the Administrative Agent without
set-off or counterclaim (subject to the terms hereof) (i) in the case of
obligations in respect of Borrower Obligations arising under the Credit
Agreement or any other Loan Document in Dollars at the Payment Office specified
in the Credit Agreement and (ii) in the case of obligations in respect of any
Borrower Hedge Agreement Obligations or any Guarantor Hedge Agreement
Obligations, in the currency and at the place specified in the applicable
Specified Hedge Agreement.
SECTION 3. GRANT OF SECURITY INTEREST
Each Pledgor hereby grants to the Administrative Agent, for the ratable
benefit of the Secured Parties, a security interest in, all of the following
property now owned or at any time hereafter acquired by such Pledgor or in which
such Pledgor now has or at any time in the future may acquire any right, title
or interest (collectively, the "Collateral"), as collateral security for the
prompt and complete payment and performance when due (whether at the stated
maturity, by acceleration or otherwise) of the Pledgor's Obligations:
(a) all Pledged Equity;
(b) all books and records pertaining to the Collateral; and
(c) to the extent not otherwise included, all Proceeds and products of
any and all of the foregoing, all Supporting Obligations in respect of any
of the foregoing and all collateral security and guarantees given by any
Person with respect to any of the foregoing.
Notwithstanding anything herein to the contrary, in no event shall the security
interest granted under this Section 3 attached to any Excluded Assets.
SECTION 4. REPRESENTATIONS AND WARRANTIES
To induce the Administrative Agent and the Lenders to enter into the
Credit Agreement and to induce the Lenders to make their respective extensions
of credit to the Borrower thereunder, each Grantor hereby represents and
warrants for itself in its capacity as Guarantor and/or Pledgor, as applicable,
to the Administrative Agent and each Lender that:
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4.1 Representations in Credit Agreement. In the case of each Grantor
(other than the Borrower), the representations and warranties set forth in
Section 4 of the Credit Agreement as they relate to such Grantor or to the Loan
Documents to which such Grantor is a party, each of which is hereby incorporated
herein by reference, are true and correct, and the Administrative Agent and each
Lender shall be entitled to rely on each of them as if they were fully set forth
herein, provided that, for the purposes of this Section, (i) each reference in
each such representation and warranty to the Borrower's knowledge shall be
deemed to be a reference to such Grantor's knowledge and (ii) each schedule in
each such representation and warranty shall apply with respect to such Grantor.
4.2 Title; No Other Liens. Except for the security interest granted to
the Administrative Agent for the ratable benefit of the Secured Parties pursuant
to this Agreement and the other Liens permitted to exist on the Collateral by
the Credit Agreement, such Pledgor owns each item of the Collateral free and
clear of any and all Liens or claims of others. No financing statement or other
public notice with respect to all or any part of the Collateral is on file or of
record in any public office where required to perfect a security interest in
such Collateral under Article 9 of the New York UCC in effect on the date hereof
or in effect immediately prior to July 1, 2001, except such as have been filed
in favor of the Administrative Agent, for the ratable benefit of the Secured
Parties, pursuant to this Agreement.
4.3 Perfected First Priority Liens. The security interests granted
pursuant to this Agreement (a) upon completion of the filings specified on
Schedule 4 (which, in the case of all filings and other documents referred to on
said Schedule, have been delivered to the Administrative Agent in completed
form) will constitute valid perfected security interests in all of the
Collateral in favor of the Administrative Agent, for the ratable benefit of the
Secured Parties, as collateral security for the Obligations and (b) are prior to
all other Liens on the Collateral in existence on the date hereof.
4.4 Jurisdiction of Organization; Chief Executive Office. On the date
hereof, such Pledgor's jurisdiction of organization, identification number from
the jurisdiction of organization (if any) and the location of such Pledgor's
chief executive office are specified on Schedule 5. Such Pledgor has furnished
to the Administrative Agent a charter, certificate of incorporation or other
organization document and long-form good standing certificate as of a date which
is recent to the date hereof.
4.5 Pledged Equity. (a) The Pledged Equity pledged by such Pledgor
hereunder constitutes the Pledged Equity Percentage of all the issued and
outstanding shares of all classes of the Capital Stock of each Issuer owned by
such Pledgor or, in the case of Foreign Subsidiary Voting Stock, if less, 65% of
the outstanding Foreign Subsidiary Voting Stock of each relevant Issuer.
(b) All of the Pledged Equity has been duly and validly issued and are
fully paid and nonassessable.
(c) Such Pledgor is the record and beneficial owner of, and has good
and marketable title to, the Pledged Equity pledged by it hereunder, free of any
and all Liens or options in favor of, or claims of, any other Person, except the
security interest created by this Agreement.
SECTION 5 . COVENANTS
Each Grantor covenants and agrees for itself in its capacity as
Guarantor and/or Pledgor, as applicable, with the Administrative Agent and the
Secured Parties that, from and after the date of this Agreement until the
Obligations shall have been paid in full, no Letter of Credit shall be
outstanding (except to the extent the same is cash collateralized in accordance
with the Credit Agreement) and the Commitments shall have terminated:
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5.1 Delivery of Certificated Securities. If any amount payable under or
in connection with any of the Collateral shall be or become evidenced by any
Instrument or Certificated Security, such Pledgor shall immediately deliver such
Instrument or Certificated Security to the Administrative Agent, duly indorsed
in a manner reasonably satisfactory to the Administrative Agent, to be held as
Collateral pursuant to this Agreement.
