EXHIBIT 10.52
AMENDED AND RESTATED PLEDGE AND SECURITY AGREEMENT
THIS AMENDED AND RESTATED PLEDGE AND SECURITY AGREEMENT (this "Security
Agreement") is made this 17th day of February, 1995, by and between VITAS
HEALTHCARE CORPORATION OF OHIO, a Delaware corporation having its principal
place of business in Miami, Dade County, Florida, (the "Pledgor"), and
NATIONSBANK OF FLORIDA, NATIONAL ASSOCIATION, a national banking association
("NationsBank"), for itself and as agent (in such agency capacity and together
with any successor agent, the "Agent") for certain lenders (the "Lenders") party
to the Credit Agreement described below (in such capacities as described below
and together with any successor agent acting as such under the Credit Agreement
described below, the "Secured Party").
W I T N E S S E T H:
WHEREAS, (i) pursuant to a Revolving Credit and Reimbursement Agreement
dated as of August 11, 1994 (the "Prior Credit Agreement") among Vitas
Healthcare Corporation (the "Company"), NationsBank as agent and NationsBank as
the lender thereunder, NationsBank has extended to the Company a revolving
credit facility in the aggregate principal amount of up to $15,000,000,
including within such revolving credit facility the issuance of letters of
credit for the account of the Company and (ii) pursuant to a Guaranty and
Contingent Purchase Agreement of even date with the Prior Credit Agreement
between the Company and NationsBank (the "Prior Company Guaranty" and, together
with the Prior Credit Agreement, the "Prior Agreements"), NationsBank extended a
term loan of $2,386,670 to the Vitas Healthcare Corporation Employee Stock
Ownership Trust (the "Trust") to refinance certain indebtedness owing from the
Trust to the Company, the repayment of which loan has been, inter alia,
guaranteed under the Prior Guaranty; and
WHEREAS, pursuant to the Prior Agreements, the Pledgor has executed and
delivered (i) its Guaranty and Suretyship Agreement of even date therewith (the
"Prior Pledgor Guaranty") guaranteeing the payment and performance by the
Company, inter alia, of its obligations under the Prior Agreements, and (ii) its
Pledge and Security Agreement of even date with the Prior Pledgor Guaranty
securing its obligations under the Prior Pledgor Guaranty (the "Prior Security
Agreement"); and
WHEREAS, the Company and Vitas Healthcare Corporation of California, a
Subsidiary of the Company ("Vitas California"), have entered into an Asset
Purchase Agreement with the Sellers (as defined in the Credit Agreement) dated
as of December 27, 1994 (the "Asset Purchase Agreement") pursuant to which Vitas
California has agreed to purchase substantially all of the operating assets of
the CHC Entities (as defined in the Credit
Agreement) pursuant to the terms and subject to the conditions set forth therein
and, in connection therewith, the Company has requested that the Prior Credit
Agreement be amended and restated to increase the revolving credit facility from
$15,000,000 to $20,000,000, to provide for a $25,000,000 term loan facility, and
to make certain other modifications, and that the Prior Company Guaranty be
amended and restated to reflect the agreement of the parties; and
WHEREAS, at the request of the Company and to effect the modifications
referred to above, (i) the Company, the Agent and the Lenders are entering into
an Amended and Restated Revolving Credit, Term Loan and Reimbursement Agreement
of even date herewith (as the same may be modified, amended or restated from
time to time, the "Credit Agreement"), and (ii) the Company and NationsBank are
entering into an Amended and Restated Guaranty and Contingent Purchase Agreement
of even date herewith (as the same may be modified, amended or restated from
time to time, the "Company Guaranty" and, together with the Credit Agreement,
the "Agreements") ; and
WHEREAS, pursuant to the Agreements, the Pledgor has executed and
delivered its Amended and Restated Guaranty and suretyship Agreement of even
date herewith (as the same may be amended, modified or restated from time to
time, the "Pledgor Guaranty") guaranteeing the payment and performance by the
Company, inter alia, of its obligations under the Agreements; and
WHEREAS, the Lenders are unwilling to extend the amend and increase the
revolving credit facility or make such term loan pursuant to the Credit
Agreement, and NationsBank is unwilling to amend the Prior Agreements as
reflected in the Agreements to permit the consummation of the CHC Transaction,
unless the Pledgor amends and restates its Prior Secuirty Agreement by entering
into this Security Agreement;
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and promises herein contained, the parties hereto agree as follows:
1. Certain Definitions. Unless otherwise defined herein, capitalized terms
used in this Security Agreement shall have the respective meanings therefor
provided in the Credit Agreement.
