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EXHIBIT 4.9
STOCK PLEDGE AGREEMENT
THIS STOCK PLEDGE AGREEMENT is made and entered this 12th day of March,
1997 by and between KLT Telecom Inc., a Missouri corporation ("KLT") and
Xxxxxxx X. Xxxxxxxxx ("Xxxxxxxxx"), an individual with an address at 00000
Xxxxxxx Xxxx, Xx. Xxxxx, Xxxxxxxx 00000, who is the sole shareholder of Digital
Teleport, Inc., a Missouri corporation ("DTI").
RECITALS
A. Concurrently herewith, KLT and DTI have entered into that certain Stock
Purchase Agreement (the "Stock Purchase Agreement"), dated December 31, 1996,
pursuant to which KLT will purchase Three Hundred (300) shares of DTI's
preferred stock for a total purchase price of Forty Five Million Dollars
($45,000,000), and which is payable in accordance with the terms of the Stock
Purchase Agreement;
B. To induce KLT to enter into the Stock Purchase Agreement with DTI,
Xxxxxxxxx has agreed to execute that certain Guaranty Agreement (the "Guaranty
Agreement"), dated the date hereof, pursuant to which Xxxxxxxxx will guaranty
the performance of all the terms and conditions and obligations of DTI under
the Stock Purchase Agreement, including the truthfulness and accuracy of all
the representations and warranties given by DTI in Article II of the Stock
Purchase Agreement;
C. To further secure the Guaranty Agreement and to further induce KLT to
enter into the Stock Purchase Agreement, Xxxxxxxxx has agreed to enter into
this Agreement and to pledge and grant a security interest in all the shares of
common stock of DTI now or hereinafter owned by Xxxxxxxxx as security for the
obligations hereinafter specified.
NOW, THEREFORE, in consideration of the mutual covenants herein contained
and other good and valuable consideration, the parties agree as follows:
1. Security Interest/Pledge. In consideration for KLT's execution of the
Stock Purchase Agreement, and as security for the performance and observance of
all of the terms, covenants and conditions of the Stock Purchase Agreement and
the Guaranty Agreement and any other documents given in connection with the
Stock Purchase Agreement, Xxxxxxxxx hereby pledges and creates and grants to
KLT a first perfected security interest in the following described instruments:
Three Hundred (300) shares (the "Pledged Shares") of DTI common stock par
value $.01, as evidenced by certificate number 3, dated the date hereof, in the
name of Xxxxxxxxx, a copy of which is attached hereto as Exhibit A, and the
original of which is duly indorsed in blank and delivered herewith to KLT.
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(a) Stock Power. Contemporaneously with the execution of this Agreement,
the Pledged Shares shall be delivered to and held by KLT together with a blank
stock power concerning the certificate duly executed by Xxxxxxxxx, which stock
shall continue to be registered in the name of Xxxxxxxxx unless and until a
default (as defined herein) occurs.
(b) Attorney-in-Fact. Xxxxxxxxx hereby designates and appoints KLT as its
attorney-in-fact and proxy, with full power of substitution, which designation
and appointment is irrevocable and coupled with an interest, upon the
occurrence of a default, for the purpose of performing any and all acts, in the
name, place and stead of Xxxxxxxxx that are authorized by the provisions of
this Agreement.
(c) Voting. During the term of this Agreement, for so long as no default
shall have occurred, as defined herein, Xxxxxxxxx shall have the sole and
absolute right to vote the stock.
(d) Dividends and Payments. During the term of this Agreement and for so
long as no default shall have occurred, as defined herein, all dividends and
distribution payments, whether paid in cash, stock or other property, and all
other rights with respect to the stock shall be paid and/or delivered to
Xxxxxxxxx.
(e) Adjustments. If, during the term of this Agreement, any share
dividend, reclassification, readjustment, or other change is declared or made
in the capital structure of DTI, all new, substituted, and additional shares,
or other securities, issued by reason of any such change shall be held by KLT
under the terms of this Agreement in the same manner as the shares originally
pledged hereunder.
(f) Warrants and Rights. If, during the term of this Agreement,
subscription warrants or any other rights or options are issued in connection
with the Pledged Shares, Xxxxxxxxx shall immediately assign the pledged
warrants, rights, or options to KLT. If exercised by KLT, all new shares or
other securities so acquired by KLT shall be immediately assigned to Xxxxxxxxx
to be held under the terms of this Agreement in the same manner as the shares
originally pledged hereunder.
