SECOND AMENDED AND RESTATED
FINCO PLEDGE AND SECURITY AGREEMENT I
SECOND AMENDED AND RESTATED FINCO PLEDGE AND SECURITY AGREEMENT I,
dated as of May 2, 1994 (as the same may be amended, supplemented or modified
from time to time, this "Agreement") made by CMFC, Inc., a Nevada corporation
(the "Company"), to Bankers Trust Company, a New York banking corporation, in
its capacity as collateral agent (the "Collateral Agent", 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. Capitalized terms, unless otherwise defined in the recitals hereto,
shall have the meanings assigned thereto in Article VIII hereof.
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the parties hereto (or their predecessors) entered into the
FINCO Pledge and Security Agreement dated as of September 1, 1988 which was
amended and restated by the Amended and Restated FINCO Pledge and Security
Agreement dated as of July 21, 1992 (the "1992 FINCO Pledge and Security
Agreement") in favor of the Collateral Agent, the Lenders and the Issuing Banks
(as defined in the 1992 FINCO Pledge and Security Agreement), and now desire to
amend and restate such agreement in its entirety; and
WHEREAS, Charter Medical Corporation, a Delaware corporation (as
successor to WAF Acquisition Corporation, a Delaware corporation, "Charter"),
certain of the Lenders, the Agent, Wells Fargo Bank, National Association and
Bank of America National Trust and Savings Association, as co-agents (the
"Original Co-Agents") are parties to that certain Credit Agreement dated as of
September l, 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 Charter, 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,
Charter; and
WHEREAS, certain Subsidiary Borrowers, certain of the Lenders, the
Agent and the Original Co-Agent 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 Company 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,
certain Subsidiary 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 issue letters of credit for the account of, the Subsidiary Borrowers;
and
WHEREAS, the Company has executed and delivered a Subsidiary Guaranty
dated as of the date hereof (as the same may be amended, supplemented or
otherwise modified from time to time, the "Subsidiary Guaranty") pursuant to
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which the Company has agreed jointly and severally to guarantee all of the
obligations of Charter and each Subsidiary Borrower under the Credit Agreements
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 Charter and the Subsidiary
Borrowers; and
WHEREAS, it was a condition precedent to the incurrence of loans and
the participation in letters of credit under the 1992 Credit Agreements that the
Company execute and deliver to the Collateral Agent the 1992 FINCO Pledge and
Security Agreement and it is a condition precedent to the incurrence of loans
and the issuance of letters of credit under the Credit Agreements that the
Company execute and deliver to the Collateral Agent this Agreement; and
WHEREAS, (a) the Senior Secured Notes (as defined in the 1992 FINCO
Pledge and Security Agreement) have been irrevocably paid in full; (b) each
Issuing Bank has agreed, among other things, that the Reimbursement Agreements
(as defined in the 1992 FINCO Pledge and Security Agreement) to which it is a
party (other than the Credit Documents to the extent the same could be consid-
ered 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 FINCO Pledge and Security Agreement) 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
Company, the receipt and sufficiency of which are hereby acknowledged, the
Company hereby makes the following representations and warranties to the
Collateral Agent and hereby covenants and agrees with the Collateral Agent as
follows:
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ARTICLE I
SECURITY INTERESTS
1.1 SECURITY FOR OBLIGATIONS, ETC. This Agreement is for the benefit
of the Secured Parties to secure the payment in full when due, whether at stated
maturity, by acceleration or otherwise, of all Obligations.
1.2 ASSIGNMENT AND PLEDGE.
(a) ASSIGNMENT. The Company hereby assigns to the Collateral Agent
for the benefit of the Secured Parties, and hereby grants to the Collateral
Agent for the benefit of the Secured Parties a security interest in, all of the
Company's right, title and interest in and to the following (together with the
Assigned Agreement Rights (as hereinafter defined), the "Assigned Collateral"):
(i) the mortgage notes in the aggregate amount listed on Schedule I attached
hereto and all other mortgage notes payable to the Company and held by the
Company from time to time (collectively, the "Mortgage Notes"), any other
mortgage, security agreement or other instrument, contract or document securing,
evidencing or otherwise relating to all or any of the Mortgage Notes whether now
existing or hereafter entered into and all rights now or hereafter existing in,
to and under each such document, other security agreements and other such
contracts as the same may be amended, restated, supplemented or otherwise
modified from time to time (as so amended, restated, supplemented or modified,
the "Assigned Agreements") and (ii) all Proceeds of any and all of the forego-
ing.