2. Grant of Security Interest. As collateral security for the full and
prompt payment, satisfaction and performance of all obligations and liabilities
of the Pledgor under the Pledgor Guaranty, whether now existing or hereafter
arising (the "Secured Obligations"), Pledgor hereby grants to the Secured Party
a continuing security interest in all of its right, title and interest in and to
all of the following property in which Pledgor now has or hereafter acquires an
interest, whether now owned or
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existing or hereafter acquired or arising and wheresoever located:
(A) All accounts, accounts receivable, notes, bills, acceptances,
choses in action, chattel paper, instruments, documents, and other forms
of obligations at any time owing to Pledgor, the proceeds thereof and all
of Pledgor's rights with respect to any goods represented thereby, whether
or not delivered, goods returned by customers and all rights as an unpaid
vendor or lienor, including rights of stoppage in transit and of
recovering possession by proceedings including replevin and reclamation,
together with all customer lists, books and records, ledger and account
cards, computer tapes, software, disks, printouts and records, whether now
in existence or hereafter created, relating thereto (collectively referred
to hereinafter as "Accounts");
(B) All goods of Pledgor, including without limitation, all
machinery, equipment, motor vehicles, parts, supplies, apparatus,
appliances, tools, patterns, molds, dies, blueprints, fittings, furniture,
furnishings, fixtures and articles of tangible personal property of every
description now or hereafter owned by Pledgor or in which Pledgor may have
or may hereafter acquire any interest, but as to leasehold interests in
personal property, only to the extent assignable (collectively referred to
hereinafter as "Equipment");
(C) All general intangibles of Pledgor, now existing or hereafter
owned or acquired or arising or in which Pledgor now has or hereafter
acquires any rights, including but not limited to causes of action,
corporate or business records, inventions, designs, patents, patent
applications, trademarks, trademark registrations and applications
therefor, goodwill, trade names, trade secrets, trade processes,
copyrights, copyright registrations and applications therefor, licenses
(to the extent assignable), permits (to the extent assignable),
franchises, customer lists (to the extent permitted by law), computer
programs, all claims under guaranties, tax refund claims, rights and
claims against carriers and shippers, leases (to the extent assignable),
claims under insurance policies, all rights to indemnification and all
other intangible personal property of every kind and nature (collectively
referred to hereinafter as "General Intangibles");
(D) All inventory of Pledgor wherever located, including without
limitation, all goods manufactured or acquired for sale or lease, and any
piece goods, raw materials, work in process and finished merchandise,
findings or component materials, and all supplies, goods, incidentals,
office supplies, packaging materials and any
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and all items used or consumed in the operation of the business of Pledgor
or which may contribute to the finished product or to the sale, promotion
and shipment thereof, in which Pledgor now or at any time hereafter may
have an interest, whether or not the same is in transit or in the
constructive, actual or exclusive occupancy or possession of Pledgor or is
held by Pledgor or by others for Pledgor's account (collectively referred
to hereinafter as "Inventory");
(E) To the extent assignable, all rights now or hereafter arising to
any Pledgor under contracts, leases, agreements or other instruments of
every character and description, and all rights of enforcement thereunder
(collectively referred to as hereinafter as "Contract Rights");
(F) All monies, certificates of deposit, commercial paper, cash
equivalents, account balances, notes, options, interests, and securities
(certificated or uncertificated), wheresoever located; excluding, however,
the equity interests (other than interests in money market funds) of the
Pledgor in Persons not constituting Subsidiaries;
(G) All accessions to, substitutions for and all replacements,
products and proceeds of the foregoing including, without limitation,
proceeds of insurance policies insuring the Collateral (as hereinafter
defined); and
(H) All books and records (including without limitation, customer
data, credit files, computer programs, printouts, and other computer
materials and records of the Pledgor and all documents) pertaining to any
of the foregoing.
All of the property and interests in property described in subsections (A)
through (H) and all other property and interests in personal property which
shall, from time to time, secure the Secured Obligations are herein collectively
referred to as the "Collateral".
3. Financing Statements. At the time of execution of this Security
Agreement, Pledgor shall have (i) furnished the Secured Party with financing
statements, approved by the Secured Party and executed as prescribed by the
Uniform Commercial Code as presently in effect in the states of Ohio and
Florida, and where other Collateral is located, as may be reasonably requested
by the Secured Party, in form and number sufficient to perfect in favor of the
Secured Party the security interest in the Collateral, and (ii) delivered to
Secured Party's possession certificated securities (with duly executed stock
powers in blank affixed thereto) representing the Pledgor's interests in
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Subsidiaries, in order that the Secured Party shall have a perfected security
interest in the Collateral following such filing of such financing statements
with the appropriate local and state governmental authorities and the delivery
of such securities (to the extent that a security interest in such Collateral is
capable of perfection by such filing or possession), and subject only to (a)
permitted liens described in the Credit Agreement, (b) such other security
interests, liens and encumbrances currently existing and set forth in Exhibit A
attached hereto and by reference made a part hereof, or as shall otherwise be
acceptable to the Secured Party in its sole discretion, and (c) limitations
under applicable law which may limit the creation, perfection or priority of
liens on Government Receivables (collectively referred to hereinafter as
"Permitted Liens"); provided, however, that with respect to the items of
property described in clause (F) of Section 2, the security interest in such
property will not be perfected until the Secured Party or any Lender takes
possession thereof or otherwise obtains perfection in accordance with the
applicable requirements of the Uniform Commercial Code. Pledgor shall execute as
reasonably required by the Secured Party any additional financing statements or
other documents to effect a perfected security interest in the Collateral to the
extent contemplated hereby, together with any necessary continuation statements
so long as this Security Agreement remains in effect.
4. Maintenance of Security Interest. Pledgor will, from time to time, upon
the request of the Secured Party, deliver specific assignments of Collateral,
together with such other instruments and documents, financing statements,
amendments thereto, assignments or other writings as the Secured Party or any
Lender may reasonably request to carry out the terms of this Security Agreement
or to protect or enforce the Secured Party's security interest in the
Collateral.
With respect to any and all Collateral as to which a security interest is
granted under this Security Agreement, Pledgor agrees to do and cause to be done
all things necessary to perfect and keep in full force the security interest
granted in favor of the Secured Party, including, but not limited to, the prompt
payment of all fees and expenses incurred in connection with any filings made to
perfect a security interest in the Collateral in favor of the Secured Party.
Pledgor agrees to make appropriate entries upon its financial statements
and books and records disclosing the Secured Party's security interest in the
Collateral.
