SECOND AMENDED AND RESTATED
SUBSIDIARY STOCK AND NOTES PLEDGE AGREEMENT
SECOND AMENDED AND RESTATED SUBSIDIARY STOCK AND NOTES PLEDGE
AGREEMENT, dated as of May 2, 1994 (as the same may be amended, modified or
supplemented from time to time, this "Agreement"), made by each of the
corporations listed on Annex A hereto (individually, a "Pledgor" and
collectively, the "Pledgors"), to Bankers Trust Company, a New York banking
corporation, in its capacity as collateral agent (the "Collateral Agent" or the
"Pledgee" and as agent under the Credit Agreements, as hereinafter defined, the
"Agent") for the financial institutions from time to time parties to the Credit
Agreements (the "Lenders"), First Union National Bank of North Carolina, as co-
agent (the "Co-Agent") and the Agent.
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, certain of the parties hereto (or their predecessors) entered
into the Subsidiary Stock and Notes Pledge dated as of September 1, 1988, as
supplemented by Supplement No. 1 dated as of October 4, 1990, which was amended
and restated by the Amended and Restated Subsidiary Stock and Notes Pledge dated
as of July 21, 1992 (the "1992 Subsidiary Stock and Notes Pledge"), in favor of
the Collateral Agent for the benefit of the Lenders, the Trustee and the Issuing
Banks (as such terms are defined in the 1992 Subsidiary Stock and Notes Pledge)
and now desire to amend and restate such pledge in its entirety; and
WHEREAS, Charter Medical Corporation, a Delaware corporation (as
successor to WAF Acquisition Corporation, a Delaware corporation, the
"Company"), certain of the Lenders, the Agent and Wells Fargo Bank, National
Association and Bank of America National Trust and Savings Association, as co-
agents (the "Original Co-Agents"), entered into that certain Credit Agreement
dated as of September 1, 1988 which was amended and restated by the Amended and
Restated Credit Agreement
dated as of July 21, 1992 (the "1992 Company Credit Agreement"), which is being
amended and restated by the Second Amended and Restated Credit Agreement dated
as of the date hereof (as the same may be further amended, restated,
supplemented or otherwise modified from time to time, the "Company Credit
Agreement"), pursuant to which certain of the Lenders made certain loans and
commitments to the Company, the terms of which are being amended and restated
pursuant to the Company Credit Agreement; and
WHEREAS, pursuant to the terms and conditions of the Company Credit
Agreement, the Lenders have made certain commitments to make additional loans
to, and participate in and/or issue letters of credit for the account of, the
Company; and
WHEREAS, certain Borrowers, certain of the Lenders, the Agent and the
Original Co-Agents entered into a Credit Agreement, dated as of September 1,
1988 which was amended and restated by the Amended and Restated Subsidiary
Credit Agreement dated as of July 21, 1992 (the "1992 Subsidiary Credit
Agreement; and, together with the 1992 Credit Agreement, the "1992 Credit
Agreements"), which is being amended and restated by the Second Amended and
Restated Subsidiary Credit Agreement dated as of the date hereof (as the same
may be further amended, restated, supplemented or otherwise modified from time
to time, the "Subsidiary Credit Agreement"; and, together with the Company
Credit Agreement, each a "Credit Agreement" and collectively the "Credit
Agreements"), pursuant to which certain of the Lenders made certain loans and
commitments to, and participated in letters of credit for the benefit of, the
Borrowers, the terms of which are being amended and restated pursuant to the
Subsidiary Credit Agreement; and
WHEREAS, pursuant to the terms and conditions of the Subsidiary Credit
Agreement, the Lenders have made certain commitments to make additional loans
to, and participate in and/or issue letters of credit for the account of, the
Borrowers; and
WHEREAS, the Pledgors have executed and delivered the Subsidiary
Guaranty dated as of the date hereof (as the same may be amended, restated,
supplemented or otherwise modified from time to time, the "Subsidiary Guaranty")
pursuant to which such Pledgors agreed jointly
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and severally to guarantee all of the obligations of the Company under the
Company Credit Agreement and the other Credit Documents, and the Borrowers under
the Subsidiary Credit Agreement and the other Credit Documents; and
WHEREAS, the Lenders have agreed to amend and restate the 1992 Credit
Agreements upon terms and conditions acceptable to the Company and the
Borrowers; and
WHEREAS, it was a condition to the incurrence of loans and the
participation in letters of credit under the 1992 Credit Agreements that each
Pledgor execute and deliver to the Agent the 1992 Subsidiary Stock and Notes
Pledge and it is a condition precedent to the incurrence of loans and the
issuance of the letters of credit under the Credit Agreements that each Pledgor
execute and deliver to the Collateral Agent this Agreement; and
WHEREAS, (a) the Senior Secured Notes (as defined in the 1992
Subsidiary Stock and Notes Pledge) have been irrevocably paid in full; (b) each
Issuing Bank has agreed, among other things, that the Reimbursement Agreements
(as defined in the 1992 Subsidiary Stock and Notes Pledge) to which it is a
party (other than the Credit Documents to the extent the same could be
considered Reimbursement Agreements) shall no longer be entitled to the security
interests and other benefits of this Agreement; and (c) the Intercreditor
Agreement (as defined in the 1992 Subsidiary Stock and Notes Pledge) has been
terminated, except for the appointment by the Lenders of Bankers Trust Company
as Collateral Agent, which appointment has been ratified and confirmed in the
Credit Agreements;
NOW, THEREFORE, in consideration of the benefits accruing to the
Pledgors, the receipt and sufficiency of which are hereby acknowledged, each
Pledgor hereby makes the following representations and warranties to the Pledgee
and hereby covenants and agrees with the Pledgee as follows:
1. DEFINITIONS. Except as otherwise defined herein, capitalized
terms used herein, including in the recital paragraphs, and defined in the
Subsidiary Credit Agreement (by reference to the Company Credit Agreement or
otherwise) shall be used herein as so defined.
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2. SECURITY FOR OBLIGATIONS ETC. This Agreement is for the benefit
of the Agent, the Co-Agent and the Lenders and their respective successors and
assigns (collectively, the "Secured Creditors") to secure, pursuant to Section 4
hereof, the prompt payment in full when due, whether at stated maturity, by
acceleration or otherwise, of all obligations of the Company, any Borrower or
any other Subsidiary of the Company now or hereafter existing under the Credit
Agreements, the Notes, the Subsidiary Guaranty or any other Credit Document,
whether for principal, premium, interest, fees, expenses or otherwise
(including, without limitation, the Obligations under the Credit Agreements of
the Company and the Subsidiary Borrowers to reimburse drawings honored under
Letters of Credit and Subsidiary Letters of Credit), and all obligations of each
Pledgor now or hereafter existing under this Agreement (all of the foregoing
being herein collectively called the "Obligations").