(b) PLEDGE. The Company hereby pledges, deposits with, and delivers
to, the Collateral Agent for the benefit of the Secured Parties the Mortgage
Notes accompanied by assignment forms duly executed in blank by the Company and
hereby assigns, transfers, hypothecates and sets over to the Collateral Agent
for the benefit of the Secured Parties, and grants to the Collateral Agent for
the benefit of the Secured Parties a security interest in, all of the Company's
right, title and interest in, to and under the following, whether now owned or
hereafter acquired by the Company, all for its benefit and the benefit of the
Secured Parties (the "Pledged
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Collateral") (the Assigned Collateral and the Pledged Collateral being referred
to collectively herein as the "Collateral"):
(i) the Mortgage Notes and all interest, cash, instruments and other
property from time to time received, receivable or otherwise distributed in
respect of or in exchange for any or all of the Mortgage Notes; and
(ii) all Proceeds of the foregoing items described in clause (i).
(c) COLLATERAL. The security interest of the Collateral Agent under
this Agreement extends to all Collateral, now existing or hereafter acquired, of
the kind which is the subject of this Agreement, which the Company may acquire
at any time during the continuation of this Agreement.
1.3. POWER OF ATTORNEY. The Company hereby constitutes and appoints
the Collateral Agent its true and lawful attorney, irrevocably, with full power
(in the name of the Company or otherwise), upon the occurrence and during the
continuance of an Event of Default, to act, require, demand, receive, compound
and give acquittance for any and all monies and claims for monies due or to
become due to the Company under or arising out of the Collateral, to endorse any
checks or other instruments or orders in connection therewith and to file any
claims or take any action or institute any proceedings, consistent with the
Collateral Agent's rights under this Agreement, which the Collateral Agent may
deem to be necessary or advisable in the premises, which appointment as attorney
is coupled with an interest and is irrevocable.
ARTICLE II
GENERAL REPRESENTATIONS, WARRANTIES AND COVENANTS
The Company represents, warrants and covenants, which representations,
warranties and covenants shall survive execution and delivery of this Agreement,
as follows:
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2.1. NO LIENS. The Company is, and as to Collateral acquired by it
from time to time after the date hereof, the Company will be, the owner of all
Collateral free from any Lien, security interest, encumbrance or other right,
title or interest of any Person (other than as created under the Security
Documents and other than in favor of the Company and except for Liens permitted
by the Company Credit Agreement ("Permitted Liens")), and, except as to Permit-
ted Liens, the Company shall defend the Collateral against all claims and
demands of all Persons at any time claiming the same or any interest therein
adverse to the Collateral Agent or any other Secured Party.
2.2. OTHER FINANCING STATEMENTS. Except for Permitted Liens, there is
no financing statement (or similar statement or instrument of registration under
the law of any jurisdiction) covering any interest of any kind in the Collateral
and so long as any of the Obligations remain unpaid, the Company will not
execute or authorize to be filed in any public office any financing statement
(or similar statement or instrument of registration under the law of any
jurisdiction) or statements relating to the Collateral, except financing
statements filed or to be filed (i) in respect of and covering the security
interests granted hereby by the Company, (ii) by the Company in respect of its
interest in the Collateral and (iii) in respect of Permitted Liens.
2.3 CHIEF EXECUTIVE OFFICE; CORPORATE NAME; RECORDS. The chief
executive office of the Company is located at 1061 East Flamingo Road, Suite
One, Las Vegas, Nevada 89119. The Company will not move its chief executive
office except to such new location the Company may establish in accordance with
the last sentence of this Section 2.3. The Company will not change its corpo-
rate name nor carry on business under any name other than its corporate name
except after having complied with the requirements of the last sentence of this
Section 2.3. The Company shall not establish a new location for its chief
executive office or change its corporate name or the name under which it
presently conducts its business until (i) it shall give to the Collateral Agent
written notice clearly describing such new location or specifying such new
corporate name, as the case may be, and providing such other information in
connection therewith as the Collateral Agent may reasonably request, and (ii)
with
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respect to such new location or such new corporate name, as the case may be, it
shall have taken all action, satisfactory to the Collateral Agent, to maintain
the security interest of the Collateral Agent in the Collateral intended to be
granted hereby at all times fully perfected and in full force and effect.
2.4. COLLATERAL. (a) As of the date hereof, all of the Mortgage
Notes are described on Schedule II attached hereto and are not in default. Such
Mortgage Notes had the respective aggregate balances of at least the amounts
listed on Schedule I attached hereto on March 31, 1994.
