Exhibit 10.17.5
AMENDED AND RESTATED PLEDGE AGREEMENT
THIS AMENDED AND RESTATED PLEDGE AGREEMENT (this "Pledge Agreement"),
dated as of October 22, 2003, is by and among the parties identified as
"PLEDGORS" on the signature pages hereto and such other parties as may become
Pledgors hereunder after the date hereof (individually a "Pledgor", and
collectively the "Pledgors") and BANK OF AMERICA, N.A., as collateral agent (in
such capacity, the "Collateral Agent") for the holders of the Secured
Obligations referenced below.
W I T N E S S E T H
WHEREAS, a revolving credit facility (the "Existing Credit Facility")
was established in favor of AMERIGROUP Corporation, a Delaware corporation (the
"Borrower"), pursuant to the terms of that credit agreement dated as of December
14, 2001 (as amended or modified through the Closing Date, the "Existing Credit
Agreement") among the Borrower, certain of its subsidiaries and affiliates
identified therein, as guarantors, the lenders identified therein and Bank of
America, N.A., as administrative agent thereunder; and
WHEREAS, the Lenders have agreed to replace, refinance and increase the
Existing Credit Facility pursuant to that Amended and Restated Credit Agreement
dated as of the date hereof (as amended, modified, increased, extended, renewed
or replaced, the "Credit Agreement") among the Borrower, the Guarantors
identified therein, the Lenders party thereto and Bank of America, N.A., as
Administrative Agent;
WHEREAS, this Pledge Agreement is required under the terms of the
Credit Agreement;
NOW, THEREFORE, in consideration of these premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. Definitions. Capitalized terms used and not otherwise defined
herein shall have the meanings provided in the Credit Agreement. In addition,
the following terms, which are defined in the UCC as in effect in the State of
New York on the date hereof, are used herein as so defined: Accession, Financial
Asset, Proceeds and Security. As used herein:
"Pledged Collateral" has the meaning provided in Section 2
hereof.
"Pledged Shares" has the meaning provided in Section 2 hereof.
"Secured Obligations" means, without duplication, (i) all
advances to, and debts, liabilities, obligations, covenants and duties
of, any Credit Party arising under any Credit Document or otherwise
with respect to any Loan or Letter of Credit, whether direct or
indirect (including those acquired by assumption), absolute or
contingent, due or to become due, now existing or hereafter arising and
including interest and fees that accrue after the commencement by or
against any Credit Party of any proceeding under any Debtor Relief Laws
naming such Persons as the debtor in such proceeding, regardless of
whether such interest and fees are allowed claims in such proceeding,
(ii) all obligations under any Swap Contract of any Credit Party to
which a Lender or any Affiliate of a
Lender is a party and (iii) all costs and expenses incurred in
connection with enforcement and collection of the Secured Obligations,
including Attorney Costs.
"UCC" means the Uniform Commercial Code of the State of New
York or its equivalent in other applicable jurisdictions, as in effect
from time to time (unless otherwise noted).
2. Pledge and Grant of Security Interest. To secure the prompt
payment and performance in full when due, whether by lapse of time,
acceleration, mandatory prepayment or otherwise, of the Secured Obligations,
each Pledgor hereby grants, pledges and assigns to the Collateral Agent, for the
benefit of the holders of the Secured Obligations, a continuing security
interest in, and a right to set-off against, any and all right, title and
interest of such Pledgor in and to the following, whether now owned or existing
or owned, acquired, or arising hereafter (collectively, the "Pledged
Collateral"):
(a) Pledged Shares. (i) One hundred percent (100%) (or,
if less, the full amount owned by such Pledgor) of the issued and
outstanding Capital Stock owned by such Pledgor of each Domestic
Subsidiary set forth on Schedule 2(a) attached hereto and (ii)
sixty-five percent (65%) (or, if less, the full amount owned by such
Pledgor) of the issued and outstanding shares of Capital Stock entitled
to vote (within the meaning of Treas. Reg. Section 1.956-2(c)(2))
("Voting Equity") and one hundred percent (100%) (or, if less, the full
amount owned by such Pledgor) of the issued and outstanding Capital
Stock not entitled to vote (within the meaning of Treas. Reg. Section
1.956-2(c)(2)) ("Non-Voting Equity") owned by such Pledgor of each
Foreign Subsidiary set forth on Schedule 2(a) attached hereto, in each
case together with the certificates (or other agreements or
instruments), if any, representing such Capital Stock, and all options
and other rights, contractual or otherwise, with respect thereto
(collectively, together with the Capital Stock described in Section
2(b) and 2(c) below, the "Pledged Shares"), including, but not limited
to, the following:
(A) all shares, securities, membership interests
or other equity interests representing a dividend on any of
the Pledged Shares, or representing a distribution or return
of capital upon or in respect of the Pledged Shares, or
resulting from a stock split, revision, reclassification or
other exchange therefor, and any subscriptions, warrants,
rights or options issued to the holder of, or otherwise in
respect of, the Pledged Shares; and
(B) without affecting the obligations of the
Pledgors under any provision prohibiting such action hereunder
or under the Credit Agreement, in the event of any
consolidation or merger involving the issuer of any Pledged
Shares and in which such issuer is not the surviving entity,
all Capital Stock of the successor entity formed by or
resulting from such consolidation or merger.
