CERTIFICATE A PLEDGE AGREEMENT
THIS CERTIFICATE A PLEDGE AGREEMENT (together with all amendments,
supplements and other modifications made from time to time, this "Pledge
Agreement"), dated as of October 14, 1998, made by BROOKDALE LIVING COMMUNITIES
OF NEW MEXICO -SF, INC., a Delaware corporation (the "Pledgor"), in favor of THE
PDL BUSINESS TRUST, a Delaware business trust (the "Pledgee"), WILMINGTON TRUST
COMPANY, a Delaware banking corporation, as valuation agent (in such capacity,
the "Valuation Agent") and LASALLE NATIONAL BANK, a national banking
association, as collateral account bank (the "Custodian").
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 October 14, 1998 (together with all amendments and other
modifications, if any, from time to time thereafter made thereto, the "Lease"),
between the Pledgor, as 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 ofthis Pledge Agreement;
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; and
WHEREAS, the Valuation Agent and the Custodian have agreed to perform
certain services on behalf of the Pledgor and the Pledgee;
NOW, THEREFORE, for good and valuable consideration the receipt of
which is hereby acknowledged, the parties hereto agree as follows:
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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.
(a) The Pledgor hereby pledges, hypothecates, assigns,
charges, mortgages, delivers, and transfers to the Pledgee and hereby
grants to the Pledgee a continuing security interest in, all of its
right, title and interest in, to and under the following property (the
"Certificate Collateral"):
(i) Certificate A, a copy of which is annexed hereto
as Schedule I, and any replacement Certificate A to be
provided pursuant to Section 7.13 hereof; and
(ii) 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 California (the
"U.C.C.")) of any of the foregoing.
(b) The Pledgor hereby further pledges, hypothecates, assigns,
charges, mortgages, delivers, and transfers to the Pledgee and the
Custodian on behalf of the Pledgee and hereby grants to the Pledgee and
the Custodian a continuing security interest, pursuant to the Uniform
Commercial Code as in effect in the State of Illinois (including
Section 9-302 thereof), in all of its right, title and interest in, to
and under the Collateral Account (as hereinafter defined) and all
moneys and funds from time to time credited to or on deposit in the
Collateral Account (the foregoing being referred to herein as the
"Account Funds"). The Certificate Collateral and the Account Funds are
hereinafter collectively referred to as the "Collateral".
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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 BH Basic Rent, Lessor Basic
Rent, Equity Balance and Supplemental Rent (to the extent the Lessor is entitled
to receive Supplemental Rent) (collectively, the "Obligations").
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SECTION 2.3 Delivery of Certificate Collateral. All certificates or
instruments representing or evidencing any Certificate Collateral, shall be
delivered to and held by or on behalf of the Pledgee pursuant hereto, shall be
in suitable form for transfer by delivery, and shall be accompanied by all
necessary instruments of transfer or assignment, duly executed in blank, all in
form and substance satisfactory to the Pledgee.
SECTION 2.4 Continuing Security Interest. This Pledge Agreement shall
create a continuing security interest in the Certificate Collateral and the
Account Funds and shall
(a) remain in full force and effect until payment in full of
all Obligations, payment in full of the Equity Balance or the Pledgee
realizes on the Certificate Collateral and the Account Funds 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, (i) 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 Certificate 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 and (ii) direct the
Custodian to remit to the Pledgor all funds in the Collateral Account.
SECTION 2.5 Security Interest Absolute. All rights of the Pledgee and
the security interests granted hereunder to the Pledgee and the Custodian on the
Pledgee's behalf, 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,
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(d) any reduction, limitation, impairment or termination of
any Obligations for any reason, including any claim of waiver, release,
surrender, alteration or compromise, and shall not be subject to (and
the Pledgor hereby waives any right to or claim of) any defense or
setoff, counterclaim, recoupment or termination whatsoever by reason of
the invalidity, illegality, nongenuineness, irregularity, compromise,
unenforceability of, or any other event or occurrence affecting, the
Pledgee or otherwise,
(e) any amendment to, rescission, waiver, or other
modification of, or any consent to departure from, any of the terms of
the any Operative Document,
(f) any addition, exchange, release, surrender or
non-perfection of any Collateral, or any amendment to or waiver or
release of or addition to or consent to departure from any guaranty,
for any of the Obligations, or
(g) any other circumstances which might otherwise constitute a
defense available to, or a legal or equitable discharge of, the Pledgor
or Pledgee or any other Person.