(b) Each of the existing Assigned Agreements has been duly
authorized, executed and delivered by each Credit Party party thereto, and is in
full force and effect and is binding upon and enforceable against each Credit
Party thereto in accordance with its terms, except to the extent that
enforcement may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting the enforcement of creditors' rights
generally, and by general principles of equity (regardless of whether
enforcement is sought in a proceeding in equity or at law). As of the date
hereof, there exists no default under any of the Assigned Agreements by any of
the parties thereto. The Company has delivered original copies of the Assigned
Agreements (including all modifications thereof and amendments and supplements
thereto) to the Collateral Agent pursuant hereto.
ARTICLE III
SPECIAL PROVISIONS
CONCERNING PLEDGED COLLATERAL
3.1. SUBSEQUENTLY ACQUIRED MORTGAGE NOTES. If the Company shall
acquire any additional Mortgage Notes at any time or from time to time after the
date hereof, the Company will forthwith pledge and deposit such Mortgage Notes
with the Collateral Agent and deliver to the Collateral Agent instruments of
transfer therefor, endorsed in blank by the Company, and will promptly thereaf-
ter deliver to the Collateral Agent a certificate executed by an authorized
officer of the Company describ-
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ing such Mortgage Notes and certifying that the same has been duly pledged with
the Collateral Agent hereunder.
3.2 COMPANY ACTIONS. The Company will not, at any time, amend,
restate, supplement or otherwise modify any material provision of any Mortgage
Note or Assigned Agreement in any manner that is adverse to the interests of the
Lenders, nor take any action which would release or render unenforceable any of
the obligations of any Mortgage Note or Assigned Agreement.
3.3 DIVIDENDS AND OTHER DISTRIBUTIONS. Unless an Event of Default
shall have occurred and be continuing, all principal, interest and cash divi-
dends payable in respect of the Pledged Collateral shall be paid to the Company.
The Collateral Agent shall be entitled to receive directly, and to retain as
part of the Collateral:
(a) all stock or other or additional securities and, after the
occurrence and during the continuance of an Event of Default, property (includ-
ing cash) paid or distributed by way of dividend in respect of the Pledged
Collateral;
(b) all stock or other or additional 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 Collateral by way
of stock-split, spin-off, split-up, reclassification, combination of shares or
similar rearrangement; and
(c) all stock or other or additional 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 Collateral by
reason of any consolidation, merger, exchange of stock, conveyance of assets,
liquidation or similar corporate reorganization or other disposition of
Collateral.
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ARTICLE IV
SPECIAL PROVISIONS
CONCERNING ASSIGNED AGREEMENTS
4.1. ASSIGNMENT OF RIGHTS. The Company hereby assigns, transfers,
delivers, pledges and sets over to the Collateral Agent, and grants to the
Collateral Agent a security interest in, all of its right, title and interest in
and to each and all of the Assigned Agreements, including but not limited to:
(a) all payments due and to become due under any Assigned Agreement,
whether as contractual obligations, damages or otherwise;
(b) all of its claims, rights, powers, or privileges and remedies
under any Assigned Agreement; and
(c) all of its rights under any Assigned Agreement to make determina-
tions, to exercise any election (including, but not limited to, election of
remedies) or option or to give or receive any notice, consent, waiver or
approval together with full power and authority with respect to any Assigned
Agreement to demand, receive, enforce, collect or receipt for any of the
foregoing rights or any property the subject of any of the Assigned Agreements,
to enforce or execute any checks, or other instruments or orders, to file any
claims and to take any action which (in the opinion of the Collateral Agent) may
be necessary or advisable in connection with any of the foregoing (the Assigned
Agreements, together with all of the foregoing in this Section 4.1, the
"Assigned Agreement Rights"); PROVIDED, HOWEVER, that until the occurrence and
continuance of an Event of Default, the Company may exclusively exercise all of
the Company's rights, powers, privileges and remedies under the Assigned
Agreements, subject to Section 3.2 herein.
The Company hereby grants the Collateral Agent full power and
authority to take all actions as the Collateral Agent deems necessary or
advisable to defend the Collateral against all claims and demands of all Persons
at any time claiming the same or any interest therein adverse to the Collateral
Agent or any other Secured Party in the event the Company fails to do so.
Furthermore, the Company hereby covenants and agrees to
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execute and deliver to the Collateral Agent such other and further instruments
of transfer, assignment and conveyance, and all such other documents and
instruments as may be reasonably requested by the Collateral Agent more fully to
transfer, assign and convey to and vest in the Collateral Agent the Assigned
Agreement Rights hereby transferred, assigned and conveyed or intended to be so.