3. DEFINITION OF SECURITIES; REPRESENTATIONS AND WARRANTIES. As
used herein, the term "Securities" shall mean (i) (x) all of the issued and
outstanding shares of every class of the capital stock from, time to time
legally and beneficially owned by such Pledgor of each of the present and future
Domestic Subsidiaries of the Company (other than future Domestic Subsidiaries
that are not or do not become Significant Subsidiaries), and (y) to the extent
permitted by applicable law, all of the issued and outstanding shares of every
class of capital stock from time to time owned by such Pledgor of the present
and future Foreign Subsidiaries of the Company (other than future Foreign
Subsidiaries that are not or do not become Significant Subsidiaries), in each
case, other than shares released pursuant to Section 22 hereof (collectively,
the "Pledged Stock"; and the issuers of such Pledged Stock, collectively, the
"Pledged Companies"); PROVIDED that in no event shall Securities or Pledged
Stock include more than 65% of all of the outstanding shares of capital stock of
any Excludable Foreign Subsidiary; and (ii) all promissory notes (the "Pledged
Notes") at any time (a) issued to any Pledgor by any present and future
Subsidiary of the Company (other than by any Excludable Foreign Subsidiary)
(collectively, the "Charter Subsidiaries") or (b) held by or issued to the
Pledgor by any Person in connection with any Asset Sale (as defined in the
Company Credit Agreement). Each Pledgor represents and warrants that on the
date hereof
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(a) the Pledged Stock consists of the number and type of shares of the common
stock of the Pledged Companies as described in Annex B attached hereto and the
Pledged Notes as described in Annex C attached hereto; (b) each Pledgor is (i)
the legal and sole beneficial owner of such Pledged Stock and (ii) the payee
with respect to the Pledged Notes; and (c) such Pledged Stock constitutes the
respective amount of the issued and outstanding capital stock of each Pledged
Company set forth opposite the name of such Pledged Company on Annex B attached
hereto.
4. PLEDGE OF SECURITIES, ETC.
4.1 PLEDGE. To secure the Obligations, each Pledgor hereby pledges
and deposits with the Pledgee the Securities owned by each Pledgor on the date
hereof, and delivers to the Pledgee (i) the certificates representing the
Pledged Stock accompanied by stock powers duly executed in blank by each Pledgor
and (ii) the instruments evidencing the Pledged Notes accompanied by assignment
forms duly executed in blank by each Pledgor or duly endorsed in blank or in
favor of the Pledgee by each Pledgor; and hereby assigns, transfers,
hypothecates and sets over to the Pledgee all of each Pledgor's right, title and
interest in, to and under any and all Securities now owned or hereafter acquired
by any Pledgor, and all principal, interest, dividends, cash, certificates,
instruments and other property from time to time received, receivable or
otherwise distributed in respect of or in exchange for any and all of such
securities, and all proceeds of the foregoing, all to be held by the Pledgee,
upon the terms and conditions set forth in this Agreement; PROVIDED that the
Pledged Notes (a) issued to any Pledgor by any Subsidiary of the Company that is
not a Significant Subsidiary or (b) held by or issued to a Pledgor by any person
in connection with an Asset Sale which are in an aggregate original principal
amount, for any individual Asset Sale, of $500,000 or less, shall not be
required to be deposited with the Pledgee, unless, in either such case, an Event
of Default shall have occurred and be continuing and any Pledgor shall have
received from the Pledgee a written request or requests that such Pledgor
deliver such Pledged Notes to the Pledgee.
4.2 SUBSEQUENTLY ACQUIRED SECURITIES. If at any time or from time to
time after the date hereof, any Pledgor shall acquire any additional Securities
(by pur-
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chase, stock dividend or otherwise) or any Pledgor shall possess any additional
Securities by virtue of possessing capital stock of a Person which becomes a
Significant Subsidiary, such Pledgor will, forthwith (i) pledge and deposit with
the Pledgee such Securities, provided that in no event shall the Pledgor be
required to pledge any promissory note issued to it by, or more than 65% of all
of the outstanding shares of capital stock of, any Excludable Foreign
Subsidiary; and (ii) deliver to the Pledgee the certificates or instruments
therefor, accompanied by stock powers or assignment forms duly executed in blank
by such Pledgor to the extent such Pledgor would have been required pursuant to
Section 5.1(c) of the Company Credit Agreement and Section 4.1 of this Agreement
to pledge such securities if they had been possessed as of the date hereof, and
will promptly thereafter deliver to the Pledgee a certificate executed by an
authorized officer of such Pledgor describing such Securities and certifying
that the same has been duly pledged with the Pledgee hereunder; PROVIDED that
the Pledged Notes (a) issued to any Pledgor by any Subsidiary of the Company
that is not a Significant Subsidiary or (b) held by or issued to a Pledgor by
any person in connection with an Asset Sale which are in an aggregate original
principal amount, for any individual Asset Sale, of $500,000 or less, shall not
be required to be deposited with the Pledgee, unless, in either such case, an
Event of Default shall have occurred and be continuing and any Pledgor shall
have received from the Pledgee a written request or requests that such Pledgor
deliver such Pledged Notes to the Pledgee.
4.3 DEFINITIONS OF PLEDGED SECURITIES AND COLLATERAL. All Securities
at any time pledged or required to be pledged hereunder are hereinafter called
the "Pledged Securities," and the Pledged Securities, together with all other
securities and moneys received and at the time held by the Pledgee hereunder and
any proceeds of any of the foregoing, are hereinafter called the "Collateral."
5. APPOINTMENT OF SUB-AGENTS; ENDORSEMENTS, ETC. The Pledgee shall
have the right to appoint one or more subagents for the purpose of retaining
physical possession of the Collateral, which may be held (if applicable and in
the discretion of the Pledgee) in the name of each Pledgor, endorsed or assigned
in blank or in
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favor of the Pledgee or any nominee or nominees of the Pledgee or a sub-agent
appointed by the Pledgee. The Pledgee agrees to give the Company prompt notice
of any such appointment; PROVIDED that the failure of the Pledgee to give such
notice shall not affect the effectiveness of any such appointment.
6. VOTING, ETC. Unless and until an Event of Default (such term to
mean an Event of Default under, and as defined in, either Credit Agreement)
shall have occurred and be continuing, each Pledgor shall be entitled to vote
any and all of its Pledged Stock and to give consents, waivers or ratifications
in respect thereof; PROVIDED that no vote shall be cast or any consent, waiver
or ratification given or any action taken which would violate or be inconsistent
with any of the terms of this Agreement or any instrument or agreement relating
to the Obligations, or which would have the effect of materially impairing the
position or interests of the Pledgee or any other Secured Creditor, except to
the extent not prohibited by the Company Credit Agreement, and each Pledgor
shall give the Pledgee at least five Business Days' written notice of the manner
in which it intends to exercise, or the reasons for refraining from exercising,
any such right if the exercise or non-exercise of such right potentially may
violate or be inconsistent with the aforementioned agreements or may materially
impair the position or interests of the Pledgee or any other Secured Creditor;
PROVIDED, further, nothing herein contained shall be deemed to limit or restrict
each Pledgor's right to take any such actions in connection with the issuance by
any Unrestricted Subsidiary of any equity interests or debt obligations. All
such rights of the Pledgors to vote and to give consents, waivers and
ratifications shall cease in case an Event of Default shall occur and be
continuing, and Section 8 hereof shall become applicable. No Pledgor will, at
any time, amend, restate, supplement, waive or otherwise modify in any respect
adverse to the interests of the Secured Creditors any provision of any Pledged
Note, nor take any action which would release or render unenforceable any of the
obligations of any of the Subsidiaries or any other Person under its respective
Pledged Note.
