[EXECUTION COPY]
Exhibit 10.3
CERTIFICATE PLEDGE AGREEMENT
----------------------------
THIS CERTIFICATE PLEDGE AGREEMENT (together with all amendments,
supplements and other modifications made from time to time, this "Pledge
Agreement"), dated as of March 6, 1998, made by BROOKDALE LIVING COMMUNITIES OF
ILLINOIS - HV, INC., a Delaware corporation (the "Pledgor"), in favor of THE
HARBOR VILLAGE BUSINESS TRUST, a Delaware business trust (the "Pledgee"),
WILMINGTON TRUST COMPANY, a Delaware banking corporation, as valuation agent (in
such capacity, the "Valuation Agent").
W I T N E S S E T H:
-------------------
WHEREAS, as a condition to the occurrence of the Acquisition Date under the
Lease dated as of the date hereof (together with all amendments and other
modifications, if any, from time to time thereafter made thereto, the "Lease"),
among the Pledgor, between Lessee and the Pledgee, as Lessor, the Pledgor is
required to execute and deliver this Pledge Agreement;
WHEREAS, the Pledgor has duly authorized the execution, delivery and
performance of this Pledge Agreement; and
WHEREAS, it is in the best interests of the Pledgor to execute this Pledge
Agreement inasmuch as the Pledgor will derive substantial benefits from the
transactions contemplated by the Lease;
NOW, THEREFORE, for good and valuable consideration the receipt of which is
hereby acknowledged, the parties hereto agree as follows:
Certificate Pledge Agreement
ARTICLE I
DEFINITIONS
SECTION 1.1 Certain Terms. Capitalized terms used but not otherwise
defined in this Pledge Agreement have the respective meanings specified in
Appendix 1 to the Lease; and the rules of interpretation set forth in Appendix 1
to the Lease shall apply to this Pledge Agreement.
ARTICLE II
PLEDGE
SECTION 2.1. Grant of Security Interest. The Pledgor hereby pledges,
hypothecates, assigns, charges, mortgages, delivers, and transfers to the
Pledgee and hereby grants to the Pledgee a continuing security interest in, all
of its right, title and interest in, to and under the following property (the
"Collateral"):
(a) Certificate A, a copy of which is annexed hereto as Schedule I,
and any replacement Certificate A to be provided pursuant to Section 7.13
hereof; and
(b) all payments made with respect to and all interest and proceeds
(as such term is defined in the Uniform Commercial Code as in effect in the
State of Ohio (the "U.C.C.")) of any of the foregoing.
SECTION 2.2 Security for Obligations. The security interest granted by the
Pledgor hereunder secures the satisfaction in full of all the Pledgor's payment
and non-payment obligations to Pledgee under the Operative Documents, including,
without limitation, the obligation to pay SELCO Basic Rent, Lessor Basic Rent,
Equity Balance and Supplemental Rent (to the extent the Lessor is entitled to
receive Supplement Rent) (collectively, the "Obligations").
SECTION 2.3 Delivery of Pledged Property. All certificates or instruments
representing or evidencing any Collateral, shall be delivered to and held by or
on behalf of the Pledgee pursuant hereto, shall be in suitable form for transfer
by delivery, and shall be accompanied by all necessary instruments of transfer
or assignment, duly executed in blank, all in form and substance satisfactory to
the Pledgee.
SECTION 2.4 Continuing Security Interest. This Pledge Agreement shall
create a continuing security interest in the Collateral and shall
-2-
Certificate Pledge Agreement
(a) remain in full force and effect until payment in full of all
Obligations, payment in full of the Equity Balance or the Pledgee takes
possession of the Collateral in accordance with Section 6.1,
(b) be binding upon the Pledgor and its successors, transferees and
assigns, and
(c) inure to the benefit of the Pledgee.
