GENERAL PLEDGE AGREEMENT
TO: IMPERIAL BANK
1. GRANT OF SECURITY INTEREST. For valuable consideration, STRATFORD
AMERICAN CORPORATION, an Arizona corporation ("Debtor"), hereby assigns,
transfers to and pledges with IMPERIAL BANK ("Bank") all money and property this
day delivered to and deposited with Bank, together with all other money or
property heretofore delivered or which shall hereafter be delivered to or come
into the possession, custody or control of Bank in any manner or for any purpose
whatsoever during the existence of this Agreement, including, without
limitation, all of the issued and outstanding common stock of Stratford American
Car Rental Systems, Inc. (collectively called "Collateral"), and whether held in
a general or special account or deposit for safekeeping or otherwise, together
with whatever is receivable or received when any of the Collateral or proceeds
thereof are sold, collected, exchanged or otherwise disposed of, whether such
disposition is voluntary or involuntary, including without limitation, (a) all
rights to payment, including returned premiums, with respect to any insurance
relating to any of the foregoing, (b) all rights to payment with respect to any
cause of action affecting or relating to any of the foregoing, and (c) all stock
rights, rights to subscribe, stock splits, liquidating dividends, cash
dividends, dividends paid in stock, new securities or other property of any kind
which Debtor is or may hereafter be entitled to receive on account of any
securities pledged hereunder, including without limitation, stock received by
Debtor due to stock splits or dividends paid in stock or sums paid upon or in
respect of any securities pledged hereunder upon the liquidation or dissolution
of the issuer thereof (hereinafter called "Proceeds"), and in the event that
Debtor receives any such Proceeds, Debtor will hold the same in trust on behalf
of and for the benefit of Bank and will immediately deliver all such Proceeds to
Bank in the exact form received, with the endorsement of Debtor if necessary
and/or appropriate undated stock powers duly executed in blank, to be held by
Bank as part of the Collateral, subject to all terms hereof.
2. OBLIGATIONS SECURED. The obligations secured hereby are the payment
and performance of: (a) all present and future Indebtedness of Debtor to Bank;
(b) all obligations of Debtor and rights of Bank under this Agreement; and (c)
all present and future obligations of Debtor to Bank of other kinds. The word
"Indebtedness" is used herein in its most comprehensive sense and includes any
and all advances, debts, obligations and liabilities of Debtor, or any of them,
heretofore, now or hereafter made, incurred or created, whether voluntary or
involuntary and however arising, whether due or not due, absolute or contingent,
liquidated or unliquidated, determined or undetermined, and whether Debtor may
be liable individually or jointly with others, or whether recovery upon such
Indebtedness may be or hereafter becomes unenforceable.
3. TERMINATION. This Agreement will terminate upon the performance of
all obligations of Debtor to Bank, including without limitation, the payment of
all Indebtedness of Debtor to Bank existing or committed by Bank at the time
Bank receives written notice from Debtor of the termination of this Agreement.
4. OBLIGATIONS OF BANK.
(a) Bank has no obligation to make any loans hereunder. Any money
received by Bank in respect of the Collateral may be deposited, at Bank's
option, into a non-interest bearing account over which Debtor shall have no
control, and the same shall, for all purposes, be deemed Collateral hereunder.
(b) Bank's obligation with respect to Collateral and Proceeds in its
possession shall be strictly limited to the duty to exercise reasonable care in
the custody and preservation of such Collateral and Proceeds, and such duty
shall not include any obligation to ascertain or to initiate any action with
respect to or to inform Debtor of maturity dates, conversion, call or exchange
rights, or offers to purchase the Collateral or Proceeds, or any similar
matters, notwithstanding Bank's knowledge of the same. Bank shall have no duty
to take any steps necessary to preserve the rights of Debtor against prior
parties, or to initiate any action to protect against the possibility of a
decline in the market value of the Collateral or Proceeds. Bank shall not be
obligated to take any action with respect to the Collateral or Proceeds
requested by Debtor unless such request is made in writing and Bank determines,
in its sole discretion, that the requested action would not unreasonably
jeopardize the value of the Collateral and Proceeds as security for the
Indebtedness. Bank may at any time deliver the Collateral and Proceeds, or any
part thereof, to any Debtor, and the receipt thereof by any Debtor shall be a
complete and full acquittance for the Collateral and Proceeds so delivered, and
Bank shall thereafter be discharged from any liability or responsibility
therefor.
