EXHIBIT B
PLEDGE AGREEMENT
THIS PLEDGE AGREEMENT is made as of this 15th day of March, 2002, between Welsh,
Carson, Anderson, & ▇▇▇▇▇ VIII, L.P., a partnership ("Pledgor") and BANK OF
AMERICA, N.A. ("Secured Party").
WHEREAS, Pledgor and Secured Party propose to enter into transactions from time
to time;
WHEREAS, Pledgor and Secured Party are entering into this Pledge Agreement and
Pledgor is granting the pledge provided for herein in contemplation of such
transactions;
NOW, THEREFORE, in consideration of their mutual covenants contained herein and
to secure the full and punctual observance and performance by Pledgor of all
Secured Obligations (as defined herein), the parties hereto, intending to be
legally bound, hereby mutually covenant and agree as follows:
1. Definitions. As used herein, the following words and phrases shall have the
following meanings:
"Additions and Substitutions" has the meaning provided in Section 2(a).
"Authorized Officer" of Pledgor means, if Pledgor is not a natural person, any
officer, trustee or general partner (or any officer thereof), as applicable, as
to whom Pledgor shall have delivered notice to Secured Party that such trustee,
general partner or officer is authorized to act hereunder on behalf of Pledgor.
"Base Number" means, as of any date, the lesser of (x) 1,000,000 and (y) the
Maximum Number of Daily Forward Delivery Amounts as of such date (as such term
shall be defined in the Confirmation for the Forward Delivery Transaction to be
entered into between Pledgor and Secured Party on or about the date hereof and
which Confirmation shall refer to this Pledge Agreement in Section 7(i)).
"Business Day" means any day on which commercial banks are open for business in
New York City.
"Calculation Agent" means Bank of America, N.A.
"Collateral" has the meaning provided in Section 2(a).
"Collateral Account" has the meaning provided in Section 5(c).
"Collateral Event of Default" means, at any time, the occurrence of either of
the following: (A) failure of the Collateral to include, as Eligible Collateral,
Shares at least equal in number to the Base Number or (B) failure at any time of
the Security Interests to constitute valid and perfected security interests in
all of the Collateral, subject to no prior or equal Lien, or assertion of such
by Pledgor in writing.
"Control" means "control" as defined in Section 8-106 and Section 9-106 of the
UCC.
"Default Event" means any Collateral Event of Default or any event of default,
termination event or similar event in connection with any Secured Transaction.
"Eligible Collateral" means Shares provided that Pledgor has good and marketable
title thereto, free of all Liens (other than the Security Interests) and
Transfer Restrictions (other than any Existing Transfer Restrictions) and that
Secured Party has a valid, first priority perfected security interest therein, a
first lien thereon and Control with respect thereto.
"Existing Transfer Restrictions" means Transfer Restrictions existing by virtue
of Rule 145 under the Securities Act.
"Issuer" means Triad Hospitals, Inc.
"Lien" means any lien, mortgage, security interest, pledge, charge or
encumbrance of any kind.
"Location" means, with respect to any party, the place such party is "located"
within the meaning of Section 9-307 of the UCC.
"Person" means an individual, a corporation, a partnership, an association, a
trust or any other entity or organization, including a government or political
subdivision or an agency or instrumentality thereof.
"Pledged Items" means, as of any date, any and all securities (or security
entitlements in respect thereof) and instruments, cash or other assets delivered
by Pledgor to be held by or on behalf of Secured Party under this Pledge
Agreement as Collateral.
"rehypothecate" has the meaning provided in Section 5(h).
"Secured Obligations" means, at any time, any and all obligations, covenants and
agreements (whether written or oral) of any kind whatsoever between Pledgor and
Secured Party, including, but not limited to, any hedging transactions
(including without limitation options, forwards, swaps or other equity
derivative products) entered into between Pledgor and Secured Party together
with any extensions or renewals thereof, any indebtedness or other obligations
of Pledgor to Secured Party or any of ifs affiliates, whether with respect to
the payment of money, delivery of securities or other instruments or property or
otherwise, whether now in existence or hereafter contracted.
"Secured Transaction" means any transaction of any kind whatsoever giving rise
to a Secured Obligation.
"Securities Act" means the Securities Act of 1933, as amended.
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"Security Interests" means the security interests in the Collateral created
hereby.
"Shares" means shares of the common stock, par value $0.01, of the Issuer (and
any security entitlements in respect thereof).