4.2. PERFORMANCE OF ASSIGNED AGREEMENTS. The Company will at its
expense (i) perform and observe all the terms and provisions of the Assigned
Agreements to be performed or observed by it, maintain the Assigned Agreements
in full force and effect, enforce each of the Assigned Agreements in accordance
with its terms, and take all such action to such end as may, after the
occurrence and during the continuance of an Event of Default, be from time to
time requested in writing by the Collateral Agent; and (ii) furnish to the
Collateral Agent promptly upon receipt thereof copies of all notices, requests
and other documents (if any) received by the Company under or pursuant to the
Assigned Agreements, and from time to time (A) furnish to the Collateral Agent
such information and reports regarding the Assigned Collateral as the Collateral
Agent may reasonably request in writing and (B) upon the written request of the
Collateral Agent make to any party thereto such demands and requests for
information and reports or for action as the Company is entitled to make under
the Assigned Agreements.
ARTICLE V
FURTHER ASSURANCES
The Company will, subject to the provisions of the last sentence of
this Article V, at its own expense, make, execute, endorse, acknowledge, file
and/or deliver to the Collateral Agent from time to time such lists,
descriptions and designations of its Collateral, financing statements,
collateral assignments, transfer endorsements, powers of attorney, certificates,
reports and other assurances or instruments and take such further steps relating
to the Collateral and other property or rights covered by the security interest
hereby granted, which the Collateral Agent deems reasonably appropriate or
advisable to perfect, preserve or protect its security
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interest in the Collateral. The Company agrees to sign and deliver to the
Collateral Agent such financing statements and collateral assignments, in form
acceptable to the Collateral Agent, as the Collateral Agent may from time to
time reasonably request or as are necessary or desirable in the opinion of the
Collateral Agent to establish and maintain a valid and enforceable perfected
security interest in the Collateral as provided herein and the other rights and
security contemplated hereby all in accordance with the Uniform Commercial Code
as enacted in any and all relevant jurisdictions or any other relevant law. To
the extent permitted by applicable law, the Company will pay any applicable
filing fees and related expenses. The Company authorizes the Collateral Agent,
to the extent permitted by applicable law, to file any such financing statements
without the signature of the Company and to sign such financing statement on
behalf of, and in the name of, the Company. Notwithstanding anything to the
contrary set forth herein, the Collateral Agent will not take any actions
requiring any filing or recording to perfect the security interest in the
Assigned Collateral hereunder except during the occurrence and continuance of an
Event of Default. Upon the recording of any collateral assignment in accordance
with the provisions hereof, the Company agrees to take all actions requested by
the Collateral Agent to record and perfect the security interest granted
pursuant to any such collateral assignment and the Company also agrees to pay
any mortgage recording tax or other fees or tax in connection with the recording
of such collateral assignment or any underlying mortgage deed of trust or
similar instrument.
ARTICLE VI
REMEDIES UPON OCCURRENCE OF EVENT OF DEFAULT
6.1. REMEDIES; OBTAINING THE COLLATERAL UPON DEFAULT. The Company
agrees that, if any Event of Default shall have occurred and be continuing, then
and in every such case, the Collateral Agent shall be entitled to exercise all
rights and remedies of a secured party under the Uniform Commercial Code as in
effect in any relevant jurisdiction to enforce the assignments and security
interests contained herein, and, to the extent permitted by applicable law, the
Collateral Agent may:
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(a) exercise any and all rights, powers and remedies of the Company
under or in connection with the Pledged Collateral or the Assigned Collateral,
including, without limitation, any and all rights of the Company to demand,
otherwise require or receive payment of any amount under, or performance of any
provision of, the Assigned Agreements;
(b) receive all payments under, in connection with or otherwise in
respect of the Collateral which are otherwise payable to the Company, all
payments received by the Company under or in connection with or otherwise in
respect of the Collateral shall be received in trust for the benefit of the
Collateral Agent, shall be segregated from other funds of the Company and shall
be forthwith paid over to the Collateral Agent in the same form as so received
(with any necessary endorsement);
(c) in its sole discretion, without notice except as specified below
at any time or from time to time, 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 Collateral Agent'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 the Company), 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 Collateral
Agent in its absolute discretion may determine. The Collateral Agent agrees
that to the extent that notice of sale shall be required by law that at least 10
days' notice to the Company of the time and place of any public sale or the time
after which any private sale is to be made shall constitute reasonable notifica-
tion. The Collateral Agent shall not be obligated to make any sale of Collater-
al regardless of notice of sale having been given. The Collateral Agent 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. The Company hereby waives
and releases to the fullest extent permitted by law any right or equity of
redemption with respect to the
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Collateral, whether before or after sale hereunder, and all rights, if any, of
marshalling the Collateral and any other security for the Obligations or
otherwise. At any such sale, unless prohibited by applicable law, the
Collateral Agent or any Secured Party, may bid for and purchase all or any part
of the Collateral so sold free from any such right or equity of redemption.