5.2 Maintenance of Perfected Security Interest; Further Documentation.
(a) Such Pledgor shall maintain the security interest created by this Agreement
as a perfected security interest having at least the priority described in
Section 4.3 and shall defend such security interest against the claims and
demands of all Persons whomsoever.
(b) Upon the written request of the Administrative Agent, such Pledgor
will furnish to the Administrative Agent for distribution to the Lenders from
time to time statements and schedules further identifying and describing the
assets and property of such Pledgor and such other reports in connection with
the Collateral as the Administrative Agent may reasonably request, all in
reasonable detail.
(c) At any time and from time to time, upon the written request of the
Administrative Agent, and at the sole expense of such Pledgor, such Pledgor will
promptly and duly execute and deliver, and have recorded, such further
instruments and documents and take such further actions as the Administrative
Agent may reasonably request for the purpose of obtaining or preserving the full
benefits of this Agreement and of the rights and powers herein granted,
including, without limitation, (i) the filing of any financing or continuation
statements under the UCC (or other similar laws) in effect in any jurisdiction
with respect to the security interests created hereby and (ii) in the case of
Pledged Equity, Collateral Accounts and any other relevant collateral, taking,
to the extent required by the Credit Agreement, any actions necessary to enable
the Administrative Agent to obtain "control" (within the meaning of the
applicable Uniform Commercial Code) with respect thereto to the extent
applicable.
5.3 Changes in Name, etc. Such Pledgor will not, except upon 15 days'
prior written notice to the Administrative Agent and delivery to the
Administrative Agent of all additional financing statements and other documents
reasonably requested by the Administrative Agent to maintain the validity,
perfection and priority of the security interests provided for herein:
(i) change its jurisdiction of organization or, in the case of any
Pledgor which is not a registered organization (as defined in the New York
UCC), the location of its chief executive office from that set forth in
Schedule 5; or
(ii) change its name.
5.4 Notices. Such Pledgor will advise the Administrative Agent and the
Lenders promptly, in reasonable detail, of:
(a) any Lien (other than security interests created hereby or Liens
permitted under the Credit Agreement) on any of the Collateral which would
adversely affect the ability of the Administrative Agent to exercise any of
its remedies hereunder; and
(b) the occurrence of any other event which could reasonably be
expected to have a material adverse effect on the aggregate value of the
Collateral or on the security interests created hereby.
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5.5 Pledged Equity. (a) If such Pledgor shall become entitled to
receive or shall receive any certificate (including, without limitation, any
certificate representing a dividend or a distribution in connection with any
reclassification, increase or reduction of capital or any certificate issued
in connection with any reorganization), option or rights in respect of the
Capital Stock of any Issuer, whether in addition to, in substitution of, as a
conversion of, or in exchange for, any shares of the Pledged Equity, or
otherwise in respect thereof (but specifically excluding any Capital Stock of
any Issuer comprising Excluded Assets), such Pledgor shall accept the same as
the agent of the Administrative Agent for the benefit of the Secured Parties,
hold the same in trust for the Administrative Agent for the benefit of the
Secured Parties and deliver the same forthwith to the Administrative Agent in
the exact form received, duly indorsed by such Pledgor to the Administrative
Agent, if required, together with an undated stock power or other applicable
transfer instrument covering such certificate duly executed in blank by such
Pledgor and with, if the Administrative Agent so requests, signature
guaranteed, to be held by the Administrative Agent, subject to the terms
hereof, as additional collateral security for the Obligations. Any sums paid
upon or in respect of the Pledged Equity upon the liquidation or dissolution
of any Issuer shall be paid over to the Administrative Agent to be held by it
hereunder as additional collateral security for the Obligations, and in case
any distribution of capital shall be made on or in respect of the Pledged
Equity, or any property shall be distributed upon or with respect to the
Pledged Equity pursuant to the recapitalization or reclassification of the
capital of any Issuer or pursuant to the reorganization thereof, the property
so distributed shall, unless otherwise subject to a perfected security
interest in favor of the Administrative Agent, be delivered to the
Administrative Agent to be held by it hereunder as additional collateral
security for the Obligations. If any sums of money or property so paid or
distributed in respect of the Pledged Equity shall be received by such
Pledgor, such Pledgor shall, until such money or property is paid or delivered
to the Administrative Agent, hold such money or property in trust for the
Secured Parties, segregated from other funds of such Pledgor, as additional
collateral security for the Obligations. Notwithstanding the foregoing, the
Pledgors shall not be required to pay over to the Administrative Agent or
deliver to the Administrative Agent as Collateral any proceeds of any
liquidation or dissolution of any Issuer, or any distribution of capital or
property in respect of any Pledged Equity, to the extent that (i) such
liquidation, dissolution or distribution, if treated as a Disposition of the
relevant Issuer, would be permitted by the Credit Agreement and (ii) the
proceeds thereof are applied toward prepayment of Loans and reduction of
Commitments to the extent required by the Credit Agreement.