"Transfer Restriction" means, with respect to any Shares or item of Collateral
pledged under this Pledge Agreement, any condition to or restriction on the
ability of the owner thereof to sell, assign or otherwise transfer such Shares
or item of Collateral or to enforce the provisions thereof or of any document
related thereto whether set forth in such item of Collateral itself or in any
document related thereto, including, without limitation, (i) any requirement
that any sale, assignment or other transfer or enforcement of such Shares or
item of Collateral be consented to or approved by any Person, including, without
limitation, the issuer thereof or any other obligor thereon, (ii) any
limitations on the type or status, financial or otherwise, of any purchaser,
pledgee, assignee or transferee of such Shares or item of Collateral, (iii) any
requirement of the delivery of any certificate, consent, agreement, opinion of
counsel, notice or any other document of any Person to the issuer of, any other
obligor on or any registrar or transfer agent for, such Shares or item of
Collateral, prior to the sale, pledge, assignment or other transfer or
enforcement of such Shares or item of Collateral (iv) any registration or
qualification requirement or prospectus delivery requirement for such Shares or
item of Collateral pursuant to any federal, state or foreign securities law
(including, without limitation, any such requirement arising as a result of the
fact that such Shares or Collateral are "restricted securities" as defined in
Rule 144 under the Securities Act, the fact that Pledgor is an "affiliate", as
defined in Rule 144 under the Securities Act, of the relevant Issuer, or the
fact that resale of such Shares or Collateral is subject to Rule 145 under the
Securities Act) and (v) a Rule 145 restrictive legend on the certificates
evidencing such Shares; provided that the required delivery of any assignment,
instruction or entitlement order from the seller, pledgor, assignor or
transferor of such Shares or item of Collateral, together with any evidence of
the corporate or other authority of such Person, shall not constitute a
"Transfer Restriction".
"UCC" means the Uniform Commercial Code as in effect in the State of New York.
2. The Security Interests. In order to secure the full and punctual observance
and performance by Pledgor of all Secured Obligations:
(a) Pledgor hereby assigns and pledges to Secured Party and grants to
Secured Party, security interests in and to, and a lien upon and right of
set-off against, and transfers to Secured Party, as and by way of a security
interest having priority over all other security interests, with power of sale,
all of its right, title and interest in and to (i) the Pledged Items described
in paragraph (b); (ii) all additions to and substitutions for such Pledged Items
(including, without limitation, any securities, instruments or other property
delivered or pledged pursuant to Section 4(a) or 5(b)) (such additions and
substitutions, the "Additions and Substitutions"); (iii) all income, proceeds
and collections received or to be received, or derived or to be derived, now or
any time hereafter (whether before or after the commencement of any proceeding
under applicable bankruptcy, insolvency or similar law, by or against Pledgor,
with respect to Pledgor) from or in connection with the Pledged Items or the
Additions and Substitutions (including, without limitation, any shares of
capital stock issued by any Issuer in respect of any Shares constituting
Collateral or any cash, securities or other property distributed in respect of
or exchanged for any Shares constituting Collateral, or into which any such
Shares are converted, in connection with any merger or similar event or
otherwise, and any security entitlements in respect of any of the foregoing);
and (iv) the Collateral Account and all securities and other financial assets
(each as defined in Section 8-102 of the UCC), including the Pledged Items and
the Additions and Substitutions, and other funds, property or assets from time
to time held therein or credited thereto; and (v) all powers and rights now
owned or hereafter acquired under or with respect to the Pledged Items or the
Additions and Substitutions (such Pledged Items, Additions and Substitutions,
proceeds, collections, powers, rights, Collateral Account and assets held
therein or credited thereto being herein collectively called the "Collateral").
Secured Party shall have all of the rights, remedies and recourses with respect
to the Collateral afforded a secured party by the UCC, in addition to, and not
in limitation of, the other rights, remedies and recourses afforded to Secured
Party by this Pledge Agreement.
(b) Within 5 Business Days after the date hereof, Pledgor shall deliver to
Secured Party in pledge hereunder Eligible Collateral consisting of a number of
Shares equal to the Base Number on the date hereof, in the manner provided in
Section 5(c).
(c) The parties hereto expressly agree that all rights, assets and property
at any time held in or credited to the Collateral Account shall be treated as
financial assets (as defined in Section 8-102 of the UCC).
3. Representations and Warranties of Pledgor. Pledgor hereby represents and
warrants to Secured Party that:
(a) Pledgor (i) owns and, at all times prior to the release of the
Collateral pursuant to the terms of this Pledge Agreement, will own the
Collateral free and clear of any Liens (other than the Security Interests) or
Transfer Restrictions (other than any Existing Transfer Restrictions) and (ii)
is not and will not become a party to or otherwise bound by any agreement, other
than this Pledge Agreement, that (x) restricts in any manner the rights of any
present or future owner of the Collateral with respect thereto or (y) provides
any person other than Pledgor, Secured Party or any securities intermediary
through whom any Collateral is held (but in the case of any such securities
intermediary only in respect of Collateral held through it) with Control with
respect to any Collateral.
