PLEDGE AGREEMENT
between
ASCENT ASSURANCE, INC.
as Pledgor
and
CREDIT SUISSE FIRST BOSTON MANAGEMENT CORPORATION
as Pledgee
Dated: As of April 17, 2001
PLEDGE AGREEMENT
THIS PLEDGE AGREEMENT is made as of April 17, 2001, between
ASCENT ASSURANCE, INC., a Delaware corporation (the "Pledgor"), and CREDIT
SUISSE FIRST BOSTON MANAGEMENT CORPORATION, as pledgee hereunder (the "Pledgee")
for its benefit in its capacity as Administrative Agent for the Lenders (as
those terms are defined below) and for its own benefit as Administrative Agent
(as that term is so defined).
RECITALS
A. Each of the entities identified in Annex 1 (each a "Company" and,
collectively, the "Companies") is a Subsidiary of the Pledgor.
B. Pursuant to the Credit Agreement dated as of the date hereof (as it
may be amended, restated, supplemented or otherwise modified from time
to time, the "Credit Agreement") among the Pledgor, as borrower,
Credit Suisse First Boston Management Corporation, as Administrative
Agent (in that capacity, the "Administrative Agent") and Arranger, and
the Lenders from time to time party thereto (the "Lenders"), the
Lenders have agreed, on the terms and subject to the conditions of the
Credit Agreement, to make loans (the "Loans") to the Borrower.
C. It is a condition precedent to the making of the initial Loans that
the Pledgor enter into this Agreement granting the Administrative
Agent a Lien (as defined below) on and in the Pledged Collateral (as
defined below) as security for the payment and performance of the
Pledgor's obligations under the Credit Agreement and the Notes (as
defined in the Credit Agreement).
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, it is agreed as follows:
SECTION 1. Definitions.
Terms used herein that are defined in the New York Uniform Commercial Code
(as amended from time to time, the "UCC"), unless otherwise defined herein, have
the meanings given to them from time to time by the UCC. Capitalized terms used
herein without definition have the meanings given to those terms in the Credit
Agreement. Certain terms relating to the Collateral are defined in Section 2.
The following terms, as used herein, have the meanings set forth below, and
shall be equally applicable to both the singular and the plural forms thereof:
"Event of Default" has the meaning set forth in Section 11.
"Law" means any treaty, foreign, federal, state or local statute,
law, rule, regulation, ordinance, order, code, policy or rule of
common law, now or hereafter in effect, in each case as amended, and
any judicial or administrative interpretation thereof by a
governmental authority or otherwise, including any judicial or
administrative order, consent decree or judgment.
"Pledged Collateral" has the meaning set forth in Section 2.
"Pledged Notes" has the meaning set forth in Section 2.
"Pledged Stock" has the meaning set forth in Section 2.
"Pledgor Documents" means this Agreement, the Notes and each
other Loan Document to which the Pledgor is or at any time hereafter
becomes a party.
"Secured Obligations" has the meaning set forth in Section 3.
"Surplus Notes" means all surplus notes issued by any Insurance
Subsidiary that are purchased by the Pledgor from time to time with
the proceeds of any of the Loans as contemplated in Section 5.10 of
the Credit Agreement and identified as Pledged Notes on Annex 2).
SECTION 2. Pledge.
The Pledgor hereby pledges to the Pledgee, in its capacity as
Administrative Agent for the benefit of the Lenders and for its own benefit as
Administrative Agent, and grants to the Pledgee a security interest in and lien
on all of the Pledgor's right, title and interest in and to the following,
whether now owned or hereafter acquired or existing (the "Pledged
Collateral"):
(a) all shares of Capital Stock of each of the Companies to the extent
that such Capital Stock is now owned by the Pledgor, regardless of the
class of that Capital Stock, in each case together with the
certificates evidencing the same, all of which are identified in Annex
1, and (ii) any options, warrants or other rights to purchase such
interests or stock at any time owned by the Pledgor, including,
without limitation, all such interests or stock, options, warrants or
other rights acquired by the Pledgor in the future (the "Pledged
Stock");
(b) all shares, securities, moneys or property representing a dividend on
any of the Pledged Stock, representing a distribution or return of
capital upon or in respect of the Pledged Stock, resulting from a
split-up, revision, reclassification or other like change of the
Pledged Stock or otherwise received in exchange therefor, and any
subscription warrants, rights or options issued to the holders of, or
otherwise in respect of, the Pledged Stock;
(c) all supporting obligations for any of the property described in the
foregoing clauses of this Section 2;
(d) subject to the proviso at the end of this Section 2, all Surplus Notes
(collectively, the "Pledged Notes");
(e) all securities or other investment property, of any nature whatsoever,
received or receivable in substitution for or in addition to any of
the Pledged Notes, any certificates representing or evidencing such
securities, and all cash, distributions and other property at any time
and from time to time received, receivable or otherwise distributed in
respect of or in exchange for any or all of the Pledged Notes, and all
securities accounts to which any or all of the foregoing may at any
time be credited; and
(f) all proceeds of and to any of the property of the Pledgor described in
the foregoing clauses in this Section 2, in whatever form, including,
without limitation, in the form of accounts, instruments, chattel
paper, documents, goods, investment property, letters of credit,
letter-of-credit rights, money, deposit accounts, claims or causes of
action or general intangibles;
provided, however, that, if the authorization of any Insurance
Regulatory Authority must, as disclosed in Schedule 3.4 of the Credit
Agreement, be obtained under any applicable Requirement of Law to
enable the Pledgor to lawfully make the pledge and grant of security
interest contemplated in this Section 2 in respect of any Surplus
Notes or Pledged Stock of an Insurance Subsidiary those Surplus Notes
(the "Committed Notes") or that Pledged Stock (the "Committed Stock")
will constitute Pledged Notes or Pledged Stock for purposes of this
Agreement subject to the issuance of that authorization by the
relevant Insurance Regulatory Authority. The Pledgor shall promptly
give the Pledgee notice of the issuance of any such authorization that
has not been obtained on or before the date of this Agreement and
shall, from time to time, after request from the Pledgee, give the
Pledgee notice of the status of the Pledgor's request or application
for any such authorization that is pending. The Pledgor shall use its
best efforts actively and vigorously to pursue all such
authorizations.