5. Collections; Secured Party's Right to Notify Account Debtors and to
Endorse Each Pledgor's Name. Pledgor hereby authorizes Secured Party at any time
after the occurrence and during the continuation of an Event of Default subject,
with respect to the Secured Obligations relating to the Company's
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obligations under the Company Guaranty, to Section 2.08 of the Company Guaranty,
(a) to open Pledgor's mail and collect any and all amounts due to Pledgor from
persons obligated on any Accounts ("Account Debtors"), but only to the extent
permitted by law with respect to Government Receivables; (b) to take over
Pledgor's post office boxes or make other arrangements as Secured Party deems
necessary to receive Pledgor's mail, including notifying the post office
authorities to change the address for delivery of Pledgor's mail to such address
as Secured Party may designate; and (c) to notify any or all Account Debtors,
but only to the extent permitted by law with respect to Government Receivables,
that the Accounts have been assigned to Secured Party and that Secured Party has
a security interest therein. Pledgor irrevocably makes, constitutes and appoints
Secured Party and all Persons designated by Secured Party for that purpose as
Pledgor's true and lawful attorney (and agent-in-fact) after the occurrence and
during the continuation of an Event of Default, subject to the limitations set
forth in the immediately preceding sentence and, with respect to the Secured
Obligations relating to the Company's obligations under the Company Guaranty, to
Section 2.08 of the Company Guaranty, to endorse such Pledgor's name on any
checks, notes, drafts or any other payment relating to and/or proceeds of the
Collateral which comes into Secured Party's possession or Secured Party's
control, and apply the same on account of the Secured Obligations as provided
herein and in the Agreements, in such order as Secured Party may elect. Secured
Party shall promptly furnish Pledgor with a copy of any such notice sent with
respect to Accounts of Pledgor and Pledgor hereby agrees that any such notice,
in Secured Party's sole discretion, may be sent on Pledgor's stationery, in
which event Pledgor shall co-sign such notice with Secured Party.
6. Collateral. Pledgor covenants with Lender that:
(A) Inspection. Secured Party and any Lender (by any of its
officers, employees and agents) shall have the right, at any time or times
during Pledgor's usual business hours, to inspect the Collateral, all
records related thereto (and to make extracts or copies from such
records), and the premises upon which any of the Collateral is located, to
discuss Pledgor's affairs and finances with its principal officers and
independent auditors and to verify the amount, quality, quantity, value
and condition of, or any other matter relating to, the Collateral. Upon or
after the occurrence of a Default or an Event of Default, Secured Party
may at any time and from time to time employ and maintain at Pledgor's
premises a custodian selected by Secured Party who shall have full
authority to do all acts necessary to protect Secured Party's interest.
All reasonable expenses incurred by Secured Party by reason of the
employment of such custodian shall be paid by the Pledgor, added to the
Secured Obligations and secured by the Collateral.
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(B) Assignments, Records and Schedules of Accounts. Pledgor shall
keep accurate and complete records of its Accounts ("Account Records")
and, upon Secured Party's request from time to time at intervals
acceptable to Secured Party, Pledgor shall reasonably provide Secured
Party and each Lender with a Schedule of Accounts in form and substance
reasonably acceptable to the Secured Party describing all Accounts created
or acquired by such Pledgor ("Schedule of Accounts") and shall at the
request of Secured Party execute and deliver further written assignments
of such Accounts to Secured Party; provided however, that Pledgor's
failure to execute and deliver any such Schedule of Accounts or
assignments shall not affect or limit Secured Party's security interest or
other rights in and to any Accounts. If requested by Secured Party,
Pledgor shall furnish Secured Party with copies of proof of delivery of
invoices and the original copy of all documents, including, without
limitation, repayment histories and present status reports, relating to
the Accounts so scheduled (collectively, "Account Documents") and such
other matter and information relating to the status of then existing
Accounts as Secured Party shall reasonably request.
(C) Notice Regarding Disputed Accounts. In the event any amounts due
and owing in excess of $100,000 are in dispute between any Account Debtor
and Pledgor (which shall include, without limitation, any dispute in which
an offset claim or counterclaim may result), Pledgor shall provide the
Secured Party with written notice thereof promptly, explaining in detail
the reason for the dispute, all claims related thereto and the amount in
controversy.
(D) Verification of Accounts. Whether or not a Default or an Event
of Default has occurred, any of Secured Party's, employees, or agents
shall have the right, at any time or times hereafter, to verify under
reasonable procedures the validity, amount or any other matter relating to
any Accounts by mail, telephone, telegraph or otherwise.
(E) Change of Trade Styles. Set forth on Schedule 6(E) delivered to
the Secured Party simultaneously with the execution of this Security
Agreement are all tradenames and trade styles under which Pledgor provides
services giving rise to Accounts as of the date of this Agreement ("Trade
Styles"). Pledgor shall not change, amend, alter, terminate, or cease
using its Trade Styles, or use additional Trade Styles, except upon giving
not less than ten (10) days prior written notice to the Secured Party and
taking or causing to be taken all such action at Pledgor's expense as may
be reasonably requested by the Secured Party (including the furnishing of
additional financing statements) to enable the Secured Party to perfect or
maintain the perfection of the
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security interest of the Secured Party in Accounts, General Intangibles,
Contract Rights and related Collateral.
(F) Safekeeping of Inventory. Pledgor shall be responsible for the
safekeeping of its Inventory, and in no event shall Secured Party or any Lender
have any responsibility for:
(i) Any loss or damage to Inventory or destruction thereof occurring
or arising in any manner or fashion from any cause other than as a result
of gross negligence, bad faith or willful misconduct of the Agent or any
Lender;
(ii) Any diminution in the value of Inventory; or
(iii) Any act or default of any carrier, warehouseman, bailee or
forwarding agency thereof or other Person in any way dealing with or
handling Inventory.
(G) Records and Schedules of Inventory. Pledgor shall keep correct and
accurate records on a perpetual basis, itemizing and describing the kind, type,
location, quality and quantity of Inventory owned by it, if any, from time to
time, and such Pledgor's cost therefor and selling price thereof, and at the
reasonable request of the Secured Party shall furnish to the Secured Party, a
current Schedule of Inventory ("Schedule of Inventory"). Pledgor shall conduct a
physical inventory, of which Secured Party shall be given prior written notice
and shall have the right to be present, no less than annually, and shall furnish
to Secured Party such other documents and reports as Secured Party shall
reasonably request with respect to the Inventory, including, without limitation,
invoices relating to Pledgor's purchase of Inventory.
