Exhibit 10.41
PLEDGE, ASSIGNMENT AND SECURITY AGREEMENT
THIS PLEDGE, ASSIGNMENT AND SECURITY
AGREEMENT (this “Agreement”) is made this 2 nd day of
December, 2005, by SUNRISE SENIOR LIVING, INC., a corporation
organized under the laws of the State of Delaware
(“Corporation”) for the benefit of BANK OF AMERICA,
N.A., as Administrative Agent, a national banking association
(“Administrative Agent”) as agent for the
Lenders.
RECITALS
A. Corporation, Administrative
Agent and the Lenders party thereto have entered into a Credit
Agreement dated the same date as this Agreement (as amended,
modified, restated, substituted, extended and renewed at any time
and from time to time, the “Credit Agreement”).
B. It is a condition precedent,
among others, to Administrative Agent’s and Lenders’
agreement to enter into the Credit Agreement and to make loans and
other financial accommodations thereunder that Corporation enter
into this Agreement in order to secure the full and prompt
performance of all of the “Obligations” defined in the
Credit Agreement and under all of the other Loan Documents.
C. All defined terms used in
this Agreement and not defined in this Agreement shall have the
meaning given to such terms in the Credit Agreement.
AGREEMENTS
NOW, THEREFORE, in consideration of
Administrative Agent’s entering into the Credit Agreement and
for other good and valuable consideration, the receipt of which is
hereby acknowledged, Corporation hereby agrees as follows:
ARTICLE I
SECURITY
Section 1.1 The Stock
Collateral.
As security for the prompt and full
performance of the Obligations, and as security for the prompt and
full performance of all obligations of Corporation under this
Agreement, all of the foregoing, whether now in existence or
hereafter created and whether joint, several, or both, primary,
secondary, direct, contingent or otherwise, Corporation hereby
pledges, assigns and grants to Administrative Agent, for the
ratable benefit of the Lenders, a security interest in the
following property of Corporation (collectively, the “Stock
Collateral”), whether now existing or hereafter created or
arising:
(a)
10,000 shares of the common stock (the “SSLMI Stock”)
of Sunrise Senior Living Management, Inc., a corporation organized
under the laws of the Commonwealth of Virginia
(“SSLMI”);
(b) 100
shares of the common stock (the “SSLII Stock”) of
Sunrise Senior Living Investments, Inc., a corporation organized
under the laws of the Commonwealth of Virginia
(“SSLII”);
(c) 100
shares of common stock and 400 shares of Series A Preferred
stock (the “SSLSI Stock”) of Sunrise Senior Living
Services, Inc., a corporation organized under the laws of the
Commonwealth of Virginia (“SSLSI”);
(d) 100
shares of the common stock (the “SDI Stock”; the SSLMI
Stock, the SSLII Stock, SSLSI Stock and the SDI Stock, arc
hereinafter referred to collectively as the “Stock”) of
Sunrise Development, Inc., a corporation organized under the laws
of the Commonwealth of Virginia (“SDI”; SSLMI, SSLII,
SSLSI and SDI are hereinafter referred to collectively as the
“Corporations”);
(e) all
stock rights, rights to subscribe, rights to distributions,
dividends (including, but not limited to, distributions in kind,
cash dividends, stock dividends, dividends paid in stock and
liquidating dividends) and any other rights and property interests
including, but not limited to, accounts, contract rights,
instruments and general intangibles arising out of or relating to
the Corporations;
(f) all
other or additional (or less) stock or other securities or property
(including cash) paid or distributed in respect of the Stock by way
of stock-split, spin-off, split-up, reclassification, combination
of shares or similar corporate rearrangement;
(g) all
other or additional stock or other securities or property
(including cash) which may be paid or distributed in respect of the
Stock by reason of any consolidation, merger, exchange of stock,
conveyance of assets, liquidation or similar corporate
reorganization; and
(h) all
proceeds (both cash and non-cash) of the foregoing, whether now or
hereafter arising under the foregoing.
Section 1.2 Rights of
Administrative Agent in the Stock Collateral.
Corporation agrees that, with respect
to the Stock Collateral, Administrative Agent shall have all the
rights and remedies of a secured party under the Uniform Commercial
Code, as well as those provided by law and/or in this Agreement.
Notwithstanding the fact that the proceeds of the Stock Collateral
constitute part of the Stock Collateral, Corporation may not
dispose of the Stock Collateral or any part thereof.
