PNCBANK
Amended and Restated Pledge Agreement
(Stocks, Bonds and Commercial Paper)
THIS AMENDED AND RESTATED PLEDGE AGREEMENT, dated as of this 15th day of
November, 1996, is made by ASSOCIATED INVESTMENTS, INC., a Delaware corporation
(the "Pledgor"), with an address at 000 Xxxxxxxx Xxxxxx, Xxxxx 000, Xxxxxxxxxx,
XX 00000, in favor of PNC BANK, NATIONAL ASSOCIATION (the "Secured Party"), with
an address at 0000 Xxxxxx Xxxxxx, Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000.
1. Pledge. In order to induce the Secured Party to extend the Obligations
(as defined below), the Pledgor hereby grants a security interest in and pledges
to the Secured Party all of the Pledgor's right, title and interest in and to
the collateral described in Exhibit A attached hereto and made a part hereof,
whether now owned or hereafter acquired, together with all additions,
substitutions, replacements and proceeds and all income, interest, dividends and
other distributions thereon (the "Collateral"). If the Collateral includes
certificated securities, documents or instruments, such certificates are
herewith delivered to the Secured Party accompanied by duly executed blank stock
or bond powers or assignments as applicable. The Pledgor hereby authorizes the
transfer of possession of all certificates, instruments, documents and other
evidence of the Collateral to the Secured Party.
2. Obligations Secured. The Collateral secures payment to the Secured Party
of all loans, advances, debts, liabilities, obligations, covenants and duties
owing to the Secured Party from the Pledgor, of any kind or nature, present or
future, whether or not evidenced by any note, guaranty or other instrument,
whether arising under any agreement, instrument or document, whether or not for
the payment of money, whether arising by reason of an extension of credit,
opening of a letter of credit, loan or guarantee or in any other manner, whether
arising out of overdrafts on deposit or other accounts or electronic funds
transfers (whether through automatic clearing houses or otherwise) or out of the
Secured Party's non- receipt of or inability to collect funds or otherwise not
being made whole in connection with depository transfer check or other similar
arrangements, whether direct or indirect (including those acquired by assignment
or participation), absolute or contingent, joint or several, due or to become
due, now existing or hereafter arising, and any amendments, extensions, renewals
or increases, and all costs and expenses of the Secured Party incurred in the
documentation, negotiation, modification, enforcement, collection or otherwise
in connection with any of the foregoing, including reasonable attorneys' fees
and expenses (collectively, the "Obligations").
3. Representations and Warranties. The Pledgor represents and warrants to
the Secured Party as follows:
3.1. There are no restrictions on the pledge or transfer of any of the
Collateral, other than restrictions referenced on the face of any certificates
evidencing the Collateral.
3.2. The Pledgor is the legal owner of the Collateral, which is
registered in the name of the Pledgor, the Custodian (as hereinafter defined) or
a nominee.
3.3. The Collateral is free and clear of any security interests,
pledges, liens, encumbrances, charges, agreements, claims or other arrangements
or restrictions of any kind, except as referenced in Section 3.1 above; and the
Pledgor will not incur, create, assume or permit to exist any pledge, security
interest, lien, charge or other encumbrance of any nature whatsoever on any of
the Collateral or assign, pledge or otherwise encumber any right to receive
income from the Collateral.
3.4. The Pledgor has the right to transfer the Collateral free of any
encumbrances and the Pledgor will defend the Pledgor's title to the Collateral
against the claims of all persons, and any registration with, or consent or
approval of, or other action by, any federal, state or other governmental
authority or regulatory body which was or is necessary for the validity of the
pledge of and grant of the security interest in the Collateral has been
obtained.
3.5. The pledge of and grant of the security interest in the
Collateral is effective to vest in the Secured Party a valid and perfected first
priority security interest, superior to the rights of any other person, in and
to the Collateral as set forth herein.
4. Covenants.
4.1. Unless otherwise agreed in writing between the Pledgor and the
Secured Party, the Pledgor agrees to maintain at all times Collateral having a
minimum market value equal to at least one hundred fifty-four percent (154%) of
the outstanding amount of the Obligations, and if such minimum market value is
not maintained at any time the Pledgor agrees to either (x) provide additional
shares of Tele-Communications, Inc. Class A common stock (or such other
publically traded stock acceptable to the Bank in its sole discretion) to the
Secured Party, or (y) repay a portion of the Obligations, in each case within
forty-eight (48) hours of the Secured Party's request and in an amount necessary
to cause the market value of the Collateral to be equal to at least one hundred
fifty-four percent (154%) of the outstanding amount of the Obligations. In
connection with the delivery to the Secured Party of additional shares pursuant
to this Section (which additional shares will be subject to this Pledge
Agreement and constitute a part of the Collateral), Pledgor agrees to also
execute and deliver to the Secured Party an Amendment to Exhibit A of this
Pledge Agreement describing such additional shares and duly executed blank stock
powers, each in form and content satisfactory to the Secured Party.