(H) Evidence of Ownership of Equipment. Pledgor, promptly on request
therefor by the Secured Party, shall deliver to the Secured Party any and all
evidence of ownership of any of the Equipment (including without limitation
certificates of title and applications for title).
(I) Records and Schedules of Equipment. Pledgor shall maintain accurate,
itemized records describing in reasonable detail its Equipment and shall furnish
the Secured Party upon reasonable request with a current schedule containing the
foregoing information ("Schedule of Equipment").
(J) Administration of Collateral. So long as no Event of Default shall
have occurred and be continuing, Pledgor may (to the extent not inconsistent
with the provisions of the Loan Documents or the ESOP Loan Documents) (i) sell,
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transfer or dispose of any asset owned by it or (ii) collect or compromise
Accounts and General Intangibles in the ordinary course of business in any
lawful manner.
(K) Voting Rights, Consensual Rights, Dividends and Distributions. A. So
long as no Event of Default shall have occurred and be continuing:
1. the Pledgor shall be entitled to exercise any and all voting and
other consensual rights pertaining to the Collateral or any part thereof
for any purpose not inconsistent with the terms of this Security
Agreement, the Credit Agreement, the other Loan Documents or the other
ESOP Loan Documents;
2. the Pledgor shall be entitled to receive and retain any and all
cash distributions or dividends paid on the Collateral which they are
otherwise entitled to receive, notwithstanding the assignment and transfer
of the Collateral and the grant of security interest in Section 2 of this
Security Agreement (provided that any cash distributions or dividends
received upon the occurrence and during the continuance of a Default shall
remain segregated from all other funds of the Pledgor and deposited with
the Secured Party), but any and all stock dividends, liquidating
dividends, distributions in property, returns of capital or other
distributions made on or in respect of any of the Collateral, whether
resulting from a subdivision, combination or reclassification of the
outstanding capital stock of any issuer of the Collateral or received in
exchange for the Collateral or any part thereof or as a result of any
merger, consolidation, acquisition or other exchange of assets to which
any issuer of any Collateral may be a party or otherwise, and any and all
cash and other property received in exchange for any of the Collateral
shall be and become part of the Collateral hereunder and, if received by
the Pledgor, shall forthwith be delivered to the Secured Party, to the
extent the Collateral for which it was exchanged was held or required to
be held by the Secured Party; and
3. the Secured Party shall execute and deliver (or cause to be
executed and delivered) to the Pledgor all such proxies and other
instruments as the Pledgor may reasonably request for the purpose of
enabling the Pledgor to exercise the voting, consensual and other rights
which the Pledgor are entitled to exercise pursuant to subparagraph (1)
above and to receive such distributions and dividends which it is
authorized to receive and retain pursuant to subparagraph (2) above.
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B. Upon the occurrence and during the continuance of an Event of
Default:
1. subject, with respect to the Secured Obligations relating
to the Company's obligations under the Company Guaranty to Section
2.08 of the Company Guaranty, all rights of the Pledgor to exercise
the voting and other consensual rights which it would otherwise be
entitled to exercise pursuant to Section 6(K)A.l and to receive and
retain the distributions and dividends which it would otherwise be
authorized to receive and retain pursuant to Section 6(K)A.2, shall
become vested in the Secured Party, which shall thereupon have the
sole right to exercise such voting and other consensual rights and
to receive and hold as Collateral such distributions and dividends
(whether or not the relevant Collateral shall have been transferred
into the name of the Secured Party or any of its nominees, the
Pledgor hereby irrevocably appointing and constituting the Secured
Party as proxy and attorney-in-fact of Pledgor, which appointment is
coupled with an interest and is irrevocable, with full power of
substitution, to act as if the Secured Party were the outright owner
thereof); and
2. all distributions and dividends which are received by the
Pledgor contrary to the provisions of Section 6(K)A.2 or Section
6(K)▇.▇ shall be received in trust for the benefit of the Secured
Party, shall be segregated from other funds of Pledgor and shall be
paid over to the Secured Party forthwith as Collateral in the same
form as so received (with any necessary endorsement).
7. Warranties Regarding Collateral. Pledgor warrants and represents that
it is and will continue to be the owner of the Collateral, now owned and upon
the acquisition of the same, free and clear of all encumbrances and security
interests other than the security interest in favor of Secured Party hereunder
and Permitted Liens, and that it will defend the Collateral and the Secured
Party's security interest therein and any products and proceeds thereof against
all claims and demands of all Persons at any time claiming the same or any
interest therein adverse to the Secured Party or any Lender.
8. Account Warranties and Representations. With respect to its Accounts,
Pledgor warrants and represents to the Secured Party and the Lenders that they
may rely on all statements or representations made by Pledgor on or with respect
to any Schedule of Accounts prepared and delivered by Pledgor and, unless
otherwise indicated in writing by Pledgor, that:
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(A) All Account Records and Account Documents are located and shall be
kept only at Pledgor's chief executive offices located at the locations
described in Schedule 6.04 delivered to the Agent pursuant to the Credit
Agreement and Schedule 4.22 delivered to the Bank pursuant to the Company
Guaranty;
(B) They are genuine, are in all material respects what they purport to
be, are not evidenced by a judgment instrument or document or, if evidenced by
an instrument or document, are only evidenced by one original instrument or
document, which has been delivered to the Secured Party;
(C) They cover the bona fide rendition of services, or the bona fide sales
and deliveries of Inventory usually dealt in by Pledgor, in the ordinary course
of business;
(D) Each Account is actually and absolutely owing to Pledgor in the face
value thereof, is valid and enforceable against the applicable Account Debtor,
and is not subject to any setoffs, discounts, allowances, claims, counterclaims,
disputes or doubtful collectibility except (i) as is customary for Accounts of
the type represented by such Account (including the nature of the Account
Debtor) of the Pledgor in the ordinary course of Pledgor's business and
consistent with past practices, and (ii) as is reflected by reserves and
reductions in the stated value of such Account, computed in a manner consistent
with the Company's policies and practices in preparing the financial statements
described in Sections 7.01 and 8.01 of the Credit Agreement and Sections 3.01(f)
and 4.01 of the Company Guaranty, included in such financial statements, in the
Schedule of Accounts and in any report or certificate including financial
information regarding such Account furnished to the Secured Party pursuant to
the Loan Documents or the ESOP Loan Documents.