Upon the payment in full of all Obligations or payment in full of the Equity
Balance, the security interest granted herein shall terminate and all rights to
the Collateral (including all interest or income paid in respect thereto) shall
revert to the Pledgor. Upon any such termination, the Pledgee will, at the sole
expense of the Pledgor, and upon written instruction of the Pledgor, deliver to
the Pledgor, without any representations, warranties or recourse of any kind
whatsoever, all certificates and instruments representing or evidencing all
Collateral pledged by the Pledgor hereunder (including all such interest or
income), together with all other Collateral held by the Pledgee hereunder and
execute and deliver to the Pledgor such documents as the Pledgor shall
reasonably request to evidence such termination.
SECTION 2.5 Security Interest Absolute. All rights of the Pledgee and the
security interests granted to the Pledgee hereunder, and all obligations of the
Pledgor hereunder, shall be absolute and unconditional, irrespective of
(a) any lack of validity or enforceability of the Pledge Agreement or
any other Operative Document,
(b) the failure of the Pledgee to assert any claim or demand or to
enforce any right or remedy against the Pledgor or any other Person under
the provisions of any Operative Document or otherwise,
(c) any change in the time, manner or place of payment of, or in any
other term of, all or any of obligations the Obligations or any other
extension, compromise or renewal of any Obligation,
(d) any reduction, limitation, impairment or termination of any
Obligations for any reason, including any claim of waiver, release,
surrender, alteration or compromise, and shall not be subject to (and the
Pledgor hereby waives any right to or claim of) any defense or setoff,
counterclaim, recoupment or termination whatsoever by reason of the
invalidity, illegality, nongenuineness, irregularity, compromise,
unenforceability of, or any other event or occurrence affecting, the
Pledgee or otherwise,
(e) any amendment to, rescission, waiver, or other modification of,
or any consent to departure from, any of the terms of the any Operative
Document,
-3-
Certificate Pledge Agreement
(f) any addition, exchange, release, surrender or non-perfection of
any Collateral, or any amendment to or waiver or release of or addition to
or consent to departure from any guaranty, for any of the Obligations, or
(g) any other circumstances which might otherwise constitute a
defense available to, or a legal or equitable discharge of, the Pledgor or
Pledgee or any other Person.
SECTION 2.6 Waiver of Subrogation. The Pledgor hereby irrevocably waives
any claim or other rights which it may now or hereafter acquire against the
Pledgee or any other Person that arise from the existence, payment, performance
or enforcement of the Pledgor's obligations under this Pledge Agreement or any
other Operative Document, including any right of subrogation, reimbursement,
exoneration, or indemnification, any right to participate in any claim or remedy
against the Pledgee or any other Person or any collateral which the Pledgee now
has or hereafter acquires, whether or not such claim, remedy or right arises in
equity, or under contract, statute or common law, including the right to take or
receive from the Pledgee or any other Person, directly or indirectly, in cash or
other property or by set-off or in any manner, payment or security on account of
such claim or other rights. If any amount shall be paid to the Pledgor in
violation of the preceding sentence and the Obligations shall not have been paid
in cash in full, such amount shall be deemed to have been paid to the Pledgor
for the benefit of, and held in trust for, the Pledgee, and shall forthwith be
paid to the Pledgee to be credited and applied upon the Obligations, whether
matured or unmatured. The Pledgor acknowledges that it will receive direct and
indirect benefits from the financing arrangements contemplated by the Pledge
Agreement and that the waiver set forth in this Section is knowingly made in
contemplation of such benefits.
SECTION 2.7 Valuation of Collateral.
(a) The Valuation Agent shall determine every two (2) weeks (the date
of such valuation being a "Valuation Date") (i) the amount of the
Certificate A (inclusive of principal and accreted/compounded interest) as
of the Valuation Date (the "Certificate Value") and (ii) by obtaining
values from the issuer of the Certificate A and at least one reputable
broker of certificates of deposit, the fair market sales value of the
Certificate A if sold prior to maturity as of the Valuation Date as the
higher of two values received (the "Sales Value"). Each such valuation by
the Valuation Agent shall be binding on the Pledgor and the Pledgee, absent
manifest error. On any Valuation Date, in the event that the Sales Value
plus any collateral previously delivered by the Pledgor pursuant to Section
2.7(b) is less than the Certificate Value (a "Deficiency"), the Valuation
Agent shall give written notice of such Deficiency (a "Collateral Notice")
within two (2) Business Days after the Valuation Date via (i) overnight
mail or hand delivery and (ii) facsimile transmission, to each of the
Pledgee, the Pledgor and a third party (the "Custodian") to be reasonably
agreed to by the parties hereto that will establish the
-4-
Certificate Pledge Agreement
Collateral Account (as hereinafter defined) on behalf of the Pledgee and
Key Corporate Capital Inc.