(b) Additional Shares. (i) One hundred percent (100%)
(or, if less, the full amount owned by such Pledgor) of the issued and
outstanding Capital Stock owned by such Pledgor of any Person which
hereafter becomes a Domestic Subsidiary and (ii) sixty-five percent
(65%) (or, if less, the full amount owned by such Pledgor) of the
Voting Equity and one hundred percent (100%) (or, if less, the full
amount owned by such Pledgor) of the Non-Voting Equity owned by such
Pledgor of any Person which hereafter becomes a Foreign Subsidiary,
including, without limitation, the certificates (or other agreements or
instruments) representing such Capital Stock.
(c) Proceeds. All Proceeds of any and all of the
foregoing.
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Without limiting the generality of the foregoing, it is hereby
specifically understood and agreed that a Pledgor may from time to time
hereafter deliver additional Capital Stock to the Collateral Agent as collateral
security for the Secured Obligations. Upon delivery to the Collateral Agent,
such additional Capital Stock shall be deemed to be part of the Pledged
Collateral of such Pledgor and shall be subject to the terms of this Pledge
Agreement whether or not Schedule 2(a) is amended to refer to such additional
Capital Stock.
3. Security for Secured Obligations. The security interest
created hereby in the Pledged Collateral of each Pledgor constitutes continuing
collateral security for all of the Secured Obligations.
4. Delivery of the Pledged Collateral. Each Pledgor hereby agrees
that:
(a) Each Pledgor shall deliver to the Collateral Agent
(i) simultaneously with or prior to the execution and delivery of this
Pledge Agreement, all certificates representing the Pledged Shares of
such Pledgor and (ii) promptly upon the receipt thereof by or on behalf
of a Pledgor, all other certificates and instruments constituting
Pledged Collateral of a Pledgor. Prior to delivery to the Collateral
Agent, all such certificates and instruments constituting Pledged
Collateral of a Pledgor shall be held in trust by such Pledgor for the
benefit of the Collateral Agent pursuant hereto. All such certificates
shall be delivered in suitable form for transfer by delivery or shall
be accompanied by duly executed instruments of transfer or assignment
in blank, substantially in the form provided in Schedule 4(a) attached
hereto.
(b) Additional Securities. If such Pledgor shall receive
by virtue of its being or having been the owner of any Pledged
Collateral, any (i) certificate, including without limitation, any
certificate representing a dividend or distribution in connection with
any increase or reduction of capital, reclassification, merger,
consolidation, sale of assets, combination of shares or other equity
interests, stock splits, spin-off or split-off, promissory notes or
other instruments; (ii) option or right, whether as an addition to,
substitution for, or an exchange for, any Pledged Collateral or
otherwise; (iii) dividends payable in securities; or (iv) distributions
of securities in connection with a partial or total liquidation,
dissolution or reduction of capital, capital surplus or paid-in
surplus, then such Pledgor shall receive such certificate, instrument,
option, right or distribution in trust for the benefit of the
Collateral Agent, shall segregate it from such Pledgor's other property
and shall deliver it forthwith to the Collateral Agent in the exact
form received together with any necessary endorsement and/or
appropriate stock power duly executed in blank, substantially in the
form provided in Schedule 4(a), to be held by the Collateral Agent as
Pledged Collateral and as further collateral security for the Secured
Obligations.
(c) Financing Statements. Each Pledgor shall execute and
deliver to the Collateral Agent such UCC or other applicable financing
statements as may be reasonably requested by the Collateral Agent in
order to perfect and protect the security interest created hereby in
the Pledged Collateral of such Pledgor.
5. Representations and Warranties. Each Pledgor hereby represents
and warrants to the Collateral Agent, for the benefit of the holders of the
Secured Obligations, that so long as any of the Secured Obligations remains
outstanding and until all of the commitments relating thereto have been
terminated:
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(a) Authorization of Pledged Shares. The Pledged Shares
are duly authorized and validly issued, are fully paid and
nonassessable and are not subject to the preemptive rights of any
Person.
(b) Title. Each Pledgor has good and indefeasible title
to the Pledged Collateral of such Pledgor and will at all times be the
legal and beneficial owner of such Pledged Collateral free and clear of
any Lien, other than Permitted Liens. There exists no "adverse claim"
within the meaning of Section 8-102 of the UCC with respect to the
Pledged Shares of such Pledgor.
(c) Exercising of Rights. The exercise by the Collateral
Agent of its rights and remedies hereunder will not violate any law or
governmental regulation or any material contractual restriction binding
on or affecting a Pledgor or any of its property.