.
SECTION 3. Security for Obligations
(a) . (a) This Agreement secures the payment and performance of any and
all obligations of the Pledgor now existing or hereafter arising under
or in respect of the Credit Agreement and each other Pledgor Document,
including this Agreement (the "Secured Obligations").
(b) The term "obligations" is used herein, and in each other Pledgor
Document, in the broadest sense possible, and includes all payment and
performance obligations of the Pledgor in respect of any and all
advances, debts, reimbursement or indemnity obligations, guarantees
and liabilities heretofore, now, or hereafter made, incurred or
created, whether in respect of principal, interest, fees or any other
amount and whether accruing before or after judgment or the
commencement of any bankruptcy or insolvency proceedings in respect of
the Pledgor, whether voluntary or involuntary and however arising,
whether due or not due, absolute or contingent, liquidated or
unliquidated, determined or undetermined, and whether the Pledgor may
be liable individually or jointly with others, whether recovery
thereon may be or hereafter becomes barred by any statute of
limitations or whether any of the foregoing may be or hereafter
becomes otherwise unenforceable.
SECTION 4. Delivery of Pledged Collateral
All certificates or instruments representing or evidencing the Pledged
Collateral shall be delivered to and held by or on behalf of the Pledgee
pursuant hereto and shall be (a) in suitable form for transfer by delivery or
(b) accompanied by duly executed instruments of transfer or assignment in blank,
all in form and substance satisfactory to the Pledgee. The Pledgee shall have
the right, at any time in its discretion and without notice to the Pledgor, to
transfer to, or to register in the name of, the Pledgee or any of its nominees
any or all of the Pledged Collateral, subject only to the revocable rights
specified in Section 6.
SECTION 5. Distributions.
So long as no Default or Event of Default is continuing, any cash dividends
or other cash distributions on the Pledged Stock and any interest paid on the
Pledged Notes may be paid directly to the Pledgor. If an Event of Default has
occurred and is continuing, upon request of the Secured Party, the principal of
the Surplus Notes and all other dividends or distributions in respect of any of
the Pledged Collateral shall be paid or delivered directly to the Pledgee, to be
held as additional Pledged Collateral hereunder or, if the Pledgee so elects,
applied to payment of the Secured Obligations, in such order as the Pledgee may
determine in its sole discretion, until all Secured Obligations are paid in
full. Any dividends, interest or distributions received by the Pledgor in
contravention of the preceding sentence of this Section 5 shall be segregated
from all other property of the Pledgor, held in trust for the Pledgee, and
delivered to the Pledgee in exactly the form received, together with any
necessary endorsements, for application in accordance with this Section 5.
SECTION 6. Voting Rights.
During the term of this Agreement, and so long as no Default or Event of
Default has occurred and is continuing, the Pledgor shall be entitled to
exercise all of its voting and other consensual rights pertaining to the Pledged
Collateral or any part thereof; provided that, without the prior written consent
of the Pledgee (which consent shall not be unreasonably withheld or delayed): to
the extent that any such matter is subject to the vote or other consent of the
Pledgor, the Pledgor shall not vote or give consent (i) to amend the certificate
of incorporation or bylaws of any Company; (ii) to sell or otherwise dispose of
or transfer, or grant any Lien (other than a Permitted Lien) on, all or any
portion of the assets of any Company; (iii) to terminate or dissolve any
Company; (iv) to cause the redemption of all or any portion of the Pledgor's
interest in any Company; (v) to admit any additional shareholder to any Company;
(vi) to permit any additional shares of the Capital Stock of any Company to be
issued; (vii) to alter the terms of any Surplus Notes or waive any of their
conditions, or (viii) to take or approve any action that could reasonably
expected to adversely affect the Pledgee's security hereunder. To this end, the
Pledgee shall execute and deliver to the Pledgor all proxies and other
instruments that the Pledgor may reasonably request. Upon the occurrence and
during the continuation of a Default or an Event of Default, all rights of the
Pledgor to exercise the voting and other consensual rights that the Pledgor
would otherwise be entitled to exercise pursuant to this Section 6 shall cease,
and all such rights shall thereupon become vested in the Pledgee, who shall
thereupon have the sole right to exercise such voting and other consensual
rights.
SECTION 7. Payment of Secured Obligations; Release of Collateral.
This Agreement shall create a continuing Lien on and in the Pledged
Collateral and shall remain in full force and effect until the termination of
the Commitments and the payment and performance in full of the Secured
Obligations. Upon termination of all Commitments and payment and performance in
full of all of the Secured Obligations, the Pledgor shall be entitled to the
return, upon the Pledgor's request and at the Pledgor's expense, of such of the
Pledged Collateral as shall not have been sold or otherwise applied pursuant to
the terms hereof, and the Pledgee shall, at the Pledgor's expense, execute and
deliver to the Pledgor such documents, and take such other acts, as the Pledgor
shall reasonably request to evidence, or give effect to, such termination.