4.2. If all or part of the Collateral constitutes "margin stock"
within the meaning of Regulation U of the Federal Reserve Board, the Pledgor
agrees to execute and deliver Form U-1 to the Secured Party and, unless
otherwise agreed in writing between the Pledgor and the Secured Party, no part
of the proceeds of the Obligations may be used to purchase or carry margin
stock.
5. Default.
5.1. If any of the following occur (each an "Event of Default"): (i)
any Event of Default (as defined in any of the Obligations), (ii) any default
under any of the Obligations that does not have a defined set of "Events of
Default" and the lapse of any notice or cure period provided in such Obligations
with respect to such default, (iii) demand by the Secured Party under any of the
Obligations that have a demand feature, (iv) the failure by the Pledgor to
perform any of its obligations hereunder, (v) the falsity, inaccuracy or
material breach by the Pledgor of any written warranty, representation or
statement made or furnished to the Secured Party by or on behalf of the Pledgor,
(vi) the failure of the Secured Party to have a perfected first priority
security interest in the Collateral, or (vii) the termination or breach of the
notification and consent agreement referred to in Section 8 below, then the
Secured Party is authorized in its discretion to declare any or all of the
Obligations to be immediately due and payable without demand or notice, which
are expressly waived, and may exercise any one or more of the rights and
remedies granted pursuant to this Pledge Agreement or given to a secured party
under the Uniform Commercial Code of the applicable state, as it may be amended
from time to time, or otherwise at law or in equity, including the right to sell
or otherwise dispose of the Collateral.
5.2. (a) At any bona fide public sale the Secured Party shall be free
to purchase all or any part of the Collateral. Any such sale may be on cash or
credit. The Secured Party shall be authorized at any such sale (if it deems it
advisable to do so) to restrict the prospective bidders or purchasers to persons
who will represent and agree that they are purchasing the Collateral for their
own account in compliance with Regulation D of the
Securities Act of 1933 or any other applicable exemption available under such
Act. The Secured Party will not be obligated to make any sale if it determines
not to do so, regardless of the fact that notice of the sale may have been
given. The Secured Party may adjourn any sale and sell at the time and place to
which the sale is adjourned. If the Collateral is customarily sold on a
recognized market and threatens to decline speedily in value, the Secured Party
may sell such Collateral at any time without giving prior notice to the Pledgor.
Whenever notice is otherwise required by law to be sent by the Secured Party to
the Pledgor of any sale or other disposition of the Collateral, five (5) days
written notice sent to the Pledgor at the notice address specified below will be
reasonable.
(b) The Pledgor recognizes that the Secured Party may be unable to
effect or cause to be effected a public sale of the Collateral by reason of
certain prohibitions contained in the Securities Act of 1933, as amended (the
"Act"), so that the Secured Party may be compelled to resort to one or more
private sales to a restricted group of purchasers who will be obligated to
agree, among other things, to acquire the Collateral for their own account, for
investment and without a view to the distribution or resale thereof. The Pledgor
understands that private sales so made may be at prices and on other terms less
favorable to the seller than if the Collateral were sold at public sales, and
agrees that the Secured Party has no obligation to delay or agree to delay the
sale of any of the Collateral for the period of time necessary to permit the
issuer of the securities which are part of the Collateral (even if the issuer
would agree), to register such securities for sale under the Act. The Pledgor
agrees that private sales made under the foregoing circumstances shall be deemed
to have been made in a commercially reasonable manner.
5.3. The net proceeds arising from the disposition of the Collateral after
deducting reasonable expenses incurred by the Secured Party will be applied to
the Obligations in the order determined by the Secured Party. If any excess
remains after the discharge of all of the Obligations, the same will be paid to
the Pledgor. If after exhausting all of the Collateral there is a deficiency,
the Pledgor will be liable therefor to the Secured Party; provided, however,
that nothing contained herein will obligate the Secured Party to proceed against
any other party obligated under the Obligations or against any other collateral
for the Obligations prior to proceeding against the Collateral.
5.4. If any demand is made at any time upon the Secured Party for the
repayment or recovery of any amount received by it in payment or on account of
any of the Obligations from the disposition of the Collateral and if the Secured
Party repays all or any part of such amount, the Pledgor will be and remain
liable for the amounts so repaid or recovered to the same extent as if never
originally received by the Secured Party.