(a) The Pledgor shall promptly, but in any event with five (5)
Business Days after receipt of a Collateral Notice (facsimile confirmation
receipt by the Valuation Agent being deemed receipt of notice by the
Pledgor and the Pledgee), wire transfer funds in U.S. Dollars to a
collateral account to be specified by the Pledgee to the Pledgor (the
"Collateral Account") in an amount equal to or exceeding the Deficiency.
The Pledgor's obligation to transfer such funds is hereinafter referred to
as the "Collateral Requirement." The Pledgor's failure to provide such
additional Collateral shall result in Pledgee having the immediate right to
all Collateral and all funds in the Collateral Account in accordance with
Section 6.1.
(b) On any Valuation Date, in the event that the Sales Value plus any
collateral previously delivered pursuant to Section 2.7(b), equals or
exceeds the Certificate Value (such excess being referred to herein as the
"Excess") and no Event of Default described in Section 6.1 or Default
relating thereto shall have occurred and be continuing, the Valuation Agent
shall provide written notice of such Excess (the "Excess Notice") within
two (2) Business Days after the Valuation Date in the manner described in
Section 2.7(a) to each of the Pledgor, the Pledgee and the Custodian. The
Custodian shall be directed thereafter to return the Excess to the Pledgor.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.1 Warranties, etc. The Pledgor represents and warrants for
itself unto the Pledgee as at the date of each pledge and delivery hereunder by
the Pledgor to the Pledgee of any Collateral pledged by the Pledgor pursuant to
this Pledge Agreement as follows:
(a) Ownership, No Liens, etc. The Pledgor is the legal and beneficial
owner of, and has good and valid title to (and has full right and authority
to pledge and assign) the Collateral, free and clear of all Liens, security
interests, options, or other charges or encumbrances, except any Lien or
security interest granted pursuant hereto in favor of the Pledgee.
(b) Valid Security Interest. The delivery of the Collateral to the
Pledgee effective to create a valid, perfected, first priority security
interest in such Collateral and all proceeds thereof, securing the
Obligations. No filing or other action will be necessary to perfect or
protect such security interest.
-5-
Certificate Pledge Agreement
(c) Authorization, Approval, etc. No authorization, approval, or
other action by, and no notice to or filing with, any governmental
authority, regulatory body or any other Person is required either
(i) for the pledge by the Pledgor of any Collateral pursuant to
this Pledge Agreement or for the execution, delivery, and performance
of this Pledge Agreement by the Pledgor, or
(ii) for the exercise by the Pledgee of any of the rights
provided for in this Pledge Agreement, or, except as may be required
in connection with a disposition of any Collateral by laws affecting
the offering and sale of securities generally, the remedies in respect
of the Collateral pursuant to this Pledge Agreement.
ARTICLE IV
COVENANTS
SECTION 4.1 Certain Covenants.
(a) The Pledgor covenants and agrees that, so long as any portion of the
Obligations shall remain unpaid or unfulfilled:
(i) except as permitted by the Operative Documents, it will not
sell, assign, transfer, pledge, or encumber in any other manner the
Collateral owned by it (except in favor of the Pledgee hereunder);
(ii) the Pledgor will warrant and defend the right and title herein
granted unto the Pledgee in and to the Collateral (and all right, title,
and interest represented by the Collateral) against the claims and demands
of all Persons whomsoever;
(iii) at any time, and from time to time, at the expense of the
Pledgor, the Pledgor will promptly execute and deliver all further
instruments, and take all further action, that the Pledgee may reasonably
request, in order to perfect and protect any security interest granted or
purported to be granted hereby or to enable the Pledgee to exercise and
enforce its rights and remedies hereunder with respect to any Collateral.