SECTION 8. Protection of Pledged Collateral.
The Pledgor shall pay all taxes, charges and assessments against the
Pledged Collateral and do all acts necessary and appropriate to preserve and
maintain the Collateral free of any Liens other than Permitted Liens. Without
limiting the generality of the foregoing, the Pledgor shall not xxxxx x Xxxx on
or in the Pledged Collateral to any other Person without the prior written
consent of the Pledgee thereto. Upon the failure of the Pledgor to comply with
any of the foregoing provisions of this Section 8, the Pledgee may make such
payments and take such actions on account thereof as the Pledgee, in its
discretion, deems necessary or appropriate. The Pledgor shall reimburse the
Pledgee immediately upon demand for any and all such payments and related costs
so incurred, together with interest thereon, from the date incurred by the
Pledgor until paid, calculated on the basis of a year of 360 days and for the
actual number of days elapsed, at the highest rate of interest then applicable
to any of the Secured Obligations.
SECTION 9. Representations and Warranties of the Pledgor.
The Pledgor hereby represents and warrants to the Pledgee and each of the
Lenders as follows:
(a) True and correct copies of the certificate of incorporation and bylaws
of each of the Companies, as currently in full force and effect, have
been delivered to the Pledgee. Except for those agreements identified
in Exhibit A, true and correct copies of which have been delivered to
the Pledgee, there are no stockholder or other agreements relating to
the management of any of the Companies.
(b) Except for the Committed Stock and Committed Notes, if any, pending
its becoming Pledged Collateral hereunder pursuant to the proviso at
the end of Section 2, the Pledged Collateral includes all of the
issued and outstanding Capital Stock of the Companies and all of the
Surplus Notes. The Pledgor is or, upon its acquisition of Pledged
Collateral not currently owned by it, will be, the legal, record or
beneficial owner of, and has, or at the time of that acquisition, will
have, good and marketable title to, the Pledged Collateral, free and
clear of any Lien whatsoever, except for the Lien created hereby.
(c) This Agreement has been duly executed and delivered by the Pledgor and
constitutes a valid, legal and binding obligation of the Pledgor
enforceable in accordance with the terms of this Agreement except to
the extent that such enforcement may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting creditors' rights generally and by general principles of
equity (whether enforcement is sought by proceedings in equity or at
law).
(d) The execution and delivery of this Agreement by the Pledgor,
performance by it of its obligations hereunder and the grant of the
Lien hereunder do not (i) require any consent or approval of the
Pledgor's stockholders, except for such consents or approvals as have
been duly obtained and are in full force and effect as of the date
hereof; (ii) contravene any Requirement of Law; (iii) violate any
provisions of, or require any filing (other than the filing of the
financing statements contemplated hereby), registration, consent or
approval under any Law, order writ, injunction, determination or award
currently in effect applicable to the Pledgor or any of the Companies
or the property of the Pledgor or any of the Companies except for the
authorizations of applicable Insurance Regulatory Authorities
identified in Schedule 3.4 of the Credit Agreement, each of which has
been requested by the Pledgor on or before the date of this Agreement;
(iv) result in a breach of, constitute a default under, or otherwise
contravene, any Contractual Obligation of the Pledgor or any Company;
or (v) cause either the Pledgor or any Company to be in default under
any such Law, order, writ, judgment, injunction, decree, determination
or award or any such Contractual Obligation or in violation of any
other obligation with respect to the Pledged Collateral.
(e) No consent or authorization, filing with, notice to, or other act by
or in respect of, any Governmental Authority or any other Person is
required with respect to the Pledgor in connection with either (i) the
grant by the Pledgor of the Lien created hereunder or the execution,
delivery or performance of this Agreement by the Pledgor or (ii) for
the perfection of or the exercise by the Pledgee of the voting or
other rights, remedies, powers or privileges provided for hereunder,
except as identified in Schedule 3.4 of the Credit Agreement.
(f) The pledge, assignment and delivery of the Pledged Collateral pursuant
to this Agreement creates a valid first lien and a first perfected
security interest in the Pledged Collateral, subject to no prior Lien
or to any agreement to grant to any third party a Lien on or in the
property or assets of the Pledgor that would include the Pledged
Collateral.
(g) Except for such restrictions as may appear on the certificates
evidencing the Pledged Stock and the restrictions imposed by
applicable Law which are identified in Schedule 3.4 of the Credit
Agreement, there are no restrictions upon the transfer of any of the
Pledged Stock.
(h) The chief place of business and chief executive office of the Pledgor
are located at the address specified for notices to the Pledgor
herein. The Pledgor does not conduct any business under any name or
tradenames other than its proper corporate name, which is the name set
forth in the first paragraph of this Agreement. The Pledgor maintains
no other place of business.
SECTION 10. Covenants of the Pledgor
(a) . (a) The Pledgor shall defend the Pledgee's right and title to, and
Lien on and in, the Pledged Collateral and the proceeds thereof
against the claims of all Persons.
(b) The Pledgor shall not (i) change the location of its chief executive
office/chief place of business from its address specified for notices
herein, or (ii) change its name (including the adoption of any new
trade name), jurisdiction of incorporation, identity or corporate
structure, unless, in any such case, it shall have provided at least
thirty (30) days' prior written notice to the Pledgee of any such
change and until such filings and other measures as may be required
under applicable law to continue uninterrupted the perfected Lien of
the Pledgee on and in the Pledged Collateral shall have been taken,
and until the Pledgee shall have received such opinions of counsel
with respect thereto as it may have reasonably requested.