7. DIVIDENDS AND OTHER DISTRIBUTIONS. Unless an Event of Default
shall have occurred and be continuing, all principal, interest and cash
dividends payable
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in respect of the Pledged Securities shall be paid to each respective Pledgor.
The Pledgee shall be entitled to receive directly, and to retain as part of the
Collateral:
(a) all other or additional stock or securities and, after the
occurrence and during the continuance of an Event of Default, property
(including cash) paid or distributed by way of dividend in respect of the
Pledged Securities;
(b) all other or additional stock or other securities and, after
the occurrence and during the continuance of an Event of Default, property
(including cash) paid or distributed in respect of the Pledged Securities by way
of stock-split, spin-off, split-up, reclassification, combination of shares or
similar rearrangement; and
(c) all other or additional stock or other securities and, after
the occurrence and during the continuance of an Event of Default, property
(including cash) which may be paid in respect of the Pledged Securities by
reason of any consolidation, merger, exchange of stock, conveyance of assets,
liquidation or similar corporate reorganization or other disposition of
Collateral.
8. REMEDIES IN CASE OF EVENT OF DEFAULT. In case an Event of
Default shall have occurred and be continuing, the Pledgee shall be entitled to
exercise all of the rights, powers and remedies (whether vested in it by this
Agreement, any other Credit Document or by law and including, without
limitation, all rights and remedies of a secured party of a debtor in default
under the Uniform Commercial Code (the "Code") in effect in any relevant
jurisdiction at that time) for the protection and enforcement of its rights in
respect of the Collateral, and to the extent permitted by applicable law the
Pledgee shall be entitled, without limitation, to exercise the following rights,
which each Pledgor hereby agrees to be commercially reasonable:
(a) to receive all amounts payable in respect of the Collateral
otherwise payable under Section 7 to the Pledgors and to enforce the payment of
the
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Pledged Notes and to exercise all of the rights, powers, and remedies of each
Pledgor thereunder;
(b) to transfer all or any part of the Collateral into the
Pledgee's name or the name of its nominee or nominees;
(c) to vote all or any part of the Collateral (whether or not
transferred into the name of the Pledgee) and give all consents, waivers and
ratifications in respect of the Collateral and otherwise act with respect
thereto as though it were the outright owner thereof;
(d) at any time or from time to time to sell, assign and
deliver, or grant options to purchase, all or any part of the Collateral in one
or more parcels, or any interest therein, at any public or private sale at any
exchange, broker's board or at any of the Pledgee's offices or elsewhere,
without demand of performance, advertisement or notice of intention to sell or
of the time or place of sale or adjournment thereof or to redeem or otherwise
(all of which are hereby expressly and irrevocably waived by each Pledgor), for
cash, on credit or for other property, for immediate or future delivery without
any assumption of credit risk, and for such price or prices and on such terms as
the Pledgee in its absolute discretion may determine. The Pledgee agrees that
to the extent that notice of sale shall be required by law that at least 10
days' notice to each Pledgor of the time and place of any public sale or the
time after which any private sale is to be made shall constitute reasonable
notification. The Pledgee shall not be obligated to make any sale of Collateral
regardless of notice of sale having been given. The Pledgee may adjourn any
public or private sale from time to time by announcement at the time and place
fixed therefor, and any such sale may, without further notice, be made at the
time and place to which it was so adjourned. Each Pledgor hereby waives and
releases to the fullest extent permitted by law any right or equity of
redemption with respect to the Collateral, whether before or after sale
hereunder, and all rights, if any, of marshaling the Collateral and any other
security for the obligations or otherwise. At any such sale, unless prohibited
by applicable law, the Pledgee, on behalf of the Secured Creditors or any
Secured Creditor, may bid for and purchase all or any part
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of the Collateral so sold free from any such right or equity of redemption.
Neither the Pledgee nor any Secured Creditor shall be liable for failure to
collect or realize upon any or all of the Collateral or for any delay in so
doing nor shall any of them be under any obligation to take any action
whatsoever with regard thereto;
(e) to settle, adjust, compromise and arrange all accounts,
controversies, questions, claims and demands whatsoever in relation to all or
any part of the Collateral;
(f) in respect of the Pledged Securities, to execute all such
contracts, agreements, deeds, documents and instruments; to bring, defend and
abandon all such actions, suits and proceedings, and to take all actions in
relation to all or any part of the Collateral as the Pledgee in its absolute
discretion may determine;
(g) to appoint managers, sub-agents, officers and servants for
any of the purposes mentioned in the foregoing provisions of this Section 8 and
to dismiss the same, all as the Pledgee in its absolute discretion may
determine; and
(h) generally, to take all such other action as the Pledgee in
its absolute discretion may determine as incidental or conducive to any of the
matters or powers mentioned in the foregoing provisions of this Section 8 and
which the Pledgee may or can do lawfully and to use the name of any Pledgor for
the purposes aforesaid and in any proceedings arising therefrom.
9. REMEDIES, ETC., CUMULATIVE. Each right, power and remedy of the
Pledgee provided for in this Agreement or any other Credit Document or now or
hereafter existing at law or in equity or by statute shall be cumulative and
concurrent and shall be in addition to every other such right, power or remedy.
The exercise or beginning of the exercise by the Pledgee or any Secured Creditor
of any one or more of the rights, powers or
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remedies provided for in this Agreement or any other Credit Document or now or
hereafter existing at law or in equity or by statute or otherwise shall not
preclude the simultaneous or later exercise by the Pledgee or any Secured
Creditor of all such other rights, powers or remedies, and no failure or delay
on the part of the Pledgee or any Secured Creditor to exercise any such right,
power or remedy shall operate as a waiver thereof.
10. APPLICATION OF PROCEEDS. All moneys collected by the Pledgee
upon any sale or other disposition of the Collateral, together with all other
moneys received by the Pledgee hereunder shall be applied as follows:
(a) first, to the payment of any and all expenses and fees
(including reasonable attorneys' fees) actually incurred by the Pledgee in
obtaining, taking possession of, removing, storing and disposing of Collateral
and any and all amounts incurred by the Pledgee in connection therewith or owing
to the Pledgee hereunder;
(b) next, any surplus then remaining, to the payment of the
other Obligations; and
(c) if the Total Commitment is then terminated, all Loans (under
and as defined in each Credit Agreement) have been paid in full, no Letters of
Credit or Subsidiary Letters of Credit are outstanding and no other Obligation
is outstanding, any surplus then remaining shall be paid to the Company,
subject, however, to the rights of the holder of any then existing Lien of which
the Agent has actual notice (without investigation);
it being understood that the Pledgor shall remain liable to the extent of any
deficiency between the amount of the proceeds of the Collateral and the
aggregate amount of the sums referred to in clauses (a) and (b) of this Section
10.
Notwithstanding the foregoing, in no event shall moneys attributable
to a given Pledgor (when aggregated with all other amounts contemporaneously
received from such Pledgor under any other Security Document in respect of the
Obligations) be applied pursuant to the foregoing clause in excess of its
Maximum Guaranty Liability (as defined in the Subsidiary Guaranty), with any
excess to be paid to such Pledgor or to whomever may be lawfully entitled to
receive the same.