(b) Without the prior written consent of the Administrative Agent, such
Pledgor will not (i) vote to enable, or take any other action to permit, any
Issuer to issue any stock or other equity securities of any nature or to issue
any other securities convertible into or granting the right to purchase or
exchange for any stock or other equity securities of any nature of any Issuer,
unless a pledge of the Pledged Equity Percentage of such additional securities
are delivered to the Administrative Agent, concurrently with the issuance
thereof, to be held by the Administrative Agent as Collateral, (ii) sell,
assign, transfer, exchange, or otherwise dispose of, or grant any option with
respect to, the Pledged Equity or Proceeds thereof (except pursuant to a
transaction expressly permitted by the Credit Agreement), (iii) create, incur or
permit to exist any Lien or option in favor of, or any claim of any Person with
respect to, any of the Pledged Equity or Proceeds thereof, or any interest
therein, except for the security interests created by this Agreement or (iv)
enter into any agreement or undertaking restricting the right or ability of such
Pledgor or the Administrative Agent to sell, assign or transfer any of the
Pledged Equity or Proceeds thereof, except as otherwise permitted by the Credit
Agreement or specified in any consent required in connection with any Pledged
Equity.
(c) In the case of each Grantor which is an Issuer, such Issuer agrees
that (i) it will be bound by the terms of this Agreement relating to the Pledged
Equity issued by it and will comply with such terms insofar as such terms are
applicable to it, (ii) it will notify the Administrative Agent promptly in
writing of the occurrence of any of the events described in Section 5.5(a) with
respect to the Pledged Equity issued by it and (iii) the terms of Sections
6.1(c) and 6.5 shall apply to it, mutatis mutandis, with
13
respect to all actions that may be required of it pursuant to Section 6.1(c)
or 6.5 with respect to the Pledged Equity issued by it.
(d) Each Issuer that is a partnership or a limited liability company
(i) confirms that none of the terms of any equity interest issued by it provides
that such equity interest is a "security" within the meaning of Sections 8-102
and 8-103 of the New York UCC (a "Security"), (ii) agrees that it will take no
action to cause or permit any such equity interest to become a Security, (iii)
agrees that it will not issue any certificate representing any such equity
interest without complying with the terms and conditions of Section 5.5(a)
hereof and (iv) agrees that if, notwithstanding the foregoing, any such equity
interest shall be or become a Security, such Issuer will (and the Pledgor that
holds such equity interest hereby instructs such Issuer to) comply with
instructions originated by the Administrative Agent without further consent by
such Pledgor.
SECTION 6 . REMEDIAL PROVISIONS
6.1 Pledged Equity. (a) Unless an Event of Default shall have occurred
and be continuing and the Administrative Agent shall have given notice to the
relevant Pledgor of the Administrative Agent's intent to exercise its
corresponding rights pursuant to Section 6.1(b), each Pledgor shall be permitted
to receive, subject to Section 5.5, all dividends paid in respect of the Pledged
Equity, to the extent not otherwise prohibited in the Credit Agreement, and to
exercise all voting and corporate and other organizational rights with respect
to the Pledged Equity; provided, however, that no vote shall be cast or
corporate or other organizational right exercised or other action taken which
would result in any violation of any provision of the Credit Agreement, this
Agreement or any other Loan Document.
(b) If an Event of Default shall occur and be continuing and the
Administrative Agent shall give written notice of its intent to exercise such
rights to the relevant Pledgor or Pledgors, (i) the Administrative Agent shall
have the right to receive any and all cash dividends, payments or other Proceeds
paid in respect of the Pledged Equity and make application thereof to the
Obligations in the order set forth in Section 6.3 and (ii) any or all of the
Pledged Equity shall be registered in the name of the Administrative Agent or
its nominee, and the Administrative Agent or its nominee may thereafter
exercise, (x) all voting, corporate or other organizational and other rights
pertaining to such Pledged Equity at any meeting of shareholders of the relevant
Issuer or Issuers or otherwise and (y) any and all rights of conversion,
exchange and subscription and any other rights, privileges or options pertaining
to such Pledged Equity as if it were the absolute owner thereof (including,
without limitation, the right to exchange at its discretion any and all of the
Pledged Equity upon the merger, consolidation, reorganization, recapitalization
or other fundamental change in the corporate or other organizational structure
of any Issuer, or upon the exercise by any Pledgor or the Administrative Agent
of any right, privilege or option pertaining to such Pledged Equity, and in
connection therewith, the right to deposit and deliver any and all of the
Pledged Equity with any committee, depositary, transfer agent, registrar or
other designated agency upon such terms and conditions as the Administrative
Agent may determine), all without liability except to account for property
actually received by it, but the Administrative Agent shall have no duty to any
Pledgor to exercise any such right, privilege or option and shall not be
responsible for any failure to do so or delay in so doing.
(c) Each Pledgor hereby authorizes and instructs each Issuer of any
Pledged Equity pledged by such Pledgor hereunder to (i) comply with any
instruction received by it from the Administrative Agent in writing that (x)
states that an Event of Default has occurred and is continuing and (y) is
otherwise in accordance with the terms of this Agreement, without any other or
further instructions from such Pledgor, and each Pledgor agrees that each Issuer
shall be fully protected in so complying, and (ii) upon receipt of any such
notice of the existence of any Event of Default, unless otherwise expressly
14
permitted hereby, pay any dividends or other payments with respect to the
Pledged Equity directly to the Administrative Agent.