Neither the Collateral Agent nor any Secured Party 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;
(d) transfer all or any part of the Collateral into the Collateral
Agent's name or the name of its nominee or nominees and to notify the obligor of
any Assigned Agreement Right or Mortgage Note (the Company hereby agreeing to
deliver any such notice at the request of the Collateral Agent) that all
payments and performance under the relevant Assigned Agreement or Mortgage Note
shall be made or rendered to the Collateral Agent or its nominee or nominees;
(e) vote all or any part of the Pledged Collateral (whether or not
transferred into the name of the Collateral Agent) and give all consents,
waivers and ratifications in respect of the Collateral and otherwise act with
respect thereto as though it were a party thereto or outright owner thereof;
(f) settle, adjust, compromise and arrange all accounts,
controversies, questions, claims and demands whatsoever in relation to all or
any part of the Collateral;
(g) in respect of the Collateral, 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 Collateral Agent in its absolute discretion
may determine;
(h) appoint managers, sub-agents, officers and servants for any of
the purposes mentioned in the foregoing provisions of this Section 6.1 and to
dismiss the same, all as the Collateral Agent in its absolute discretion may
determine; and
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(i) generally take all such other action as the Collateral Agent in
its reasonable discretion may determine as incidental or conducive to any of the
matters or powers mentioned in the foregoing provisions of this Section 6.1 and
which the Collateral Agent may or can do lawfully and to use the name of the
Company for the purposes aforesaid and in any proceedings arising therefrom.
The Company hereby expressly agrees that no Secured Party other than
the Collateral Agent shall have any obligations or liabilities in connection
with this Agreement.
6.2. DISPOSITION OF THE COLLATERAL. The Company recognizes that, by
reason of certain prohibitions contained in the Securities Act of 1933, as
amended (the "Securities Act"), and applicable state securities laws, the
Collateral Agent may be compelled, with respect to any sale of all or any part
of the Collateral pursuant to Section 6.1(c), to limit purchasers to those who
will agree, among other things, to acquire the Collateral for their own account,
for investment and not with a view to the distribution or resale thereof. The
Company acknowledges that any such private sales may be at prices and on terms
less favorable to the Collateral Agent than those obtainable through a public
sale without such restrictions (including, without limitation, a public offering
made pursuant to a registration statement under the Securities Act), and,
notwithstanding such circumstances, agrees that any such private sale shall be
deemed to have been made in a commercially reasonable manner and that the
Collateral Agent shall have no obligation to engage in public sales and no
obligation to delay the sale of any Collateral for the period of time necessary
to permit the issuer thereof to register it for a form of public sale requiring
registration under the Securities Act or under applicable state securities laws,
even if the Company would agree to do so.
6.3. WAIVER OF CLAIMS. EXCEPT AS OTHERWISE PROVIDED IN THIS
AGREEMENT, THE COMPANY HEREBY WAIVES, TO THE EXTENT PERMITTED BY APPLICABLE LAW,
NOTICE OR JUDICIAL HEARING IN CONNECTION WITH THE COLLATERAL AGENT'S TAKING
POSSESSION OR THE COLLATERAL AGENT'S DISPOSITION OF ANY OF THE COLLATERAL,
INCLUDING, WITHOUT LIMITATION, ANY AND ALL PRIOR NOTICE AND HEARING FOR ANY
PREJUDGMENT
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REMEDY OR REMEDIES AND ANY SUCH RIGHT WHICH THE COMPANY WOULD OTHERWISE HAVE
UNDER THE CONSTITUTION OR ANY STATUTE OF THE UNITED STATES OR OF ANY STATE, and
the Company hereby further waives to the extent permitted by applicable law:
(a) all damages occasioned by such taking of possession except any
damages which are the direct result of the Collateral Agent's gross negligence
or willful misconduct;
(b) all other requirements as to the time, place and terms of sale or
other requirements with respect to the enforcement of the Collateral Agent's
rights hereunder; and
(c) all rights of redemption, appraisal, valuation, stay, extension
or moratorium now or hereafter in force under any applicable law in order to
prevent or delay the enforcement of this Agreement or the absolute sale of the
Collateral or any portion thereof, and the Company, for itself and all who may
claim under it, insofar as it or they may now or hereafter lawfully do so,
hereby waives the benefit of such laws.