6. Voting Rights and Transfer. Prior to the occurrence of an Event of
Default, the Pledgor will have the right to exercise all voting rights with
respect to the Collateral. At any time after the occurrence of an Event of
Default, the Secured Party may transfer any or all of the Collateral into its
name or that of its nominee and may exercise all voting rights with respect to
the Collateral, but no such transfer shall constitute a taking of such
Collateral in satisfaction of any or all of the Obligations unless the Secured
Party expressly so indicates by written notice to the Pledgor.
7. Dividends, Interest and Premiums. The Pledgor will have the right to
receive all cash dividends, interest and premiums declared and paid on the
Collateral prior to the occurrence of any Event of Default. In the event any
additional shares are issued to the Pledgor as a stock dividend or in lieu of
interest on any of the Collateral, as a result of any split of any of the
Collateral, by reclassification or otherwise, any certificates evidencing any
such additional shares will be immediately delivered to the Secured Party and
such shares will be subject to this Pledge Agreement and a part of the
Collateral to the same extent as the original Collateral. At any time after the
occurrence of an Event of Default, the Secured Party shall be entitled to
receive all cash or stock dividends, interest and premiums declared or paid on
the Collateral, all of which shall be subject to the Secured Party's rights
under Section 5 above.
8. Uncertificated Securities. If the Collateral includes uncertificated
securities, then the Pledgor agrees to cause the financial intermediary on whose
books and records the ownership interest of the Pledgor in the Collateral
appears (the "Custodian") to execute and deliver a notification and consent
agreement satisfactory to the Secured Party in order to perfect and protect the
Secured Party's security interest in the Collateral.
9. Further Assurances. At any time and from time to time, upon demand of
the Secured Party, the Pledgor will give, execute, file and record any notice,
financing statement, continuation statement, instrument, document or agreement
that the Secured Party may consider necessary or desirable to create, preserve,
continue, perfect or validate any security interest granted hereunder or to
enable the Secured Party to exercise or enforce its rights hereunder with
respect to such security interest. Without limiting the generality of the
foregoing, the Pledgor hereby irrevocably appoints the Secured Party as the
Pledgor's attorney-in-fact to do all acts and things in the Pledgor's name that
the Secured Party may deem necessary or desirable. The Secured Party is
authorized to file financing statements, continuation statements and other
documents under the Uniform Commercial Code relating to the Collateral without
the Pledgor's signature, naming the Pledgor as debtor and the Secured Party as
secured party.
10. Notices. All notices, demands, requests, consents, approvals and other
communications required or permitted hereunder must be in writing and will be
effective upon receipt if delivered personally to the Pledgor or the Secured
Party, or if sent by facsimile transmission with confirmation of delivery, or by
nationally recognized overnight courier service, to the address set forth above
or to such other address as either the Pledgor or the Secured Party may give to
the other in writing for such purpose.
11. Preservation of Rights. No delay or omission on the Secured Party's
part to exercise any right or power arising hereunder will impair any such right
or power or be considered a waiver of any such right or power, nor will the
Secured Party's action or inaction impair any such right or power. The Secured
Party's rights and remedies hereunder are cumulative and not exclusive of any
other rights or remedies which the Secured Party may have under other
agreements, at law or in equity.
12. Illegality. In case any one or more of the provisions contained in
this Pledge Agreement should be invalid, illegal or unenforceable in any
respect, the validity, legality and enforceability of the remaining provisions
contained herein shall not in any way be affected or impaired thereby.
13. Changes in Writing. No modification, amendment or waiver of any
provision of this Pledge Agreement nor consent to any departure by the Pledgor
therefrom will be effective unless made in a writing signed by the Secured
Party, and then such waiver or consent shall be effective only in the specific
instance and for the purpose for which given. No notice to or demand on the
Pledgor in any case will entitle the Pledgor to any other or further notice or
demand in the same, similar or other circumstance.
14. Entire Agreement. This Pledge Agreement (including the documents and
instruments referred to herein) constitutes the entire agreement and supersedes
all other prior agreements and understandings, both written and oral, between
the Pledgor and the Secured Party with respect to the subject matter hereof.
15. Successors and Assigns. This Pledge Agreement will be binding upon and
inure to the benefit of the Pledgor and the Secured Party and their respective
heirs, executors, administrators, successors and assigns; provided, however,
that the Pledgor may not assign this Pledge Agreement in whole or in part
without the Secured Party's prior written consent and the Secured Party at any
time may assign this Pledge Agreement in whole or in part.
16. Interpretation. In this Pledge Agreement, unless the Secured
Party and the Pledgor otherwise agree in writing, the singular includes the
plural and the plural the singular; references to statutes are to be construed
as including all statutory provisions consolidating, amending or replacing
the statute referred to; the word "or" shall be deemed to include "and/or",
the words "including", "includes" and "include" shall be deemed to be
followed by the words "without limitation." Section headings in this Pledge
Agreement are included for convenience of reference only and shall not
constitute a part of this Pledge Agreement for any other purpose. If this
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Pledge Agreement is executed by more than one party as Pledgor, the obligations
of such persons or entities will be joint and several.