SECTION 2.6 Waiver of Subrogation. The Pledgor hereby irrevocably
waives any claim or other rights which it may now or hereafter acquire against
the Pledgee or any other Person that arise from the existence, payment,
performance or enforcement of the Pledgor's obligations under this Pledge
Agreement or any other Operative Document, including any right of subrogation,
reimbursement, exoneration, or indemnification, any right to participate in any
claim or remedy against the Pledgee or any other Person or any collateral which
the Pledgee now has or hereafter acquires, whether or not such claim, remedy or
right arises in equity, or under contract, statute or common law, including the
right to take or receive from the Pledgee or any other Person, directly or
indirectly, in cash or other property or by set-off or in any manner, payment or
security on account of such claim or other rights. If any amount shall be paid
to the Pledgor in violation of the preceding sentence and the Obligations shall
not have been paid in cash in full, such amount shall be deemed to have been
paid to the Pledgor for the benefit of, and held in trust for, the Pledgee, and
shall forthwith be paid to the Pledgee to be credited and applied upon the
Obligations, whether matured or unmatured. The Pledgor acknowledges that it will
receive direct and indirect benefits from the financing arrangements
contemplated by the Pledge 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 on the first Wednesday
of each month (or if such day is not a Business Day, the following
Business Day) (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"), (ii) by obtaining values from the issuer of the
Certificate A and at least one
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reputable broker of certificates of deposit, the fair market sales
value of the Certificate A if sold as of the Valuation Date which fair
market sales value shall be equal to the higher of the two values
received (the "Sales Value") and (iii) the rating of the provider of
the Certificate A from a source the Valuation Agent deems appropriate.
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 Account Funds in the
Collateral Account is less than the Certificate Value (a "Deficiency"),
the Valuation Agent shall give written notice in such form as the
Valuation Agent deems appropriate of such Deficiency 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
Custodian and the Pledgor (a "Deficiency Notice"). Notice in accordance
with the previous sentence shall be provided by the Valuation Agent in
such form as the Valuation Agent deems appropriate in the event that
the rating of the provider of the Certificate A is less than "A" (or an
equivalent thereto) (a "Rating Notice"). Upon the written request of
the Valuation Agent, approved in writing by the Pledgee and Bank
Hapoalim B.M., San Xxxxxxxxx Xxxxxx ("BH"), the frequency of the
Valuation Date may be modified from time to time.
(b) The Pledgor shall promptly, but in any event within five
(5) Business Days after receipt of a Deficiency Notice (facsimile
confirmation receipt by the Valuation Agent being deemed receipt of
notice by the Pledgor, the Pledgee and the Custodian), wire transfer
additional Account Funds in U.S. Dollars to the Collateral Account in
an amount equal to or exceeding the Deficiency. The Pledgor's
obligation to deposit such Account Funds in the Collateral Account is
hereinafter referred to as the "Collateral Requirement." The Valuation
Agent agrees to contact the Custodian (and the Custodian agrees to
promptly furnish such information) on the last day that each Collateral
Requirement is required to be satisfied to verify the satisfaction of
same by the Pledgor and to immediately notify the Pledgor and the
Pledgee in the manner described in Section 2.7(a) of the Pledgor's
failure to satisfy the Collateral Requirement. The Pledgor's failure to
satisfy the Collateral Requirement shall result in the Pledgee having
the immediate right to the Certificate Collateral and Account Funds in
accordance with Section 6.1.