(E) The goods or services giving rise thereto are not, and were not at the
time of the sale or performance thereof, subject to any lien, claim, encumbrance
or security interest, except those of the Secured Party and those removed or
terminated prior to the date hereof;
(F) They have not been pledged to any Person other than to Secured Party
under this Security Agreement and will be owned by Pledgor free and clear of any
liens, claims or encumbrances except Permitted Liens; and
(G) Secured Party's security interest therein will not be subject to any
offset, deduction, counterclaim, lien or other adverse condition, other than
Permitted Liens or as is consistent with Section 8(D) above.
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9. Inventory Warranties and Representations. With respect to Inventory,
Pledgor warrants and represents to the Secured Party and the Lenders that they
may rely on all statements or representations made by Pledgor on or with respect
to any Inventory and, unless otherwise indicated in writing by Pledgor, that
(A) Except for the relocation of Inventory from time to time in the
ordinary course of business not aggregating more than $100,000 at any one
time in any location other than those set forth in Schedules 6.03 and 6.04
delivered pursuant to the Credit Agreement or Schedules 4.22 and 4.23
delivered pursuant to the Company Guaranty, the Pledgor shall not locate
or relocate inventory to any location other than those set forth in
Section 8(A) above or Schedules 6.03 and 6.04 delivered pursuant to the
Credit Agreement or Schedules 4.22 and 4.23 delivered pursuant to the
Company Guaranty without giving the Secured Party not less than thirty
(30) days prior written notice and taking or causing to be taken at its
expense all steps as may be reasonably requested by the Secured Party
(including the furnishing of additional financing statements) to enable
the Secured Party to perfect or continue the perfection of its security
interest in such property.
(B) No Inventory is or will be subject to any lien, claim,
encumbrance or security interest whatsoever, except for the security
interest of Secured Party hereunder and Permitted Liens;
(C) No Inventory having an aggregate value in excess of $100,000 is
now, and shall not at any time or times hereafter be, stored with a
bailee, warehouseman, or similar party without Secured Party's prior
written consent and, if Secured Party gives such consent, Pledgor will
concurrently therewith cause any such bailee, warehouseman, or similar
party to issue and deliver to Secured Party in form and substance
acceptable to Secured Party, warehouse receipts therefor in Secured
Party's name; and
(D) No Inventory is under consignment to any Person.
10. Equipment Warranties and Representations. With respect to Equipment,
Pledgor warrants and represents to the Secured Party and each Lender that:
(A) Except for the relocation of Equipment from time to time in the
ordinary course of business not aggregating more than $100,000 at any one
time in any location other than those set forth in Schedules 6.03 and 6.04
of the Credit Agreement and Schedules 4.22 and 4.23 of the Company
Guaranty, the Pledgor shall not locate or relocate Equipment to any
location other than those set forth in Schedules 6.03
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and 6.04 of the Credit Agreement and Schedules 4.22 and 4.23 of the
Company Guaranty without giving the Secured Party not less than thirty
(30) days prior written notice and taking or causing to be taken at their
expense all steps as may be reasonably requested by the Secured Party
(including the furnishing of additional financing statements) to enable
the Secured Party to perfect or continue the perfection of its security
interest in such property; and
(B) Pledgor has and at all times will have good and marketable title
to and ownership of the Equipment free and clear of any lien, claim,
encumbrance, or security interest whatsoever, except for (i) the security
interest of Secured Party created hereunder and (ii) Permitted Liens.
11. Casualty and Liability Insurance Required. (A) Pledgor will keep the
Collateral continuously insured as may be expressly required by the Agreements.
(B) Each insurance policy obtained in satisfaction of the requirements of
Section 11(A) hereof:
(i) shall be by such insurer (or insurers) as shall be financially
responsible and qualified to do business in the applicable jurisdictions;
(ii) shall be in such form and have such provisions (including,
without limitation, the loss payable clause, the waiver of subrogation
clause, the deductible amount, if any, and the standard mortgagee
endorsement clause), as are generally considered standard provisions for
the type of insurance involved and are acceptable in all respects to
Secured Party;
(iii) shall prohibit cancellation or substantial modification,
termination or lapse in coverage by the insurer without at least 30 days'
prior written notice to Secured Party;
(iv) shall provide that the interest of Secured Party shall not be
impaired or invalidated by any act or neglect of Pledgor nor by the
occupation of the premises wherein such Collateral is located for purposes
more hazardous than are permitted by said policy;
(v) without limiting the generality of the foregoing, all insurance
policies covering loss or damage to the Collateral shall name Secured
Party as mortgagee, loss payee and a party insured thereunder and any loss
thereunder shall be paid directly to Secured Party.
(C) Prior to expiration of any such policy, Pledgor shall furnish Secured
Party with evidence reasonably satisfactory to
13
Secured Party that the policy or certificate has been renewed or replaced or is
no longer required by this Security Agreement.