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11. PURCHASERS OF COLLATERAL. Upon any sale of any of the Collateral
hereunder (whether by virtue of the power of sale herein granted, pursuant to
judicial process or otherwise), the receipt of the Pledgee or the officer making
the sale shall be a sufficient discharge to the purchaser or purchasers of the
Collateral so sold, and such purchaser or purchasers shall not be obligated to
see to the application of any part of the purchase money paid over to the
Pledgee or such officer or be answerable in any way for the misapplication or
nonapplication thereof.
12. INDEMNITY. Without duplication of any amounts payable under
Section 12.1 of each Credit Agreement, each Pledgor shall jointly and severally,
subject, with respect to each Pledgor, to the last paragraph of Paragraph 10:
(i) whether or not the transactions hereby contemplated are consummated, pay all
reasonable out-of-pocket costs and expenses of the Pledgee actually incurred in
connection with the administration (both before and after the execution hereof
and including advice of counsel as to the rights and duties of the Pledgee with
respect thereto) of and in connection with the preparation, execution and
delivery of this Agreement (including, without limitation, the reasonable fees
and disbursements of Skadden, Arps, Slate, Meagher & Flom and of the Pledgee
actually incurred in connection with the preservation of rights under, and
enforcement of, and, after an Event of Default, the renegotiation or
restructuring of this Agreement and any amendment, waiver or consent relating
thereto (including, without limitation, the reasonable fees and disbursements of
counsel for the Pledgee); (ii) pay and hold the Pledgee harmless from and
against any and all present and future stamp or documentary taxes or any other
excise or property taxes, charges or similar levies which arise from any payment
made hereunder or from the execution, delivery or registration of, or otherwise
with respect to this Agreement and save the Pledgee harmless from and against
any and all liabilities with respect to or resulting from any delay or omission
to pay any such taxes, charges or levies; and (iii) indemnify the Pledgee, its
officers, directors, employees, representatives and agents from and hold each of
them harmless against any and all costs, losses, liabilities, claims, damages or
expenses actually incurred by any of them (whether or not any of them is
designated a party thereto) arising out of or by reason
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of any investigation, litigation or other proceeding related to this Agreement
or any transaction contemplated hereby, including, without limitation, the
reasonable fees and disbursements of counsel incurred in connection with any
such investigation, litigation or other proceeding. Notwithstanding anything in
this Agreement to the contrary, no Pledgor shall be responsible to the Pledgee,
or any officer, director, employee, representative or agent of the foregoing (an
"Indemnified Party") for any losses, damages, liabilities or expenses which
result from such Indemnified Party's gross negligence or willful misconduct. It
is understood that no Pledgor shall, in connection with any single action, suit,
proceeding or claim or separate but substantially similar or related actions,
suits, proceedings or claims, arising out of the same general allegations or
circumstances, be liable for the fees and expenses of more than one separate
firm of attorneys at the same time for the Indemnified Parties (which firm shall
be designated by the Pledgee) except that, if any Indemnified Party other than
the Pledgee shall determine, in its sole discretion, that there may be a
conflict in such firm representing the Pledgee and such Indemnified Party, then
the Pledgors shall be liable for the reasonable fees and expenses of an
additional firm for such Indemnified Party whose interests may be in conflict.
The Pledgors' obligations under this Section 12 shall survive any termination of
this Agreement.
13. FURTHER ASSURANCES. Each Pledgor agrees that it will join
with the Pledgee in executing and, at its own expense, file and refile under the
Uniform Commercial Code such financing statements, continuation statements and
other documents in such offices as the Pledgee may deem necessary or appropriate
and wherever required or permitted by law in order to perfect and preserve the
Pledgee's security interest in the Collateral and hereby authorizes the Pledgee
to file financing statements and amendments thereto relative to all or any part
of the Collateral without the signature of such Pledgor and to sign the same in
the name of such Pledgor, in each case where permitted by law, and agrees to do
such further acts and things and to promptly execute and deliver to the Pledgee
such additional conveyances, assignments, agreements and instruments as the
Pledgee may reasonably require or deem advisable to carry into effect the
purposes of this Agreement or to further
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assure and confirm unto the Pledgee its rights, powers and remedies hereunder.
14. THE PLEDGEE AS AGENT. (a) The Pledgee will hold in accordance
with this Agreement all items of the Collateral at any time received under this
Agreement. It is expressly understood and agreed that the obligations of the
Pledgee as holder of the Collateral and interests therein and with respect to
the disposition thereof, and otherwise under this Agreement, are only those
expressly set forth in this Agreement.
(b) The Pledgee shall be deemed to have exercised reasonable
care in the custody and preservation of the Collateral in its possession if the
Collateral is accorded treatment substantially equal to that which the Pledgee
accords its own property, it being understood that neither the Pledgee nor any
Secured Creditor shall have responsibility for (i) ascertaining or taking action
with respect to calls, conversions, exchanges, maturities, tenders or other
matters relative to any Collateral, whether or not the Pledgee or any Secured
Creditor has or is deemed to have knowledge of such matters, or (ii) taking any
necessary steps to preserve rights against any parties with respect to any
Collateral.
15. TRANSFER BY THE PLEDGORS. No Pledgor will sell or otherwise
dispose of, grant any option with respect to, or mortgage, pledge or otherwise
encumber any of the Collateral or any interest therein (except pursuant to
Section 21 of this Agreement or as otherwise expressly permitted by the Credit
Agreements).
16. REPRESENTATIONS AND WARRANTIES. Each Pledgor hereby represents
and warrants that (a) it is the legal and beneficial owner of, and has good and
marketable title to, the Securities described in Section 3 hereof, subject to no
pledge, lien, mortgage, hypothecation, security interest, charge, option or
other encumbrance whatsoever, except the liens and security interests created by
this Agreement and as permitted by the Credit Agreements; (b) it has full power,
authority and legal right to pledge all the Securities pursuant to this
Agreement; (c) except as set forth in Schedule 6.7 of the Company Credit
Agreement, no consent of any other party (including, without limitation, any
stockholder or creditor of such Pledgor, any Pledged Company or any Charter
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Subsidiary) and no order, consent, license, permit, approval, validation or
authorization of, exemption by, notice to, or registration, recording, filing or
declaration with, any governmental or public body or authority is required to be
obtained by such Pledgor in connection with the execution, delivery or
performance of this Agreement or consummation of the transactions contemplated
hereby, including, without limitation, the exercise by the Pledgee of the voting
or other rights provided for in this Agreement or the remedies in respect of the
Collateral pursuant to this Agreement (except as may be required (i) from
stockholders of the Pledgor's Subsidiaries other than the Pledgor and (ii) in
connection with the disposition of the Pledged Securities by laws affecting the
offering and sale of securities generally); (d) all shares of Pledged Stock have
been duly and validly issued, are fully paid and nonassessable and such Pledgor
is a holder in due course of the Pledged Notes which it acquired for value, and
in good faith and without notice of any claim or defense thereto on the part of
any person; and (e) the pledge, assignment and delivery of the Securities
pursuant to this Agreement creates a valid and perfected security interest in
the Securities and the proceeds thereof superior to and prior to the rights of
all other Persons therein (as provided in the Uniform Commercial Code) (except
as permitted by the Credit Agreements).