Any sale of, or the grant of options to purchase, or any other realization upon,
any Collateral shall operate to divest all right, title, interest, claim and
demand, either at law or in equity, of the Company therein and thereto, and
shall be a perpetual bar both at law and in equity against the Company and
against any and all Persons claiming or attempting to claim the Collateral so
sold, optioned or realized upon, or any part thereof, from, through and under
the Company.
6.4. APPLICATION OF PROCEEDS; COMPANY LIABLE FOR DEFICIENCY. All
moneys collected by the Collateral Agent upon any sale or other disposition of
the Collateral, together with all other moneys received by the Collateral Agent
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 Collateral Agent in
obtaining, taking possession of, removing, storing and disposing of Collateral
and any and all amounts incurred by the Col-
15
lateral Agent in connection therewith or owing to the Collateral Agent
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 indefeasibly paid in full, no
Letters of Credit or Subsidiary Letters of Credit or other Obligations are
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
Collateral Agent has actual notice (without investigation);
it being understood that the Company shall remain liable to the extent of any
deficiency between the amount of the proceeds of the Collateral and the aggre-
gate amount of the sums referred to in clauses (a) and (b) of this Section 6.4.
Notwithstanding the foregoing, in no event shall moneys be applied
pursuant to the foregoing clause (b) (when aggregated with all other amounts
contemporaneously received from the Company under any other Security Document in
respect of the Obligations) in excess of the Company's Maximum Guaranty
Liability (as defined in the Subsidiary Guaranty) with any excess to be paid to
the Company or to whomever may be lawfully entitled to receive the same.
6.5. REMEDIES CUMULATIVE. Each and every right, power and remedy
hereby specifically given to the Collateral Agent shall be in addition to every
other right, power and remedy specifically given under this Agreement or under
any other Credit Document or now or hereafter existing at law or in equity, or
by statute and each and every right, power and remedy whether specifically
herein given or otherwise existing may be exercised from time to time or
simultaneously and as often and in such order as may be deemed expedient by the
Collateral Agent. All such rights, powers and remedies shall be cumulative and
the exercise or the beginning of exercise of one shall not be deemed a waiver of
the right to exercise of any other or others. No delay or omission of the
Collateral Agent in the exercise of any such right, power
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or remedy and no renewal or extension of any of the Obligations shall impair any
such right, power or remedy or shall be construed to be a waiver of any Event of
Default or an acquiescence therein.
6.6. DISCONTINUANCE OF PROCEEDINGS. In case the Collateral Agent
shall have instituted any proceeding to enforce any right, power or remedy under
this Agreement by foreclosure, sale, entry or otherwise, and such proceeding
shall have been discontinued or abandoned for any reason or shall have been
determined adversely to the Collateral Agent, then and in every such case the
Company and the Collateral Agent shall be restored to their former positions and
rights hereunder with respect to the Collateral subject to the security interest
created under this Agreement, and all rights, remedies and powers of the
Collateral Agent shall continue as if no such proceeding had been instituted.
ARTICLE VII
INDEMNITY
Without duplication of any amounts payable under Section 12.1 of the
Company Credit Agreement and any similar indemnity provision under any other
Credit Document, the Company shall: (i) whether or not the transactions hereby
contemplated are consummated, pay all reasonable out-of-pocket costs and
expenses of the Collateral Agent 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 Collateral Agent 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 Collateral
Agent 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 Collateral Agent); (ii) pay and hold the Collateral Agent
harmless from and against any and all present and future stamp or documentary
taxes or any other excise or property taxes,
17
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 Collateral Agent 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 Collateral Agent, 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 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, the Company shall not be responsible to the Collateral Agent 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 the Company shall not, 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 Collateral Agent) except that, if any
Indemnified Party other than the Collateral Agent shall determine, in its sole
discretion, that there may be a conflict in such firm representing the
Collateral Agent and such Indemnified Party, then the Company shall be liable
for the reasonable fees and expenses of an additional firm for such Indemnified
Party whose interests may be in conflict. The Company's obligations under this
Article VII shall survive any termination of this Agreement.
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ARTICLE VIII
DEFINITIONS
8.1. DEFINITIONS. The following terms shall have the meanings herein
specified unless the context otherwise requires. Such definitions shall be
equally applicable to the singular and plural forms of the terms defined.