(D) Pledgor hereby irrevocably makes, constitutes and appoints Secured
Party (and all officers, employees or agents designated by Secured Party),
effective upon the occurrence of an Event of Default which has not been waived
or cured, as Pledgor's true and lawful attorney (and agent-in-fact) for the
purpose of making, settling and adjusting claims under such policies of
insurance, endorsing the name of Pledgor on any check, draft, instrument or
other item or payment for the proceeds of such policies of insurance and for
making all determinations and decisions with respect to such policies of
insurance.
(E) In the event Pledgor shall fail to maintain, or cause to be
maintained, the full insurance coverage required hereunder or shall fail to keep
any Collateral in good repair and good operating condition, the Secured Party
may (but shall be under no obligation to), without waiving or releasing any
Secured Obligation or Event of Default, after giving notice to the Pledgor,
contract for the required policies of insurance and pay the premiums on the same
or make any required repairs, renewals and replacements; and all sums so
disbursed by Secured Party, including reasonable attorneys' fees, court costs,
expenses and other charges related thereto, shall be payable on demand by
Pledgor to Secured Party and shall be additional Secured Obligations secured by
the Collateral.
(F) In case of any material damage to or destruction of all or any part of
the Collateral, Pledgor shall give prompt notice thereof to Secured Party. Each
such notice shall describe generally the nature and extent of such damage,
destruction, taking, loss, proceeding or negotiations.
12. Rights and Remedies Upon Default. Subject, with respect to the Secured
Obligations relating to the Company's obligations under the Company Guaranty, to
Section 2.08 of the Company Guaranty, upon and after an Event of Default which
has not been waived or cured, the Secured Party shall have the following rights
and remedies, all of which may be exercised with or without notice to Pledgor:
(A) All of the rights and remedies of a secured party under the
Uniform Commercial Code of the state where such rights and remedies are
asserted, or under other applicable law, all of which rights and remedies
shall be cumulative, and none of which shall be exclusive, to the extent
permitted by law, in addition to any other rights and remedies contained
in this Security Agreement, the Agreements, or any of the other Loan
Documents or ESOP Loan Documents;
14
(B) The right to foreclose the liens and security instruments
created under this Security Agreement or any of the other Loan Documents
or ESOP Loan Documents by any available judicial procedure or without
judicial process;
(C) The right to (i) enter upon the premises of Pledgor through
self-help and without judicial process, without first obtaining a final
judgment or giving Pledgor notice and opportunity for a hearing on the
validity of Secured Party's claim and without any obligation to pay rent
to Pledgor, or any other place or places where any Collateral is located
and kept, and remove the Collateral therefrom to the premises of Secured
Party or any agent of Secured Party, for such time as Secured Party may
desire, in order to effectively collect or liquidate the Collateral,
and/or (ii) require Pledgor to assemble the Collateral and make it
available to Secured Party at a place to be designated by Secured Party in
its sole discretion;
(D) The right (to the extent permissible by law with respect to
Governmental Receivables) to (i) demand payment of the Accounts; (ii)
enforce payment of the Accounts and General Intangibles and enforce all
Contract Rights, by legal proceedings or otherwise; (iii) exercise all or
any of Pledgor's rights and remedies with respect to the collection of the
Accounts and General Intangibles and in respect of Contract Rights; (iv)
settle, adjust, compromise, extend or renew the Accounts; (v) settle,
adjust or compromise any legal proceedings brought to collect the Accounts
or General Intangibles or to enforce Contract Rights; (vi) sell or assign
the Accounts, General Intangibles, Contract Rights or other Collateral
upon such terms, for such amounts and at such time or times as Secured
Party deems advisable; (vii) discharge and release the Accounts; (viii)
take control, in any manner, of any item of payment or proceeds; (ix)
prepare, file and sign Pledgor's name on a Proof of Claim in bankruptcy or
similar document against any account obligor; (x) prepare, file and sign
Pledgor's name on any notice of lien, assignment or satisfaction of lien
or similar document in connection with the Accounts; (xi) endorse the name
of Pledgor upon any chattel paper, document, instrument, invoice, freight
▇▇▇▇, ▇▇▇▇ of lading or similar document or agreement relating to the
Accounts or Inventory; (xii) use Pledgor's stationery for verifications of
the Accounts and notices thereof to account obligors; (xiii) use the
information recorded on or contained in any data processing equipment and
computer hardware and software relating to the Accounts, General
Intangibles, Equipment, Contract Rights or Inventory to which Pledgor has
access; and (xiv) do all acts and things and execute all documents
necessary, in Secured Party's sole discretion, to collect the Accounts and
General Intangibles;
15
(E) The right to sell, assign, lease or to otherwise dispose of all
or any Collateral in its then condition, or after any further
manufacturing or processing thereof, at public or private sale or sales,
with such notice as may be required by law, in lots or in bulk, for cash
or on credit, with or without representations and warranties, all as
Secured Party, in its sole discretion, may deem advisable (except, in the
case of Government Receivables, to the extent such sales or other
disposition are prohibited by applicable law). Secured Party shall have
the right to conduct such sales on Pledgor's premises or elsewhere and
shall have the right to use Pledgor's premises without charge for such
sales for such time or times as Secured Party may see fit. Secured Party
may, if it deems it reasonable, postpone or adjourn any sale of the
Collateral from time to time by an announcement at the time and place of
such postponed or adjourned sale, without being required to give a new
notice of sale. Pledgor agrees that Secured Party has no obligation to
preserve rights to the Collateral against prior parties or to ▇▇▇▇▇▇▇▇ any
Collateral for the benefit of any Person. Secured Party is hereby granted
a license or other right to use, without charge, Pledgor's labels,
patents, copyrights, rights of use of any name, trade secrets, tradenames,
trademarks and advertising matter, or any property of a similar nature, as
it pertains to the Collateral, in completing production of, advertising
for sale and selling any Collateral and Pledgor's rights under any license
and any franchise agreement shall inure to Secured Party's benefit. If any