(b) Other than financing statements or other similar or equivalent
documents or instruments with respect to the Security Interests, no financing
statement, security agreement or similar or equivalent document or instrument
covering all or any part of the Collateral is on file or of record in any
jurisdiction in which such filing or recording would be effective to perfect a
Lien, security interest or other encumbrance of any kind on such Collateral.
(c) All Shares at any time pledged hereunder (or in respect of which
security entitlements are pledged hereunder) are and will be issued by an Issuer
organized under the laws of the United States, any State thereof or the District
of Columbia and (i) certificated (and the certificate or certificates in respect
of such Shares are and will be located in the United States), and unless
registered in the name of the Secured Party, registered in the name of Pledgor
or held through a securities intermediary whose securities intermediary's
jurisdiction (within the meaning of Section 8-110(e) of the UCC) is located in
the United States or (ii) uncertificated and either registered in the name of
Pledgor or held through a securities intermediary whose securities
intermediary's jurisdiction (within the meaning of Section 8-110(e) of the UCC)
is located in the United States; provided that this representation shall not be
deemed to be breached if, at any time, any such Collateral is issued by an
Issuer that is not organized under the laws of the United States, any State
thereof or the District of Columbia, and the parties hereto agree to procedures
or amendments hereto necessary to enable Secured Party to maintain a valid and
continuously perfected security interest in such Collateral, in respect of which
Secured Party will have Control, subject to no prior Lien. The parties hereto
agree to negotiate in good faith any such procedures or amendments.
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(d) (i) Upon the delivery of certificates evidencing any Shares to Secured
Party in accordance with Section 5(c) (A) or the registration of uncertificated
Shares in the name of Secured Party or its nominee in accordance with Section
5(c) (B), and, in each case, the crediting of such securities or financial
assets to the Collateral Account, Secured Party will have a valid and, as long
as Secured Party retains possession of such certificates or such uncertificated
Shares remain so registered, perfected security interest therein, in respect of
which Secured Party will have Control, subject to no prior Lien and (ii) upon
the crediting of any Shares to the Collateral Account, Secured Party will have a
valid and, so long as such Shares continue to be credited to the Collateral
Account, perfected security interest in a securities entitlement in respect
thereof, in respect of which Secured Party will have Control subject to no prior
Lien.
(e) No registration, recordation or filing with any governmental body,
agency or official is required in connection with the execution and delivery of
this Pledge Agreement or necessary for the validity or enforceability hereof or
thereof or for the perfection or enforcement of the Security Interests.
(f) Pledgor has not performed and will not perform any acts that might
prevent Secured Party from enforcing any of the terms of this Pledge Agreement
or that might limit Secured Party in any such enforcement.
(g) The Location of Pledgor is the State of Delaware, and under the Uniform
Commercial Code as in effect in such Location, no filing other than with the
Secretary of State of the State of Delaware is required to perfect a security
interest in collateral consisting of general intangibles.
4. Certain Covenants of Pledgor. Pledgor agrees that, so long as any Secured
Obligation remains outstanding:
(a) Pledgor shall ensure at all times that a Collateral Event of Default
shall not occur, and shall pledge additional Collateral in the manner described
in Sections 5(b) and 5(c) as necessary to cause such requirement to be met.
(b) Pledgor shall, at the expense of Pledgor and in such manner and form as
Secured Party may require, give, execute, deliver, file and record any financing
statement, notice, instrument, document, agreement or other papers that may be
necessary or desirable in order (i) to create, preserve, perfect, substantiate
or validate any security interest granted pursuant hereto, (ii) to create or
maintain Control with respect to any such security interests in any investment
property (as defined in Section 9-102(49) of the UCC) or (iii) to enable Secured
Party to exercise and enforce its rights hereunder with respect to such security
interest. To the extent permitted by applicable law, Pledgor hereby authorizes
Secured Party to execute and file, in the name of Pledgor or otherwise, UCC
financing or continuation statements (which may be carbon, photographic,
photostatic or other reproductions of this Pledge Agreement or of a financing
statement relating to this Pledge Agreement) that Secured Party in its sole
discretion may deem necessary or appropriate to further perfect, or maintain the
perfection of, the Security Interests.
(c) Pledgor shall warrant and defend its title to the Collateral, subject
to the rights of Secured Party, against the claims and demands of all persons.
Secured Party may elect, but without an obligation to do so, to discharge any
Lien of any third party on any of the Collateral.
(d) Pledgor agrees that it shall not change (1) its name or identity or, if
Pledgor is not a natural person, its organizational structure in any manner or
(2) its Location, unless in any such case (A) it shall have given Secured Party
not less than 30 days' prior notice thereof and (B) such change shall not cause
any of the Security Interests to become unperfected, cause Secured Party to
cease to have Control in respect of any of the Security Interests in any
Collateral consisting of investment property (as defined in Section 9-102(49) of
the UCC) or subject any Collateral to any other Lien.
