EXHIBIT 4.40
SECURITIES PLEDGE AGREEMENT
TO: FCC, LCC ("FCC")
WHEREAS pursuant to that certain Loan and Security Agreement dated as of
May ____, 2004 (as the same may be amended, supplemented, revised, restated or
varied from time to time, the "Loan Agreement"), between Addison York Insurance
Brokers Ltd. (the "Borrower") and FCC, FCC has agreed to make certain loan
facilities available to the Borrower, a subsidiary of Xxxxxxx Xxxxx
International Insurance Brokers Ltd. (the "Guarantor").
AND WHEREAS as contemplated under the Loan Agreement and as a condition
precedent of the availability of the loan facilities, the Guarantor has agreed
to execute and deliver in favour of FCC a Guarantee (the "Guarantee") and a
General Security Agreement, both of even date herewith and this Securities
Pledge Agreement as security for the payment and performance of the Borrower's
Obligations (as that term is defined in the Loan Agreement).
NOW THEREFORE, in consideration of the foregoing premises and other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged by the Guarantor, the Guarantor hereby covenants to and for the
benefit of FCC as follows:
ARTICLE I
INTERPRETATION
1.1 Defined Terms. In this agreement or any amendment to this agreement,
capitalized terms used herein and not otherwise defined shall have the
meanings ascribed thereto in the Loan Agreement.
1.2 Other Usages. References to "this agreement", "the agreement", "hereof',
"herein", and like references refer to this Securities Pledge Agreement, as
the same may be amended, supplemented, revised, restated or replaced from
time to time, and not to any particular Article, section or other
subdivision of this agreement.
1.3 Plural and Similar. Where the context so requires, words importing the
singular number shall include the plural and vice versa.
1.4 Headings. The insertion of headings in this agreement is for convenience of
reference only and shall not affect the construction or interpretation of
this agreement.
1.5 Time of the Essence. Time shall in all aspects be of the essence of this
agreement, and no extension or variation of this agreement or any
obligation hereunder shall operate as a waiver of this provision.
ARTICLE II
SECURITY
2.1 Pledge of Securities. Subject only to the prior physical delivery and
pledge of the securities described in the attached Schedule "A" to Oak
Street Funding LLC ("Oak
Street") pursuant to a Securities Pledge Agreement (the "SPA") executed by
the Guarantor in favour of Oak Street dated March 19th, 2004, the Guarantor
hereby pledges, hypothecates, assigns, mortgages, charges, transfers, and
grants a security interest in the securities described in Schedule "A", to
and in favour of FCC, and agrees to physically deliver and deposit with FCC
any and all security certificates evidencing such securities, accompanied
in each case by a duly executed power of attorney (collectively, together
with all dividends, monies, rights and claims hereinafter referred to and
the securities referred to in Section 2.2, the "Securities"), any cash
dividends or other monies now or hereafter received or declared in respect
of the Securities and all other rights and claims of the Guarantor in
respect of the Securities.
2.2 Substitutions, Additions and Proceeds. The term "Securities" shall include
the Security Interest (as defined in Section 2.3) and agreements provided
for herein shall extend to any substitutions, additions or proceeds arising
out of any consolidation, subdivision, reclassification, stock dividend or
similar increase or decrease in, or alteration to, the capital of Borrower
(also from time to time referred to herein as the "Issuer") and shall at
all times mean and extend to 100% of the issued and outstanding securities
in the Issuer.
2.3 Obligations Secured. The pledges, hypothecations, assignments, mortgages,
charges, and security interests granted hereby (the "Security Interest")
secure the payment and performance of all debts, liabilities and
obligations present or future, direct or indirect, absolute or contingent,
matured or unmatured, at any time due or accruing due, owing by the
Guarantor to FCC, however or wherever incurred, and in any currency, and
whether incurred by the Guarantor alone or with another or others, and
whether as principal or surety, of the Guarantor to FCC pursuant to or in
connection with the Guarantee or the Loan Agreement (the "Guarantor's
Obligations"), including without limitation for the Borrower's Obligations.