(b) Each of the Pledgee and the Pledgor covenants to the Valuation Agent
that they will provide the Valuation Agent with prompt written notice of an
Event of Default
-6-
Certificate Pledge Agreement
that occurs during the term of this Pledge Agreement and of any cure of any
such Event of Default and notice of a failure of the Pledgor to satisfy the
Collateral Requirement.
ARTICLE V
THE PLEDGEE
SECTION 5.1 Pledgee Appointed Attorney-in-Fact. The Pledgor hereby
irrevocably appoints the Pledgee the Pledgor's attorney-in-fact, with full
authority in the place and stead of the Pledgor and in the name of the Pledgor
or otherwise, from time to time upon the occurrence and during the continuance
of any Event of Default described in Section 6.1, to take any action and to
execute any instrument which the Pledgee may deem necessary or advisable to
accomplish the purposes of this Pledge Agreement, including without limitation:
(a) to ask, demand, collect, xxx for, recover, compromise, receive and
give acquittance and receipts for moneys due and to become due under or in
respect of any of the Collateral;
(b) to receive, endorse, and collect any drafts or other instruments,
documents and chattel paper, in connection with clause (a) above; and
(c) to file any claims or take any action or institute any proceedings
which the Pledgee may deem necessary or desirable for the collection of any
of the Collateral or otherwise to enforce the rights of the Pledgee with
respect to any of the Collateral.
The Pledgor hereby acknowledges, consents and agrees that the power of attorney
granted pursuant to this Section is irrevocable and coupled with an interest.
SECTION 5.2 Pledgee May Perform. If the Pledgor fails to perform any
agreement contained herein, the Pledgee may itself perform, or cause performance
of, such agreement, and the expenses of the Pledgee incurred in connection
therewith shall be payable by the Pledgor pursuant to Section 6.3.
ARTICLE VI
REMEDIES
SECTION 6.1 Certain Remedies. If any Event of Default shall have occurred,
other than an Event of Default caused by an "Event of Default" pursuant to the
following provisions of each of the Nomura Loan Agreement and the Mezzanine Loan
Agreement which was caused
-7-
Certificate Pledge Agreement
solely by the Pledgee and not caused directly, indirectly or proximately by an
act or omission of the Pledgor: (i) Section 7.1(ix) (solely as to
representations and warranties of the Pledgee as of the date hereof pursuant to
Sections 4.1(a)(A), (B) or (C), and Sections 4.1(b)(A), (B), (C), (G), (H), (I),
(J), (L), (N), (Z), (AA) or (AJ) of each of the Nomura Loan Agreement and the
Mezzanine Loan Agreement, (ii) Section 7.1(x) (solely as to the Pledgee), (iii)
Section 7.1(xi) (solely as to the Pledgee), (iv) Section 7.1(xiii) (solely as to
the Pledgee), (v) Section 7.1(xv) (solely as to Section 5.1(a)(U)) or (vi)
Section 7.1(xvi) (solely as to Section 5.1(a)(T)) or if the Pledgor has failed
to comply with the Collateral Requirement in accordance with Section 2.7 or if
the Pledgor, Pledgee, the Valuation Agent and the Custodian have not entered
into the Amendment (as hereinafter defined) (which failure may be waived by the
Pledgee with the consent of Key Corporate Capital Inc.):
(a) The Pledgee may exercise in respect of the Collateral, in
addition to other rights and remedies provided for herein or otherwise
available to it, all the rights and remedies of a secured party on default
under the U.C.C. (whether or not the U.C.C. applies to the affected
Collateral) and also may, without notice except as specified below, sell or
redeem, as applicable, the Collateral or any part thereof (to the extent
the Collateral can be used to satisfy the obligations of the Pledgor
pursuant to Section 2.2 of this Pledge Agreement), for cash, on credit or
for future delivery, and upon such other terms as the Pledgee may deem
commercially reasonable. Further, the Pledgee may distribute the Collateral
in any manner it deems appropriate upon seizing the Collateral.