17. COVENANTS OF THE PLEDGORS. Each Pledgor covenants and agrees
that (a) such Pledgor will defend the Pledgee's right, title and security
interest in and to the Collateral against the claims and demands of all persons
whomsoever (except as against Persons holding liens, security interests, or
other encumbrances permitted by the Credit Agreements having priority over the
security interest granted hereunder pursuant to applicable law); (b) such
Pledgor will have like title to and right to pledge any other property at any
time hereafter constituting Collateral and will likewise defend the right
thereto and security interest therein of the Pledgee and the Secured Creditors;
and (c) such Pledgor will not, with respect to any Collateral, enter into any
shareholder agreements, voting agreements, voting trusts, trust deeds,
irrevocable proxies or any other similar agreements or instruments, except for
any contained in the Transaction Documents.
15
18. PLEDGORS' OBLIGATIONS ABSOLUTE, ETC. The obligations of each
Pledgor under this Agreement shall be joint, several, absolute and unconditional
in accordance with its terms and shall remain in full force and effect without
regard to, and shall not be released, suspended, discharged, terminated or
otherwise affected by, any circumstance or occurrence whatsoever, including,
without limitation: (a) any change in the time, place or manner of payment of,
or in any other term of, all or any of the Obligations, any waiver, indulgence,
renewal, extension, amendment or modification of or addition, consent or
supplement to or deletion from or any other action or inaction under or in
respect of either Credit Agreement, any Note, any other Credit Document or any
other documents, instruments or agreements relating to the Obligations or any
other instrument or agreement referred to therein or any assignment or transfer
of any thereof; (b) any lack of validity or enforceability of either Credit
Agreement, any Note, any other Credit Document, or any other documents,
instruments or agreements referred to therein or any assignment or transfer of
any thereof; (c) any furnishing of any additional security to the Pledgee, the
Secured Creditors or their assignees or any acceptance thereof or any release of
any security by the Pledgee, the Secured Creditors or their assignees; (d) any
limitation on any party's liability or obligations under any such instrument or
agreement or any invalidity or unenforceability, in whole or in part, of any
such instrument or agreement or any term thereof; (e) any bankruptcy,
insolvency, reorganization, composition, adjustment, dissolution, liquidation or
other like proceeding relating to such Pledgor or any subsidiary or stockholder
of such Pledgor, or any action taken with respect to this Agreement by any
trustee or receiver, or by any court, in any such proceeding, whether or not
such Pledgor shall have notice or knowledge of any of the foregoing; (f) any
exchange, release or nonperfection of any other collateral, or any release, or
amendment or waiver of or consent to departure from any guaranty or security,
for all or any of the Obligations; or (g) any other circumstance which might
otherwise constitute a defense available to, or a discharge of, such Pledgor.
19. REGISTRATION, ETC. (a) If an Event of Default shall have
occurred and be continuing and any Pledgor shall have received from the Pledgee
a written request or requests that such Pledgor cause any registra-
16
tion, qualification or compliance under any Federal or state securities law or
laws to be effected with respect to all or any part of the Pledged Securities,
such Pledgor as soon as practicable and at its own expense will use its best
efforts to cause such registration to be effected (and be kept effective) and
will use its best efforts to cause such qualification and compliance to be
effected (and be kept effective) as may be so requested and as would permit or
facilitate the sale and distribution of such Pledged Securities, including,
without limitation, registration under the Securities Act of 1933 as then in
effect (or any similar statute then in effect), appropriate qualifications under
applicable blue sky or other state securities laws and appropriate compliance
with any other government requirements, and reasonably do or cause to be done
all such other reasonable acts and things as may be necessary to make such sale
of the Pledged Securities valid and binding in compliance with applicable laws;
PROVIDED, that the Pledgee shall furnish to such Pledgor such information
regarding the Pledgee as such Pledgor may reasonably request in writing and as
shall be required in connection with any such registration, qualification or
compliance. Each Pledgor will cause the Pledgee to be kept reasonably advised in
writing as to the progress of each such registration, qualification or
compliance and as to the completion thereof, will furnish to the Pledgee such
number of prospectuses, offering circulars or other documents incident thereto
as the Pledgee from time to time may reasonably request, and will indemnify the
Pledgee and all others participating in the distribution of such Pledged
Securities against all claims, losses, damages and liabilities caused by any
untrue statement (or alleged untrue statement) of a material fact contained
therein (or in any related registration statement, notification or the like) or
by any omission (or alleged omission) to state therein (or in any related
transaction statement, notification or the like) a material fact required to be
stated therein or necessary to make the statements not misleading, except
insofar as the same may have been caused by an untrue statement or omission
based upon information furnished in writing to such Pledgor by the Pledgee
expressly for use therein.
(b) If at any time when any Pledgee shall determine to exercise
its right to sell all or any part of the Pledged Securities pursuant to Section
8, such
17
Pledged Securities or the part thereof to be sold shall not, for any reason
whatsoever, be effectively registered under the Securities Act of 1933, as then
in effect, the Pledgee may, in its sole and absolute discretion, sell such
Pledged Securities or part thereof by private sale in such manner and under such
circumstances as the Pledgee may deem necessary or advisable in order that such
sale may legally be effected without such registration. Without limiting the
generality of the foregoing, in any such event the Pledgee, in its sole and
absolute discretion (i) may proceed to make such private sale notwithstanding
that a registration statement for the purpose of registering such Pledged
Securities or part thereof shall have been filed under such Securities Act, (ii)
may approach and negotiate with a single possible purchaser to effect such sale,
and (iii) may restrict such sale to a purchaser who will represent and agree
that such purchaser is purchasing for its own account, for investment, and not
with a view to the distribution or sale of such Pledged Securities or part
thereof. In the event of any such sale, the Pledgee shall incur no
responsibility or liability for selling all or any part of the Pledged
Securities at a price which the Pledgee, in its sole and absolute discretion,
may in good faith deem reasonable under the circumstances, notwithstanding the
possibility that a substantially higher price may be realized if the sale were
deferred until after registration as aforesaid.
20. NOTICES, ETC. All notices and other communications hereunder
shall be given to the Company (on behalf of each Pledgor), the Pledgee and the
Agent at the addresses and in the manner specified in the Credit Agreements.