2.4 Expenses. The Guarantor covenants to pay to FCC on demand all expenses,
costs and charges incurred by or on behalf of FCC in connection with this
Securities Pledge Agreement, the Security Interest or the realization of
the Securities including all legal fees, court costs, receiver's or agent's
remuneration and other expenses relating to the taking or defending any
action in connection with such realization, the taking possession of,
repairing, protecting, insuring, preparing for disposition, realizing,
collecting, selling, transferring, delivering or obtaining payment of the
Securities or other lawful exercises of the powers conferred by the
Agreement and such amounts shall be added to and form a part of the debts
and obligations secured hereby.
2.5 Attachment.
(a) The Guarantor acknowledges that (i) value has been given, (ii) it has
rights in the Securities, (iii) notwithstanding anything else contained
herein, it has not agreed to postpone the time of attachment of the
Security Interest, and (iv) it has received a duplicate original copy of
this Securities Pledge Agreement.
(b) If the Securities are now or at any time hereafter become evidenced in
whole or in part, by uncertificated securities registered or recorded in
records maintained by or on behalf
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of the Issuer in the name of a clearing agency the Guarantor shall, at the
request of FCC, cause the Security Interest to be entered in the records of
such clearing agency.
(c) Subject to the SPA, at the election of FCC and immediately upon written
notice being provided by FCC to the Guarantor, the Guarantor shall cause
the Securities to be transferred into and registered in the name of FCC or
as FCC may direct and the Guarantor covenants that, at the time of any such
transfer, it will provide all required consents and approvals.
2.6 Care and Custody of Securities. FCC need not see to the collection of
dividends on, or exercise any option or right in connection with, the
Securities and need not protect or preserve them from depreciating in value
or becoming worthless and is released from all responsibility for any loss
of value. FCC is limited to exercising with regard to the Securities the
same degree of care which FCC gives to its valuable property of the same
value and kind without limiting the foregoing, FCC shall have not duty or
obligations to the Guarantor whatsoever with respect to the Securities
prior to physical delivery of the Securities to FCC.
2.7 Representation. The Guarantor represents and warrants to FCC that (i) it is
the registered, legal and beneficial owner of the Securities, (ii) the
Securities are free and clear of all liens, mortgages, charges and security
interests whatsoever other than those created in favour of FCC and
Permitted Encumbrances (including in favour of Oak Street), (iii) the
Securities have been issued and are fully paid and non-assessable and (iv)
the information contained in Schedule "A" is true, accurate and complete in
all respects and the Securities described in Schedule "A" represent 100% of
the issued and outstanding shares of the Borrower.
2.8 Rights of the Guarantor.
(a) So long as no Default or event, circumstance or condition which could with
the giving of notice or passage of time, or both, give rise to a Default,
has occurred and is continuing, (i) the Guarantor shall be entitled to vote
the Securities and to receive all cash dividends and (ii) FCC will grant,
or cause its nominee to grant to the Guarantor or its nominee a proxy to
vote and to exercise all rights with respect to any Securities registered
in the name of FCC. Upon the occurrence and during the continuance of a
Default, all rights of the Guarantor to vote or to receive dividends shall
cease and all such rights shall become vested solely and absolutely in FCC.
(b) Any dividends received by the Guarantor contrary to Section 2.8(a) or any
other monies or property which may be received by the Guarantor at any time
for, or in respect of, the Securities shall be received as trustee for FCC
and shall be immediately paid over to FCC.
