FIRST AMENDMENT TO PLEDGE AGREEMENT
This First Amendment to Pledge Agreement (the "Amendment") is made as of
this 30th day of November, 2000, to be effective as of September 30, 2000, by
and among ASCENT ASSURANCE, INC., formerly Westbridge Capital Corp., (the
"Pledgor"), and LASALLE BANK NATIONAL ASSOCIATION, formerly LaSalle National
Bank, ("Bank").
W I T N E S S E T H
WHEREAS, Pledgor executed and delivered that certain Pledge Agreement,
dated as of June 26, 1997 in favor of Bank with respect to 100% of the issued
and outstanding shares of the capital stock of National Financial Insurance
Company ("NFIC") and National Foundation Life Insurance Company ("NFL"); and
WHEREAS, Pledgor delivered the Pledge Agreement pursuant to (i) that
certain Credit Agreement, dated as of June 6, 1997 between Ascent Funding, Inc.
(formerly Westbridge Funding Corporation) and the Bank (the "Credit Agreement")
and (ii) that certain Guaranty Agreement, dated as of June 26, 1997 by Pledgor
in favor the Bank (the "Guaranty Agreement"); and
WHEREAS, NFL has requested and the Texas Insurance Commissioner has
approved an extraordinary distribution of approximately $4,131,000 to Pledgor,
consisting of 100% of the issued and outstanding common capital stock of Freedom
Holding Company ("FHC") and its wholly owned subsidiary, Freedom Life Insurance
Company of America ("FLICA"); and
WHEREAS, as a result of such extraordinary distribution, FHC is a direct
subsidiary and FLICA is an indirect subsidiary of Pledgor, and, through an
additional restructuring of FHC, FLICA shall become a direct subsidiary of
Pledgor; and
WHEREAS, Pledgor has agreed to pledge all of the outstanding capital stock
of FHC, FLICA, NFL and NFIC (collectively, the "Pledged Subsidiary") to Bank,
subject to obtaining the required Pledge Approvals, and any additional shares of
the capital stock or series of any Pledged Subsidiary which Pledgor may from
time to time acquire in any way at any time hereafter, including due to the
restructuring of FLICA; and
WHEREAS, the parties desire to amend the Pledge Agreement, as more fully
set forth herein.
NOW, THEREFORE, in consideration of the mutual agreements herein contained
and other good and valuable consideration, the adequacy of which is hereby
acknowledged, and subject to the terms and conditions hereof, the parties hereto
agree as follows:
SECTION 1. DEFINITIONS. Unless otherwise defined herein, all capitalized terms
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shall have the meaning given to them in the Pledge Agreement.
SECTION 2. AMENDMENTS TO PLEDGE AGREEMENT.
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2.1 Attachment A to the Pledge Agreement is hereby deleted in its entirety and
replaced by inserting the following in its stead:
Attachment A
Name of Issuer No. of Shares Certificate No.(s)
National Financial Insurance 125,000 3
Company
National Foundation Life 2,600,000 1
Insurance Company
Freedom Holding Company 2,000,000 11
Freedom Life Insurance
Company of America 1,761,816 1
SECTION 3. CONDITIONS PRECEDENT. The effectiveness of this Amendment is
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expressly conditioned upon satisfaction of the following conditions precedent:
3.1 The Bank shall have received copies of this Amendment duly executed by the
Pledgor.
3.2 The Bank shall have received the stock certificates representing all of the
outstanding capital stock of each Pledged Subsidiary (with stock powers signed
in blank).
3.3 Pledgor shall have received the required Pledge Approval (as defined in the
Guaranty Agreement) with respect to the pledge of all of the outstanding capital
stock of FHC and FLICA to Bank.
3.4 The Bank shall have received such other documents, certificates and
assurances as it shall reasonably request, all of which have been delivered on
or prior to the date hereof.
SECTION 4. REAFFIRMATION OF PLEDGOR. Pledgor hereby ratifies and reaffirms that
certain Pledge Agreement and each of the terms and provisions contained therein,
and agrees that the Pledge Agreement continues in full force and effect
following the execution and delivery of this Amendment. Pledgor represents and
warrants to Bank that the Pledge Agreement was, on the date of the execution and
delivery thereof, and continues to be, the valid and binding obligation of
Pledgor enforceable in accordance with its terms and that Pledgor has no claims
or defenses to the enforcement of the rights and remedies of Bank under the
Pledge Agreement.
Pledgor further agrees to immediately pledge and deliver to Bank any Additional
Pledged Shares or Pledged Securities (including the delivery and execution of
all certificates and/or other instruments or documents representing each item
thereof) which Pledgor may acquire in any way at any time after the effective
date hereof in connection with the restructuring of FLICA as a direct subsidiary
of Pledgor.
SECTION 5. COUNTERPARTS. This Amendment may be executed in two or more
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counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same document.
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, the parties hereto have executed this Amendment on the day
and year specified above.
ASCENT ASSURANCE, INC.
By: /s/Xxxxxxx X. Xxxxxxxx
Name: Xxxxxxx X. Xxxxxxxx
Title: Chairman of the Board and CEO
LASALLE BANK NATIONAL ASSOCIATION
By: /s/Xxxxx X. Xxxxx
Name: Xxxxx X. Xxxxx
Title: Senior Vice President