(e) Pledgor agrees that it shall not (1) create or permit to exist any Lien
(other than the Security Interests) or any Transfer Restriction (other than any
Existing Transfer Restrictions) upon or with respect to the Collateral, (2) sell
or otherwise dispose of, or grant any option with respect to, any of the
Collateral or (3) enter into or consent to any agreement pursuant to which any
person other than the Pledgor, the Secured Party and any securities intermediary
through whom any of the Collateral is held (but in the case of any such
securities intermediary only in respect of Collateral held through it) has or
will have Control in respect of any Collateral.
5. Administration of the Collateral and Valuation of the Securities. (a) Secured
Party shall determine on each Business Day whether a Collateral Event of Default
shall have occurred.
(b) Pledgor may pledge additional Eligible Collateral hereunder at any
time. Concurrently with the delivery of any additional Eligible Collateral,
Pledgor shall deliver to Secured Party a certificate of Pledgor or, if Pledgor
is not a natural person, an Authorized Officer of Pledgor substantially in the
form of Exhibit A hereto and dated the date of such delivery, (A) identifying
the additional items of Eligible Collateral being pledged and (B) certifying
that with respect to such items of additional Eligible Collateral the
representations and warranties contained in paragraphs (a), (b), (c) and (d) of
Section 3 hereunder are true and correct with respect to such Eligible
Collateral on and as of the date thereof. Pledgor hereby covenants and agrees to
take all actions required under Section 5(c) and any other actions necessary to
create for the benefit of Secured Party a valid, first priority, perfected
security interest in, and a first lien upon, such additional Eligible
Collateral, as to which Secured Party will have Control.
(c) Any delivery of Shares as Collateral to Secured Party by Pledgor shall
be effected (A) in the case of Collateral consisting of certificated Shares
registered in the name of Pledgor, by delivery of certificates representing such
Shares to Secured Party, accompanied by any required transfer tax stamps, and in
suitable form for transfer by delivery or accompanied by duly executed
instruments of transfer or assignment in blank, with signatures appropriately
guaranteed, all in form and substance satisfactory to Secured Party, and the
crediting by Secured Party of such securities to a securities account (as
defined in Section 8-501 of the UCC) (the "Collateral Account") of Secured Party
maintained at Banc of America Securities LLC, (B) in the case of Collateral
consisting of uncertificated Shares registered in the name of Pledgor, by
transmission by Pledgor of an instruction to the Issuer of such Shares
instructing such Issuer to register such Shares in the name of Secured Party or
its nominee, accompanied by any required transfer tax stamps, the issuer's
compliance with such instructions and the crediting by Secured Party of such
securities to the Collateral Account, (C) in the case of Shares in respect of
which security entitlements are held by Pledgor through a securities
intermediary, by the crediting of such Shares, accompanied by any required
transfer tax stamps, to a securities account of Secured Party at such securities
intermediary or, at the option of Secured Party, at another securities
intermediary satisfactory to Secured Party and the crediting by Secured Party of
such securities to the Collateral Account or (D) in any case, by complying with
such alternative delivery instructions which shall be appropriate taking into
account Existing Transfer Restrictions, as Secured Party shall provide to
Pledgor in writing. Upon delivery of any such Pledged Item under this Pledge
Agreement, Secured Party shall examine such Pledged Item and any certificates
delivered pursuant to Section 5(b) or otherwise pursuant to the terms hereof in
connection therewith to determine that they comply as to form with the
requirements for Eligible Collateral.
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(d) If on any Business Day Secured Party determines that a Collateral Event
of Default shall have occurred, Secured Party shall promptly notify Pledgor of
such determination by telephone call to Pledgor or, if Pledgor is not a natural
person, an Authorized Officer of Pledgor followed by a written confirmation of
such call.
(e) If on any Business Day Secured Party determines that no Default Event
or failure by Pledgor to meet any of its obligations under Sections 4 or 5
hereof has occurred and is continuing, Pledgor may obtain the release from the
Security Interests of any Collateral upon delivery to Secured Party of a written
notice from Pledgor or, if Pledgor is not a natural person, an Authorized
Officer of Pledgor indicating the items of Collateral to be released so long as,
after such release, no Collateral Event of Default shall have occurred. If on
the last Exchange Business Day of any month Secured Party determines that (i) no
Default Event or failure by Pledgor to meet any of its obligations under Section
4 or 5 hereof has occurred and is continuing and (ii) the Collateral includes a
number of Shares which exceeds the Base Number by 20,000 or more Shares, Secured
Party shall release from the Security Interests a number of Shares equal to (x)
the number of Shares included in this Collateral minus (y) the Base Number, so
long as, after such release, no Collateral Event of Default shall have occurred.