(c) On any Valuation Date, in the event that the Sales Value
plus the Account Funds then held in the Collateral Account, 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 in such
form as the Valuation Agent deems appropriate (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 remit to the Pledgor (to an account
designated by Pledgor from time to time) within three (3) Business Days
after its receipt
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of the Excess Notice (facsimile confirmation receipt by the Valuation
Agent being deemed receipt of notice by the Pledgor, Pledgee and the
Custodian) funds in the Collateral Account equal to the Excess, so that
after distributing such funds the sum of the Sales Value plus the
Account Funds in the Collateral Account will equal the Certificate
Value.
SECTION 2.8 Collateral Account.
(a) The Custodian shall establish a trust account at its
branch located at 000 X. XxXxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx, 00000, in
the name of the Pledgee for the benefit of the Pledgee (the "Collateral
Account") and invest any Account Funds in the Custodian's ABN AMRO
Treasury Money Market Fund or in any other fund or investment with a
rating of "A" or better which is available through the Custodian. If an
Event of Default described in Section 6.1 exists or the Pledgor has
failed to comply with the Collateral Requirement in accordance with
Section 2.7, the Pledgee may provide written notice to the Custodian
instructing the Custodian to withdraw and release all Account Funds to
BH pursuant to the terms of the Lessor Pledge Agreement as instructed
by the Pledgee. Until the Obligations are paid in full, the Pledgor
shall have no right to make withdrawals from the Collateral Account or
to otherwise exercise any control with respect to any property from
time to time on deposit in or credited to the Collateral Account. The
Custodian agrees to respond to reasonable inquiries no more frequently
than once every two weeks of the Pledgor, the Pledgee and the Valuation
Agent as to the balance of the Collateral Account.
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 Certificate Collateral and Account Funds
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 Certificate
Collateral to the Pledgee and the Account Funds to the Custodian are
each effective to create a valid,
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perfected, first priority security interest in such Certificate
Collateral and Account Funds and all proceeds thereof, securing the
Obligations. No filing or other action will be necessary to perfect or
protect such security interest.
(c) Authorization, Approval, etc. No authorization, approval,
or other action by, and no notice to or filing with, any governmental
authority, regulatory body or any other Person is required either
(i) for the pledge by the Pledgor of the Certificate
Collateral or Account Funds 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
Certificate Collateral by laws affecting the offering and sale
of securities generally, the remedies in respect of the
Certificate 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 and the Custodian in
and to the Certificate Collateral and the Account Funds,
respectively (and all right, title, and interest represented
by the Certificate Collateral and the Account Funds) 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
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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 and the Custodian that it will provide the Valuation
Agent and the Custodian with prompt written notice of an Event of
Default 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 or upon the Pledgor's failure
to comply with the Collateral Requirement, 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 with respect to the Collateral, 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.
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ARTICLE VI
REMEDIES
SECTION 6.1 Certain Remedies. If any Event of Default exists (other
than an Uncurable Event of Default (as defined in the Xxxxxx Subleasehold
Mortgage)) or if the Pledgor has failed to comply with the Collateral
Requirement in accordance with Section 2.7 or if the Pledgor fails to pay the
Custodian its fees in accordance with Section 6.4 within sixty (60) days of the
date same is due or if a successor provider of the Certificate A is not obtained
in accordance with Section 9.13 within ten (10) Business Days of the receipt by
the Pledgee of the Rating Notice:
(a) The Pledgee may exercise in respect of the Certificate
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 Certificate Collateral) and also may, without
notice except as specified below, sell or redeem, as applicable, the
Certificate Collateral or any part thereof (to the extent the
Certificate 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 Certificate Collateral in any manner it deems appropriate upon
seizing the Certificate 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
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(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.
(c) The Pledgee may exercise in respect of the Account Funds,
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 Uniform Commercial Code as in effect in the
State of Illinois (whether or not same applies to the Account Funds).
SECTION 6.2 Securities Laws. If the Pledgee shall exercise its right to
sell all or any of the Certificate 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 Certificate Collateral owned by the Pledgor or any part
thereof valid and binding and in compliance with applicable law.