5. REPRESENTATIONS AND WARRANTIES. Debtor represents and warrants to
Bank that: (a) Debtor is the owner and has possession or control of the
Collateral and Proceeds; (b) Debtor has the right to pledge the Collateral and
Proceeds; (c) all Collateral and Proceeds are genuine, free from liens, adverse
claims, setoffs, default, prepayment, defenses and conditions precedent of any
kind or character, except as heretofore disclosed to Bank in writing; (d) all
statements contained herein and, where applicable, in the Collateral, are true
and complete; (e) no financing statement covering any of the Collateral or
Proceeds, and naming any secured party other than Bank, is on file in any public
office; and (f) specifically with respect to Collateral and Proceeds consisting
of investment securities, instruments, chattel paper, documents, contracts,
insurance policies or any like property, (i) all persons appearing to be
obligated thereon have authority and capacity to contract and are bound as they
appear to be, and (ii) the same
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comply with applicable laws concerning form, content and manner of preparation
and execution.
6. COVENANTS OF DEBTOR.
(a) Debtor Agrees in General: (i) to pay Indebtedness secured hereby
when due; (ii) to indemnify Bank against all losses, claims, demands,
liabilities and expenses of every kind caused by property subject hereto; (iii)
to pay all costs and expenses, including reasonable attorneys' fees, incurred by
Bank in the perfection, preservation, realization, enforcement and exercise of
its rights, powers and remedies hereunder; (iv) to permit Bank to exercise its
powers; (v) to execute and deliver such documents as Bank deems necessary to
create, perfect and continue the security interests contemplated hereby; and
(vi) not to change its chief place of business or the places where Debtor keeps
any of the Collateral or Debtor's records concerning the Collateral and Proceeds
without first giving Bank written notice of the address to which Debtor is
moving same.
(b) Debtor Agrees with Regard to the Collateral and Proceeds: (i) not
to permit any lien on the Collateral or Proceeds, except in favor of Bank; (ii)
not to attempt to withdraw any funds from any deposit account pledged to Bank
without Bank's prior written consent; (iii) not to sell, hypothecate or
otherwise dispose of any of the Collateral or Proceeds, or any interest therein,
without Bank's prior written consent; (iv) to keep, in accordance with generally
accepted accounting principles, complete and accurate records regarding all
Collateral and Proceeds, and to permit Bank to inspect the same and make copies
thereof at any reasonable time; (v) if requested by Bank, to receive and use
reasonable diligence to collect Proceeds, in trust and as the property of Bank,
and to immediately endorse as appropriate and deliver such Proceeds to Bank
daily in the exact form in which they are received together with a collection
report in form satisfactory to Bank; (vi) not to commingle Collateral or
Proceeds, or collections thereunder, with other property; (vii) in the event
Bank elects to receive payments of Proceeds hereunder, to pay all expenses
incurred by Bank in connection therewith, including expenses of accounting,
correspondence, collection efforts, filing, recording, record keeping and
expenses incidental thereto; (viii) to provide any service and do any other acts
which may be necessary to keep all Collateral and Proceeds free and clear of all
defenses, rights of offset and counterclaims; and (ix) if the Collateral or
Proceeds consists of securities and so long as no Event of Default exists, to
vote said securities and to give consents, waivers and ratifications with
respect thereto, provided that no vote shall be cast or consent, waiver or
ratification given or action taken which would impair Bank's interests in the
Collateral and Proceeds or be inconsistent with or violate any provisions of
this Agreement.
7. POWERS OF BANK. Debtor appoints Bank its true attorney in fact to
perform any of the following powers, which are coupled
3.