(f) Secured Party may at any time or from time to time, in its sole
discretion, cause any or all of the Shares pledged hereunder registered in the
name of Pledgor or its nominee to be transferred of record into the name of
Secured Party or its nominee. Pledgor shall promptly give to Secured Party
copies of any notices or other communications received by Pledgor with respect
to Shares pledged hereunder registered, or held through a securities
intermediary, in the name of Pledgor or Pledgor's nominee and Secured Party
shall promptly give to Pledgor copies of any notices and communications received
by Secured Party with respect to Shares pledged hereunder registered, or held
through a securities intermediary, in the name of Secured Party or Secured
Party's nominee.
(g) Pledgor agrees that Pledgor shall forthwith upon demand pay to Secured
Party:
i. the amount of any taxes that Secured Party may have been required
to pay by reason of the Security Interests or to free any of the Collateral from
any Lien thereon, and
ii. the amount of any and all out-of-pocket expenses, including the
fees and disbursements of counsel and of any other experts, that Secured Party
may incur in connection with (A) the enforcement of this Pledge Agreement,
including such expenses as are incurred to preserve the value of the Collateral
and the validity, perfection, rank and value of the Security Interests, (B) the
collection, sale or other disposition of any of the Collateral, (C) the exercise
by Secured Party of any of the rights conferred upon it hereunder or (D) any
Default Event.
Any such amount not paid on demand shall bear interest (computed on the basis of
a year of 360 days and payable for the actual number of days elapsed) at a rate
per annum equal to 5% plus the prime rate as published in The Wall Street
Journal, Eastern Edition in effect from time to time during the period from the
date hereof to the date of the termination of this Pledge Agreement.
(h) Without limiting the rights and obligations of the parties under this
Pledge Agreement, Secured Party shall, notwithstanding Section 9-207 of the UCC,
upon the consent of Pledgor, have the right to sell, lend, pledge,
rehypothecate, assign, invest, use, commingle or otherwise dispose of, or
otherwise use in its business (collectively, "rehypothecate") any Collateral it
holds in connection with a Secured Transaction, free from any claim or right of
any nature whatsoever of Pledgor, including any equity or right of redemption by
Pledgor, provided that Secured Party will, in each case in a manner consistent
with industry practice for loans of equity securities, (i) replace any
rehypothecated Collateral (with the same Collateral or identical substitute
Collateral) upon three Business Days' notice from Pledgor, (ii) if not already
replaced, replace such Collateral immediately prior to the time at which such
Collateral ceases to be subject to the Security Interests and (iii) prior to
replacement of such Collateral, pay Pledgor amounts equivalent to dividends paid
or other distributions made on such Collateral, whereupon the amount so paid or
the assets so delivered shall be proceeds of the Collateral and shall be subject
to Section 6. All determinations related to the immediately preceding sentence
shall be made by the Calculation Agent. For purposes of determining the
occurrence of a Collateral Event of Default, the rehypothecation of any
Collateral pledged hereunder shall not affect the status of such Collateral as
Collateral or Eligible Collateral hereunder.
(i) Pledgor hereby acknowledges that during such time as the Collateral is
held by Secured Party pursuant to the terms of this Pledge Agreement, Pledgor
will not receive periodic account statements with respect to the value thereof.
(j) If, at any time, Pledgor is obligated pursuant to any Secured
Transaction to deliver Shares to Secured Party or at the direction of Secured
Party, unless Pledgor shall have otherwise delivered such Shares in respect of
such obligation, Secured Party shall deliver or cause to be delivered to an
affiliate of Secured Party designated by Secured Party from the Collateral
Account, in whole or partial, as the case may be, satisfaction of Pledgor's
obligation to deliver such Shares. Upon any such delivery, such affiliate of
Secured Party shall hold such Shares absolutely and free from any claim or right
whatsoever (including, without limitation, any claim or right of Pledgor).
6. Income and Voting Rights in Collateral. (a) Secured Party shall have the
right to receive and retain as Collateral hereunder all proceeds (including,
without limitation, ordinary cash dividends or interest) of the Collateral, and
Pledgor shall take all such action as Secured Party shall deem necessary or
appropriate to give effect to such right. All such proceeds that are received by
Pledgor shall be received in trust for the benefit of Secured Party and, if
Secured Party so directs, shall be segregated from other funds of Pledgor and
shall, forthwith upon demand by Secured Party, be delivered over to Secured
Party as Collateral in the same form as received (with any necessary
endorsement).