(d) Pledgor's Authority. No authorization, approval or
action by, and no notice or filing with any Governmental Authority or
with the issuer of any Pledged Stock is required either (i) for the
pledge made by a Pledgor or for the granting of the security interest
by a Pledgor pursuant to this Pledge Agreement (except as have been
already obtained) or (ii) for the exercise by the Collateral Agent or
the holders of the Secured Obligations of their rights and remedies
hereunder (except (A) applicable regulatory requirements and (B) as may
be required by laws affecting the offering and sale of securities).
(e) Security Interest/Priority. This Pledge Agreement is
effective to create in favor of the Collateral Agent, for the ratable
benefit of the holders of the Secured Obligations, a legal, valid and
enforceable security interest in the Pledged Collateral, and the taking
of possession by the Collateral Agent of the certificates representing
the Pledged Shares and all other certificates and instruments
constituting Pledged Collateral will perfect and establish the first
priority of the Collateral Agent's security interest in the Pledged
Shares and, when properly perfected by filing or registration, in all
other Pledged Collateral represented by such Pledged Shares and
instruments securing the Secured Obligations. Except as set forth in
this Section 5(e), no action is necessary to perfect or otherwise
protect such security interest.
(f) Partnership and Membership Interests. Except as
previously disclosed to the Collateral Agent, none of the Pledged
Shares consisting of partnership or limited liability company interests
(i) is dealt in or traded on a securities exchange or in a securities
market, (ii) by its terms expressly provides that it is a security
governed by Article 8 of the UCC, (iii) is an investment company
security, (iv) is held in a securities account or (v) constitutes a
Security or a Financial Asset.
(g) No Other Interests. No Pledgor owns any Capital Stock
in any Subsidiary other than as set forth on Schedule 2(a) attached
hereto (other than any Capital Stock pledged to the Collateral Agent to
secure the Secured Obligations pursuant to any other pledge agreement
reasonably acceptable to the Administrative Agent).
6. Covenants. Each Pledgor hereby covenants, that so long as any
of the Secured Obligations remains outstanding and until all of the commitments
relating thereto have been terminated, such Pledgor shall:
(a) Defense of Title. Warrant and defend title to and
ownership of the Pledged Collateral of such Pledgor at its own expense
against the claims and demands of all other parties
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claiming an interest therein, keep the Pledged Collateral free from all
Liens, except for Permitted Liens, and not sell, exchange, transfer,
assign, lease or otherwise dispose of Pledged Collateral of such
Pledgor or any interest therein, except as permitted under the Credit
Agreement and the other Credit Documents.
(b) Further Assurances. Promptly execute and deliver at
its expense all further instruments and documents and take all further
action that may be necessary and desirable or that the Collateral Agent
may reasonably request in order to (i) perfect and protect the security
interest created hereby in the Pledged Collateral of such Pledgor
(including, without limitation, any and all action necessary to satisfy
the Collateral Agent that the Collateral Agent has obtained a first
priority perfected security interest in all Pledged Collateral); (ii)
enable the Collateral Agent to exercise and enforce its rights and
remedies hereunder in respect of the Pledged Collateral of such
Pledgor; and (iii) otherwise effect the purposes of this Pledge
Agreement, including, without limitation and if requested by the
Collateral Agent, delivering to the Collateral Agent irrevocable
proxies in respect of the Pledged Collateral of such Pledgor.
(c) Amendments. Not make or consent to any amendment or
other modification or waiver with respect to any of the Pledged
Collateral of such Pledgor or enter into any agreement or allow to
exist any restriction with respect to any of the Pledged Collateral of
such Pledgor other than pursuant hereto or as may be permitted under
the Credit Agreement.
(d) Compliance with Securities Laws. File all reports and
other information now or hereafter required to be filed by such Pledgor
with the United States Securities and Exchange Commission and any other
state, federal or foreign agency in connection with the ownership of
the Pledged Collateral of such Pledgor.
(e) Issuance or Acquisition of Capital Stock. Not,
without executing and delivering, or causing to be executed and
delivered, to the Collateral Agent such agreements, documents and
instruments as the Collateral Agent may reasonably require, issue or
acquire any Capital Stock consisting of an interest in a partnership or
a limited liability company that (i) is dealt in or traded on a
securities exchange or in a securities market, (ii) by its terms
expressly provides that it is a security governed by Article 8 of the
UCC, (iii) is an investment company security, (iv) is held in a
securities account or (v) constitutes a Security or a Financial Asset.