with an interest, are irrevocable until termination of this Agreement and may be
exercised from time to time by Bank's officers and employees, or any of them,
whether or not Debtor is in default: (a) upon the occurrence and continuation of
an Event of Default (as defined in the Credit Agreement), to perform any
obligation of Debtor hereunder in Debtor's name or otherwise; (b) to notify any
person obligated on any security, instrument or other document subject to this
Agreement of Bank's rights hereunder; (c) upon the occurrence and continuation
of an Event of Default (as defined in the Credit Agreement), to collect by legal
proceedings or otherwise all dividends, interest, principal or other sums now or
hereafter payable upon or on account of the Collateral or Proceeds; (d) upon the
occurrence and continuation of an Event of Default (as defined in the Credit
Agreement), to enter into any extension, reorganization, deposit, merger or
consolidation agreement, or any other agreement relating to or affecting the
Collateral or Proceeds, and in connection therewith to deposit or surrender
control of the Collateral and Proceeds, to accept other property in exchange for
the Collateral and Proceeds, and to do and perform such acts and things as Bank
may deem proper, with any money or property received in exchange for the
Collateral or Proceeds, at Bank's option, to be applied to the Indebtedness or
held by Bank under this Agreement; (e) upon the occurrence and continuation of
an Event of Default (as defined in the Credit Agreement), to make any compromise
or settlement Bank deems desirable or proper in respect of the Collateral and
Proceeds; (f) to insure, process and preserve the Collateral and Proceeds; (g)
upon the occurrence and continuation of an Event of Default (as defined in the
Credit Agreement), to exercise all rights, powers and remedies which Debtor
would have, but for this Agreement, with respect to all Collateral and Proceeds
subject hereto; and (h) upon the occurrence and continuation of an Event of
Default (as defined in the Credit Agreement), to do all acts and things and
execute all documents in the name of Debtor or otherwise, deemed by Bank as
necessary, proper and convenient in connection with the preservation, perfection
or enforcement of its rights hereunder. To effect the purposes of this Agreement
or otherwise upon instructions of Debtor, or any of them, Bank may cause any
Collateral and/or Proceeds to be transferred to Bank's name or the name of
Bank's nominee. If an Event of Default has occurred and is continuing, any or
all Collateral and/or Proceeds consisting of securities may be registered,
without notice, in the name of Bank or its nominee, and thereafter Bank or its
nominee may exercise, without notice, all voting and corporate rights at any
meeting of the shareholders of the issuer thereof, any and all rights of
conversion, exchange or subscription, or any other rights, privileges or options
pertaining to such Collateral and/or Proceeds, all as if it were the absolute
owner thereof. The foregoing shall include, without limitation, the right of
Bank or its nominee to exchange, at its discretion, any and all Collateral
and/or Proceeds upon the merger, consolidation, reorganization, recapitalization
or other readjustment of the issuer thereof, or upon the exercise by the issuer
thereof or Bank of any right, privilege or option pertaining
4.
to any shares of the Collateral and/or Proceeds, and in connection therewith,
the right to deposit and deliver any and all of the Collateral and/or Proceeds
with any committee, depository, transfer agent, registrar or other designated
agency upon such terms and conditions as Bank may determine. All of the
foregoing rights, privileges or options may be exercised without liability on
the part of Bank or its nominee except to account for property actually received
by Bank. Bank shall have no duty to exercise any of the foregoing, or any other
rights, privileges or options with respect to the Collateral or Proceeds and
shall not be responsible for any failure to do so or delay in so doing.
8. PAYMENT OF PREMIUMS, TAXES, CHARGES, LIENS AND ASSESSMENTS. Debtor
agrees to pay, prior to delinquency, all insurance premiums, taxes, charges,
liens and assessments against the Collateral and Proceeds, and upon the failure
of Debtor to do so, Bank at its option may pay any of them and shall be the sole
judge of the legality or validity thereof and the amount necessary to discharge
the same. Any such payments made by Bank shall be obligations of Debtor to Bank,
due and payable immediately upon demand, together with interest at a rate
determined in accordance with the provisions of Section 12 hereof, and shall be
secured by the Collateral and Proceeds, subject to all terms and conditions of
this Agreement.
9. EVENTS OF DEFAULT. The occurrence of any of the following shall
constitute an "Event of Default" under this Agreement, subject to the expiration
of all applicable notice and cure periods set forth in the Credit Agreement: (a)
any default in the payment or performance of any obligation, or any defined
event of default, under (i) any contract or instrument evidencing any
Indebtedness, or (ii) any other agreement between any Debtor and Bank, including
without limitation any loan agreement, relating to or executed in connection
with any Indebtedness; (b) any representation or warranty made by any Debtor
herein shall prove to be incorrect, false or misleading in any material respect
when made; (c) any Debtor shall fail to observe or perform any obligation or
agreement contained herein; (d) any attachment or like levy on any property of
any Debtor; and (e) Bank, in good faith, believes any or all of the Collateral
and/or Proceeds to be in danger of misuse, dissipation, commingling, loss,
theft, damage or destruction, or otherwise in jeopardy or unsatisfactory in
character or value.