of the Collateral shall require repairs, maintenance, preparation or the
like, or is in process or other unfinished state, Secured Party shall have
the right, but shall not be obligated to perform such repairs,
maintenance, preparation, processing or completion of manufacturing for
the purpose of putting the same in such saleable form as Secured Party
shall deem appropriate, but Secured Party shall have the right to sell or
dispose of the Collateral without such processing. In addition, Pledgor
agrees that in the event notice is necessary under applicable law, written
notice mailed to Pledgor in the manner specified in either of the
Agreements ten (10) days prior to the date of public sale of any of the
Collateral or prior to the date after which any private sale or other
disposition of the Collateral will be made shall constitute commercially
reasonable notice to Pledgor. Secured Party or any Lender may purchase all
or any part of the Collateral at public or, if permitted by law, private
sale, free from any right of redemption which is hereby expressly waived
by Pledgor and, in lieu of actual payment of such purchase price, may set
off the amount of such price against the Secured Obligations. The net
cash proceeds resulting from the collection, liquidation, sale, lease or
other disposition of the Collateral shall be applied first to the
reasonable expenses (including all reasonable attorneys'
16
fees) of retaking, holding, storing, processing and preparing for sale,
selling, collecting, liquidating and the like (collectively, the
"Administration Expenses"), and then to the satisfaction of all Secured
Obligations, application as to particular Secured Obligations or against
principal or interest to be in subject to the terms of Section 13 hereof
and of the Agreements. Pledgor shall be liable to Secured Party and the
Lenders and shall pay to the Secured Party on demand any deficiency which
may remain after such sale, disposition, collection or liquidation of the
Collateral. Pledgor recognize that the Secured Party may be unable to
effect a public sale of securities constituting Collateral by reason of
certain prohibitions contained in the Securities Act of 1933, as amended
(the "Securities Act"), and applicable state securities or Blue Sky laws,
and as a consequence may be compelled to resort to one or more private
sales to a restricted group of purchasers who will be obliged to agree,
among other things, to acquire such Collateral for their own account, for
investment and not with a view to the distribution or resale thereof.
Pledgor agrees and acknowledges that private sales so made may be at
prices and upon terms less favorable to Pledgor than if such Collateral
were sold at public sales and that the Secured Party has no obligation to
delay the sale of any of the Collateral for the period of time necessary
to permit the issuer of such Collateral to register or otherwise qualify
them, even if such issuer would agree to register or otherwise qualify
such Collateral for public sale under the Securities Act and applicable
state securities or Blue Sky laws. Pledgor further agrees, to the extent
permitted by applicable law, that the use of private sales made under the
foregoing circumstances to dispose of the Collateral shall be deemed to be
dispositions in a commercially reasonable manner;
(F) The rights and remedies provided to Secured Party or any Lender
under this Security Agreement or any of the other Loan Documents or ESOP
Loan Documents.
13. Anti-Marshalling Provisions. The right is hereby given by Pledgor to
Secured Party and the Lenders to make releases (whether in whole or in part) of
all or any part of the Collateral agreeable to Secured Party and the Lenders
without notice to, or the consent, approval or agreement of other parties and
interests, including junior lienors, which releases shall not impair in any
manner the validity of or priority of the liens and security interest in the
remaining Collateral conferred under such documents, nor release Pledgor from
personal liability for the indebtedness hereby secured. Notwithstanding the
existence of any other security interest in the Collateral held by Secured Party
or any Lender, Secured Party and the Lenders shall have the right to determine
the order in which any or all of the Collateral shall be subjected to the
remedies provided in this
17
Security Agreement. The proceeds realized upon the exercise of the remedies
provided herein shall be applied as provided herein, in the Pledgor Guaranty and
in the Agreements. Pledgor hereby waives any and all right to require the
marshalling of assets in connection with the exercise of any of the remedies
permitted by applicable law or provided herein.
14. Appointment of Secured Party as Pledgor's Lawful Attorney. Upon and
after an Event of Default which has not been waived or cured, Pledgor
irrevocably designates, makes, constitutes and appoints Secured Party (and all
Persons designated by Lender) as Pledgor's true and lawful attorney (and
agent-in-fact). To the extent permitted by law, all acts of Secured Party or its
designee lawfully taken pursuant to Section 13 are hereby ratified and confirmed
and Secured Party or its designee shall not be liable for any acts of omission
or commission nor for any error of judgment or mistake of fact or law which does
not constitute bad faith, willful misconduct or gross negligence. This power,
being coupled with an interest, is irrevocable by Pledgor until all Secured
Obligations are finally paid in full.
15. Rights and Remedies Cumulative; Non-Waiver; Etc. The enumeration of
Secured Party's and Lenders' rights and remedies set forth in this Security
Agreement is not intended to be exhaustive and the exercise by the Secured Party
or any Lender of any right or remedy shall not preclude the exercise of any
other rights or remedies, all of which shall be cumulative, and shall be in
addition to any other right or remedy given hereunder, or under any other
agreement between Pledgor and Secured Party or any Lender or which may now or
hereafter exist in law or in equity or by suit or otherwise. No delay or failure
to take action on the part of Lender in exercising any right, power or privilege
shall operate as a waiver thereof, nor shall any single or partial exercise of
any such right, power or privilege preclude other or further exercise thereof or
the exercise of any other right, power or privilege or be construed to be a
waiver of any Event of Default. No waiver by a party hereunder shall be
effective unless it is in writing and signed by the party making such waiver,
and then only to the extent specifically stated in such writing. No course of
dealing between Pledgor and the Secured Party or any Lender or their respective
agents or employees shall be effective to change, modify or discharge any
provision of this Security Agreement or to constitute a waiver of any Event of
Default.