(b) Unless a Default Event shall have occurred and be continuing, Pledgor
shall have the right, from time to time, to vote and to give consents,
ratifications and waivers with respect to the Collateral (other than Collateral
that has been rehypothecated by Secured Party pursuant to Section 5(h)) and
Secured Party shall, upon receiving a written request from Pledgor accompanied
by a certificate of Pledgor or, if Pledgor is not a natural person, an
Authorized Officer of Pledgor stating that no Default Event has occurred and is
continuing, deliver to Pledgor or as specified in such request such proxies,
powers of attorney, consents, ratifications and waivers in respect of any of the
Collateral that is registered, or held through a securities intermediary, in the
name of Secured Party or its nominee as shall be specified in such request and
shall be in form and substance satisfactory to Secured Party.
(c) If a Default Event shall have occurred and be continuing, Secured Party
shall have the right, to the extent permitted by law, and Pledgor shall take all
such action as may be necessary or appropriate to give effect to such right, to
vote and to give consents, ratifications and waivers, and to take any other
action with respect to any or all of the Collateral with the same force and
effect as if Secured Party were the absolute and sole owner thereof.
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7. Remedies upon Default Events. (a) If any Default Event shall have occurred
and be continuing, Secured Party may exercise all the rights of a secured party
under the Uniform Commercial Code (whether or not in effect in the jurisdiction
where such rights are exercised) and, in addition, without being required to
give any notice, except as herein provided or as may be required by mandatory
provisions of law, may (i) deliver or cause to be delivered to itself or to an
affiliate from the Collateral Account, Collateral consisting of Shares with a
value (as determined by the Calculation Agent) equal to the value (as determined
by the Calculation Agent) of Pledgor's obligations hereunder and under any and
all Secured Obligations to which a Default Event applies, whereupon Secured
Party shall hold such Shares absolutely free from any claim or right of
whatsoever kind, including any equity or right of redemption of Pledgor that may
be waived or any other right or claim of Pledgor, and Pledgor, to the extent
permitted by law, hereby specifically waives all rights of redemption, stay or
appraisal that Pledgor has or may have under any law now existing or hereafter
adopted; or (ii) sell such Collateral as may be necessary to generate proceeds
sufficient to satisfy in full all Secured Obligations or hereunder, at public or
private sale or at any broker's board or on any securities exchange, for cash,
upon credit or for future delivery, and at such price or prices as Secured Party
may deem satisfactory; or (iii) take any combination of the actions described in
clauses (i) and (ii). Pledgor covenants and agrees that it will execute and
deliver such documents and take such other action as Secured Party deems
necessary or advisable in order that any such sale may be made in compliance
with law. Upon any such sale Secured Party shall have the right to deliver,
assign and transfer to the buyer thereof the Collateral so sold. Each buyer at
any such sale shall hold the Collateral so sold absolutely and free from any
claim or right of whatsoever kind, including any equity or right of redemption
of Pledgor that may be waived or any other right or claim of Pledgor, and
Pledgor, to the extent permitted by law, hereby specifically waives all rights
of redemption, stay or appraisal that Pledgor has or may have under any law now
existing or hereafter adopted. The notice (if any) of such sale required by
Section 9-611 of the UCC shall (1) in case of a public sale, state the time and
place fixed for such sale, (2) in case of sale at a broker's board or on a
securities exchange, state the board or exchange at which such sale is to be
made and the day on which the Collateral, or the portion thereof so being sold,
will first be offered for sale at such board or exchange, and (3) in the case of
a private sale, state the day after which such sale may be consummated. Any such
public sale shall be held at such time or times within ordinary business hours
and at such place or places as Secured Party may fix in the notice of such sale.
At any such sale the Collateral may be sold in one lot as an entirety or in
separate parcels, as Secured Party may determine. Secured Party shall not be
obligated to make any such sale pursuant to any such notice. Secured Party may,
without notice or publication, adjourn any public or private sale or cause the
same to be adjourned from time to time by announcement at the time and place
fixed for the sale, and such sale may be made at any time or place to which the
same may be so adjourned. In case of any sale of all or any part of the
Collateral on credit or for future delivery, the Collateral so sold may be
retained by Secured Party until the selling price is paid by the buyer thereof,
but Secured Party shall not incur any liability in case of the failure of such
buyer to take up and pay for the Collateral so sold and, in case of any such
failure, such Collateral may again be sold upon like notice. Secured Party,
instead of exercising the power of sale herein conferred upon it, may proceed by
a suit or suits at law or in equity to foreclose the Security Interests and sell
the Collateral, or any portion thereof, under a judgment or decree of a court or
courts of competent jurisdiction.