(c) Pursuant to Section 5.10 of the Credit Agreement, when the Pledgor
shall at any time acquire any Surplus Notes, the Pledgor shall (i)
immediately deliver those Surplus Notes to the Administrative Agent to
be held as additional collateral security for the Secured Obligations
hereunder, (ii) promptly deliver to the Administrative Agent a
supplement to this Pledge Agreement, substantially in the form set
forth in Exhibit B to this Agreement, and (iii) promptly cause the
Subsidiary that issued those Surplus Notes to execute and deliver an
acknowledgment and consent substantially in the form appended as
Schedule I to Exhibit B to this Agreement unless it has already done
so at an earlier time.
SECTION 11. Default.
The occurrence of any Event of Default shall constitute an "Event of
Default" hereunder, whether such occurrence is voluntary or involuntary or
occurs by operation of law or otherwise. If any Event of Default has occurred
and is continuing:
(a) In addition to any and all other rights and remedies provided for
herein or otherwise available to the Pledgee, the Pledgee shall have
all the rights and remedies of a secured party on default under the
UCC. The Pledgee (personally or through an agent) is hereby authorized
and empowered, upon the occurrence and during the continuation of an
Event of Default, to transfer and register in its name or in the name
of its nominee the whole or any part of the Pledged Collateral, to
exercise all voting rights with respect thereto, to collect and
receive all cash dividends and other distributions made thereon, and
to otherwise act with respect to the Pledged Collateral as though the
Pledgee were the outright owner thereof, the Pledgor irrevocably
constituting and appointing the Pledgee as the proxy and
attorney-in-fact of the Pledgor, with full power of substitution, to
do so; provided, however, that the Pledgor shall have no duty to
exercise or to preserve any such right and shall not be liable for any
failure to do so or for any delay in doing so.
(b) With respect to the Pledged Collateral or any part thereof that shall
then be in or shall thereafter come into possession or custody of the
Pledgee or that the Pledgee shall otherwise have the ability to
transfer under applicable law, the Pledgee may, in its sole
discretion, without notice except as set forth below, after the
occurrence of an Event of Default, sell or cause such Pledged
Collateral to be sold at any exchange or broker's board or at a public
or private sale, in one or more sales or lots, at such price as the
Pledgee may deem best, for cash or on credit or for future delivery,
without assumption of any credit risk, and the purchaser of any or all
of the Pledged Collateral so sold shall thereafter own the Pledged
Collateral so purchased absolutely free of any adverse claim of any
kind whatsoever. The Pledgee may, in its own name, or in the name of a
designee or nominee, buy the Pledged Collateral at any public sale,
and, if permitted by applicable law, at any private sale; and shall
have the right to credit against the amount of the bid made therefor
the amount payable to the Pledgee out of the net proceeds of such
sale.
(c) Unless any of the Pledged Collateral threatens to decline speedily in
value or is or becomes of a type sold on a recognized market, the
Pledgee will give the Pledgor reasonable notice of the time and place
of any public sale thereof, or of the time after which any private
sale or other intended disposition is to be made. Any sale of the
Pledged Collateral conducted in conformity with reasonable commercial
practices of banks, commercial finance companies, insurance companies
or other financial institutions disposing of property similar to the
Pledged Collateral shall be deemed to be commercially reasonable.
Notwithstanding any provision to the contrary contained herein, the
Pledgor agrees that any requirements of reasonable notice shall be met
by notice given to the Pledgor in accordance with the notice
provisions hereof at least ten (10) business days before the time of
the sale or other disposition, provided, however, that the Pledgee may
give any shorter notice that is commercially reasonable under the
circumstances. Any requirement of notice, demand or advertisement for
sale is waived, to the extent permitted by law. Proceeds of any
realization upon all or any part of the Pledged Collateral shall be
applied first, to the payment of the Pledgee's reasonable
out-of-pocket expenses (including reasonable attorneys' fees and
expenses and reasonable expert witnesses' and consultants' fees and
expenses) incurred in retaking, collecting, selling or disposing of
the Pledged Collateral and other expenses payable under the terms of
any Secured Obligation, and second, to payment of the remaining
Secured Obligations, in such order as the Pledgee may determine in its
sole discretion. Any surplus of such proceeds held by the Pledgee and
remaining after payment in full of all of the Secured Obligations
shall be paid over to the Pledgor or to whomsoever may be lawfully
entitled to receive such surplus.
(d) The Pledgee shall not be obligated to make any sale of Pledged
Collateral regardless of notice of sale having been given. The Pledgee
may adjourn any public or private sale from time to time by
announcement at the time and place fixed therefor, and such sale may,
without further notice, be made at the time and place it was so
adjourned. If sale of all or any part of the Pledged Collateral is
made on credit or for future delivery: (i) the Pledged Collateral so
sold may be retained by the Pledgee until the sale price is paid by
the purchaser or purchasers thereof, (ii) the Secured Obligations
shall be reduced only to the extent that payment is actually received
by the Pledgee in respect of such sale, and (iii) the Pledgee shall
not incur any liability in the event that any purchaser or purchasers
shall fail to take up and pay for the Pledged Collateral so sold and,
in case of any such failure, such Pledged Collateral may be sold again
upon like notice.