10. REMEDIES. Upon the occurrence of any Event of Default, Bank shall
have the right to declare immediately due and payable all or any Indebtedness
secured hereby and to terminate any commitments to make loans or otherwise
extend credit to Debtor. Bank shall have all other rights, powers, privileges
and remedies granted to a secured party upon default under the Uniform
Commercial Code or otherwise provided by law, including without limitation, the
right to contact all persons obligated to Debtor on any Collateral or Proceeds
and to instruct such persons to deliver
5.
all Collateral and/or Proceeds directly to Bank. All rights, powers, privileges
and remedies of Bank shall be cumulative. No delay, failure or discontinuance of
Bank in exercising any right, power, privilege or remedy hereunder shall affect
or operate as a waiver of such right, power, privilege or remedy; nor shall any
single or partial exercise of any such right, power, privilege or remedy
preclude, waive or otherwise affect any other or further exercise thereof or the
exercise of any other right, power, privilege or remedy. Any waiver, permit,
consent or approval of any kind by Bank of any default hereunder, or any such
waiver of any provisions or conditions hereof, must be in writing and shall be
effective only to the extent set forth in writing. It is agreed that public or
private sales, for cash or on credit, to a wholesaler or retailer or investor,
or user of property of the types subject to this Agreement, or public auction,
are all commercially reasonable since differences in the sales prices generally
realized in the different kinds of sales are ordinarily offset by the
differences in the costs and credit risks of such sales. While an Event of
Default exists: (a) Bank may, at any time and at Bank's sole option, liquidate
any time deposits pledged hereunder, whether or not said time deposits have
matured and notwithstanding the fact that such liquidation may give rise to
penalties for early withdrawal of funds; (b) Debtor will not dispose of any of
the Collateral or Proceeds except on terms approved by Bank; (c) Bank may
appropriate the Collateral and apply all Proceeds toward repayment of the
Indebtedness in such order of application as Bank may from time to time elect;
and (d) at Bank's request, Debtor will assemble and deliver all Collateral and
Proceeds, and books and records pertaining thereto, to Bank at a reasonably
convenient place designated by Bank. For any Collateral or Proceeds consisting
of securities, Bank shall have no obligation to delay a sale of any portion
thereof for the period of time necessary to permit the issuer thereof to
register such securities for public sale under any applicable state or Federal
law, even if the issuer thereof would agree to do so.
11. DISPOSITION OF COLLATERAL AND PROCEEDS. Upon the transfer of all or
any part of the Indebtedness, Bank may transfer all or any part of the
Collateral or Proceeds and shall be fully discharged thereafter from all
liability and responsibility with respect to any of the foregoing so
transferred, and the transferee shall be vested with all rights and powers of
Bank hereunder with respect to any of the foregoing so transferred; but with
respect to any Collateral or Proceeds not so transferred, Bank shall retain all
rights, powers, privileges and remedies herein given. Any proceeds of any
disposition of any of the Collateral or Proceeds, or any part thereof, may be
applied by Bank to the payment of expenses incurred by Bank in connection with
the foregoing, including reasonable attorneys' fees, and the balance of such
proceeds may be applied by Bank toward the payment of the Indebtedness in such
order of application as Bank may from time to time elect.
6.
12. COSTS, EXPENSES AND ATTORNEYS' FEES. Debtor shall pay to Bank
immediately upon demand the full amount of all payments, advances, charges,
costs and expenses, including reasonable attorneys' fees (to include outside
counsel fees and all allocated costs of Bank's in-house counsel), incurred by
Bank in exercising any right, power, privilege or remedy conferred by this
Agreement or in the enforcement thereof, including any of the foregoing incurred
in connection with any bankruptcy proceeding relating to Debtor or the valuation
of the Collateral and/or Proceeds, including without limitation, the seeking of
relief from or modification of the automatic stay or the negotiation and
drafting of a cash collateral order. All of the foregoing shall be paid by
Debtor with interest at the default interest rate set forth in the Notes (as
defined in the Credit Agreement).
13. STATUTE OF LIMITATIONS. Until all Indebtedness shall have been paid
in full, the power of sale and all other rights, powers, privileges and remedies
granted to Bank hereunder shall continue to exist and may be exercised by Bank
at any time and from time to time irrespective of the fact that the Indebtedness
or any part thereof may have become barred by any statute of limitations, or
that the personal liability of Debtor may have ceased, unless such liability
shall have ceased due to the payment in full of all Indebtedness secured
hereunder.