7. Advances by Holders of the Secured Obligations. On failure of
any Pledgor to perform any of the covenants and agreements contained herein, the
Collateral Agent may, at its sole option and in its sole discretion, perform the
same and in so doing may expend such sums as the Collateral Agent may reasonably
deem advisable in the performance thereof, including, without limitation, the
payment of any insurance premiums, the payment of any taxes, a payment to obtain
a release of a Lien or potential Lien, expenditures made in defending against
any adverse claim and all other expenditures which the Collateral Agent or the
holders of the Secured Obligations may make for the protection of the security
hereof or which may be compelled to make by operation of law. All such sums and
amounts so expended shall be repayable by the Pledgors on a joint and several
basis (subject to Section 25 hereof) promptly upon timely notice thereof and
demand therefor, shall constitute additional Secured Obligations and shall bear
interest from the date said amounts are expended at the Default Rate for
Revolving Loans that are Base Rate Loans. No such performance of any covenant or
agreement by the Collateral Agent or the holders of the Secured Obligations on
behalf of any Pledgor, and no such advance or expenditure therefor, shall
relieve the Pledgors of any default under the terms of this Pledge Agreement,
the other Credit Documents or any other documents relating to the Secured
Obligations. The holders of the Secured Obligations may make any payment hereby
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authorized in accordance with any xxxx, statement or estimate procured from the
appropriate public office or holder of the claim to be discharged without
inquiry into the accuracy of such xxxx, statement or estimate or into the
validity of any tax assessment, sale, forfeiture, tax lien, title or claim
except to the extent such payment is being contested in good faith by a Pledgor
in appropriate proceedings and against which adequate reserves are being
maintained in accordance with GAAP.
8. Remedies.
(a) General Remedies. Upon the occurrence of an Event of
Default and during the continuation thereof, the Collateral Agent and
the holders of the Secured Obligations shall have, in addition to the
rights and remedies provided herein, in the Credit Documents, in any
other documents relating to the Secured Obligations, or by law
(including, without limitation, levy of attachment and garnishment),
the rights and remedies of a secured party under the UCC of the
jurisdiction applicable to the affected Pledged Collateral.
(b) Sale of Pledged Collateral. Upon the occurrence of an
Event of Default and during the continuation thereof, without limiting
the generality of this Section 8 and without notice, the Collateral
Agent may, in its sole discretion, sell or otherwise dispose of or
realize upon the Pledged Collateral, or any part thereof, in one or
more parcels, at public or private sale, at any exchange or broker's
board or elsewhere, at such price or prices and on such other terms as
the Collateral Agent may deem commercially reasonable, for cash, credit
or for future delivery or otherwise in accordance with applicable law.
To the extent permitted by law, any holder of the Secured Obligations
may in such event, bid for the purchase of such securities. Each
Pledgor agrees that, to the extent notice of sale shall be required by
law and has not been waived by such Pledgor, any requirement of
reasonable notice shall be met if notice, specifying the place of any
public sale or the time after which any private sale is to be made, is
personally served on or mailed, postage prepaid, to such Pledgor, in
accordance with the notice provisions of Section 11.02 of the Credit
Agreement at least ten days before the time of such sale. The
Collateral Agent shall not be obligated to make any sale of Pledged
Collateral of such Pledgor regardless of notice of sale having been
given. The Collateral Agent 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 to
which it was so adjourned.
(c) Private Sale. Upon the occurrence of an Event of
Default and during the continuation thereof, the Pledgors recognize
that the Collateral Agent may deem it impracticable to effect a public
sale of all or any part of the Pledged Shares or any of the securities
constituting Pledged Collateral and that the Collateral Agent may,
therefore, to the extent permitted by applicable law, determine to make
one or more private sales of any such Pledged Collateral to a
restricted group of purchasers who will be obligated to agree, among
other things, to acquire such Pledged Collateral for their own account,
for investment and not with a view to the distribution or resale
thereof. Each Pledgor acknowledges that any such private sale may be at
prices and on terms less favorable to the seller than the prices and
other terms which might have been obtained at a public sale and,
notwithstanding the foregoing, agrees that such private sale shall be
deemed to have been made in a commercially reasonable manner and that
the Collateral Agent shall have no obligation to delay sale of any such
Pledged Collateral for the period of time necessary to permit the
issuer of such Pledged Collateral to register such Pledged Collateral
for public sale under the Securities Act. Each Pledgor further
acknowledges and agrees that any offer to sell such Pledged Collateral
which has been (i) publicly advertised on a bona fide basis in a
newspaper or other publication of general circulation in the financial
community of New
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York, New York (to the extent that such offer may be advertised without
prior registration under the Securities Act), or (ii) made privately in
the manner described above shall be deemed to involve a "public sale"
under the UCC, notwithstanding that such sale may not constitute a
"public offering" under the Securities Act, and the Collateral Agent
may, in such event, bid for the purchase of such Pledged Collateral.
(d) Retention of Pledged Collateral. To the extent
permitted under applicable law, in addition to the rights and remedies
hereunder, upon the occurrence of an Event of Default, the Collateral
Agent may, after providing the notices required by Sections 9-620 and
9-621 of the UCC or otherwise complying with the requirements of
applicable law of the relevant jurisdiction, accept or retain all or
any portion of the Pledged Collateral in satisfaction of the Secured
Obligations. Unless and until the Collateral Agent shall have provided
such notices, however, the Collateral Agent shall not be deemed to have
accepted or retained any Pledged Collateral in satisfaction of any
Secured Obligations for any reason.