SECTION 6.3 Indemnity and Expenses. The Pledgor hereby indemnifies and
holds harmless the Pledgee, the Valuation Agent and the Custodian 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 Custodian and the Valuation Agent
resulting from the Custodian's or the Valuation Agent's gross negligence or
wilful misconduct. Upon demand, the Pledgor will pay to the Pledgee, the
Valuation Agent and Custodian 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, the Valuation Agent or Custodian 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 Custodian and Valuation Agent. The Pledgor agrees
to pay the Valuation Agent fees in accordance with the terms of the Trustee Fee
Agreement and the fees of the Custodian in the amount of $1,500 per annum during
the term of this Pledge Agreement, payable annually in advance commencing on the
effective date of this Pledge Agreement.
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ARTICLE VII
THE CUSTODIAN
SECTION 7.1 Custodian Appointed Attorney-in-Fact and Agent.
(a) The Pledgor hereby irrevocably appoints the Custodian 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 during which an Event of Default described in Section 6.1
exists (the Custodian being entitled to rely upon a notice from Pledgee
that such Event of Default exists) or upon the Pledgor's failure to
comply with the Collateral Requirement in accordance with the terms
hereof, to take any action and to execute any instrument as directed by
the Pledgee to accomplish the purposes of this Pledge Agreement with
respect to the Account Funds, including without limitation:
(i) 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 the
Account Funds;
(ii) to receive, endorse, and collect any drafts or
other instruments, documents and chattel paper, in connection
with clause (a) above; and
(iii) to file any claims or take any action or
institute any proceedings as directed by the Pledgee for the
collection of any of the Account Funds or otherwise to enforce
the rights of the Custodian with respect to any of the Account
Funds.
The Pledgor hereby acknowledges, consents and agrees that the power of
attorney granted pursuant to this Section is irrevocable and coupled with an
interest.
(b) The Pledgee hereby appoints the Custodian as the Pledgee's
agent for retaining physical possession of the Account Funds in
accordance with the terms of this Pledge Agreement. All Account Funds
shall be segregated from all other property, including, without
limitation, that of the Pledgor and the Pledgee.
SECTION 7.2 Custodian May Perform. If the Pledgor fails to perform any
agreement contained herein with respect to the Account Funds, the Custodian may
itself perform, or cause performance of, such agreement, and the expenses of the
Custodian incurred in connection therewith shall be payable by the Pledgor
pursuant to Section 6.3.
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SECTION 7.3 No Duty.
(a) The powers conferred on the Custodian hereunder are solely
to protect the interests of the Pledgee in the Account Funds, and shall
not impose any duty on it to exercise any such powers. Except for
reasonable care of any Account Funds in its possession by the Custodian
and the accounting by the Custodian for moneys actually received by it
hereunder, the Custodian shall not have any duty as to any Account
Funds or responsibility for taking any necessary steps to preserve
rights against prior parties or any other rights pertaining to any
Account Funds.
(b) Notwithstanding anything to the contrary, the Custodian
shall have no duties, obligations or responsibilities except as
expressly set forth in this Pledge Agreement. Except as set forth in
this Pledge Agreement, the Custodian shall have no fiduciary duty,
obligation or responsibility in respect of any party hereto or any
indirect beneficiary of this Pledge Agreement or the Account Funds.
SECTION 7.4 Reasonable Care. The Custodian is required to exercise
reasonable care in the custody and preservation of any of the Account Funds in
its possession; provided, however, the Custodian shall be deemed to have
exercised reasonable care in the custody and preservation of any of the Account
Funds, if it takes such action for that purpose as the Pledgor reasonably
requests in writing at times other than upon the occurrence and during the
continuance of any Event of Default described in Section 6.1, but failure of the
Custodian to comply with any such request at any time shall not in itself be
deemed a failure to have exercised reasonable care but shall be used as a factor
in determining whether the Custodian has exercised reasonable care. The
Custodian agrees to exercise the same degree of care as customarily exercised by
the Custodian generally when acting in such capacity for similar property in
exercising its duties under this Pledge Agreement.