ARTICLE III
ENFORCEMENT
3.1 Remedies. Subject to the SPA, upon the occurrence and during the
continuance of a Default, FCC may, at any time in its sole discretion, (i)
realize upon or otherwise dispose
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of or contract to dispose of the Securities by sale, transfer or delivery,
or (ii) exercise and enforce all rights and remedies of a holder of the
Securities as if FCC were their absolute owner (including, if necessary,
causing the Securities to be registered in the name of FCC or its nominee),
all without demand of performance or other demand, advertisement or notice
of any kind to or upon the Guarantor or any third party (except as may be
required by law). Any remedy may be exercised separately or in combination
and shall be in addition to, and not in substitution for, any other rights
FCC may have, however created. FCC shall not be bound to exercise any right
or remedy, and the exercise of rights and remedies shall be without
prejudice to the rights of FCC in respect of the Obligations including the
right to claim for any deficiency.
3.2 Standards of Sale. Without prejudice to the ability of FCC to dispose of
the Securities in any manner which is commercially reasonable, the
Guarantor acknowledges that a disposition of Securities by FCC which takes
place substantially in accordance with the following provisions shall be
deemed to be commercially reasonable:
(a) Securities may be disposed of in whole or in part;
(b) Securities may be disposed of by public auction, public tender or private
contract, with or without advertising and without any other formality;
(c) any assignee of such Securities may be FCC;
(d) any sale conducted by FCC shall be at such time and place, on such notice
and in accordance with such procedures as FCC, in its sole discretion, may
deem advantageous;
(e) Securities may be disposed of in any manner and on any terms necessary to
avoid violation of applicable law (including, without limitation,
compliance with such procedures as may restrict the number of prospective
bidders and purchasers, require that the prospective bidders and purchasers
have certain qualifications, and restrict the prospective bidders and
purchasers to persons who will represent and agree that they are purchasing
for their own account for investment and not with a view to the
distribution or resale of the Securities) or in order to obtain any
required approval of the disposition (or of the resulting purchase) by any
governmental or regulatory authority or official;
(f) a disposition of Securities may be on such terms and conditions as to
credit or otherwise as FCC, in its sole discretion, may deem advantageous;
and
(g) FCC may establish an upset or reserve bid or price in respect of the
Securities.
3.3 Dealing with the Securities.
(a) FCC shall not be obliged to exhaust its recourse against the Borrower, the
Guarantor or any other person or against any other security it may hold in
respect of the Borrower's Obligations or the Guarantor's Obligations before
realizing upon or otherwise dealing with the Securities in such manner as
FCC may consider desirable.
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(b) FCC may grant extensions or other indulgences, take and give up security,
accept compositions, grant releases and discharges and otherwise deal with
the Guarantor and with other persons, sureties or security as it may see
fit without prejudice to the Borrower's Obligations, the Guarantor's
Obligations, the liability and obligations of the Guarantor or the rights
of FCC in respect of the Securities.
(c) FCC shall not be (i) liable or accountable for any failure to collect,
realize or obtain payment in respect of the Securities, (ii) bound to
institute proceedings for the purpose of collecting, enforcing, realizing
or obtaining payment of the Securities or for the purpose of preserving any
rights of any persons, (iii) responsible for any loss occasioned by any
sale or other dealing with the Securities or by the retention of or failure
to sell or otherwise deal with the Securities, or (iv) bound to protect the
Securities from depreciating in value or becoming worthless.
3.4 Appointment of Attorney. The Guarantor irrevocably appoints FCC (and any of
its officers) as attorney of the Guarantor (with full power of
substitution) to do, make and execute in the name of and on behalf of the
Guarantor upon FCC exercising its rights and remedies under the Agreement
all such further acts, documents, matters and things which FCC may deem
necessary or advisable to accomplish the purposes of this Securities Pledge
Agreement including the execution, endorsement and delivery and transfer of
the Securities to FCC or its nominees or transferees. FCC or its nominees
and transferees are empowered to exercise all rights and powers and to
perform all acts of ownership with respect to the Securities to the same
extent as the Guarantor might do. The powers of attorney herein granted is
an addition to, and not in substitution for any stock power of attorney
delivered by the Guarantor and such power of attorney may be relied upon by
FCC severally or in combination. All acts of the attorney are hereby
ratified and approved, and the attorney shall not be liable for any act,
failure to act or any other matter or thing in connection therewith, except
to the extent caused by its own gross negligence or willful misconduct.