(e) Deficiency. In the event that the proceeds of any
sale, collection or realization are insufficient to pay all amounts to
which the Collateral Agent or the holders of the Secured Obligations
are legally entitled, the Pledgors shall be jointly and severally
liable for the deficiency (subject to Section 25 hereof), together with
interest thereon at the Default Rate for Revolving Loans that are Base
Rate Loans, together with the costs of collection and Attorney Costs.
Any surplus remaining after the full payment and satisfaction of the
Secured Obligations shall be returned to the Pledgors or to whomsoever
a court of competent jurisdiction shall determine to be entitled
thereto.
(f) Acknowledgement. Notwithstanding the foregoing, the
Collateral Agent and the Lenders expressly acknowledge and agree that
any transfer of the Pledged Shares, or any exercise of control with
respect thereto, is subject to, and shall be effected solely in
compliance with, applicable regulatory requirements.
9. Rights of the Collateral Agent.
(a) Power of Attorney. In addition to other powers of
attorney contained herein, each Pledgor hereby designates and appoints
the Collateral Agent, on behalf of the holders of the Secured
Obligations, and each of its designees or agents, as attorney-in-fact
with power of substitution of such Pledgor for the purpose of carrying
out the provisions of this Pledge Agreement and taking any action and
executing any instrument deemed necessary or advisable to accomplish
the purposes hereof, which appointment is irrevocable and coupled with
an interest. Without limiting the generality of the foregoing, the
Collateral Agent shall have the authority to take any or all of the
following actions upon the occurrence and during the continuation of an
Event of Default:
(i) to demand, collect, settle, compromise and
adjust, and give discharges and releases concerning the
Pledged Collateral, all as the Collateral Agent may reasonably
deem appropriate;
(ii) to commence and prosecute any actions at any
court for the purposes of collecting any of the Pledged
Collateral and enforcing any other right in respect thereof;
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(iii) to defend, settle or compromise any action
brought and, in connection therewith, give such discharge or
release as the Collateral Agent may reasonably deem
appropriate;
(iv) to pay or discharge taxes, liens, security
interests or other encumbrances levied or placed on or
threatened against the Pledged Collateral;
(v) to direct any parties liable for any payment
in connection with any of the Pledged Collateral to make
payment of any and all monies due and to become due thereunder
directly to the Collateral Agent or as the Collateral Agent
shall direct;
(vi) to receive payment of and receipt for any
and all monies, claims, and other amounts due and to become
due at any time in respect of or arising out of any Pledged
Collateral;
(vii) to sign and endorse any drafts, assignments,
proxies, stock powers, verifications, notices and other
documents relating to the Pledged Collateral;
(viii) to execute and deliver all assignments,
conveyances, statements, financing statements, renewal
financing statements, security and pledge agreements,
affidavits, notices and other agreements, instruments and
documents that the Collateral Agent may reasonably deem
appropriate in order to perfect and maintain the security
interests and liens granted in this Pledge Agreement and in
order to fully consummate all of the transactions contemplated
therein;
(ix) to exchange any of the Pledged Collateral or
other property upon any merger, consolidation, reorganization,
recapitalization or other readjustment of the issuer thereof
and, in connection therewith, deposit any of the Pledged
Collateral with any committee, depository, transfer agent,
registrar or other designated agency upon such terms as the
Collateral Agent may reasonably deem appropriate;
(x) to vote for a shareholder resolution, or to
sign an instrument in writing, sanctioning the transfer of any
or all of the Pledged Collateral into the name of the
Collateral Agent or one or more of the holders of the Secured
Obligations or into the name of any transferee to whom the
Pledged Collateral or any part thereof may be sold pursuant to
Section 8 hereof; and
(xi) to do and perform all such other acts and
things as the Collateral Agent may reasonably deem appropriate
or convenient in connection with the Pledged Collateral.
The Collateral Agent shall be under no duty to exercise or
withhold the exercise of any of the rights, powers, privileges and
options expressly or implicitly granted to the Collateral Agent in this
Pledge Agreement, and shall not be liable for any failure to do so or
any delay in doing so. The Collateral Agent shall not be liable for any
act or omission or for any error of judgment or any mistake of fact or
law in its individual capacity or its capacity as attorney-in-fact
except acts or omissions resulting from its gross negligence or willful
misconduct. This power of attorney is conferred on the Collateral Agent
solely to protect, preserve and realize upon its security interest in
the Pledged Collateral.
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(b) Performance by the Collateral Agent of Obligations.
If any Pledgor fails to perform any agreement or obligation contained
herein, the Collateral Agent itself may perform, or cause performance
of, such agreement or obligation, and the expenses of the Collateral
Agent incurred in connection therewith shall be payable by the Pledgors
on a joint and several basis pursuant to Section 25 hereof.