21. POWER OF ATTORNEY. Each Pledgor hereby absolutely and
irrevocably constitutes and appoints the Pledgee such Pledgor's true and lawful
agent and attorney-in-fact, with full power of substitution, in the name of such
Pledgor upon the occurrence and during the continuance of an Event of Default:
(a) to execute and do all such assurances, acts and things which such Pledgor
ought to do (but has failed to do) under the covenants and provisions contained
in this Agreement; (b) to take any and all such action as the Agent or any of
its sub-agents or attorneys may, in its or their sole and absolute discretion,
reasonably determine as necessary or advisable for the purpose of maintaining,
preserving or
18
protecting the security constituted by this Agreement or any of the rights,
remedies, powers or privileges of the Pledgee under this Agreement; and (c)
generally, in the name of such Pledgor exercise all or any of the powers,
authorities, and discretions conferred on or reserved to the Pledgee by or
pursuant to this Agreement, and (without prejudice to the generality of any of
the foregoing) to seal and deliver or otherwise perfect any deed, assurance,
agreement, instrument or act as the Pledgee may deem proper in or for the
purpose of exercising any of such powers, authorities or discretions. Each
Pledgor hereby ratifies and confirms, and hereby agrees to ratify and confirm,
whatever lawful acts the Pledgee or any of the Pledgee's sub-agents or attorneys
shall do or purport to do in the exercise of the power of attorney granted to
the Pledgee pursuant to this Section 21, which power of attorney, being given
for security, is irrevocable and coupled with an interest.
22. TERMINATION, RELEASE. (a) At any time and from time to time, at
the request and expense of any Pledgor, the Pledgee shall release to such
Pledgor shares of Pledged Stock to enable such Pledgor to take actions permitted
pursuant to the terms and conditions of the Company Credit Agreement, including,
without limitation, to effect Asset Sales and sales of such shares of Pledged
Stock so long as the Company and the Pledgors shall remain in compliance with
Section 8.2 of the Company Credit Agreement.
(b) After full payment and performance of all of the Obligations
(other than indemnities which by their terms survive the repayment of the Loans
and the Revolving Loans) and the irrevocable termination of the commitments of
the Lenders under the Credit Agreements, this Agreement, so long as no Letter of
Credit or Subsidiary Letter of Credit is outstanding, shall terminate, and the
Pledgee, at the request and expense of each Pledgor, will execute and deliver to
the Pledgor a proper instrument or instruments acknowledging the satisfaction
and termination of this Agreement, and will duly assign, transfer and deliver to
each respective Pledgor (without recourse and without any representation or
warranty) such of the Collateral as may be in the possession of the Pledgee and
as has not theretofore been sold or otherwise applied or released pursuant to
this Agreement, together
19
with any moneys at the time held by the Pledgee hereunder.
23. MISCELLANEOUS. Each Pledgor agrees with the Pledgee that each of
the obligations and liabilities of each Pledgor to the Pledgee under this
Agreement may be enforced against each Pledgor without the necessity of joining
any Pledged Company, any other Subsidiary of the Company or any other Person as
a party. This Agreement shall create a continuing security interest in the
Collateral and shall be binding upon the successors and assigns of each Pledgor
and shall inure to the benefit of and be enforceable by the Pledgee, the Secured
Creditors and their respective permitted successors and assigns. Without
limiting the generality of the foregoing sentence, any Secured Creditor may
assign or otherwise transfer any note held by it to any other person or entity
in accordance with the provisions of either of the Credit Agreements, to the
extent permitted by such agreement, and such other person or entity shall
thereupon become vested with all the benefits in respect thereof granted to such
Secured Creditor herein. This Agreement may be changed, waived, discharged or
terminated only in accordance with the provisions of the Credit Agreements or as
provided in Section 22. Unless otherwise defined herein or in the Company
Credit Agreement, terms defined in Article 9 of the Uniform Commercial Code in
the State of New York are used herein as defined. The headings in this
Agreement are for purposes of reference only and shall not limit or define the
meaning hereof. This Agreement may be executed in any number of counterparts,
each of which shall be an original, but all of which shall constitute one
instrument. In the event that any provision of this Agreement shall prove to be
invalid or unenforceable, such provision shall be deemed to be severable from
the other provisions of this Agreement which shall remain binding on all parties
hereto.
24. COLLATERAL AGENT. The appointment of the Collateral Agent as
Collateral Agent hereunder pursuant to the Intercreditor Agreement has been
ratified and confirmed by the Lenders in the Credit Agreements, and the
Collateral Agent shall be entitled to the benefits of the Credit Agreements. The
Collateral Agent shall be obligated, and shall have the right hereunder, to make
demands, to give notices, to exercise or refrain from exercising any rights, and
to take or refrain from taking
20
action (including, without limitation, the release or substitution of
Collateral) solely in accordance with this Agreement and the Credit Agreements.
The Collateral Agent may resign and a successor Collateral Agent may be
appointed in the manner provided in the Credit Agreements. Upon the acceptance
of any appointment as a Collateral Agent by a successor Collateral Agent, that
successor Collateral Agent shall thereupon succeed to and become vested with all
the rights, powers, privileges and duties of the retiring Collateral Agent under
this Agreement, and the retiring Collateral Agent shall thereupon be discharged
from its duties and obligations under this Agreement. After any retiring
Collateral Agent's resignation, the provisions of this Agreement shall inure to
its benefit as to any actions taken or omitted to be taken by it under this
Agreement while it was Collateral Agent.
25. GOVERNING LAW; APPOINTMENT OF AGENT FOR SERVICE OF PROCESS;
SUBMISSION TO JURISDICTION. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF
THE PARTIES HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY
THE LAW OF THE STATE OF NEW YORK (WITHOUT GIVING EFFECT TO THE CONFLICT OF LAW
PRINCIPLES THEREOF). ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS
AGREEMENT OR ANY DOCUMENT RELATED HERETO MAY BE BROUGHT IN THE COURTS OF THE
STATE OF NEW YORK OR OF THE UNITED STATES OF AMERICA FOR THE SOUTHERN DISTRICT
OF NEW YORK, AND, BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH PLEDGOR
HEREBY CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE JURISDICTION
OF THE AFORESAID COURTS SOLELY FOR THE PURPOSE OF ADJUDICATING ITS RIGHTS OR THE
RIGHTS OF THE COLLATERAL AGENT OR THE AGENT WITH RESPECT TO THIS AGREEMENT OR
ANY DOCUMENT RELATED HERETO. EACH PLEDGOR HEREBY IRREVOCABLY DESIGNATES CT
CORPORATION SYSTEM, LOCATED AT 1633 BROADWAY, NEW YORK, NEW YORK 10019 AS THE
DESIGNEE, APPOINTEE AND AGENT OF SUCH PLEDGOR, TO RECEIVE, FOR AND ON BEHALF OF
SUCH PLEDGOR, SERVICE OF PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY
DOCUMENT RELATED HERETO AND SUCH SERVICE SHALL, TO THE EXTENT PERMITTED BY
APPLICABLE LAW, BE DEEMED COMPLETED TEN DAYS AFTER DELIVERY THEREOF TO SAID
AGENT. IT IS UNDERSTOOD THAT A COPY OF SUCH PROCESS SERVED ON SUCH AGENT WILL
BE PROMPTLY FORWARDED BY MAIL TO THE COMPANY (ON BEHALF OF THE RESPECTIVE
PLEDGOR) AT ITS ADDRESS SET FORTH IN THE COMPANY CREDIT AGREEMENT, BUT THE
FAILURE OF THE COMPANY (ON BEHALF OF SUCH PLEDGOR) TO RECEIVE SUCH
21
COPY SHALL NOT, TO THE EXTENT PERMITTED BY APPLICABLE LAW, AFFECT IN ANY WAY THE
SERVICE OF SUCH PROCESS. EACH PLEDGOR HEREBY IRREVOCABLY WAIVES, TO THE EXTENT
PERMITTED BY APPLICABLE LAW, ANY OBJECTION, INCLUDING, WITHOUT LIMITATION, ANY
OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON
CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR
PROCEEDING IN SUCH RESPECTIVE JURISDICTIONS IN RESPECT OF THIS AGREEMENT OR ANY
DOCUMENT RELATED THERETO. NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE PLEDGEE
TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL
PROCEEDINGS OR OTHERWISE PROCEED AGAINST ANY PLEDGOR IN ANY OTHER JURISDICTION.