(b) The Pledgee may (to the extent the Collateral is necessary to
satisfy the Pledgor's Obligations pursuant to Section 2.2 hereof):
(i) transfer all or any part of the Collateral into the name
of its nominee, with or without disclosing that such Collateral is
subject to the lien and security interest hereunder,
(ii) notify the parties obligated on any of the Collateral to
make payment to the Pledgee of any amount due or to become due
thereunder,
(iii) enforce collection of any of the Collateral by suit or
otherwise, and surrender, release or exchange all or any part thereof,
or compromise or extend or renew for any period (whether or not longer
than the original period) any obligations of any nature of any party
with respect thereto,
(iv) endorse any checks, drafts, or other writings in the
Pledgor's name to allow collection of the Collateral,
(v) take control of any proceeds of the Collateral, and
-8-
Certificate Pledge Agreement
(vi) execute (in the name, place and stead of the Pledgor)
endorsements, assignments, instruments of conveyance or
transfer with respect to all or any of the Collateral.
SECTION 6.2 Securities Laws. If the Pledgee shall exercise its right to
sell all or any of the Collateral pursuant to Section 6.1, the Pledgor agrees
that, upon request of the Pledgee, the Pledgor will, at its own expense do or
cause to be done all such acts and things as may be necessary to make such sale
of the Collateral owned by the Pledgor or any part thereof valid and binding and
in compliance with applicable law.
SECTION 6.3 Indemnity and Expenses. The Pledgor hereby jointly and
severally indemnifies and holds harmless the Pledgee and the Valuation Agent
from and against any and all claims, losses, and liabilities arising out of or
resulting from this Pledge Agreement (including enforcement of this Pledge
Agreement) except claims, issues or liabilities of the Valuation Agent resulting
from the Valuation Agent's gross negligence or wilful misconduct. Upon demand,
the Pledgor will pay to the Pledgee and the Valuation Agent the amount of any
and all reasonable expenses, including the reasonable fees and disbursements of
its counsel and of any experts and agents, which the Pledgee or the Valuation
Agent may incur in connection with:
(a) the administration of this Pledge Agreement;
(b) the custody, preservation, use, or operation of, or the sale of,
collection from, or other realization upon, any of the Collateral;
(c) the exercise or enforcement of any of its rights hereunder; or
(d) the failure by the Pledgor to perform or observe any of the
provisions hereof.
SECTION 6.4 Fees of Valuation Agent. The Pledgor agrees to pay the
Valuation Agent fees in accordance with the terms of the Nomura Loan Agreement
and the Mezzanine Loan Agreement.
ARTICLE 7.
THE VALUATION AGENT
SECTION 7.1 Successor Valuation Agent. At any time, the Pledgor shall have
the right to appoint a successor valuation agent to replace Wilmington Trust
Company (or any successor Valuation Agent) as the Valuation Agent hereunder, so
long as such successor valuation agent is
-9-
Certificate Pledge Agreement
approved by the Pledgee and Key Corporate Capital Inc., each of which approval
shall not be unreasonably withheld. The Pledgor shall give the Valuation Agent
at least 30 days' prior written notice of the appointment and approval of a
successor valuation agent. At any time, the Valuation Agent shall have the right
to resign as Valuation Agent by giving the Pledgor and the Pledgee at least 30
days' prior written notice. Prior to the date of the Valuation Agent's
resignation, the Pledgor shall notify the Valuation Agent of the successor
valuation agent appointed by the Pledgor and approved by the Pledgee. Upon such
appointment of a successor valuation agent, such valuation agent shall succeed
to the rights, powers and duties of the Valuation Agent, and the term "Valuation
Agent" shall mean successor valuation agent effective upon such appointment and
approval, and the former Valuation Agent's rights, powers and duties as the
Valuation Agent shall be terminated, without any other or further act or deed on
the part of such former Valuation Agent or any of the parties to this Pledge
Agreement.