(c) The Collateral Agent's Duty of Care. Other than the
exercise of reasonable care to assure the safe custody of the Pledged
Collateral while being held by the Collateral Agent hereunder, the
Collateral Agent shall have no duty or liability to preserve rights
pertaining thereto, it being understood and agreed that the Pledgors
shall be responsible for preservation of all rights in the Pledged
Collateral, and the Collateral Agent shall be relieved of all
responsibility for the Pledged Collateral upon surrendering it or
tendering the surrender of it to the Pledgors. The Collateral Agent
shall be deemed to have exercised reasonable care in the custody and
preservation of the Pledged Collateral in its possession if such
Pledged Collateral is accorded treatment substantially equal to that
which the Collateral Agent accords its own property, which shall be no
less than the treatment employed by a reasonable and prudent agent in
the industry, it being understood that the Collateral Agent shall not
have responsibility for (i) ascertaining or taking action with respect
to calls, conversions, exchanges, maturities, tenders or other matters
relating to any Pledged Collateral, whether or not the Collateral Agent
has or is deemed to have knowledge of such matters, or (ii) taking any
necessary steps to preserve rights against any parties with respect to
any of the Pledged Collateral.
(d) Voting Rights in Respect of the Pledged Collateral.
(i) So long as no Event of Default shall have
occurred and be continuing, to the extent permitted by law,
(x) each Pledgor may exercise any and all voting and other
consensual rights and powers pertaining to the Pledged
Collateral of such Pledgor or any part thereof for any purpose
not inconsistent with the terms of this Pledge Agreement or
the Credit Agreement and (y) the Collateral Agent shall
execute and deliver to each Pledgor, or cause to be executed
and delivered to each Pledgor, all proxies, powers of attorney
and other instruments as such Pledgor may reasonably request
for the purpose of enabling such Pledgor to exercise the
voting and/or consensual rights and powers it is entitled to
exercise pursuant to subclause (x) above; and
(ii) Upon the occurrence and during the
continuance of an Event of Default, following notice to the
Pledgor from the Collateral Agent, all rights of such Pledgor
to exercise the voting and other consensual rights which it
would otherwise be entitled to exercise pursuant to paragraph
(i) of this subsection shall cease and all such rights shall
thereupon become vested in the Collateral Agent which shall
then have the sole right to exercise such voting and other
consensual rights. After all Events of Default have been cured
or waived, each Pledgor shall have the right to exercise the
voting and/or consensual rights and powers that it would
otherwise be entitled to exercise pursuant to the terms of
clause (i) of this subsection (d).
(e) Dividend Rights in Respect of the Pledged Collateral.
(i) So long as no Event of Default shall have
occurred and be continuing and subject to Section 4(b) hereof,
(x) each Pledgor may receive and retain any and all
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dividends (other than stock dividends and other dividends
constituting Pledged Collateral addressed hereinabove),
interest or principal paid in respect of the Pledged
Collateral to the extent they are allowed under the Credit
Agreement and (y) the Collateral Agent shall execute and
deliver to each Pledgor, or cause to be executed and delivered
to each Pledgor, all proxies, powers of attorney and other
instruments as such Pledgor may reasonably request for the
purpose of enabling such Pledgor to receive the dividends it
is entitled to receive pursuant to subclause (x) above.
(ii) Upon the occurrence and during the
continuance of an Event of Default:
(A) all rights of a Pledgor to receive
the dividends, interest or principal payments which
it would otherwise be authorized to receive and
retain pursuant to paragraph (i) of this subsection
shall cease and all such rights shall thereupon be
vested in the Collateral Agent, which shall then have
the sole right to receive and hold as Pledged
Collateral such dividends and interest payments; and
(B) all dividends and interest payments
which are received by a Pledgor contrary to the
provisions of paragraph (A) of this subsection shall
be received in trust for the benefit of the
Collateral Agent, shall be segregated from other
property or funds of such Pledgor, and shall be
forthwith paid over to the Collateral Agent as
Pledged Collateral in the exact form received, to be
held by the Collateral Agent as Pledged Collateral
and as further collateral security for the Secured
Obligations.
(f) Release of Pledged Collateral. The Collateral Agent
may release any of the Pledged Collateral from this Pledge Agreement or
may substitute any of the Pledged Collateral for other Pledged
Collateral to the extent permitted under, and on the terms and
conditions set forth in, the Credit Agreement, and such release or
substitution shall not alter, vary or diminish in any way the force,
effect, lien, pledge or security interest of this Pledge Agreement as
to any Pledged Collateral not expressly released or substituted, and
this Pledge Agreement shall continue as a first priority lien (subject
to Permitted Liens) on all Pledged Collateral not expressly released or
substituted.
10. Rights of Required Lenders. All rights of the Collateral Agent
hereunder, if not exercised by the Collateral Agent, may be exercised by the
Required Lenders.