(e) The Pledgor recognizes that the Pledgee may be unable to effect a
public sale of all or part of the Pledged Collateral by reason of
certain prohibitions contained in the Securities Act of 1933, as
amended, or in applicable New York or other states' securities laws as
now or hereafter in effect, unless registration or qualification, as
the case may be, is accomplished. The Pledgor acknowledges that the
Pledgee may resort to one or more private sales to a single purchaser
or a restricted group of purchasers who will be obliged to agree,
among other things, to acquire such securities for their own account,
for investment and not with a view to the distribution or resale
thereof. The Pledgor agrees that private sales may be at prices and
other terms less favorable to the Pledgor than if such securities were
sold at a public sale and that the Pledgee shall have no obligation to
delay the sale of any such portion of the Pledged Collateral for the
period of time necessary to permit the issuer of such securities to
register or qualify such securities, even if such issuer would, or
should, proceed to register or qualify such securities for public
sale. The Pledgor agrees that private sales made under the foregoing
circumstances shall be deemed to have been made in a "commercially
reasonable" manner.
(f) Notwithstanding the foregoing, insofar as any Pledged Stock or Pledged
Notes of an Insurance Subsidiary are concerned, the rights and
remedies of the Pledgee provided for above in this Section 11 shall be
exercised only in accordance with any restriction imposed by an
applicable Requirement of Law or under an authorization from an
Insurance Regulatory Authority that was necessary for the creation of
the Lien of this Agreement on that Pledged Stock or, as the case may
be, those Pledged Notes.
SECTION 12. Possession of Pledged Collateral
(a) . (a) The Pledgee will hold in accordance with this Agreement all
items of the Pledged Collateral at any time received under this
Agreement. It is understood and agreed that the obligations of the
Pledgee as holder of the Pledged Collateral and interests therein and
with respect to the disposition thereof, and otherwise under this
Agreement, are only those expressly set forth in this Agreement. If
the Pledgor takes possession of any items of Pledged Collateral,
pursuant to this Agreement or otherwise, including, without
limitation, the certificates representing the Pledged Stock or the
Pledged Notes and any assignments separate from any certificate or
other documents relating thereto, the Pledgor agrees (subject to the
provisions of Section 5) to immediately transfer possession of such
items of Pledged Collateral to the Pledgee and, until such time as
such transfer of possession is effected, agrees to hold such items of
Pledged Collateral in trust for the Pledgee and the Lenders.
(b) The Pledgee shall have no obligation in respect of the Pledged
Collateral, except as set forth in this Agreement and except to use
reasonable care in the custody and preservation of Pledged Collateral
in its possession. The obligations of the Pledgee shall not include
any obligation to ascertain or to initiate any action with respect to
or to inform the Pledgor of maturity dates, conversion, call, or
exchange rights, offers to purchase the Pledged Collateral or any
similar matters, notwithstanding the Pledgee's knowledge. The Pledgee
shall have no duty to take any steps necessary to preserve the rights
of the Pledgor against prior parties or to initiate any action to
protect against the possibility of a decline in the value of the
Pledged Collateral. The Pledgee shall not be obligated to take any
actions that may be requested by the Pledgor with respect to the
Pledged Collateral unless such request is made in writing and the
Pledgee determines, in its sole and absolute discretion, that the
requested actions would not unreasonably jeopardize the value of the
Pledged Collateral as security for the Secured Obligations. The
Pledgee may at any time deliver the Pledged Collateral, or any part
thereof, to the Pledgor, and the receipt thereof by the Pledgor shall
be a complete and full acquittance for the Pledged Collateral so
delivered, and the Pledgee shall thereafter be discharged from any
liability or responsibility therefor.
SECTION 13. Waivers
(a) . The Pledgee shall have no duty with respect to the preservation or
protection of the Pledged Collateral or any income thereof or the
preservation or protection of any rights against other parties with
respect thereto. The Pledgee may exercise any rights it may have
hereunder against the Pledgor or the Pledged Collateral, after having
given notice to the Pledgor as provided herein or under applicable
law, whether or not it has given notice to any other Person or
otherwise taken any action against any other Person, or other assets,
for the enforcement of its rights in respect of any Secured
Obligation. Without limiting the generality of the foregoing: to the
extent that the Secured Obligations are now or hereafter secured or
otherwise supported by any assets or property other than the Pledged
Collateral or by the guarantee, endorsement, assets or property of any
other Person, then the Pledgee shall have the right in its sole
discretion to determine which rights, security, Liens or remedies the
Pledgee shall at any time pursue, foreclose upon, relinquish,
subordinate, modify or take any other action with respect to, without
in any way modifying or affecting any of them, or any of the Pledgee's
rights hereunder.
SECTION 14. Indemnity and Expenses.
The Pledgor shall, on demand, (a) pay or reimburse the Pledgee for all its
reasonable out-of-pocket costs and expenses incurred in connection with the
development, preparation and execution of, and any amendment, supplement or
modification to, this Agreement and the other Loan Documents and any other
documents prepared in connection herewith or therewith, and the consummation and
administration of the transactions contemplated hereby and thereby, including,
without limitation, the reasonable fees and disbursements of counsel to the
Pledgee, (b) pay or reimburse the Pledgee and each of the Lenders for all its
costs and expenses incurred in connection with the enforcement or preservation
of any rights under this Agreement, the other Loan Documents and any such other
documents, including, without limitation, the fees and disbursements of counsel
to the Pledgee and each of the Lenders, and (c) pay, and indemnify and hold
harmless the Pledgee and each of the Lenders from, any and all recording and
filing fees and any and all liabilities with respect to, or resulting from any
delay in paying, stamp, excise and other taxes, if any, which may be payable or
determined to be payable in connection with the execution and delivery of, or
consummation or administration of any of the transactions contemplated by, or
any amendment, supplement or modification of, or any waiver or consent under or
in respect of, this Agreement, the other Loan Documents and any such other
documents, and (d) pay, and indemnify and hold harmless the Pledgee and each of
the Lenders (including each of their respective parents, subsidiaries, officers,
directors, employees, agents and affiliates) from and against, any and all other
claims, demands, liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, settlements, expenses or disbursements of whatever kind
or nature arising from, in connection with or with respect to the execution,
delivery, enforcement, performance and administration of this Agreement, the
other Loan Documents, or any other documents or the use of the proceeds of the
Loans or any other purpose (all the foregoing in this clause (d), collectively,
the "indemnified liabilities"); provided that the Pledgor shall have no
obligation hereunder to the Pledgee or any Lender with respect to indemnified
liabilities arising from the gross negligence or willful misconduct of the
Pledgee or that Lender. The agreements in this Section 14 shall survive
repayment of the Secured Obligations hereunder.
