THIS PLEDGE
AGREEMENT (this “Agreement”) is made as of the 17th
day of July, 2009, by and between TRUSTWAY INSURANCE AGENCIES,
LLC, a Georgia limited liability company (the
“Pledgor”) and WACHOVIA BANK, NATIONAL
ASSOCIATION (the “Bank”). Unless otherwise defined
herein or if the context clearly requires to the contrary, any
capitalized term used herein but not defined shall have the meaning
ascribed to such term in that certain that certain Guaranty of
Payment dated as of even date herewith among Pledgor and Bank (as
amended, the “Guaranty”) guaranteeing the obligations
of AssuranceAmerica Corporation, a Nevada corporation
(“Borrower”) pursuant to that certain Loan Agreement
between Borrower and Bank (as amended from time to time, the
“Loan Agreement”).
In consideration
of the mutual covenants and agreements contained in this Agreement
and other good and valuable consideration, the receipt and adequacy
of which is hereby acknowledged, Pledgor hereby agrees with Bank as
follows:
SECTION 1.
Pledge . As collateral security for payment in full of the
Guaranteed Obligations, Pledgor hereby pledges, hypothecates,
collaterally assigns and delivers unto Bank, and grants to Bank a
lien on, upon, and in all of the following: (a) the
securities, investment properties and general intangibles listed on
Exhibit A attached hereto (and as supplemented from time to
time in connection with a Permitted Acquisition (as defined in the
Loan Agreement)), the proceeds thereof and any earnings thereon,
and (b) any cash, options, instruments, shares or securities,
dividends, distributions, rights or other property at any time and
from time to time receivable or otherwise distributable in respect
of, in exchange for, or in substitution of, any and all such
securities described in clause (a), together with the proceeds
thereof (all of the foregoing being hereinafter collectively called
the “Pledged Collateral”). Upon the execution hereof,
(i) any securities, investment properties and general
intangibles now or hereafter included in the Pledged Collateral
(hereinafter called the “Pledged Securities”) shall be
accompanied by duly executed transfer powers, as applicable, in
blank and by such other instruments or documents as Bank or its
counsel may reasonably request, and (ii) all other property
comprising part of the Pledged Collateral shall be delivered to
Bank and accompanied by proper instruments of assignment duly
executed by Pledgor and by such other instruments or documents as
Bank or its counsel may reasonably request. At any time after an
Event of Default, Bank, at its option, may have any and all Pledged
Securities registered in its name or that of its nominee, and
Pledgor hereby covenants that, upon Bank’s request, Pledgor
will cause the issuer of the Pledged Securities to effect such
registration. Each schedule so delivered shall supersede any prior
schedules so delivered.
TO HAVE AND TO
HOLD the Pledged Collateral, together with all rights, titles,
interests, powers, privileges and references pertaining or
incidental thereto, unto Bank, its successors and assigns, forever,
subject, however, to the terms, covenants and conditions
hereinafter set forth.
SECTION 2.
Guaranteed Obligations Secured . This Agreement is made, and
the security interest created hereby is granted to Bank, to secure
payment and performance in full of the Guaranteed
Obligations.
SECTION 3.
Representations and Warranties . Pledgor hereby represents
and warrants that, except for the lien granted to Bank and other
liens permitted by the terms of Section 5.3 of the Loan
Agreement, Pledgor is the legal and equitable owner of the Pledged
Collateral, holds the same free and clear of all liens, and will
make no voluntary assignment, pledge, mortgage, hypothecation or
transfer of the Pledged Collateral during the term of this
Agreement; that Pledgor has good right and legal
authority
to pledge the
Pledged Collateral in the manner hereby done or contemplated and
will defend its title thereto against the claims of all persons
whomsoever and that no consent or approval of any Governmental
Authority, or of any securities exchange, was or is necessary to
the validity of such pledge which has not been obtained; and that
the pledge of the Pledged Collateral is effective to vest in Bank
the rights of Pledgor in the Pledged Collateral as set forth
herein.
SECTION 4. No
Options or Rights . Pledgor agrees that, until the Guaranteed
Obligations (other than Cash Management Guaranteed Obligations that
continue after the termination of the Loan Facility) have been
satisfied in full, no options or rights in respect of the Pledged
Collateral shall be granted by Pledgor without the prior approval
of Bank.
SECTION 5.
Voting Rights; Distributions; Etc.