SECTION 7.5 Successor Custodian. At any time, the Pledgor shall have
the right to appoint a successor custodian to replace LaSalle National Bank (or
any successor Custodian) as the Custodian hereunder, so long as such successor
custodian is approved by the Pledgee and BH, each of which approval shall not be
unreasonably withheld. The Pledgor shall give the Custodian at least 30 days'
prior written notice of the appointment and approval of a successor custodian.
At any time, the Custodian shall have the right to resign as Custodian by giving
the Pledgor and the Pledgee at least 30 days' prior written notice. Prior to the
date of the Custodian's resignation, the Pledgor shall notify the Custodian of
the successor custodian appointed by the Pledgor and approved by the Pledgee and
BH. Upon such appointment of a successor custodian, such custodian shall succeed
to the rights, powers and duties of the Custodian, and the term "Custodian"
shall mean successor custodian effective upon such appointment and approval, and
the former Custodian's rights, powers and duties as the Custodian shall be
terminated, without any other or further act or deed on the part of such former
Custodian or any of the parties to this Pledge Agreement.
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ARTICLE VIII
THE VALUATION AGENT
SECTION 8.1 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 approved by the Pledgee
and BH, 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 and BH. 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 8.2 No Duty. 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 as 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 IX
MISCELLANEOUS PROVISIONS
SECTION 9.1 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 9.2 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.
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SECTION 9.3 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; provided that
any such amendment or waiver shall be consented to by the Pledgee and BH, which
consent shall not be unreasonably withheld.
SECTION 9.4 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 9.5 Addresses for Notices. All notices, demands, requests,
consents, approvals and other communications hereunder shall be in writing
(including by facsimile) and directed (a) in the case of the Pledgee and the
Pledgor, to the respective address or facsimile number described in, and deemed
received in accordance with the provisions of, Section 33.4 of the Lease, (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 and (c) in the
case of the Custodian, to LaSalle National Bank, 000 X. XxXxxxx Xxxxxx, Xxxxx
0000, Xxxxxxx, Xxxxxxxx, 00000, facsimile number (000) 000-0000, telephone
number (000) 000-0000, Attention: Xxxx Xxxxxx, Corporate Trust Officer;
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 9.6 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 9.7 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 9.8 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.
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SECTION 9.9 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 AND ACCOUNT FUNDS, SUCH
MATTERS SHALL BE GOVERNED AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF
THE STATE OF CALIFORNIA AND THE STATE OF ILLINOIS, RESPECTIVELY.
SECTION 9.10 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 9.11 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 9.12 Pledge of Interest in Certificate Collateral and Account
Funds. The Pledgor hereby consents to the terms of the Pledge Agreement, dated
as of the date hereof, between the Pledgee and BH, pursuant to which the Pledgee
pledged and granted a security interest to BH in all the Pledgee's rights, title
and, interest in and to the Certificate Collateral and all payments and proceeds
with respect thereto and the Account Funds.
SECTION 9.13 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
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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 9.13(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 and all security interests and rights granted
hereunder with respect to the original Certificate A shall apply to any
replacement Certificate A.
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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 NEW MEXICO - SF, INC.,
as Pledgor
By: _____________________________
Name:
Title:
THE PDL BUSINESS TRUST, as Pledgee
By Wilmington Trust Company, not in its
individual capacity but solely as trustee
under the Trust Agreement
By: _____________________________
Name:
Title:
WILMINGTON TRUST COMPANY,
as Valuation Agent
By: _____________________________
Name:
Title:
LASALLE NATIONAL BANK, as
Custodian
By: _____________________________
Name:
Title:
ACKNOWLEDGED AND AGREED TO BY:
BANK HAPOALIM B.M.,
SAN XXXXXXXXX XXXXXX
By: ________________________________
Name:
Title:
Certificate A Pledge Agreement
SCHEDULE I
TO PLEDGE AGREEMENT
[Copy of Certificate A]