11. Application of Proceeds. Upon the occurrence and during the
continuation of an Event of Default, any payments in respect of the Secured
Obligations and any proceeds of the Pledged Collateral, when received by the
Collateral Agent or any of the holders of the Secured Obligations in cash or its
equivalent, will be applied in reduction of the Secured Obligations in the order
set forth in the Credit Agreement or other document relating to the Secured
Obligations, and each Pledgor irrevocably waives the right to direct the
application of such payments and proceeds and acknowledges and agrees that the
Collateral Agent shall have the continuing and exclusive right to apply and
reapply any and all such payments and proceeds in the Collateral Agent's sole
discretion, notwithstanding any entry to the contrary upon any of its books and
records.
12. Costs of Counsel. At all times hereafter, whether or not upon
the occurrence of an Event of Default, the Pledgors agree to promptly pay upon
demand any and all reasonable costs and expenses
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(including, without limitation, Attorney Costs) of the Collateral Agent and the
holders of the Secured Obligations (a) as required under Section 11.04 of the
Credit Agreement and (b) as necessary to protect the Pledged Collateral or to
exercise any rights or remedies under this Pledge Agreement or with respect to
any of the Pledged Collateral. All of the foregoing costs and expenses shall
constitute Secured Obligations hereunder.
13. Continuing Agreement.
(a) This Pledge Agreement shall be a continuing agreement
in every respect and shall remain in full force and effect so long as
any of the Secured Obligations remains outstanding and until all of the
commitments relating thereto have been terminated (other than any
obligations with respect to the indemnities and the representations and
warranties set forth in the Credit Documents). Upon such payment and
termination, this Pledge Agreement shall be automatically terminated
and the Collateral Agent and the holders of the Secured Obligations
shall, upon the request and at the expense of the Pledgors, forthwith
release all of its liens and security interests hereunder and shall
execute and deliver all UCC termination statements and/or other
documents reasonably requested by the Pledgors evidencing such
termination. Notwithstanding the foregoing, all releases and
indemnities provided hereunder shall survive termination of this Pledge
Agreement.
(b) This Pledge Agreement shall continue to be effective
or be automatically reinstated, as the case may be, if at any time
payment, in whole or in part, of any of the Secured Obligations is
rescinded or must otherwise be restored or returned by the Collateral
Agent or any holder of the Secured Obligations as a preference,
fraudulent conveyance or otherwise under any bankruptcy, insolvency or
similar law, all as though such payment had not been made; provided
that in the event payment of all or any part of the Secured Obligations
is rescinded or must be restored or returned, all reasonable costs and
expenses (including, without limitation, Attorney Costs) incurred by
the Collateral Agent or any holder of the Secured Obligations in
defending and enforcing such reinstatement shall be deemed to be
included as a part of the Secured Obligations.
14. Amendments and Waivers. This Pledge Agreement and the
provisions hereof may not be amended, waived, modified, changed, discharged or
terminated except as set forth in Section 11.01 of the Credit Agreement.
15. Successors in Interest. This Pledge Agreement shall create a
continuing security interest in the Collateral and shall be binding upon each
Pledgor, its successors and assigns, and shall inure, together with the rights
and remedies of the Collateral Agent and the holders of the Secured Obligations
hereunder, to the benefit of the Collateral Agent and the holders of the Secured
Obligations and their successors and permitted assigns; provided, however, that
none of the Pledgors may assign its rights or delegate its duties hereunder
without the prior written consent of the requisite Lenders under the Credit
Agreement. To the fullest extent permitted by law, each Pledgor hereby releases
the Collateral Agent and each holder of the Secured Obligations, and their
respective successors and assigns, from any liability for any act or omission
relating to this Pledge Agreement or the Collateral, except for any liability
arising from the gross negligence or willful misconduct of the Collateral Agent
or such holder, or their respective officers, employees or agents.
16. Notices. All notices required or permitted to be given under
this Pledge Agreement shall be given as provided in Section 11.02 of the Credit
Agreement.
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17. Counterparts. This Pledge Agreement may be executed in any
number of counterparts, each of which where so executed and delivered shall be
an original, but all of which shall constitute one and the same instrument. It
shall not be necessary in making proof of this Pledge Agreement to produce or
account for more than one such counterpart.
18. Headings. The headings of the sections and subsections hereof
are provided for convenience only and shall not in any way affect the meaning or
construction of any provision of this Pledge Agreement.
19. Governing Law; Submission to Jurisdiction; Venue.
(a) THIS PLEDGE AGREEMENT AND THE RIGHTS AND OBLIGATIONS
OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. Any
legal action or proceeding with respect to this Pledge Agreement may be
brought in the state or federal courts located in Charlotte, North
Carolina, and, by execution and delivery of this Pledge Agreement, each
Pledgor hereby irrevocably accepts for itself and in respect of its
property, generally and unconditionally, the jurisdiction of such
courts. Each Pledgor further irrevocably consents to the service of
process out of any of the aforementioned courts in any such action or
proceeding by the mailing of copies thereof by registered or certified
mail, postage prepaid, to it at the address for notices pursuant to
Section 11.02 of the Credit Agreement, such service to become effective
three days after such mailing. Nothing herein shall affect the right of
the Collateral Agent to serve process in any other manner permitted by
law or to commence legal proceedings or to otherwise proceed against
any Pledgor in any other jurisdiction.