6.2 Proceeds to be Turned Over To Administrative Agent. If an Event of
Default shall occur and be continuing, all Proceeds received by any Pledgor
consisting of cash, checks and Instruments shall be held by such Pledgor in
trust for the Administrative Agent for the benefit of the Secured Parties,
segregated from other funds of such Pledgor, and shall, forthwith upon receipt
by such Pledgor, be turned over to the Administrative Agent in the exact form
received by such Pledgor (duly indorsed by such Pledgor to the Administrative
Agent for the benefit of the Secured Parties, if required). All Proceeds
received by the Administrative Agent hereunder shall be held by the
Administrative Agent in a Collateral Account maintained under its sole dominion
and control and which, to the extent reasonably practicable, bears interest. All
Proceeds while held by the Administrative Agent in a Collateral Account shall
continue to be held as collateral security for all the Obligations and shall not
constitute payment thereof until applied as provided in Section 6.3.
6.3 Application of Proceeds. At such intervals as may be agreed upon by
the Borrower and the Administrative Agent, or, if an Event of Default shall have
occurred and be continuing, at any time at the Administrative Agent's election,
the Administrative Agent may apply all or any part of Proceeds constituting
Collateral, whether or not held in any Collateral Account, and any proceeds of
the guarantee set forth in Section 2, in payment of the Obligations in the
following order:
First , to pay incurred and unpaid fees and expenses of the
Administrative Agent under the Loan Documents;
Second , to the Administrative Agent, for application by it towards
payment of amounts then due and owing and remaining unpaid in respect of the
Obligations, pro rata among the Secured Parties according to the amounts of
the Obligations then due and owing and remaining unpaid to the Secured
Parties;
Third , to the Administrative Agent, for application by it towards
prepayment of the Obligations, pro rata among the Secured Parties according
to the amounts of the Obligations then held by the Secured Parties; and
Fourth , any balance of such Proceeds remaining after the Obligations
shall have been paid in full, no Letters of Credit shall be outstanding
(except to the extent the same are cash collateralized in accordance with
the terms of the Credit Agreement) and the Commitments shall have terminated
shall be paid over to the Borrower or to whomsoever may be lawfully entitled
to receive the same.
6.4 Code and Other Remedies. If an Event of Default shall occur and be
continuing, the Administrative Agent, on behalf of the Secured Parties, may
exercise, in addition to all other rights and remedies granted to them in this
Agreement and in any other instrument or agreement securing, evidencing or
relating to the Obligations, all rights and remedies of a secured party under
the New York UCC or any other applicable law. Without limiting the generality of
the foregoing, the Administrative Agent, without demand of performance or other
demand, presentment, protest, advertisement or notice of any kind (except any
notice required by law referred to below) to or upon any Pledgor or any other
Person (all and each of which demands, defenses, advertisements and notices are
hereby waived), may in such circumstances forthwith collect, receive,
appropriate and realize upon the Collateral, or any part thereof, and/or may
forthwith sell, lease, assign, give option or options to purchase, or otherwise
dispose of and deliver the Collateral or any part thereof (or contract to do any
of the foregoing), in one or more parcels at public or private sale or sales, at
any exchange, broker's board or office of the Administrative Agent or
15
any Secured Party or elsewhere upon such terms and conditions as it may
reasonably deem advisable and at such prices as it may reasonably deem best,
for cash or on credit or for future delivery without assumption of any credit
risk. The Administrative Agent or any Secured Party shall have the right upon
any such public sale or sales, and, to the extent permitted by applicable law,
upon any such private sale or sales, to purchase the whole or any part of the
Collateral so sold, free of any right or equity of redemption, which right or
equity is hereby waived and released. Each Pledgor further agrees, at the
Administrative Agent's request, to assemble the Collateral and make it
available to the Administrative Agent at places which the Administrative Agent
shall reasonably select, whether at such Pledgor's premises or elsewhere. The
Administrative Agent shall apply the net proceeds of any action taken by it
pursuant to this Section 6.4 with respect to any Pledgor's Collateral, after
deducting its actual out-of-pocket costs and expenses incurred in connection
therewith or incidental to the care or safekeeping of any of the Collateral of
such Pledgor, including, without limitation, reasonable attorneys' fees and
disbursements, to the payment in whole or in part of the Obligations of such
Pledgor, in the order specified in Section 6.3, and only after such application
and after the payment by the Administrative Agent of any other amount required
by any provision of applicable law, including, without limitation, Section
9-615(a)(3) of the New York UCC, shall the Administrative Agent deliver the
surplus, if any, to any Pledgor. To the extent permitted by applicable law,
each Pledgor waives all claims, damages and demands it may acquire against the
Administrative Agent or any Secured Party arising out of the exercise by them
of any rights hereunder. If any notice of a proposed sale or other disposition
of Collateral shall be required by law, such notice shall be deemed reasonable
and proper if given at least 10 days before such sale or other disposition.