(a) So long
as no Event of Default shall have occurred:
(i) Pledgor shall
be entitled to exercise any and all voting and/or consensual rights
and powers accruing to an owner of the Pledged Securities or any
part thereof for any purpose not inconsistent with the terms of
this Agreement or any Loan Document; provided ,
however , that Pledgor shall not exercise, or refrain from
exercising, any such right or power if any such action would have a
material adverse effect on the value of such Pledged Securities or
any part thereof or on the rights and interests of Bank hereunder
with respect to the Pledged Securities;
(ii) Pledgor shall
be entitled to retain and use any and all cash distributions paid
on Pledged Securities, but any and all stock and/or liquidating
distributions, other distributions in property, return of capital
or other distributions made on or in respect of Pledged Securities,
whether resulting from a subdivision, combination or
reclassification of outstanding capital stock of any corporation
the capital stock of which is pledged hereunder or received in
exchange for Pledged Securities or any part thereof or as a result
of any merger, consolidation, acquisition or other exchange of
assets or on the liquidation, whether voluntary or involuntary, of
any issuer of the Pledged Securities, or otherwise, shall be and
become part of the Pledged Collateral pledged hereunder and, if
received by Pledgor, shall forthwith be delivered to Bank to be
held as collateral subject to the terms of this Agreement;
and
(iii) Bank shall
execute and deliver to Pledgor, or cause to be executed and
delivered to Pledgor, as appropriate, all such proxies, powers of
attorney, distribution orders and other instruments as Pledgor may
reasonably request for the purpose of enabling Pledgor to exercise
the voting and/or consensual rights and powers which Pledgor is
entitled to exercise pursuant to Subparagraph (a)(i) above and/or
to receive the distributions which Pledgor is authorized to retain
pursuant to Subparagraph (a)(ii) above.
(b) Upon
(i) the occurrence and during the continuance of an Event of
Default and (ii) five (5) days prior written notice to
the Pledgor, all rights of Pledgor to exercise the voting and/or
consensual rights and powers which Pledgor is entitled to exercise
pursuant to Subparagraph (a)(i) above and/or to receive the
distributions which Pledgor is authorized to receive and retain
pursuant to Subparagraph (a)(ii) above shall cease, and all such
rights thereupon shall become vested in Bank, which shall have the
sole and exclusive right and authority to exercise such voting
and/or consensual rights and powers which Pledgor shall otherwise
be entitled to exercise pursuant to Subparagraph (a)(i) above
and/or to receive and retain the distributions which Pledgor shall
otherwise be authorized to retain pursuant to Subparagraph (a)(ii)
above. Any and all money and other property paid over to or
received by Bank pursuant to the provisions of this Paragraph
(b) shall be retained by Bank as additional collateral
hereunder and shall be applied in accordance with the provisions of
Section 9 hereof.
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SECTION 6.
Remedies upon Default . If an Event of Default shall have
occurred, Bank may continue to hold the Pledged Collateral for its
own account and may, with prior notice to Pledgor, sell, assign,
transfer, endorse and deliver the whole or, from time to time, any
part of the Pledged Collateral at public or private sale or on any
securities exchange, for cash, upon credit or for other property,
for immediate or future delivery, and for such price or prices and
on such terms as Bank, in its sole discretion, shall deem
appropriate. Bank shall be authorized at any 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 Pledged Collateral for their own account in
compliance with the Securities Act of 1933, as amended, and upon
consummation of any such sale, Bank shall have the right to assign,
transfer, endorse and deliver to the purchaser or purchasers
thereof the Pledged Collateral so sold. Each such purchaser at any
such sale shall hold the property sold absolutely free from any
claim or right on the part of Pledgor, and Pledgor hereby waives
(to the extent permitted by law) all rights of redemption, stay
and/or appraisal which Pledgor now has or may at any time in the
future have under any rule of law or statute now existing or
hereafter enacted. Bank shall give Pledgor ten
(10) days’ written notice (which Pledgor agrees is
reasonable notification within the meaning of Section 9-504(3)
of the Uniform Commercial Code) of Bank’s intention to make
any such sale. Such notice, in case of public sale, shall state the
time and place for such sale, and, in the case of sale on a
securities exchange, shall state the exchange at which such sale is
to be made and the day on which the Pledged Collateral, or portion
thereof, will first be offered for sale at such exchange. Any such
public sale shall be held at such time or times within ordinary
business hours and at such place or places at the Bank may fix and
shall state in the notice or publication (if any) of such sale. At
any such sale, the Pledged Collateral, or portion thereof to be
sold, may be sold in one lot as an entirety or in separate parcels,
as Bank may (in its sole and absolute discretion) determine. Bank
shall not be obligated to make any sale of the Pledged Collateral
if it shall determine not to do so, regardless of the fact that
notice of sale of the Pledged Collateral may have been given. Bank
may, without notice or publication, adjourn any public or private
sale or cause the same to be adjourned from time to time by
announcement at the time and place fixed for sale, and such sale
may, without further notice, be made at the time and place to which
the same was so adjourned. In case sale of all or any part of the
Pledged Collateral is made on credit or for future delivery, the
Pledged Collateral so sold may be retained by Bank until the sale
price is paid by the purchaser or purchasers thereof, but Bank
shall not incur any liability in case any such purchaser or
purchasers shall fail to take up and pay for the Pledged Collateral
so sold and, in case of any such failure, such Pledged Collateral
may be sold again upon like notice. At
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