SECTION 15. Assignment.
The Pledgor shall not pledge, assign or otherwise transfer any or all of
its rights, obligations or duties in, or in respect of, the Pledged Collateral
or hereunder, without the prior written consent of the Pledgee. This Agreement
(a) shall be binding in accordance with and to the extent of its terms upon the
Pledgor and its successors and assigns and each other Person who becomes bound
as a debtor to this Agreement under applicable law, and (b) shall inure,
together with all rights, remedies, powers and privileges of the Pledgee
hereunder, to the benefit of the Pledgee and the Lenders and its and their
respective successors, endorsees, transferees and assigns. Without limiting the
generality of clause (b) of the immediately preceding sentence, the Pledgee may
assign or otherwise transfer its rights under this Agreement to any other Person
in connection with any assignment or transfer of its rights as Agent in
accordance with the provisions of the Credit Agreement, and such other Person
shall thereupon become vested with all of the benefits in respect thereof
granted to the Pledgee herein or otherwise.
SECTION 16. Further Assurances.
The Pledgor shall cooperate with the Pledgee, and shall execute and
deliver, or cause to be executed and delivered, all such other stock powers,
proxies, instruments and documents, and shall take all such other actions,
including, without limitation, the execution and filing or recording, as
applicable, of financing statements, amendments thereto, continuation
statements, and agreements granting control to the Pledgee over all or any
portion of the Pledged Collateral, and such other instruments or notices, as may
be necessary or reasonably desirable, or as the Pledgee may reasonably request
from time to time, in order to carry out the provisions and purposes of this
Agreement. The Pledgor hereby irrevocably makes, constitutes and appoints the
Pledgee (and all persons designated by the Pledgee for that purpose) the
Pledgor's true and lawful attorney-in-fact to sign the name of the Pledgor on
any financing statement, amendment thereto, continuation sttement or other
writing necessary or requested by the Pledgee to perfect and maintain a
perfected Lien on and in any of the Pledged Collateral. The Pledgor hereby
authorizes the Pledgee, where permitted by law, to file any financing statement,
amendment thereto, or continuation statement without the Pledgor's signature. If
at any time after the date hereof all or any portion of the Pledged Collateral
shall be represented or evidenced by certificates or instruments not theretofore
delivered to the Pledgee, all such certificates or instruments representing or
evidencing the Pledged Collateral shall be delivered to and held by the Pledgee
pursuant hereto and shall be in suitable form for transfer by delivery, or shall
be accompanied by duly executed instruments of transfer or assignment in blank,
all in form and substance satisfactory to the Pledgee.
SECTION 17. Power of Attorney.
The Pledgor hereby irrevocably appoints the Pledgee as the Pledgor's
attorney-in-fact, with full power of substitution, and with full authority in
the place and stead of and in the name of the Pledgor, the Pledgee or otherwise,
to take any action and to execute any instrument, that the Pledgee may deem
necessary or advisable to accomplish the purposes of this Agreement, including,
without limitation:
(a) to perform or cause the performance of any obligation of the Pledgor
hereunder;
(b) during the continuance of any Event of Default, to liquidate any
Pledged Collateral and otherwise to deal in or with the Pledged
Collateral or the proceeds or avails thereof, as full and effectually
as if the Pledgee were the absolute owner thereof, and to apply the
proceeds thereof to payment of the Secured Obligations,
notwithstanding the fact that such liquidation may give rise to
penalties;
(c) to ask, demand, collect, xxx for, recover, compromise, receive and
give acquittance and receipts for moneys due and to become due under
or in respect of any of the Pledged Collateral;
(d) to receive, endorse, assign and collect any and all checks, notes,
drafts and other negotiable and non-negotiable instruments, documents
and chattel paper constituting Pledged Collateral in connection with
clause (b) or (c) above, and the Pledgor waives notice of presentment,
protest and non-payment of any instrument, document or chattel paper
so endorsed or assigned; (e) during the continuance of any Event of
Default, to file any claims, take any action or institute any
proceedings that the Pledgee may deem necessary or desirable for the
collection of any of the Pledged Collateral or otherwise to enforce
the rights of the Pledgee or the Pledgor with respect to any of the
Pledged Collateral;
(f) to notify any Person obligated on any Pledged Collateral of the
Pledgee's rights hereunder; and
(g) to enter into any extension, reorganization, deposit, merger or
consolidation agreement or any other agreement relating to or
affecting the Pledged Collateral and, in connection therewith, to
deposit or surrender control of the Pledged Collateral and to accept
other property in exchange for the Pledged Collateral, subject
otherwise to this Agreement.