6.5 Private Sale.(a) (a) Each Pledgor recognizes that the
Administrative Agent may be unable to effect a public sale of any or all the
Pledged Equity, by reason of certain prohibitions contained in the Securities
Act and applicable state securities laws or otherwise, and may be compelled to
resort to one or more private sales thereof to a restricted group of purchasers
which will be obliged to agree, among other things, to acquire such securities
for their own account for investment and not with a view to the distribution or
resale thereof. Each Pledgor acknowledges and agrees that any such private sale
may result in prices and other terms less favorable than if such sale were a
public sale and, notwithstanding such circumstances, agrees that no such private
sale shall be deemed to have been made in a commercially unreasonable manner
solely because it has such a result. The Administrative Agent shall be under no
obligation to delay a sale of any of the Pledged Equity for the period of time
necessary to permit the Issuer thereof to register such securities for public
sale under the Securities Act, or under applicable state securities laws, even
if such Issuer would agree to do so.
(b) Each Pledgor agrees to use commercially reasonable efforts to do or
cause to be done all such other acts as may be necessary to make such sale or
sales of all or any portion of the Pledged Equity pursuant to this Section 6.5
valid and binding and in compliance with any and all other applicable
Requirements of Law.
6.6 Deficiency. Each Pledgor shall remain liable for any deficiency if
the proceeds of any sale or other disposition of the Collateral are insufficient
to pay its Obligations and the fees and disbursements of any attorneys employed
by the Administrative Agent or any Secured Party to collect such deficiency.
SECTION 7. THE ADMINISTRATIVE AGENT
7.1 Administrative Agent's Appointment as Attorney-in-Fact, etc. Each
Pledgor hereby irrevocably constitutes and appoints the Administrative Agent and
any officer or agent thereof, with full power of substitution, as its true and
lawful attorney-in-fact with full irrevocable power and authority in the place
and stead of such Pledgor and in the name of such Pledgor or in its own name,
16
for the purpose of carrying out the terms of this Agreement, to take any and all
appropriate action and to execute any and all documents and instruments which
may be necessary or desirable to accomplish the purposes of this Agreement, and,
without limiting the generality of the foregoing, in connection therewith each
Pledgor hereby gives the Administrative Agent the power and right, on behalf of
such Pledgor, without notice to or assent by such Pledgor, to do any or all of
the following:
(i) in the name of such Pledgor or its own name, or otherwise, take
possession of and indorse and collect any checks, drafts, notes, acceptances
or other instruments for the payment of moneys due under with respect to any
Collateral and file any claim or take any other action or proceeding at law
or in equity in any court of competent jurisdiction or otherwise reasonably
deemed appropriate by the Administrative Agent for the purpose of collecting
any and all such moneys due with respect to any Collateral whenever payable;
(ii) pay or discharge taxes and Liens levied or placed on or threatened
against the Collateral;
(iii) execute, in connection with any sale provided for in Section 6.4
or 6.5, any indorsements, assignments or other instruments of conveyance or
transfer with respect to the Collateral; and
(iv) (1) direct any party liable for any payment under any of the
Collateral to make payment of any and all moneys due or to become due
thereunder directly to the Administrative Agent or as the Administrative
Agent shall direct; (2) ask or demand for, collect, and receive payment of
and receipt for, any and all moneys, claims and other amounts due or to
become due at any time in respect of or arising out of any Collateral; (3)
sign and indorse any assignments, verifications, notices and other documents
in connection with any of the Collateral; (4) commence and prosecute any
suits, actions or proceedings at law or in equity in any court of competent
jurisdiction to collect the Collateral or any portion thereof and to enforce
any other right in respect of any Collateral; (5) defend any suit, action or
proceeding brought against such Pledgor with respect to any Collateral; (6)
settle, compromise or adjust any such suit, action or proceeding and, in
connection therewith, give such discharges or releases as the Administrative
Agent may reasonably deem appropriate; and (7) generally, sell, transfer,
pledge and make any agreement with respect to or otherwise deal with any of
the Collateral as fully and completely as though the Administrative Agent
were the absolute owner thereof for all purposes, and do, at the
Administrative Agent's option and such Pledgor's expense, at any time, or
from time to time, all acts and things which the Administrative Agent
reasonably deems necessary to protect, preserve or realize upon the
Collateral and the Administrative Agent's and the Secured Parties' security
interests therein and to effect the intent of this Agreement, all as fully
and effectively as such Pledgor might do.
Anything in this Section 7.1(a) to the contrary notwithstanding, the
Administrative Agent agrees that it will not exercise any rights under the power
of attorney provided for in this Section 7.1(a) unless an Event of Default shall
have occurred and be continuing.
(b) If any Pledgor fails to perform or comply with any of its
agreements contained herein, the Administrative Agent, at its option, but
without any obligation to do so, may perform or comply, or otherwise cause
performance or compliance, with such agreement, and the Administrative Agent
shall provide the relevant Pledgor with prompt notice of such performance or
compliance.
(c) The expenses of the Administrative Agent incurred in connection
with actions undertaken as provided in this Section 7.1, together with interest
thereon at a rate per annum equal to the
17
rate per annum at which interest would then be payable on past due Base Rate
Loans under the Credit Agreement, from the date of payment by the
Administrative Agent to the date reimbursed by the relevant Pledgor, shall be
payable by such Pledgor to the Administrative Agent on demand.