17. Indemnity. The Pledgor agrees to indemnify each of the Secured Party,
its directors, officers and employees and each legal entity, if any, who
controls the Secured Party (the "Indemnified Parties") and to hold each
Indemnified Party harmless from and against any and all claims, damages, losses,
liabilities and expenses (including all reasonable fees of counsel with whom any
Indemnified Party may consult and all reasonable expenses of litigation or
preparation therefor) which any Indemnified Party may incur or which may be
asserted against any Indemnified Party as a result of the execution of or
performance under this Pledge Agreement; provided, however, that the foregoing
indemnity agreement shall not apply to claims, damages, losses, liabilities and
expenses solely attributable to an Indemnified Party's gross negligence or
willful misconduct. The indemnity agreement contained in this Section shall
survive the termination of this Pledge Agreement. The Pledgor may participate at
its expense in the defense of any such claim.
18. Governing Law and Jurisdiction. This Pledge Agreement has been
delivered to and accepted by the Secured Party and will be deemed to be made in
the State where the Secured Party's office indicated above is located. THIS
PLEDGE AGREEMENT WILL BE INTERPRETED AND THE RIGHTS AND LIABILITIES OF THE
PLEDGOR AND THE SECURED PARTY DETERMINED IN ACCORDANCE WITH THE LAWS OF THE
STATE WHERE THE SECURED PARTY'S OFFICE INDICATED ABOVE IS LOCATED, EXCLUDING ITS
CONFLICT OF LAWS RULES. The Pledgor hereby irrevocably consents to the exclusive
jurisdiction of any state or federal court for the county or judicial district
where the Secured Party's office indicated above is located, and consents that
all service of process be sent by nationally recognized overnight courier
service directed to the Pledgor at the Pledgor's address set forth herein and
service so made will be deemed to be completed on the business day after deposit
with such courier; provided that nothing contained in this Pledge Agreement will
prevent the Secured Party from bringing any action, enforcing any award or
judgment or exercising any rights against the Pledgor individually, against any
security or against any property of the Pledgor within any other county, state
or other foreign or domestic jurisdiction. The Pledgor acknowledges and agrees
that the venue provided above is the most convenient forum for both the Secured
Party and the Pledgor. The Pledgor waives any objection to venue and any
objection based on a more convenient forum in any action instituted under this
Pledge Agreement.
19. Amendment and Restatement. This Pledge Agreement amends and restates,
and is in substitution for, that certain Pledge Agreement dated as of February
15, 1995, executed by the Pledgor in favor of the Secured Party (the "Original
Pledge Agreement"). However, nothing herein is intended or should be construed
to impair the lien priority granted to the Bank under the Original Pledge
Agreement.
20. WAIVER OF JURY TRIAL. THE PLEDGOR IRREVOCABLY WAIVES ANY AND ALL RIGHT
THE PLEDGOR MAY HAVE TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR CLAIM OF
ANY NATURE RELATING TO THIS PLEDGE AGREEMENT, ANY DOCUMENTS EXECUTED IN
CONNECTION WITH THIS PLEDGE AGREEMENT OR ANY TRANSACTION CONTEMPLATED IN ANY OF
SUCH DOCUMENTS. THE PLEDGOR ACKNOWLEDGES THAT THE FOREGOING WAIVER IS KNOWING
AND VOLUNTARY.
The Pledgor acknowledges that it has read and understood all the provisions of
this Pledge Agreement, including the waiver of jury trial, and has been advised
by counsel as necessary or appropriate.
WITNESS the due execution hereof as a document under seal, as of the date first
written above.
[CORPORATE SEAL] ASSOCIATED INVESTMENTS, INC.
Attest:______________________________ By: /s/ Xxxxx X. Xxxxxxx
Print Name:__________________________ Print Name: Xxxxx X. Xxxxxxx
Title:_______________________________ Title: Assistant Secretary
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EXHIBIT A TO AMENDED AND RESTATED PLEDGE AGREEMENT
(CERTIFICATED SECURITIES)
The specific assets listed below are pledged as collateral and are restricted
from trading and withdrawals. The Secured Party's written approval is required
prior to any trading or withdrawals of such assets.
Quantity Description of Securities Certificate Number
-------- ------------------------- ------------------
2,079,996 Tele-Communications, Inc. TA 08767
Class A Common Stock
500,000 Tele-Communications, Inc. TA 08775
Class A Common Stock
39,988 Tele-Communications, Inc. TA 08800
Class A Common Stock
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