(b) Pledgor hereby irrevocably appoints Secured Party its true and lawful
attorney, with full power of substitution, in the name of Pledgor, Secured Party
or otherwise, for the sole use and benefit of Secured Party, but at the expense
of Pledgor, to the extent permitted by law, to exercise, at any time and from
time to time while a Default Event has occurred and is continuing, all or any of
the following powers with respect to all or any of the Collateral:
i. to demand, ▇▇▇ for, collect, receive and give acquittance for any
and all monies due or to become due upon or by virtue thereof,
ii. to settle, compromise, compound, prosecute or defend any action or
proceeding with respect thereto,
iii. to sell, transfer, assign or otherwise deal in or with the same
or the proceeds or avails thereof, as fully and effectually as if Secured Party
were the absolute owner thereof (including, without limitation, the giving of
instructions and entitlement orders in respect thereof), and
iv. to extend the time of payment of any or all thereof and to make
any allowance and other adjustments with reference thereto;
provided that Secured Party shall give Pledgor not less than one day's prior
written notice of the time and place of any sale or other intended disposition
of any of the Collateral, except any Collateral that threatens to decline
speedily in value, including, without limitation, equity securities, or is of a
type customarily sold on a recognized market. Secured Party and Pledgor agree
that such notice constitutes "reasonable authenticated notification" within the
meaning of Section 9-611 of the UCC.
(c) Upon any delivery or sale of all or any part of any Collateral made
either under the power of delivery or sale given hereunder or under judgment or
decree in any judicial proceedings for foreclosure or otherwise for the
enforcement of this Pledge Agreement, Secured Party is hereby irrevocably
appointed the true and lawful attorney of Pledgor, in the name and stead of
Pledgor, to make all necessary deeds, bills of sale, instruments of assignment,
transfer or conveyance of the property, and all instructions and entitlement
orders in respect of the property, thus delivered or sold. For that purpose
Secured Party may execute all such documents, instruments, instructions and
entitlement orders. This power of attorney shall be deemed coupled with an
interest, and Pledgor hereby ratifies and confirms that which Pledgor's attorney
acting under such power, or such attorney's successors or agents, shall lawfully
do by virtue of this Pledge Agreement. If so requested by Secured Party or by
any buyer of the Collateral or a portion thereof, Pledgor shall further ratify
and confirm any such delivery or sale by executing and delivering to Secured
Party or to such buyer or buyers at the expense of Pledgor all proper deeds,
bills of sale, instruments of assignment, conveyance or transfer, releases,
instructions and entitlement orders as may be designated in any such request.
(d) In the case of a Default Event, Secured Party may proceed to realize
upon the security interest in the Collateral against any one or more of the
types of Collateral, at any time, as Secured Party shall determine in its sole
discretion subject to the foregoing provisions of this Section 7. The proceeds
of any sale of, or other realization upon, or other receipt from, any of the
Collateral shall be applied by Secured Party in the following order of
priorities:
first, to the payment to Secured Party of the expenses of such sale or other
realization, including reasonable compensation to the agents and counsel of
Secured Party, and all expenses, liabilities and advances incurred or made by
Secured Party in connection therewith, including brokerage fees in connection
with the sale by Secured Party of any Collateral;
second, to the payment to Secured Party of the aggregate amount (or the value of
any delivery or other performance) owed by Pledgor to Secured Party under all
Secured Transactions;
finally, if all of the obligations of Pledgor hereunder and under all Secured
Transactions have been fully discharged or sufficient funds have been set aside
by Secured Party at the request of Pledgor for the discharge thereof, any
remaining proceeds shall be released to Pledgor.
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8. Netting and Set-off. (a) If on any date, cash would otherwise be payable or
Shares or other property would otherwise be deliverable (including, for the
avoidance of doubt, the replacement, as required by Section 5(h), of Shares that
have been rehypothecated pursuant to such Section) pursuant to any Secured
Transaction or this Pledge Agreement by Secured Party to Pledgor and by Pledgor
to Secured Party and the type of property required to be paid or delivered by
each such party on such date is the same, then, on such date, each such party's
obligation to make such payment or delivery will be automatically satisfied and
discharged and, if the aggregate amount that would otherwise have been payable
or deliverable by one such party exceeds the aggregate amount that would
otherwise have been payable or deliverable by the other such party, replaced by
an obligation upon the party by whom the larger aggregate amount would have been
payable or deliverable to pay or deliver to the other party the excess of the
larger aggregate amount over the smaller aggregate amount.