The Pledgor hereby ratifies and approves all acts of the Pledgee taken
pursuant to the foregoing appointment, other than acts of the Pledgee
constituting gross negligence or willful misconduct, and the Pledgee, as the
Pledgor's attorney-in-fact, will not be liable for any acts of commission or
omission, or for any error of judgment or mistake of fact or law, other than
those that result from the Pledgee's gross negligence or willful misconduct. The
foregoing power, being coupled with an interest, is irrevocable for so long as
this Agreement remains in effect.
SECTION 18. Notices.
All notices, requests and demands to or upon the respective parties hereto
to be effective, shall be in writing (including by telecopy) and, unless
otherwise expressly provided herein, shall be deemed to have been duly given or
made (a) when delivered by hand, (b) five Business Days after being deposited in
the mail, postage prepaid, or (c) in the case of telecopy notice or delivery by
a nationally recognized overnight courier, when received, in each case,
addressed as follows:
(a) To the Pledgor:
Ascent Assurance, Inc.
000 X. 0xx Xx., Xxxxx 000
Xxxx Xxxxx, XX 00000
Attention: President
Telecopy: (000) 000 0000
(b) if to the Pledgee:
Credit Suisse First Boston Management Corporation
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xx. Xxxx Xxxxxxx,
Xx. Xxxxx X. Xxxxxxxx
Telecopy: (000) 000-0000
or to such other address for notices as such Person may deliver to the other
party in accordance with this Section 18; provided that any notice, request or
demand to or upon the Pledgee shall not be effective until received.
SECTION 19. Governing Law.
THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS
AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF
CONFLICT OF LAWS OTHER THAN SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE
STATE OF NEW YORK, EXCEPT TO THE EXTENT THAT THE VALIDITY OR PERFECTION OF THE
LIEN PROVIDED FOR HEREIN, OR ANY REMEDY HEREUNDER, IN RESPECT OF ANY PARTICULAR
PLEDGED COLLATERAL IS GOVERNED BY THE LAWS OF A JURISDICTION OTHER THAN THE
STATE OF NEW YORK.
SECTION 20. Miscellaneous
(a) . (a) Any provision of this Agreement that 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 or affecting the
validity or enforceability of such provision in any other
jurisdiction. If and to the extent that applicable Law confers any
rights in addition to any of the provisions of this Agreement, the
affected provision shall be considered amended to conform thereto.
(b) The failure of the Pledgee to exercise, or delay in exercising, any
right, remedy, power or privilege hereunder, shall not operate as a
waiver thereof, nor shall any single or partial exercise by the
Pledgee of any right, remedy or privilege hereunder preclude any other
or future exercise thereof, or the exercise of any other right,
remedy, power or privilege. This Agreement is in addition to and not
in limitation of any other rights, remedies, powers and privileges the
Pledgee may have by virtue of any other instrument or agreement
heretofore, contemporaneously herewith or hereafter executed by the
Pledgor or any other Person or by applicable Law or otherwise. All
rights, remedies, powers and privileges of the Pledgor shall be
cumulative and may be exercised singly or concurrently.
(c) The representations, covenants and agreements of the Pledgor herein
contained shall survive the date hereof, and shall be deemed to have
been remade on and as of the date on which any additional Secured
Obligations are created.
(d) Neither this Agreement nor any of the provisions hereof can be
changed, waived or terminated orally. No waiver or modification of any
of the provisions hereof shall be binding upon the Pledgee unless in
writing and signed by a duly authorized representative thereof.
(e) This Agreement may be executed in counterparts, each of which shall
constitute an original but all of which, when taken together, shall
constitute one instrument.
(f) The headings herein are included for convenience of reference only and
shall be ignored in the construction or interpretation hereof. When
used in this Agreement: (i) "or" is not exclusive; (ii) "including" is
not limiting; (iii) a reference to any law, rule or regulation
includes any amendment or modification thereto or thereof, as well as
any replacement therefor; and (iv) unless otherwise provided for in
this Agreement, a reference to any Pledgor Document or other
agreement, instrument or document, shall include such Pledgor
Document, other agreement, instrument or document, as it may be
amended, restated, supplemented or otherwise modified from time to
time in accordance with its terms. References herein to Sections,
paragraphs, Annexes and Schedules and the like, unless otherwise
stated, are references to Sections or paragraphs of, or Annexes or
Schedules to, this Agreement. Terms such as "herein", "hereof", or
"hereunder" refer to this Agreement as a whole, and not to any
particular provision hereof.
SECTION 21. Waiver of Trial By Jury.
TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, THE PLEDGOR, THE PLEDGEE
AND (BY THEIR ACCEPTANCE OF THE BENEFITS OF THIS AGREEMENT) EACH OF THE LENDERS,
HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL ACTION
OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AND FOR ANY
COUNTERCLAIM THEREIN.
SECTION 22. Jurisdiction.
Each of the Pledgor and the Pledgee and (by its acceptance of the benefits
of this Agreement) each of the Lenders hereby irrevocably and unconditionally
(i) submits for itself and its property, in any legal action or proceeding
relating to this Agreement or any other Pledgor Document or the transactions
contemplated hereunder or thereunder, or for recognition and enforcement of any
judgment in respect thereof, to the non-exclusive general jurisdiction of the
courts of the State of New York, the courts of the United States of America for
the Southern District of New York, and appellate courts from any thereof; (ii)
agrees that all claims in respect of any such action or proceeding may be heard
or determined in such New York State court or, to the extent permitted by law,
in such federal court; (iii) consents that any such action or proceeding may be
brought in such courts and, to the extent permitted by applicable Law, waives
and agrees not to assert, by way of motion, as a defense or otherwise, in any
such action or proceeding, any claim that it is not personally subject to the
jurisdiction of such courts, that the action or proceeding is brought in an
inconvenient forum, that the venue of the action or proceeding is improper or
that this Agreement or the subject matter hereof may not be litigated in or by
such courts; and (iv) agrees that a final judgment in any such action or
proceeding shall be conclusive and may be enforced in other jurisdictions by
suit on the judgment or in any other manner provided by Law. The Pledgor agrees
that service of process in any such action or proceeding may be effected by
mailing a copy thereof by registered or certified mail (or any substantially
similar form of mail), postage prepaid, to such party, at the address for
Pledgor specified in Section 18 or at such other address of the Pledgor of which
the Pledgee shall have been notified pursuant thereto; and agrees that nothing
herein shall affect the right to effect service of process in any other manner
permitted by law or shall limit the right to xxx in any other jurisdiction.