Except as otherwise defined herein, including in the recital paragraphs,
capitalized terms used herein and defined in the Company Credit Agreement shall
be used herein as so defined.
"Agreement" shall mean this Second Amended and Restated FINCO Pledge
and Security Agreement as the same may be amended, restated, supplemented or
otherwise modified from time to time in accordance with its terms.
"Assigned Agreement Rights" shall have the meaning specified in
Section 4.1(c).
"Assigned Agreements" shall have the meaning specified in Section
1.2(a).
"Assigned Collateral" shall have the meaning specified in Section
1.2(a).
"Collateral" shall have the meaning specified in Section 1.2(b).
"Event of Default" shall mean and include any "Event of Default" under
either Credit Agreement.
"Indemnified Party" shall have the meaning specified in Article VII.
"Mortgage Notes" shall mean, collectively, all promissory notes from
time to time made to the Company by Charter or a Subsidiary of Charter.
"Obligations" shall mean (a) all indebtedness, obligations, and
liabilities (including without limitation, guarantees, reimbursement obligations
in respect of Letters of Credit and Subsidiary Letters of Credit and other
contingent liabilities) of the Company, Charter, any Subsidiary Borrower and any
other Subsidiary of Charter to any Secured Party arising under or in connec-
19
tion with the Credit Agreements, the Subsidiary Guaranty, this Agreement, or any
other Credit Document, as the same may be amended, restated, supplemented or
otherwise modified from time to time; (b) any and all sums advanced by the
Collateral Agent in order to preserve the Collateral or preserve its security
interest in the Collateral; and (c) in the event of any proceeding for the
collection or enforcement of any indebtedness, obligations, or liabilities of
the Company referred to in clause (a), after an Event of Default shall have
occurred and be continuing, the reasonable expenses of retaking, holding,
preparing for sale, selling or otherwise disposing or realizing on the
Collateral, or of any exercise by the Collateral Agent of its rights hereunder,
together with reasonable attorneys' fees and court costs.
"Permitted Liens" shall have the meaning specified in Section 2.1
hereof.
"Pledged Collateral" shall have the meaning specified in Section
1.2(b).
"Proceeds" shall mean "Proceeds" as such term is defined in the
Uniform Commercial Code as in effect on the date hereof in the State of New
York.
"Secured Parties" shall mean the Lenders, the Agent, the Co-Agent, and
the Collateral Agent and their respective successors and assigns.
"Securities Act" shall have the meaning specified in Section 6.2.
"Total Commitment" shall mean the Total Revolving Loan Commitment.
ARTICLE IX
MISCELLANEOUS
9.1. NOTICES. All notices and other communications hereunder shall be
given to the Company (at the address for Charter), the Collateral Agent and the
Agent at the addresses and in the manner specified in the Company Credit
Agreement.
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9.2. WAIVER; AMENDMENT. No delay on the part of the Collateral Agent
in exercising any of its rights, remedies, powers and privileges hereunder or
partial or single exercise thereof, shall constitute a waiver thereof. None of
the terms and conditions of this Agreement may be changed, waived, modified or
varied in any manner whatsoever unless executed in accordance with the
provisions of the Credit Agreements. No notice to or demand on the Company in
any case shall entitle it to any other or further notice or demand in similar or
other circumstances or constitute a waiver of any of the rights of the
Collateral Agent to any other or further action in any circumstances without
notice or demand.
9.3. OBLIGATIONS ABSOLUTE. The obligations of the Company under this
Agreement shall be 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 of the 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 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 Collateral Agent, the other Secured Parties or their
assignees or any acceptance thereof or any release of any security by the
Collateral Agent, the other Secured Parties or their assignees; (d) any
limitation on any party's liability or obligations under any such instrument or
agreement or any term thereof; (e) any bankruptcy, insolvency, reorganization,
composition, adjustment, dissolution, liquidation or other like proceeding
relating to the Company or any Subsidiary of the Company, 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 the
21
Company 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 the Company.
9.4. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon the
Company and its successors and assigns and shall inure to the benefit of each
Secured Party and its permitted successors and assigns, provided that the
Company may not transfer or assign any or all of its rights or obligations
hereunder without the written consent of the Collateral Agent.
9.5. HEADINGS DESCRIPTIVE. The headings of the several sections of
this Agreement are inserted for convenience only and shall not in any way affect
the meaning or construction of any provision of this Agreement.