(b) In addition to and without limiting any rights of set-off that Secured
Party may have as a matter of law, pursuant to contract or otherwise, upon the
occurrence of any Default Event, Secured Party shall have the right to
terminate, liquidate and otherwise close out all Secured Transactions and this
Pledge Agreement pursuant to the terms of such Secured Transactions and this
Pledge Agreement, and to set off any obligation it may have to (i) release from
the Security Interests or return to Pledgor any Collateral pursuant to Section
5(e) or (ii) replace any rehypothecated Collateral pursuant to Section 5(h),
against any right Secured Party or any of its affiliates may have against
Pledgor, including without limitation any right to receive a payment or delivery
pursuant to any provision of any Secured Transaction. In the case of a set-off
of any obligation to return or replace assets against any right to receive
assets of the same type, such obligation and right shall be set off in kind. In
the case of a set-off of any obligation to return or replace assets against any
right to receive assets of any other type, the value of each of such obligation
and such right shall be determined by the Calculation Agent and the result of
such set-off shall be that the net obligor shall pay or deliver to the other
party an amount of cash or assets, at the net obligor's option, with a value
(determined, in the case of a delivery of assets, by the Calculation Agent)
equal to that of the net obligation. In determining the value of any obligation
to release or deliver Shares or right to receive Shares, the value at any time
of such obligation or right shall be determined by reference to the market value
of the Shares at such time. If an obligation or right is unascertained at the
time of any such set-off, the Calculation Agent may in good faith estimate the
amount or value of such obligation or right, in which case set-off will be
effected in respect of that estimate, and the relevant party shall account to
the other party at the time such obligation or right is ascertained.
9. Miscellaneous. Whenever any of the parties hereto is referred to, such
reference shall be deemed to include the successors and assigns of such party.
All the covenants and agreements herein contained by or on behalf of Pledgor and
Secured Party shall bind, and inure to the benefit of, Pledgor's respective
successors and assigns whether so expressed or not, and shall be enforceable by
and inure to the benefit of Secured Party and its successors and assigns.
(a) To the extent permitted by law, the unenforceability or invalidity of
any provision or provisions of this Pledge Agreement shall not render any other
provision or provisions herein contained unenforceable or invalid.
(b) Any provision of this Pledge Agreement may be amended or waived if, and
only if, such amendment or waiver is in writing and signed, in the case of an
amendment, by Pledgor and Secured Party or, in the case of a waiver, by the
party against whom the waiver is to be effective. No failure or delay by either
party in exercising any right, power or privilege hereunder shall operate as a
waiver thereof nor shall any single or partial exercise thereof preclude any
other or further exercise thereof or the exercise of any other right, power or
privilege. The rights and remedies herein provided shall be cumulative and not
exclusive of any rights or remedies provided by law.
(c) All notices and other communications hereunder shall be in writing and
shall be deemed to have been duly given if mailed or transmitted by any standard
forms of telecommunication. Notices to Pledgor shall be directed to Pledgor at
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, Telecopy No. 212.893.9575, Attention:
▇▇▇▇▇▇▇▇ Rather; notices to Secured Party shall be directed to it care of Banc
of America Securities LLC, ▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
Telecopy No. ▇▇▇-▇▇▇-▇▇▇▇, Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇.
(d) This Pledge Agreement shall in all respects be construed in accordance
with and governed by the laws of the State of New York (without reference to
choice of law doctrine); provided that as to Pledged Items located in any
jurisdiction other than the State of New York, Secured Party shall have, in
addition to any rights under the laws of the State of New York, all of the
rights to which a secured party is entitled under the laws of such other
jurisdiction. The parties hereto hereby agree Secured Party's and Banc of
America Securities LLC's jurisdiction, within the meaning of Section 8-110(e) of
the UCC, insofar as it acts as a securities intermediary hereunder or in respect
hereof, is the State of New York.
(e) Each party hereby irrevocably and unconditionally submits to the
non-exclusive jurisdiction of the Federal and state courts located in the
Borough of Manhattan, in the City of New York in any suit or proceeding arising
out of or relating to this Pledge Agreement or the transactions contemplated
hereby.
(f) Each party hereby irrevocably and unconditionally waives any and all
right to trial by jury in any legal proceeding arising out of or related to this
Pledge Agreement or the transactions contemplated hereby.
(g) This Pledge Agreement may be executed, acknowledged and delivered in
any number of counterparts and all such counterparts taken together shall be
deemed to constitute one and the same agreement.
10. Termination of Pledge Agreement. This Pledge Agreement and the rights
granted by Pledgor in the Collateral shall cease, terminate and be void upon
fulfillment of all of the obligations of Pledgor under the Secured Obligations
and hereunder. Any Collateral remaining at the time of such termination shall be
fully released and discharged from the Security Interests and delivered to
Pledgor by Secured Party, all at the request and expense of Pledgor.
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IN WITNESS WHEREOF, the parties have signed this Pledge Agreement as of the date
and year first above written.
PLEDGOR: SECURED PARTY:
Welsh, Carson, Anderson, & ▇▇▇▇▇ VIII, L.P. BANK OF AMERICA, N.A.
By WCAS Associates LLC, General Partner
By: ____________________________ By: ___________________________
Name: Name:
Title: Managing Member Title
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