SECTION 7.2 No Duty.
-------
1. Notwithstanding anything to the contrary, the Valuation Agent shall
have no duties, obligations or responsibilities except as expressly set forth in
this Pledge Agreement. Except a set forth in this Pledge Agreement the Valuation
Agent shall have no fiduciary duty, obligation or responsibility in respect of
any party hereto or any indirect beneficiary of this Pledge Agreement or the
Collateral.
ARTICLE III
MISCELLANEOUS PROVISIONS
SECTION 8.1 Operative Document. This Pledge Agreement is an Operative
Document executed pursuant to the Lease and shall (unless expressly indicated
herein) be construed, administered and applied in accordance with the terms and
provisions of the Lease.
SECTION 8.2 Successors, Transferees and Assigns. This Pledge Agreement
shall be binding upon the Pledgor and its successors, transferees and assigns
and shall inure to the benefit of and be enforceable by the Pledgee and its
successors and permitted assigns. Except as provided in the Lessor Pledge
Agreement, without the express written consent of the Pledgor, which shall not
be unreasonably withheld, the Pledgee shall not have the right to assign this
Pledge Agreement to any person or entity which is not the Lessor under the
Lease.
SECTION 8.3 Amendments, etc. No amendment to or waiver of any provision of
this Pledge Agreement, nor consent to any departure by the Pledgor herefrom,
shall in any event be effective unless the same shall be in writing and signed
by the Pledgee, and then such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given. The parties
hereto agree to entered into an amendment to this Pledge Agreement (the
"Amendment") within fourteen (14) days of the date hereof providing for the
establishment of
-10-
Certificate Pledge Agreement
the Collateral Account, the granting by the Pledgor to the Pledgee and the
Custodian of a security interest in the Collateral Account and the proceeds
thereof. The terms of such amendment shall be reasonably satisfactory to the
parties hereto and the Custodian.
SECTION 8.4 Protection of Collateral. The Pledgee may from time to time,
at its option, perform any act which the Pledgor agrees hereunder to perform and
which the Pledgor shall fail to perform after being requested in writing so to
perform (it being understood that no such request need be given after the
occurrence and during the continuance of an Event of Default described in
Section 6.1) and the Pledgee may from time to time take any other action which
the Pledgee reasonably deems necessary for the maintenance, preservation or
protection of any of the Collateral or of its security interest therein.
SECTION 8.5 Addresses for Notices. All notices, demands, requests,
consents, approvals and other communications hereunder shall be in writing
(including by facsimile) and directed (a) to the address or facsimile number
described in, and deemed received in accordance with the provisions of, Section
33.4 of the Lease and (b) in the case of the Valuation Agent, to Wilmington
Trust Company, 0000 Xxxxx Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxx 00000-0000,
facsimile number (000) 000-0000, telephone number (000) 000-0000, Attention:
Custody Department; provided, however, that all such notices and other
communications given by one by party hereto to another in connection with this
Pledge Agreement shall be given to all other parties hereto.
SECTION 8.6 No Waiver; Remedies. No failure on the part of the Pledgee to
exercise, and no delay in exercising, any right hereunder shall operate as a
waiver thereof; nor shall any single or partial exercise of any right hereunder
preclude any other or further exercise thereof or the exercise of any other
right. The remedies herein provided are cumulative and not exclusive of any
remedies provided by law.
SECTION 8.7 Section Captions. Section captions used in this Pledge
Agreement are for convenience of reference only, and shall not affect the
construction of this Pledge Agreement.
SECTION 8.8 Severability. Wherever possible each provision of this Pledge
Agreement shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Pledge Agreement shall be
prohibited by or invalid under such law, such provision shall be ineffective to
the extent of such prohibition or invalidity, without invalidating the remainder
of such provision or the remaining provisions of this Pledge Agreement.