Section 1.3 Rights of
Corporation in the Stock Collateral.
Until an Event of Default (as that
term is defined in ARTICLE IV (Default and Rights and Remedies)
hereof) occurs, Corporation shall be entitled to receive all
dividends and other distributions which may be paid on the Stock
Collateral and which are not otherwise prohibited by the Loan
Documents. Any cash dividend or distribution payable in respect of
the Stock
Collateral which represents, in whole or in part a return of
capital or a violation of this Agreement or the other Loan
Documents shall be received by Corporation in trust for
Administrative Agent, shall be paid immediately to Administrative
Agent and shall be retained by Administrative Agent as part of the
Stock Collateral.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
To induce Administrative Agent and
Lenders to advance sums to Corporation under the Credit Agreement,
Corporation represents and warrants to Administrative Agent and
shall be deemed to represent and warrant at the time of each
request for, and the time of each advance under, the credit
facilities described in the Credit Agreement, as follows:
Section 2.1 Stock
Interests.
The Stock represents one hundred
percent (100%) of the issued and outstanding equity interests of
each of the Corporations, and thereafter the Stock Collateral will
continue to represent the same percentage of the equity interest of
the Corporations, unless otherwise permitted under the Credit
Agreement.
Section 2.2 Power and
Authority.
Corporation has full corporate power
and authority to execute and deliver this Agreement, to transfer
the Stock Collateral and perform all other obligations required
hereunder with respect to the Stock Collateral and interests, and
to incur and perform its obligations whether under this Agreement,
all of which have been duly authorized by all proper and necessary
corporate action. No consent or approval of shareholders or any
creditors of Corporation, the Corporations, or shareholders of the
Corporations, and no consent, approval, filing or registration with
or notice to any Governmental Authority on the part of Corporation,
is required as a condition to the execution, delivery, validity or
enforceability of this Agreement, including, without limitation,
the right of Administrative Agent to dispose of the Stock
Collateral following an Event of Default. Corporation has full
right, power and authority and has all voting rights in any
corporate matters as may be represented by the Stock
Collateral.
Section 2.3 Binding
Agreements.
This Agreement has been properly
executed and delivered and constitutes the valid and legally
binding obligations of Corporation and is fully enforceable against
Corporation in accordance with its terms.
Section 2.4 No
Conflicts.
Neither the execution, delivery and
performance of the terms of this Agreement nor the consummation of
the transactions contemplated by this Agreement will conflict with,
violate or be prevented by (a) Corporation’s charter or
bylaws, (b) any existing mortgage, indenture, contract or
agreement binding on Corporation or affecting its property, or
(c) any Laws; provided , however , any transfer
of ownership of Stock pursuant to the exercise of the Lenders
remedies hereunder, will cause a default in a substantial number of
management Agreements and development agreements to which the
Corporations are parties.
Section 2.5 Compliance with
Laws.
Corporation is not in violation of
any applicable Laws (including, without limitation, any Laws
relating to employment practices, to environmental, occupational
and health standards and controls) or order, writ, injunction,
decree or demand of any court, arbitrator, or any Governmental
Authority affecting Corporation or any of its properties, the
violation of which could adversely affect the authority of
Corporation to enter into, or the ability of Corporation to perform
under, this Agreement.
Section 2.6 Title to
Properties.
Corporation has good and marketable
title to the Stock Collateral. Corporation has legal, enforceable
and uncontested rights to use freely such property and assets.
Corporation is the sole owner of all of the Stock Collateral, free
and clear of all security interests, pledges, voting trusts,
agreements, Liens, claims and encumbrances whatsoever, other than
the security interest, assignment and lien granted under this
Agreement. The interests assigned as Stock Collateral are subject
to no outstanding options, voting trusts, shareholders agreement,
or other requirements with respect to such interests.
Section 2.7 Perfection and
Priority of Stock Collateral.
Administrative Agent has, or upon
execution and recording of this Agreement and the Security
Documents will have, and will continue to have as security for the
Obligations and the other obligations secured by this Agreement, a
valid and perfected Lien on and security interest in all Stock
Collateral, free of all other Liens, claims and rights of third
parties whatsoever.
ARTICLE III
COVENANTS
Until payment in full and the
performance of all of the Obligations and all of the obligations of
Corporation hereunder or secured hereby, Corporation covenants and
agrees with Administrative Agent as follows:
Section 3.1 Corporate
Existence.