14. MISCELLANEOUS. The obligations of Debtor are joint and several;
presentment, protest, notice of protest, notice of dishonor and notice of
nonpayment are waived with respect to any Proceeds to which Bank is entitled
hereunder; any right to direct the application of payments or security for any
Indebtedness of Debtor, or indebtedness of customers of Debtor, and any right to
require proceedings against others or to require exhaustion of security are
waived; and consent to extensions, forbearances or alterations of the terms of
Indebtedness, the release or substitution of security, and the release of
guarantors is given with respect to Proceeds subject to this Agreement; provided
however, that in each instance Bank believes in good faith that the action in
question is commercially reasonable in that it does not unreasonably increase
the risk of nonpayment of the Indebtedness to which the action applies. Until
all Indebtedness shall have been paid in full, no Debtor shall have any right of
subrogation or contribution, and each Debtor hereby waives any benefit of or
right to participate in any of the Collateral or Proceeds or any other security
now or hereafter held by Bank.
15. OBLIGATIONS OF MARRIED PERSONS. Any married person who signs this
Agreement as Debtor hereby expressly agrees that recourse may be had against his
or her separate property (as well as all marital property) for all his or her
Indebtedness to Bank secured by the Collateral and Proceeds under this
Agreement.
16. NOTICES. All notices, requests and demands required under this
Agreement must be in writing, addressed to Bank at the
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address specified in any other loan documents entered into between Debtor and
Bank and to Debtor at the address of its chief executive office (or personal
residence, if applicable) specified below or to such other address as any party
may designate by written notice to each other party, and shall be deemed to have
been given or made as follows: (a) if personally delivered, upon delivery; (b)
if sent by mail, upon the earlier of the date of receipt or three (3) days after
deposit in the U.S. mail, first class and postage prepaid; and (c) if sent by
telecopy, upon receipt.
17. GOVERNING LAW; SUCCESSORS, ASSIGNS. This Agreement shall be
governed by and construed in accordance with the laws of the State of
California, and shall be binding upon and inure to the benefit of the heirs,
executors, administrators, legal representatives, successors and assigns of the
parties, provided, however, the creation and enforcement of any UCC security
interest and lien shall be governed by the laws of the State of Arizona.
18. SEVERABILITY OF PROVISIONS. If any provision of this Agreement
shall be held to be prohibited by or invalid under applicable law, such
provision shall be ineffective only to the extent of such prohibition or
invalidity, without invalidating the remainder of such provision or any
remaining provisions of this Agreement.
Debtor warrants that its chief executive office (or personal residence,
if applicable) is located at the following address: 2400 East Arizona Xxxxxxxx
Xxxxxx, Xxxxxxxx 0, Xxxxx 0000, Xxxxxxx, Xxxxxxx 00000.
8.
IN WITNESS WHEREOF, this Agreement has been duly executed as of
December 11, 1996.
STRATFORD AMERICAN CORPORATION,
an Arizona corporation
By: /s/ Xxx X. Xxxxxx
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Title: President
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IMPERIAL BANK
By: /s/ R. Xxxx Xxxxxxxx
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Title: Vice President
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9.
JOINDER
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The undersigned, shareholders of Stratford American Car Rental Systems,
Inc., hereby join in the foregoing General Pledge Agreement for the sole purpose
of assigning, transferring and pledging to Imperial Bank, all of the
undersigned's rights, title, claims and interest in and to the issued and
outstanding common stock of Stratford American Car Rental Systems, Inc., as
additional collateral for the Bank's loan to Stratford American Corporation and
Stratford American Car Rental Systems, Inc. By joining in, and pledging their
interest in such stock, Imperial Bank hereby acknowledges and agrees that the
undersigned shall have no liability whatsoever for joining in the General Pledge
Agreement and Imperial Bank hereby agrees to take no action against the
undersigned for any principal, interest, fees, expenses, claims or liabilities
arising out of, or relating to, the Indebtedness as defined in the foregoing
General Pledge Agreement.
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Xxxxx X. Xxxxxxxx-Xxxxxx
T.W.P. COMPANY
By:
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Title:
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Xxxx Xxxxxxxx
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Xxxxx Xxxxxxxxx
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Xxxxx Xxxxxxx, Xx.
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Xxxxx X. Xxxxx
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Xxxx X. Xxxxx
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Xxxxxxx Xxxxxxxxx
10.
XXXXX FARGO EQUITY CORPORATION
By:
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Title:
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11.