9.6. SEVERABILITY. To the extent permitted by applicable law, any
provision of this Agreement which is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
9.7. 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, THE COMPANY
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 SECURED PARTIES WITH RESPECT TO THIS AGREE-
22
MENT OR ANY DOCUMENT RELATED HERETO THE COMPANY HEREBY IRREVOCABLY DESIGNATES
CT CORPORATION SYSTEM, LOCATED AT 1633 BROADWAY, NEW YORK, NEW YORK 10019 AS THE
DESIGNEE, APPOINTEE AND AGENT OF THE COMPANY, TO RECEIVE, FOR AND ON BEHALF OF
THE COMPANY, SERVICE OF PROCESS IN SUCH JURISDICTION IN ANY LEGAL ACTION OR
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 AT THE ADDRESS FOR CHARTER SET FORTH IN THE COMPANY CREDIT
AGREEMENT, BUT THE FAILURE OF THE COMPANY TO RECEIVE SUCH COPY SHALL NOT, TO
THE EXTENT PERMITTED BY APPLICABLE LAW, AFFECT IN ANY WAY THE SERVICE OF SUCH
PROCESS. THE COMPANY 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 COMPANY TO SERVE PROCESS
IN ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR
OTHERWISE PROCEED AGAINST THE COMPANY IN ANY OTHER JURISDICTION.
9.8. THE COMPANY'S DUTIES. It is expressly agreed, anything herein
contained to the contrary notwithstanding, that the Company shall remain liable
to perform all of the obligations, if any, assumed by it with respect to the
Collateral and the Collateral Agent shall not have any obligations or
liabilities with respect to any Collateral by reason of or arising out of this
Agreement, nor shall the Company be required or obligated in any manner to
perform or fulfill any of the obligations of Collateral Agent under or with
respect to any Collateral.
9.9. 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 de-
23
mands, to give notices, to exercise or refrain from exercising any rights, and
to take or refrain from taking 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.
9.10. TERMINATION; RELEASE. When the Total Commitment is
terminated, no Letters of Credit or Subsidiary Letters of Credit are outstanding
and all Loans (under and as defined in each Credit Agreement) and other
Obligations are irrevocably paid in full, this Agreement shall terminate. Upon
the termination of this Agreement, the Collateral Agent, at the request and
expense of the Company will promptly execute and deliver to the Company the
proper instruments (including Uniform Commercial Code termination statements on
form UCC-3, if necessary) acknowledging the termination of this Agreement and
will duly assign, transfer and deliver to the Company (without recourse and
without any representation or warranty) such of the Collateral as may be in the
possession of the Collateral Agent and has not theretofore been sold or
otherwise applied or released pursuant to this Agreement. Notwithstanding
anything therein to the contrary, the Collateral Agent shall release the
Collateral to the extent that the Company shall be required to release the same
in accordance with the terms of the Mortgage Notes or Assigned Agreements;
PROVIDED, HOWEVER, that the Collateral Agent may release Collateral from the
lien and security interest of this Agreement in accordance with the provisions
of the Credit Agreements.
9.11. WAIVER OF TRIAL BY JURY. TO THE EXTENT PERMITTED BY
APPLICABLE LAW, THE COMPANY HEREBY IRREVOCA-
24
BLY WAIVES ALL RIGHT OF TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM
ARISING OUT OF IN CONNECTION WITH THIS AGREEMENT OR ANY MATTER ARISING IN
CONNECTION HEREUNDER.
9.12. AMENDMENT AND RESTATEMENT. This Agreement constitutes an
amendment and restatement of the 1992 FINCO Pledge and Security Agreement
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.
25
Charter Medical Corporation
FINCO Pledge and Security Agreement I
May 2, 1994
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed and delivered by their duly authorized officers as of the date first
above written.
CMFC, INC.
By: -----------------------------
Name:
Title:
BANKERS TRUST COMPANY,
as Collateral Agent
By: /s/ Mary Kay Coyle
-----------------------------
Name: Mary Kay Coyle
Title: Vice President
SCHEDULE I
SECOND AMENDED AND RESTATED FINCO PLEDGE AND SECURITY
AGREEMENT I (CMFC, INC.)
The notes payable balances due to CMFC, Inc. at March 31, 1994 are as follows:
Charter Medical Corporation - $124,066,000.00
SCHEDULE II
SECOND AMENDED AND RESTATED FINCO PLEDGE AND SECURITY
AGREEMENT I (CMFC. INC.)
A. The Charter Medical Corporation and CMCI, Inc. notes each have
Credit agreement and Borrowing Resolutions.