SECTION 8.9 Governing Law. THIS PLEDGE AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK. FOR
PURPOSES OF THE CREATION AND PERFECTION OF THE SECURITY INTEREST GRANTED UNDER
THIS PLEDGE AGREEMENT WITH RESPECT TO THE COLLATERAL, SUCH MATTERS SHALL
-11-
Certificate Pledge Agreement
BE GOVERNED AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF
OHIO.
SECTION 8.10 Waiver of Jury Trial. THE PLEDGOR HEREBY KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHTS IT MAY HAVE TO A TRIAL BY JURY
IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN
CONNECTION WITH, THIS PLEDGE AGREEMENT. THE PLEDGOR ACKNOWLEDGES AND AGREES THAT
IT HAS RECEIVED FULL AND SUFFICIENT CONSIDERATION FOR THIS PROVISION AND THAT
THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE PLEDGEE ENTERING INTO THE LEASE.
SECTION 8.11 Execution in Counterparts. This Pledge Agreement may be
executed by the parties hereto in several counterparts, each of which shall be
deemed to be an original and all of which shall constitute together but one and
the same agreement.
SECTION 8.12 Pledge of Interest in Certificate A. The Pledgor hereby
consents to the terms of the Pledge Agreement, dated as of the date hereof,
between the Pledgee and Key Corporate Capital Inc. (the "Key Pledge Agreement"),
pursuant to which the Pledgee pledged and granted a security interest to Key
Corporate Capital Inc. in all the Pledgee's rights, title and, interest in and
to Certificate A and all payments and proceeds with respect thereto.
SECTION 8.13 Replacement of Issuing Bank; Replacement of Certificate A.
(a) The parties hereto hereby agree that if, at any time, (a) Fleet
National Bank or a successor provider of the Certificate A cannot continue
to provide the Certificate A or fails to maintain a rating of "A" (or an
equivalent thereto) or better with a nationally recognized rating agency,
or (b) the Pledgor and the Pledgee agree that another provider of the
Certificate A would be more satisfactory to their needs, the parties shall,
at Pledgor's cost and expense, arrange for a substitute financial
institution with a rating meeting such standard to issue an investment
certificate bearing interest at a rate no less than that of the Certificate
A and having the same maturity date of the Certificate A.
(b) The Pledgor shall provide to the Pledgee at the time of delivery
of any replacement Certificate A a Responsible Employee's Certificate
whereby a Responsible Employee shall certify that the Pledgor is solvent as
of such date. Upon receipt by the Pledgee of the aforementioned Responsible
Employee's Certificate and the replacement Certificate A, the Pledgee shall
transfer to the Pledgor the original Certificate A (or a replacement
provided pursuant to Section 8.13(a)) in the manner so instructed by the
Pledgor . The parties hereto agree that all references in this Pledge
Agreement to the Certificate A shall include any replacement thereof in
accordance with the terms hereof
-12-
Certificate Pledge Agreement
and all security interests and rights granted hereunder with respect to the
original Certificate A shall apply to any replacement Certificate A.
-13-
aPAGE>
Certificate Pledge Agreement
IN WITNESS WHEREOF, the parties hereto have caused this Pledge Agreement to
be duly executed and delivered by their respective officers thereunto duly
authorized as of the day and year first above written.
BROOKDALE LIVING COMMUNITIES OF
ILLINOIS - HV, INC.,
as Pledgor
By /s/ Xxxxxx X. Xxxxxxxx, Xx.
-----------------------------
Name: Xxxxxx X. Xxxxxxxx, Xx.
Title: Vice President
THE HARBOR VILLAGE BUSINESS
TRUST, as Pledgee
By Wilmington Trust Company, not in its
individual capacity but solely as trustee
under the Trust Agreement
By /s/ Xxxxx X. Xxxxxx
-----------------------------
Name: Xxxxx X. Xxxxxx
Title: Vice President
WILMINGTON TRUST COMPANY,
as Valuation Agent
By /s/ Xxxxx X. Xxxxxx
-----------------------------
Name: Xxxxx X. Xxxxxx
Title: Vice President
-14-
Certificate Pledge Agreement
SCHEDULE I
TO PLEDGE AGREEMENT
[Copy of Certificate A]