(b) Each Pledgor hereby irrevocably waives any objection
which it may now or hereafter have to the laying of venue of any of the
aforesaid actions or proceedings arising out of or in connection with
this Pledge Agreement brought in the courts referred to in subsection
(a) hereof and hereby further irrevocably waives and agrees not to
plead or claim in any such court that any such action or proceeding
brought in any such court has been brought in an inconvenient forum.
20. Waiver of Jury Trial. TO THE EXTENT PERMITTED BY APPLICABLE
LAW, EACH OF THE PARTIES TO THIS PLEDGE AGREEMENT HEREBY IRREVOCABLY WAIVES ALL
RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF
OR RELATING TO THIS PLEDGE AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
21. Severability. If any provision of this Pledge Agreement is
determined to be illegal, invalid or unenforceable, such provision shall be
fully severable and the remaining provisions shall remain in full force and
effect and shall be construed without giving effect to the illegal, invalid or
unenforceable provisions.
22. Entirety. This Pledge Agreement, the other Credit Documents
and the other documents relating to the Secured Obligations represent the entire
agreement of the parties hereto and thereto, and supersede all prior agreements
and understandings, oral or written, if any, including any commitment letters or
correspondence relating to the Credit Documents, any other documents relating to
the Secured Obligations, or the transactions contemplated herein and therein.
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23. Survival. All representations and warranties of the Pledgors
hereunder shall survive the execution and delivery of this Pledge Agreement, the
other Credit Documents and the other documents relating to the Secured
Obligations, the delivery of the Notes and the extension of credit thereunder or
in connection therewith.
24. Other Security. To the extent that any of the Secured
Obligations are now or hereafter secured by property other than the Pledged
Collateral (including, without limitation, real and other personal property
owned by a Pledgor), or by a guarantee, endorsement or property of any other
Person, then the Collateral Agent shall have the right to proceed against such
other property, guarantee or endorsement upon the occurrence of any Event of
Default, and the Collateral Agent shall have the right, in its sole discretion,
to determine which rights, security, liens, security interests or remedies the
Collateral Agent shall at any time pursue, relinquish, subordinate, modify or
take with respect thereto, without in any way modifying or affecting any of them
or the Secured Obligations or any of the rights of the Collateral Agent or the
holders of the Secured Obligations under this Pledge Agreement, under any of the
other Credit Documents or under any other document relating to the Secured
Obligations.
25. Joint and Several Obligations of Pledgors.
(a) Subject to subsection (c) of this Section 25, each of
the Pledgors is accepting joint and several liability hereunder in
consideration of the financial accommodation to be provided by the
holders of the Secured Obligations, for the mutual benefit, directly
and indirectly, of each of the Pledgors and in consideration of the
undertakings of each of the Pledgors to accept joint and several
liability for the obligations of each of them.
(b) Subject to subsection (c) of this Section 25, each of
the Pledgors jointly and severally hereby irrevocably and
unconditionally accepts, not merely as a surety but also as a
co-debtor, joint and several liability with the other Pledgors with
respect to the payment and performance of all of the Secured
Obligations arising under this Pledge Agreement, the other Credit
Documents and any other documents relating to the Secured Obligations,
it being the intention of the parties hereto that all the Secured
Obligations shall be the joint and several obligations of each of the
Pledgors without preferences or distinction among them.
(c) Notwithstanding any provision to the contrary
contained herein, in any other of the Credit Documents or in any other
documents relating to the Secured Obligations, the obligations of each
Guarantor under the Credit Agreement and the other Credit Documents
shall be limited to an aggregate amount equal to the largest amount
that would not render such obligations subject to avoidance under
Section 548 of the Bankruptcy Code of the United States or any other
Debtor Relief Law (including any comparable provisions of any
applicable state law).
[remainder of page intentionally left blank]
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Each of the parties hereto has caused a counterpart of this Pledge
Agreement to be duly executed and delivered as of the date first above written.
PLEDGORS: AMERIGROUP CORPORATION,
a Delaware corporation
By: /s/ Xxxxxx X. Xxx
----------------------------------------
Name: Xxxxxx X. Xxx
Title: SVP, Treasurer and Asst. Secretary
PHP HOLDINGS, INC.,
a Florida corporation
By: /s/ Xxxxxxx X. Xxxxxxx
-------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: VP and Secretary
AMERIGROUP CORPORATION
PLEDGE AGREEMENT
Accepted and agreed to as of the date first above written.
BANK OF AMERICA, N.A.,
as Collateral Agent
By: /s/ Xxxxx Xxxxxx
----------------------------------------
Name: Xxxxx Xxxxxx
Title: Assistant Vice President
AMERIGROUP CORPORATION
PLEDGE AGREEMENT