3.5 Dealings by Third Parties. No person dealing with FCC or an agent or
receiver shall be required to determine (i) whether the Security Interest
has become enforceable, (ii) whether the powers which such person is
purporting to exercise have become exercisable, (iii) whether any money
remains due to FCC by the Guarantor, (iv) the necessity or expediency of
the stipulations and conditions subject to which any sale or lease shall be
made, (v) the propriety or regularity of any sale or other dealing by FCC
with the Securities, or (vi) how any money paid to FCC has been applied.
(a) Subject to the prior rights of Oak Street, any purchaser of Securities from
FCC shall hold the Securities absolutely, free from any claim or right of
whatever kind, including any equity of redemption, of the Guarantor, which
it specifically waives (to the fullest extent permitted by law) as against
any such purchaser, all rights of redemption, stay or appraisal which the
Guarantor has or may have under any rule of law or statute now existing or
hereafter adopted.
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ARTICLE IV
GENERAL
4.1 Notices. Any notices and other communications provided for in this
Securities Pledge Agreement shall be given in accordance with the
provisions of the Loan Agreement.
4.2 No Merger. This Securities Pledge Agreement shall not operate by way of
merger of any of the present and future debts, liabilities and obligations
of the Guarantor to FCC or of the Borrower's Obligations and no judgment
recovered by FCC shall operate by way of merger of, or in any way affect,
the Security Interest.
4.3 Further Assurances. The Guarantor shall from time to time, whether before
or after the occurrence of a Default, do all acts and things and execute
and deliver all transfers, assignments and instruments as FCC may
reasonably require for (i) protecting the Securities, (ii) perfecting the
Security Interest, and (iii) exercising all powers, authorities and
discretions hereby conferred upon FCC. The Guarantor shall, from time to
time, upon the occurrence and during the continuance of a Default, do all
acts and things and execute and deliver all transfers, assignments and
instruments as FCC may require for facilitating the sale or other
disposition of the Securities in connection with their realization.
4.4 Supplemental Security. This Securities Pledge Agreement is in addition to
and without prejudice to all other security now held or which may hereafter
be held by FCC in respect of the Obligations.
4.5 Successors and Assigns. This Securities Pledge Agreement shall be binding
upon the Guarantor, its successors and assigns, and shall enure to the
benefit of FCC and its successors and assigns. All rights of FCC shall be
assignable and in any action brought by an assignee to enforce any right,
the Guarantor shall not assert against the assignee any claim or defense
which the Guarantor now has or hereafter may have against FCC.
4.6 Severability. If any provision of this Securities Pledge Agreement shall be
deemed by any court of competent jurisdiction to be invalid or void, the
remaining provisions shall continue in full force and effect.
4.7 Governing Law. This Securities Pledge Agreement shall be governed by and
interpreted and enforced in accordance with the laws of the Province of
Alberta and the federal laws of Canada applicable therein. The Guarantor
consents to the non-exclusive jurisdiction of the courts of the Province of
Alberta in connection with the resolution of any disputes relating to this
Security Pledge Agreement or any other Agreement or document executed or
delivered hereunder. The Guarantor irrevocably waives any objection,
including any objection to the laying of venue based on the grounds of
forum non conveniens, which it may now or hereafter have to the bringing of
any action or proceeding with respect to this Securities Pledge Agreement.
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IN WITNESS WHEREOF the Guarantor has caused this Securities Pledge
Agreement to be executed by its duly authorized officers on this ____ day of
June, 2004.
XXXXXXX XXXXX INTERNATIONAL
INSURANCE BROKERS LTD.
By: /s/ Xxxx Xxxxxxxx
-------------------------------
Name:
Title:
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SCHEDULE "A"
SECURITIES
Number of
Issuer Class of Securities Securities Certificate Number
Addison York Insurance
Brokers Ltd.
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