Corporation shall maintain its
corporate existence in good standing in the jurisdiction in which
it is incorporated and in each other jurisdiction where it is
required to register or qualify to do business if the failure to do
so in such other jurisdiction might have a material adverse effect
on the ability of Corporation to perform its obligations under this
Agreement, on the conduct of Corporation’s operations, on
Corporation’s financial condition, or on the value of, or the
ability of Administrative Agent to realize upon, the Stock
Collateral.
Section 3.2 Delivery of Stock
Collateral.
Corporation shall deliver immediately
to Administrative Agent (a) the certificates representing the
shares of the Stock, (b) immediately upon its receipt of any
additional (or fewer) shares of stock in the Corporations, the
certificates representing such additional shares of stock,
(c) all instruments, items of payment and other Stock
Collateral received by Corporation, and (d) executed irrevocable,
blank stock powers for all of the assigned shares of stock in form
and substance satisfactory to Administrative Agent and its counsel.
All Stock Collateral at any time
received
or held by Corporation shall be received and held by Corporation in
trust for the benefit of Administrative Agent, and shall be kept
separate and apart from, and not commingled with,
Corporation’s other assets; provided, however, that except
after the occurrence and during the continuance of an Event of
Default, Corporation and the Corporations may, in the ordinary
course of their business, make cash distributions, issue cash
dividends and transfer real property rights which may be Stock
Collateral.
Section 3.3 Defense of Title
and Further Assurances.
Corporation will do or cause to be
done all things necessary to preserve and to keep in full force and
affect its interests in the Stock Collateral, and shall defend, at
its sole expense, the title to the Stock Collateral and any part
thereof. Further, Corporation shall promptly, upon request by
Administrative Agent, execute, acknowledge and deliver any
financing statement, endorsement, renewal, affidavit, deed,
assignment, continuation statement, security agreement, certificate
or other document as Administrative Agent may require in order to
perfect, preserve, maintain, protect, continue, realize upon,
and/or extend the lien and security interest of Administrative
Agent under this Agreement and the priority thereof. Corporation
shall pay to Administrative Agent upon demand all taxes, costs and
expenses (including but not limited to reasonable attorney’s
fees) incurred by Administrative Agent in connection with the
preparation, execution, recording and filing of any such document
or instrument mentioned aforesaid.
Section 3.4 Compliance with
Laws.
Corporation shall comply with all
applicable Laws and observe the valid requirements of Governmental
Authorities, the noncompliance with or the nonobservance of which
might have a material adverse effect on the ability of Corporation
to perform its obligations under this Agreement or on the conduct
of Corporation’s operations, on Corporation’s financial
condition, or on the value of, or the ability of Administrative
Agent to realize upon, the Stock Collateral.
Section 3.5 Protection of
Stock Collateral.
Corporation agrees that
Administrative Agent may at any time take such steps as
Administrative Agent deems reasonably necessary to protect
Administrative Agent’s interest in, and to preserve the Stock
Collateral. Corporation agrees to cooperate fully with
Administrative Agent’s efforts to preserve the Stock
Collateral and will take such actions to preserve the Stock
Collateral as Administrative Agent may in good faith direct. All of
Administrative Agent’s expenses of preserving the Stock
Collateral, including, without limitation, reasonable
attorneys’ fees, shall be part of the Enforcement
Costs.
Section 3.6 Certain
Notices.
Corporation will promptly notify
Administrative Agent in writing of any Event of Default and of any
litigation, regulatory proceeding, or other event which materially
and adversely affects the value of the Stock Collateral, the
ability of Corporation or Administrative Agent to dispose of the
Stock Collateral, or the rights and remedies of Administrative
Agent in relation thereto.
Section 3.7 Books and
Records; Information.
(a)
Corporation shall maintain proper books of record and accounts in
which full, true and correct entries are made of all dealings and
transactions in relation to the Stock and which reflect the Lien of
Administrative Agent thereon.
(b)
Corporation agrees that Administrative Agent may from time to time
and at its option (i) require Corporation to, and Corporation
shall, periodically deliver to Administrative Agent records and
schedules, which show the status of the Stock Collateral and such
other matters which affect the Stock Collateral; (ii) verify the
Stock Collateral and inspect the books and records of Corporation
and make copies thereof or extracts therefrom; (iii) notify
any prospective buyers or transferees of the Stock Collateral or
any other Persons of Administrative Agent’s interest in the
Stock Collateral; and
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