26. WAIVER OF TRIAL BY JURY. TO THE EXTENT PERMITTED BY APPLICABLE
LAW, EACH PLEDGOR HEREBY IRREVOCABLY WAIVES ALL RIGHT OF TRIAL BY JURY IN ANY
ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR IN CONNECTION WITH THIS
AGREEMENT, OR ANY MATTER ARISING IN CONNECTION HEREUNDER.
27. AMENDMENT AND RESTATEMENT. This Agreement constitutes an
amendment and restatement of the 1992 Subsidiary Stock and Notes Pledge amended
hereby (the "Original Instrument"), and such Original Instrument shall continue
in effect on and after the date hereof as so amended and restated. The parties
do not intend that this Agreement constitute a novation, termination, release or
satisfaction of the Original Instrument, or constitute payment or satisfaction
of any indebtedness or other obligation secured by the Original Instrument.
22
Charter Medical Corporation
Subsidiary Stock and Notes Pledge Agreement
May 2, 1994
IN WITNESS WHEREOF, each Pledgor and the Pledgee have caused this
Agreement to be executed by their duly elected officers duly authorized as of
the date first above written.
BANKERS TRUST COMPANY,
in its capacity as
Collateral Agent, as
Pledgee
By /s/ Mary Kay Coyle
------------------------------------
Name: Mary Kay Coyle
Title: Vice President
PLEDGORS:
By /s/ Charlotte A. Sanford
--------------------------------------
Charlotte A. Sanford,
in her capacity as
Treasurer for each of
the Corporations list-
ed on Annex A
IN WITNESS WHEREOF, Charter Medical of England Limited has caused this
instrument to be duly executed as a Deed and delivered by two of its Directors
thereunto duly authorized as of the date first above written.
/s/ Charlotte A. Sanford
- ------------------------------------
Charlotte A. Sanford
Director
/s/ James M. Filush
- ------------------------------------
James M. Filush
Director
[COMMON SEAL]
The Common Seal of
Charter Medical (Cayman Islands) Ltd.
was hereunto affixed in the presence of:
/s/ John C. McCauley
- ------------------------------------
John C. McCauley
Director
/s/ Glenn A. McRae
- ------------------------------------
Glenn A. McRae
Director
[COMMON SEAL]
The Common Seal of
Charter Medical International, Inc.
was hereunto affixed in the presence of:
/s/ John C. McCauley
- ------------------------------------
John C. McCauley
Director
/s/ Glenn A. McRae
- ------------------------------------
Glenn A. McRae
Director
ANNEX A
-------
SECOND AMENDED AND RESTATED SUBSIDIARY STOCK
--------------------------------------------
AND NOTES PLEDGE AGREEMENT
--------------------------
DOMESTIC SUBSIDIARIES:
- ----------------------
1. Ambulatory Resources, Inc.
Subsidiary:
2. Gwinnett Immediate Care Center, Inc.
3. Holcomb Bridge Immediate Care Center, Inc.
4. Atlanta MOB, Inc.
5. Beltway Community Hospital, Inc.
6. CCM, Inc. (50%-Charter Medical Corporation and 50%-CMCI,Inc.)
7. Charter Alvarado Behavioral Health System, Inc.
8. Charter Appalachian Hall Behavioral Health System, Inc.
9. Charter Arbor Indy Behavioral Health System, Inc.
10. Charter Augusta Behavioral Health System, Inc.
11. Charter Bay Harbor Behavioral Health System, Inc.
12. Charter Beacon Behavioral Health System, Inc.
13. Charter Behavioral Health System at Fair Oaks, Inc.
14. Charter Behavioral Health System at Hidden Brook, Inc.
15. Charter Behavioral Health System at Los Altos, Inc.
16. Charter Behavioral Health System at Potomac Ridge, Inc.
17. Charter Behavioral Health System at Warwick Manor, Inc.
18. Charter Behavioral Health System of Athens, Inc.
19. Charter Behavioral Health System of Austin, Inc.
20. Charter Behavioral Health System of Baywood, Inc.
21. Charter Behavioral Health System of Bradenton, Inc.
22. Charter Behavioral Health System of Canoga Park, Inc.
23. Charter Behavioral Health System of Central Georgia, Inc.
24. Charter Behavioral Health System of Charleston, Inc.
25. Charter Behavioral Health System of Charlottesville, Inc.
26. Charter Behavioral Health System of Chicago, Inc.
27. Charter Behavioral Health System of Chula Vista, Inc.
28. Charter Behavioral Health System of Columbia, Inc.
29. Charter Behavioral Health System of Corpus Christi, Inc.
30. Charter Behavioral Health System of Dallas, Inc.
31. Charter Behavioral Health System of Evansville, Inc.
32. Charter Behavioral Health System of Fort Worth, Inc.
33. Charter Behavioral Health System of Jackson, Inc.
34. Charter Behavioral Health System of Jacksonville, Inc.
35. Charter Behavioral Health System of Jefferson, Inc.
36. Charter Behavioral Health System of Kansas City, Inc.
37. Charter Behavioral Health System of Lafayette, Inc.
38. Charter Behavioral Health System of Lake Charles, Inc.
39. Charter Behavioral Health System of Lakewood, Inc.
Page 1
ANNEX A
-------
SECOND AMENDED AND RESTATED SUBSIDIARY STOCK
--------------------------------------------
AND NOTES PLEDGE AGREEMENT
--------------------------
40. Charter Behavioral Health System of Michigan City, Inc.
41. Charter Behavioral Health System of Mobile, Inc.
42. Charter Behavioral Health System of Nashua, Inc.
43. Charter Behavioral Health System of Nevada, Inc.
44. Charter Behavioral Health System of New Mexico, Inc.
45. Charter Behavioral Health System of Northwest Arkansas, Inc.
46. Charter Behavioral Health System of Northwest Indiana, Inc.
47. Charter Behavioral Health System of Paducah, Inc.
48. Charter Behavioral Health System of Rockford, Inc.
49. Charter Behavioral Health System of San Jose, Inc.
50. Charter Behavioral Health System of Southern California, Inc.
51. Charter Behavioral Health System of Tampa Bay, Inc.
52. Charter Behavioral Health System of Texarkana, Inc.
53. Charter Behavioral Health System of Toledo, Inc.
54. Charter Behavioral Health System of Tucson, Inc.
55. Charter Behavioral Health System of Virginia Beach, Inc.
56. Charter Behavioral Health System of Visalia, Inc.
57. Charter Behavioral Health System of Washington D.C., Inc.
58. Charter Behavioral Health System of Waverly, Inc.
59. Charter Behavioral Health System of Winston-Salem, Inc.
60. Charter Behavioral Health System of Yorba Linda, Inc.
61. Charter Behavioral Health Systems of Atlanta, Inc.
62. Charter Brawner Behavioral Health System, Inc.
Subsidiary:
63. Charter Behavioral Health System of Savannah, Inc.
64. Charter-By-The-Sea Behavioral Health System, Inc.
65. Charter Canyon Behavioral Health System, Inc.
66. Charter Canyon Springs Behavioral Health System, Inc.
67. Charter Centennial Peaks Behavioral Health System, Inc.
68. Charter Colonial Institute, Inc.
69. Charter Community Hospital, Inc.
70. Charter Community Hospital of Des Moines, Inc.
71. Charter Contract Services, Inc.
72. Charter Cove Forge Behavioral Health System, Inc.
73. Charter Crescent Pines Behavioral Health System, Inc.
74. Charter Fairbridge Behavioral Health System, Inc.
75. Charter Fairmount Behavioral Health System, Inc.
76. Charter Fenwick Hall Behavioral Health System, Inc.
77. Charter Financial Offices, Inc.
78. Charter Forest Behavioral Health System, Inc.
79. Charter Grapevine Behavioral Health System, Inc.
80. Charter Greensboro Behavioral Health System, Inc.
81. Charter Health Management of Texas, Inc.
Page 2
ANNEX A
-------
SECOND AMENDED AND RESTATED SUBSIDIARY STOCK
--------------------------------------------
AND NOTES PLEDGE AGREEMENT
--------------------------
82. Charter Hospital of Columbus, Inc.
83. Charter Hospital of Denver, Inc.
84. Charter Hospital of Ft. Collins, Inc.
85. Charter Hospital of Laredo, Inc.
86. Charter Hospital of Mobile, Inc.
87. Charter Hospital of Northern New Jersey, Inc.
88. Charter Hospital of Santa Teresa, Inc.
89. Charter Hospital of St. Louis, Inc.
Subsidiary:
90. Charter Hospital of Miami, Inc.
91. Charter Hospital of Torrance, Inc.
92. Charter Indianapolis Behavioral Health System, Inc.
93. Charter Lafayette Behavioral Health System, Inc.
94. Charter Lakehurst Behavioral Health System, Inc.
95. Charter Lakeside Behavioral Health System, Inc.
96. Charter Laurel Heights Behavioral Health System, Inc.
97. Charter Laurel Oaks Behavioral Health System, Inc.
98. Charter Linden Oaks Behavioral Health System, Inc.
99. Charter Little Rock Behavioral Health System, Inc.
100. Charter Louisville Behavioral Health System, Inc.
101. Charter Meadows Behavioral Health System, Inc.
102. Charter Medfield Behavioral Health System, Inc.
103. Charter Medical Executive Corporation
104. Charter Medical Information Services, Inc.
105. Charter Medical International, S.A., Inc.
106. Charter Medical Management Company
107. Charter Medical of East Valley, Inc.
108. Charter Medical of North Phoenix, Inc.
109. Charter Medical of Orange County, Inc.
110. Charter Medical - California, Inc.
Subsidiary:
111. Charter Behavioral Health System of Northern California, Inc.
112. Charter Medical - Clayton County, Inc.
113. Charter Medical - Cleveland, Inc.
Subsidiary:
114. Charter Regional Medical Center, Inc.
115. Charter Medical - Dallas, Inc.
116. Charter Medical - Long Beach, Inc.
117. Charter Medical - New York, Inc.
118. Charter Mental Health Options, Inc.
119. Charter Mid-South Behavioral Health System, Inc.
120. Charter Milwaukee Behavioral Health System, Inc.
121. Charter Mission Viejo Behavioral Health System, Inc.
Page 3
ANNEX A
-------
SECOND AMENDED AND RESTATED SUBSIDIARY STOCK
--------------------------------------------
AND NOTES PLEDGE AGREEMENT
--------------------------
122. Charter MOB of Charlottesville, Inc.
123. Charter North Behavioral Health System, Inc.
Subsidiary:
124. Charter North Counseling Center, Inc.
125. Charter Northbrooke Behavioral Health System, Inc.
126. Charter Northridge Behavioral Health System, Inc.
127. Charter Northside Hospital, Inc.
128. Charter Oak Behavioral Health System, Inc.
129. Charter of Alabama, Inc.
130. Charter Palms Behavioral Health System, Inc.
131. Charter Peachford Behavioral Health System, Inc.
132. Charter Pines Behavioral Health System, Inc.
133. Charter Plains Behavioral Health System, Inc.
134. Charter Psychiatric Hospitals, Inc.
135. Charter Real Behavioral Health System, Inc.
136. Charter Richmond Behavioral Health System, Inc.
137. Charter Ridge Behavioral Health System, Inc.
138. Charter Rivers Behavioral Health System, Inc.
139. Charter San Diego Behavioral Health System, Inc.
140. Charter Serenity Lodge Behavioral Health System, Inc.
141. Charter Sioux Falls Behavioral Health System, Inc.
142. Charter South Bend Behavioral Health System, Inc.
143. Charter Springs Behavioral Health System, Inc.
144. Charter Springwood Behavioral Health System, Inc.
145. Charter Surburban Hospital of Mesquite, Inc.
146. Charter Terre Haute Behavioral Health System, Inc.
147. Charter Thousand Oaks Behavioral Health System, Inc.
148. Charter Tidewater Behavioral Health System, Inc.
149. Charter Treatment Center of Michigan, Inc.
150. Charter Westbrook Behavioral Health System, Inc.
Subsidiary:
151. CPS Associates, Inc.
152. Charter White Oak Behavioral Health System, Inc.
153. Charter Wichita Behavioral Health System, Inc.
154. Charter Woods Behavioral Health System, Inc.
Subsidiary:
155 Charter Woods Hospital, Inc.
156. Charter - Provo School, Inc.
157. Charterton/LaGrange, Inc.
158. CMSF, Inc.
159. C.A.C.O. Services, Inc.
160. Desert Springs Hospital, Inc.
Page 4
ANNEX A
-------
SECOND AMENDED AND RESTATED SUBSIDIARY STOCK
--------------------------------------------
AND NOTES PLEDGE AGREEMENT
--------------------------
161. CMCI, Inc.
162. CMFC, Inc.
163. Employee Assistance Services, Inc.
164. Florida Health Facilities, Inc.
165. Gulf Coast EAP Services, Inc.
166. HCS, Inc.
167. Hospital Investors, Inc.
168. Mandarin Meadows, Inc.
169. Metropolitan Hospital, Inc.
170. Middle Georgia Hospital, Inc.
171. Pacific - Charter Medical, Inc.
Subsidiary:
172. Charter Behavioral Health System of the Inland Empire, Inc.
173 Peachford Professional Network, Inc.
174. Rivoli, Inc.
175. Shallowford Community Hospital, Inc.
176. Sistemas De Terapia Respiratoria S.A., Inc.
177. Stuart Circle Hospital Corporation
178. Tampa Bay Behavioral Health Alliance, Inc.
179. Western Behavioral Systems, Inc.
Page 5