(d) Each Pledgor hereby ratifies all that said attorneys shall lawfully
do or cause to be done by virtue hereof in accordance with this Agreement. All
powers, authorizations and agencies contained in this Agreement are coupled with
an interest and are irrevocable until this Agreement is terminated and the
security interests created hereby are released.
7.2 Duty of Administrative Agent. The Administrative Agent's sole duty
with respect to the custody, safekeeping and physical preservation of the
Collateral in its possession, under Section 9-207 of the New York UCC or
otherwise, shall be to deal with it in the same manner as the Administrative
Agent deals with similar property for its own account. Neither the
Administrative Agent, any Secured Party nor any of their respective officers,
directors, employees or agents shall be liable for failure to demand, collect or
realize upon any of the Collateral or for any delay in doing so or shall be
under any obligation to sell or otherwise dispose of any Collateral upon the
request of any Pledgor or any other Person or to take any other action
whatsoever with regard to the Collateral or any part thereof. The powers
conferred on the Administrative Agent for the benefit of the Secured Parties
hereunder are solely to protect the Administrative Agent's and the Secured
Parties' interests in the Collateral and shall not impose any duty upon the
Administrative Agent or any Secured Party to exercise any such powers. The
Administrative Agent and the Secured Parties shall be accountable only for
amounts that they actually receive as a result of the exercise of such powers,
and neither they nor any of their officers, directors, employees or agents shall
be responsible to any Pledgor for any act or failure to act hereunder, except
for their own gross negligence or willful misconduct.
7.3 Authorization to File Financing Statements. Pursuant to any
applicable law, each Pledgor authorizes the Administrative Agent to file or
record financing statements and other filing or recording documents or
instruments with respect to the Collateral without the signature of such Pledgor
in such form and in such offices as the Administrative Agent determines
appropriate to perfect the security interests of the Administrative Agent under
this Agreement. Such financing statements may describe the collateral in the
same manner as described in this Agreement or may contain an indication or
description of collateral that describes such property in any other manner as
the Administrative Agent may determine, in its reasonable discretion, is
necessary or prudent to ensure the perfection of the security interest in the
collateral granted to the Administrative Agent in connection herewith. Each
Pledgor hereby ratifies and authorizes the filing by the Administrative Agent of
any financing statement with respect to the Collateral made prior to the date
hereof.
7.4 Authority of Administrative Agent. Each Pledgor acknowledges that
the rights and responsibilities of the Administrative Agent under this Agreement
with respect to any action taken by the Administrative Agent or the exercise or
non-exercise by the Administrative Agent of any option, voting right, request,
judgment or other right or remedy provided for herein or resulting or arising
out of this Agreement shall, as between the Administrative Agent and the Secured
Parties, be governed by the Credit Agreement and by such other agreements with
respect thereto as may exist from time to time among them, but, as between the
Administrative Agent and each Pledgor, the Administrative Agent shall be
conclusively presumed to be acting as agent for the Secured Parties with full
and valid authority so to act or refrain from acting, and no Pledgor shall be
under any obligation, or entitlement, to make any inquiry respecting such
authority. Notwithstanding any other provision herein or in any Loan Document to
the contrary, the only duty or responsibility of the Administrative Agent to any
Qualified Counterparty under this Agreement is the duty to remit to such
Qualified Counterparty any amounts to which it is entitled pursuant to Section
6.3.
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SECTION 8. MISCELLANEOUS
8.1 Amendments in Writing. None of the terms or provisions of this
Agreement may be waived, amended, supplemented or otherwise modified except in
accordance with Section 10.1 of the Credit Agreement. No consent of any
Qualified Counterparty shall be required for any waiver, amendment, supplement
or other modification to this Agreement.
8.2 Notices. All notices, requests and demands to or upon the
Administrative Agent or any Grantor hereunder shall be effected in the manner
provided for in Section 10.2 of the Credit Agreement; provided that any such
notice, request or demand to or upon any Grantor (other than the Borrower) shall
be addressed to such Grantor at its notice address set forth on Schedule 3.
8.3 No Waiver by Course of Conduct; Cumulative Remedies. Neither the
Administrative Agent nor any Secured Party shall by any act (except by a written
instrument pursuant to Section 8.1), delay, indulgence, omission or otherwise be
deemed to have waived any right or remedy hereunder or to have acquiesced in any
Default or Event of Default. No failure to exercise, nor any delay in
exercising, on the part of the Administrative Agent, any right, power or
privilege hereunder shall operate as a waiver thereof. No single or partial
exercise of any right, power or privilege hereunder shall preclude any other or
further exercise thereof or the exercise of any other right, power or privilege.
A waiver by the Administrative Agent of any right or remedy hereunder on any one
occasion shall not be construed as a bar to any right or remedy which the
Administrative Agent would otherwise have on any future occasion. The rights and
remedies herein provided are cumulative, may be exercised singly or concurrently
and are not exclusive of any other rights or remedies provided by applicable
law.
8.4 Enforcement Expenses; Indemnification. (a) Each Guarantor agrees to
pay, or reimburse each Secured Party and the Administrative Agent for, all its
actual costs and expenses incurred in collecting against such Guarantor under
the guarantee contained in Section 2 or otherwise enforcing or preserving any
rights under this Agreement and the other Loan Documents to which such Guarantor
is a party, including, without limitation, the fees and disbursements of one
primary counsel for the Secured Parties.