16. Waivers. In addition to the other waivers contained herein and in any
other agreement between Pledgor and Secured Party or any Lender, Pledgor hereby
expressly waives, to the extent permitted by law: presentment for payment,
demand, protest, notice of demand, notice of protest, notice of default or
dishonor, notice of payments and nonpayments and all other notices and consents
that Secured Party may release, compromise,
18
settle, extend or renew any commercial paper, instruments or guaranties at any
time held by Secured Party or any Lender on which Pledgor may in any way be
liable and notice of any action taken by Secured Party or any Lender unless
expressly required by this Security Agreement or by law.
17. Notice. Except as otherwise provided herein, all notices, requests and
demands to or upon a party hereto shall be effective as provided in the Pledgor
Guaranty.
18. Applicable Law. This Security Agreement shall be governed in all
respects by, and construed in accordance with, the internal laws of the State of
Florida without reference to choice of laws principles.
19. References to Credit Agreement Definitions. In the event that the
Credit Agreement shall no longer be in effect at any time while the Pledgor
Guaranty shall continue in effect or there shall otherwise continue to remain
outstanding Secured Obligations, all references to the Credit Agreement,
including terms defined by reference to their respective definitions contained
in the Credit Agreement, shall be deemed to refer to the Credit Agreement as in
effect as of the date hereof, with such amendments thereto to which the Secured
Party shall have given its express consent in accordance with the Loan Documents
and the ESOP Loan Documents.
20. Entire Agreement. This Security Agreement, together with the Credit
Agreement and other Loan Documents and ESOP Loan Documents, constitute and
express the entire understanding between the parties hereto with respect to the
subject matter hereof, and supersede all prior agreements and understandings,
inducements, commitments or conditions, express or implied, oral or written,
except as herein contained. The express terms hereof control and supersede any
course of performance or usage of the trade inconsistent with any of the terms
hereof. Neither this Security Agreement nor any portion or provision hereof may
be changed, altered, waived, modified, supplemented, discharged, canceled,
terminated, or amended orally or in any manner other than (i) as to the Agent,
as provided in the Credit Agreement and (ii) as to NationsBank, by the express
written consent of NationsBank in each instance.
21. Section Headings. The Section headings in this Security Agreement are
for convenience of reference only; they form no part of this Security Agreement
and shall not affect its interpretation.
22. Severability. The provisions of this Security Agreement are
independent of and separable from each other. If any provision hereof shall for
any reason be held invalid or unenforceable, such invalidity or unenforceability
shall not affect the validity or enforceability of any other provision
19
hereof, but this Security Agreement shall be construed as if such invalid or
unenforceable provision had never been contained herein.
23. Successors and Assigns. This Security Agreement shall be binding upon
the successors and assigns of Pledgor and shall inure to the benefit of and be
enforceable by the Secured Party and their successors and assigns; provided,
however, the obligations of Pledgor hereunder may not be assigned or delegated
to any other Person without the prior written consent of the Secured Party.
24. Agency. Notwithstanding the foregoing references to the Secured Party,
Pledgor acknowledges and agrees that so long as NationsBank shall be the sole
Lender under the Credit Agreement, the term "Agent" shall mean NationsBank as
Lender. When and if there shall be more than one Lender party to the Credit
Agreement, then the term "Agent" shall refer to the Agent under the Credit
Agreement pursuant to the provisions of Article XI of the Credit Agreement, to
which reference is hereby made.
25. Termination. In the event that all of the Secured Obligations shall be
fully, finally and indefeasibly paid and satisfied in full (subject to
provisions of the Agreements that expressly survive), the Agreements shall be
terminated and there shall be no Outstanding Letters of Credit, the Secured
Party shall, at the request and at the expense of the Pledgor, terminate the
security interest and powers of attorney herein conferred and, in furtherance
thereof, execute such Uniform Commercial Code termination statements and such
other documents in form and substance reasonably satisfactory to the Secured
Party to release and terminate the Lien hereof of record. Notwithstanding the
foregoing provisions of this Section 25, in the event that any payment made or
deemed made to the Secured Party or any Lender in payment of any Secured
Obligation shall be rescinded or declared to be or become void, voidable or
otherwise recoverable from the Secured Party or such Lender for any reason
whatsoever, the Lien in favor of the Secured Party created hereunder shall be
and become reinstituted in respect of such Secured Obligations until the same
shall be thereafter fully and finally paid, satisfied and discharged.
[Remainder of page intentionally left blank]
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IN WITNESS WHEREOF, the parties hereto have caused this Security Agreement
to be duly executed by authority duly given as of the day and year first above
written.
WITNESS: VITAS HEALTHCARE CORPORATION OF OHIO
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
------------------------------- -------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Vice President
--------------------------------
SECURED PARTY:
WITNESS: NATIONSBANK OF FLORIDA, NATIONAL
ASSOCIATION, as Agent
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-------------------------------- -------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Vice President
--------------------------------
WITNESS: NATIONSBANK OF FLORIDA, NATIONAL
ASSOCIATION
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-------------------------------- -------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Vice President
--------------------------------
21
Vitas Healthcare Corporation of Ohio
PLEDGE AND SECURITY AGREEMENT
INDEX TO EXHIBITS AND SCHEDULES*
1. Exhibit A Existing Liens on the Collateral
2. Schedule 6(E) Trade Styles
VITAS AGREES TO PROVIDE A COPY OF THE EXHIBIT AND SCHEDULE LISTED ABOVE TO THE
COMMISSION UPON REQUEST.
----------
* The inclusion of any information on any one of these Exhibits and Schedules is
not and shall not be deemed to be, a representation that such information must
be set forth on such Exhibit or Schedule or any supplement thereto or otherwise
in the agreement to which such Exhibit or Schedule relates. Information provided
in any one Exhibit or Schedule shall be deemed to be incorporated into each
Exhibit and Schedule, as applicable.