IN WITNESS WHEREOF, the parties have executed and delivered
this Agreement as of the date first written above.
PLEDGOR: ASCENT ASSURANCE, INC.
By: /s/Xxxxxxx X. Xxxxxxxx
Name: Xxxxxxx X. Xxxxxxxx
Title:
PLEDGEE: CREDIT SUISSE FIRST BOSTON
MANAGEMENT CORPORATION
By:/s/Xxxxx X. Xxxxxxxx
Name: Xxxxx X. Xxxxxxxx
Title: Director
[Signature Page to Pledge Agreement]
ACKNOWLEDGMENT
Each of the undersigned, the Companies referred to in the foregoing Pledge
Agreement, hereby acknowledges receipt of a copy thereof and agrees to cooperate
in the implementation of the terms thereof insofar as such terms are applicable
to it or to exercise by the Pledgee of its rights and remedies under that Pledge
Agreement in respect of the Pledged Stock or Pledged Notes issued by that
company, including their registration in the name of the Pledgee or its nominee.
Pacific Casualty Company, Inc.
By: /s/Xxxxxxx X. Xxxxxxxx
Name: Xxxxxxx X. Xxxxxxxx
Title: Chairman
Foundation Financial Services, Inc.
By: /s/Xxxxxxx X. Xxxxxxxx
Name: Xxxxxxx X. Xxxxxxxx
Title: Chairman
Westbridge Printing Services, Inc.
By: /s/Xxxxxxx X. Xxxxxxxx
Name: Xxxxxxx X. Xxxxxxxx
Title: Chairman
ANNEX 1
to the Pledge Agreement
Pledged Stock
Company No. of Shares Class of Stock Certificate Nos.
Foundation Financial 1 common 2
Services, Inc.
Westbridge Printing 1 common 3
Services, Inc.
Pacific Casualty 1,000 common 1
Company, Inc.
ANNEX 2
to the Pledge Agreement
Pledged Notes
Initially none
EXHIBIT A
to the Pledge Agreement
AGREEMENTS AFFECTING MANAGEMENT OF COMPANY
None.
EXHIBIT B
to the Pledge Agreement
PLEDGE AGREEMENT SUPPLEMENT
PLEDGE AGREEMENT SUPPLEMENT, dated as of ____________, made by
Ascent Assurance, Inc., a Delaware corporation (the "Pledgor"), in favor of
Credit Suisse First Boston Management Corporation, as pledgee under the Pledge
Agreement referred to below (in such capacity, the "Pledgee").
1. Reference is hereby made to the Pledge Agreement, dated as
of April 17, 2001, made by the Pledgor in favor of the Pledgee (as
amended, supplemented or otherwise modified as of the date hereof, the
"Pledge Agreement"). Terms defined in the Pledge Agreement are used
herein as therein defined.
2. The Pledgor hereby confirms and reaffirms the security
interest in the Pledged Collateral granted to the Pledgee for the
benefit of the Lenders and its own benefit as provided in the Pledge
Agreement, and, as additional collateral security for the prompt and
complete payment when due (whether at stated maturity, by acceleration
or otherwise) of the Secured Obligations and in order to induce the
Lenders to make their Loans under the Credit Agreement and the other
Loan Documents, the Pledgor hereby delivers to the Pledgee, for the
benefit of the Lenders and for the benefit of the Administrative Agent,
as security for the Secured Obligations, the Surplus Note in a
principal amount equal to the aggregate principal amount of the Loans
made on the date hereof under the Credit Agreement, as described in
Schedule 1 to this Supplement (the "Additional Pledged Note") and
hereby confirms its grant to the Administrative Agent, for the ratable
benefit of the Lenders and for the benefit of the Administrative Agent,
as security for the Secured Obligations, of a first priority security
interest in the Additional Pledged Note and all Proceeds thereof. From
and after the date of this Supplement, as used in the Pledge Agreement
as supplemented by this Supplement and for all purposes of the Pledge
Agreement as so supplemented, "Pledged Notes" shall be deemed to
include the Additional Pledged Note.
3. The Pledgor hereby represents and warrants that the
representations and warranties contained in Section 9 of the Pledge
Agreement are true and correct on the date of this Supplement with
references therein to the "Pledged Note" to include the Additional
Pledged Note, and with references to the Pledge Agreement to mean the
Pledge Agreement as supplemented hereby.
4. This Supplement shall be governed by, and construed
and interpreted in accordance with, the laws of the State of New York.
IN WITNESS WHEREOF, the undersigned has caused this Supplement
to be duly executed and delivered as of the date first above written.
ASCENT ASSURANCE, INC.
By: ________________________
Name:
Title:
SCHEDULE I
to the Pledge Agreement Supplement
DESCRIPTION OF ADDITIONAL PLEDGED NOTE
Name of Issuer