(b) Each Guarantor agrees to pay, and to save the Administrative Agent
and the Secured Parties harmless from, any and all actual out-of-pocket costs
and expenses incurred with respect to, or resulting from any delay in paying,
any and all stamp, excise, sales or other taxes which may be payable or
determined to be payable with respect to any of the Collateral or in connection
with any of the transactions contemplated by this Agreement.
(c) Each Guarantor agrees to pay, and to save the Administrative Agent
and the Secured Parties harmless from, any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind or nature whatsoever with respect to the execution,
delivery, enforcement, performance and administration of this Agreement to the
extent the Borrower would be required to do so pursuant to Section 10.5 of the
Credit Agreement.
(d) The agreements in this Section shall survive repayment of the
Obligations and all other amounts payable under the Credit Agreement and the
other Loan Documents.
8.5 Successors and Assigns. This Agreement shall be binding upon the
successors and assigns of each Grantor and shall inure to the benefit of the
Administrative Agent and the Secured Parties and their successors and assigns;
provided that no Grantor may assign, transfer or delegate any of its rights or
obligations under this Agreement without the prior written consent of the
Administrative Agent.
19
8.6 Set-Off. Each Guarantor hereby irrevocably authorizes the
Administrative Agent and each Secured Party at any time and from time to time
while an Event of Default shall have occurred and be continuing, without notice
to such Guarantor or any other Guarantor, any such notice being expressly waived
by each Guarantor, to set-off and appropriate and apply any and all deposits
(general or special, time or demand, provisional or final), in any currency, and
any other credits, indebtedness or claims, in any currency, in each case whether
direct or indirect, absolute or contingent, matured or unmatured, at any time
held or owing by the Administrative Agent or such Secured Party to or for the
credit or the account of such Guarantor, or any part thereof in such amounts as
the Administrative Agent or such Secured Party may elect, against and on account
of the obligations and liabilities of such Guarantor to the Administrative Agent
or such Secured Party hereunder and claims of every nature and description of
the Administrative Agent or such Secured Party against such Guarantor, in any
currency, whether arising hereunder, under the Credit Agreement, any other Loan
Document or otherwise, as the Administrative Agent or such Secured Party may
elect, whether or not the Administrative Agent or any Secured Party has made any
demand for payment and although such obligations, liabilities and claims may be
contingent or unmatured. The Administrative Agent and each Secured Party shall
notify such Guarantor promptly of any such set-off and the application made by
the Administrative Agent or such Secured Party of the proceeds thereof, provided
that the failure to give such notice shall not affect the validity of such
set-off and application. The rights of the Administrative Agent and each Secured
Party under this Section are in addition to other rights and remedies
(including, without limitation, other rights of set-off) which the
Administrative Agent or such Secured Party may have.
8.7 Counterparts. This Agreement may be executed by one or more of the
parties to this Agreement on any number of separate counterparts (including by
telecopy), and all of said counterparts taken together shall be deemed to
constitute one and the same instrument.
8.8 Severability. Any provision of this Agreement which is prohibited
or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
8.9 Section Headings. The Section headings used in this Agreement are
for convenience of reference only and are not to affect the construction hereof
or be taken into consideration in the interpretation hereof.
8.10 Integration. This Agreement and the other Loan Documents represent
the agreement of the Grantors, the Administrative Agent and the Secured Parties
with respect to the subject matter hereof and thereof, and there are no
promises, undertakings, representations or warranties by the Administrative
Agent or any Secured Party relative to subject matter hereof and thereof not
expressly set forth or referred to herein or in the other Loan Documents.
8.11 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED
AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
8.12 Submission To Jurisdiction; Waivers. Each of the Grantors hereby
irrevocably and unconditionally:
(a) submits for itself and its property in any legal action or
proceeding relating to this Agreement and the other Loan Documents to which
it is a party, or for recognition and enforcement of any judgment in respect
thereof, to the non-exclusive general jurisdiction of the
20
Courts of the State of New York, the courts of the United States of America
for the Southern District of New York, and appellate courts from any
thereof;
(b) consents that any such action or proceeding may be brought in such
courts and waives any objection that it may now or hereafter have to the
venue of any such action or proceeding in any such court or that such action
or proceeding was brought in an inconvenient court and agrees not to plead
or claim the same;
(c) agrees that service of process in any such action or proceeding may
be effected by mailing a copy thereof by registered or certified mail (or
any substantially similar form of mail), postage prepaid, to such Grantor at
its address referred to in Section 8.2 or at such other address of which the
Administrative Agent shall have been notified pursuant thereto;
(d) agrees that nothing herein shall affect the right to effect service
of process in any other manner permitted by law or shall limit the right to
xxx in any other jurisdiction; and
(e) waives, to the maximum extent not prohibited by applicable law, any
right it may have to claim or recover in any legal action or proceeding
referred to in this Section any special, exemplary, punitive or
consequential damages.
8.13 Acknowledgments. Each of the Grantors hereby acknowledges that:
(a) it has been advised by counsel in the negotiation, execution and
delivery of this Agreement and the other Loan Documents to which it is a
party;
(b) neither the Administrative Agent nor any Secured Party has any
fiduciary relationship with or duty to any such party arising out of or in
connection with this Agreement or any of the other Loan Documents, and the
relationship between the Grantors, on the one hand, and the Administrative
Agent and Secured Parties, on the other hand, in connection herewith or
therewith is solely that of debtor and creditor; and
(c) no joint venture is created hereby or by the other Loan Documents
or otherwise exists by virtue of the transactions contemplated hereby among
the Secured Parties or among the Grantors and the Secured Parties.
8.14 Additional Pledgors or Guarantors. Each Subsidiary of the Borrower
that is required to become a party to this Agreement pursuant to Section 6.11 of
the Credit Agreement shall become a Pledgor or a Guarantor, as applicable, for
all purposes of this Agreement upon execution and delivery by such Subsidiary of
an Assumption Agreement in the form of Annex 1 hereto. Upon the execution and
delivery by any Subsidiary of an Assumption Agreement, the supplemental
schedules attached to such Assumption Agreement shall be incorporated into and
become a part of and supplement the Schedules to this Agreement and each
reference to such Schedules shall mean and be a reference to such Schedules as
supplemented pursuant to each Assumption Agreement.
8.15 Releases. (a) At such time as the Loans, the Reimbursement
Obligations and the other Obligations shall have been paid in full, the
Commitments have been terminated and no Letters of Credit shall be outstanding
(except to the extent the same are cash collateralized in accordance with the
terms of the Credit Agreement), the Collateral shall be released from the Liens
created hereby, and this Agreement and all obligations (other than those
expressly stated to survive such termination) of the Administrative Agent and
each of the Grantors hereunder shall automatically terminate, all without
delivery of any instrument or performance of any act by any party, and all
rights to the Collateral shall
21
revert to the Pledgors, provided that at the sole expense of the applicable
Pledgor following any such termination, the Administrative Agent shall deliver
to such Pledgor any Collateral held by the Administrative Agent hereunder, and
execute and deliver to such Pledgor such documents as such Pledgor shall
reasonably request to evidence such termination.
(b) If any of the Collateral shall be sold, transferred or otherwise
disposed of by any Pledgor in a transaction permitted by the Credit Agreement,
then (i) the Liens created hereby on such Collateral shall automatically
terminate and (ii) the Administrative Agent, at the request and sole expense of
such Pledgor, shall execute and deliver to such Pledgor all releases or other
documents reasonably necessary or desirable to evidence such automatic release
of the Liens created hereby on such Collateral. At the request and sole expense
of the Borrower, (i) a Pledgor shall be released from its obligations hereunder
in the event that all the Capital Stock owned by such Pledgor comprising
Collateral shall be sold, transferred or otherwise disposed of in a transaction
permitted by the Credit Agreement and (ii) a Guarantor shall be released from
its obligations hereunder in the event that all the Capital Stock of such
Guarantor shall be sold, transferred or otherwise disposed of in a transaction
permitted by the Credit Agreement; provided that the Borrower shall have
delivered to the Administrative Agent, at least 10 Business Days prior to the
date of the proposed release, a written request for release identifying the
relevant Pledgor or Guarantor and the terms of the sale or other disposition in
reasonable detail, including the price thereof and any expenses in connection
therewith, together with a certification by the Borrower stating that such
transaction is in compliance with the Credit Agreement and the other Loan
Documents.
(c) No consent of any Qualified Counterparty shall be required for any
release of Collateral or a Pledgor or a Guarantor pursuant to this Section.
8.16 WAIVER OF JURY TRIAL. EACH PLEDGOR AND GUARANTOR AND, BY
ACCEPTANCE OF THE BENEFITS HEREOF, EACH AGENT AND EACH SECURED PARTY, HEREBY
IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR
PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AND FOR ANY
COUNTERCLAIM THEREIN.
IN WITNESS WHEREOF, each of the undersigned has caused this Guarantee
and Pledge Agreement to be duly executed and delivered as of the date first
above written.
BROOKDALE SENIOR LIVING INC.
By: /s/ R. Xxxxxxx Xxxxx
----------------------------------
Name: R. Xxxxxxx Xxxxx
Title:Executive Vice President and
Chief Financial Officer
BROOKDALE LIVING COMMUNITIES, INC.
By: /s/ R. Xxxxxxx Xxxxx
----------------------------------
Name: R. Xxxxxxx Xxxxx
Title:Vice President
AMERICAN RETIREMENT CORPORATION
By: /s/ R. Xxxxxxx Xxxxx
----------------------------------
Name: R. Xxxxxxx Xxxxx
Title:Vice President
FEBC-ALT INVESTORS LLC
By: /s/ R. Xxxxxxx Xxxxx
----------------------------------
Name: R. Xxxxxxx Xxxxx
Title:Vice President
FEBC-ALT HOLDINGS INC.
By: /s/ R. Xxxxxxx Xxxxx
----------------------------------
Name: R. Xxxxxxx Xxxxx
Title:Vice President
ALTERRA HEALTHCARE CORPORATION
By: /s/ R. Xxxxxxx Xxxxx
----------------------------------
Name: R. Xxxxxxx Xxxxx
Title:Vice President
AGREED AND ACCEPTED:
XXXXXX COMMERCIAL PAPER INC.,
as Administrative Agent
By: /s/ Xxxxxxx X. Xxxxxxx
-------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title:Authorized Signatory