2. Representations and Warranties. Xxxxxxxxx hereby represents and
warrants to KLT that:
(a) Title, Validity and Enforceability. Xxxxxxxxx is the direct and
beneficial owner of each of the Pledged Shares and has the full power and
authority to grant to KLT the security interest in the Pledged Shares pursuant
to this Agreement. Each of the Pledged Shares has been duly and validly
issued, is fully paid and nonassessable and is owned by
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Xxxxxxxxx free and clear of any lien or encumbrance other than the security
interest created by this Agreement. This Agreement constitutes the legal,
binding obligation of Xxxxxxxxx and creates a security interest which is
enforceable against Xxxxxxxxx in all securities of DTI now owned and
hereinafter acquired.
(b) No Restrictions on Transfer. There are no restrictions upon the
transfer of the Pledged Shares, other than those which may appear on the face
or back of the certificate therefor, and that Xxxxxxxxx has the right to
transfer the Pledged Shares free of any encumbrance and without obtaining the
consents of the other shareholders of DTI.
(c) Conflicting Laws and Contracts. Neither the execution and delivery by
Xxxxxxxxx of this Agreement, the creation and perfection of the security
interest in the Pledged Shares granted hereunder, nor compliance with the terms
and provisions hereof will violate (i) any law, rule, regulation, order, writ,
judgment, injunction, decree or award binding on Xxxxxxxxx, (ii) other
provisions of any indenture, instrument or agreement to which Xxxxxxxxx or DTI
is a party or is subject, or by which he or it, or his or its property, is
bound, or (iii) DTI's articles of incorporation or bylaws, or conflict with or
constitute a default thereunder, or result in the creation or imposition of any
lien pursuant to the terms of any such indenture, instrument or agreement. No
order, consent, approval, license, authorization, or validation of, or filing
(except the filing of financing statements covering the Pledged Shares),
recording or registration with, or exemption by, any governmental or public
body or authority, or any subdivision thereof, is required to authorized, or is
required in connection with the execution, delivery and performance of, or the
legality, validity, binding effect or enforceability of, this Agreement.
(d) Disclosure. No representation or warranty by Xxxxxxxxx contained
herein or in any information, certificate or other document furnished by
Xxxxxxxxx pursuant hereto contains any untrue statement of material fact or
omits to state a material fact necessary to make such representation or
warranty not misleading in light of the circumstances under which it was made;
3. Covenants of Xxxxxxxxx. So long as this Agreement is in effect and
until such time as the obligations secured hereunder have been fully paid and
discharged, Xxxxxxxxx covenants and agrees that:
(a) Xxxxxxxxx will execute and deliver to KLT, in a form acceptable to
KLT, any instrument, document, stock certificate, stock power, financing
statement, assignment or other writing which KLT may deem necessary or
desirable to carry out the terms of this Agreement, to perfect KLT's security
interest in the Pledged Shares for the obligations to KLT, or to enable KLT to
enforce conveniently its security interest in any of the foregoing;
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(b) If subscription warrants or other rights or options are issued in
connection with the Pledged Shares, such warrants, rights and options shall be
considered additional collateral and shall be delivered to KLT immediately upon
Xxxxxxxxx acquiring an interest therein. If, with the consent of KLT, such
warrants, rights and options are exercised by Xxxxxxxxx, then all shares, or
other securities so acquired by Xxxxxxxxx shall be delivered to and held by KLT
under the terms of this Agreement in the same manner as the Pledged Shares
originally delivered and pledged hereunder;
(c) If any share dividend, reclassification, adjustment, split-up, or
other change is declared or is made in the capital structure of DTI, then all
stock, property, rights or interests of any description at any time issued or
issuable as an addition to, in substitution of, in exchange for, or with
respect to the Pledged Shares, shall be delivered to and held by KLT under the
terms of this Agreement in the same manner as the Pledged Shares originally
delivered and pledged hereunder;
(d) If any additional securities of the Company are issued to or otherwise
acquired by Xxxxxxxxx, such securities shall be delivered to and held by KLT
under the terms of this Agreement in the same manner as the Pledged Shares
originally delivered and pledged hereunder;
(e) Xxxxxxxxx will pay KLT, upon demand, the cost of collection or
enforcement (including reasonable attorneys' fees) of any collateral for
obligations to KLT, if KLT itself undertakes such collection or enforcement,
together with all charges and expenses of every kind or description (including
taxes with respect to Pledged Shares) paid or incurred by KLT under or with
respect to the obligations or any collateral therefor, or execution or levy on
such collateral, and any such charges shall be considered part of Xxxxxxxxx'x
liabilities hereunder;
(f) Xxxxxxxxx will take any and all actions reasonably necessary to defend
title to the Pledged Shares against all persons and to defend the security
interest of KLT in the Pledged Shares and the priority thereof against any lien
or encumbrance not expressly permitted hereunder.
(g) Xxxxxxxxx will not create, incur or suffer to exist any lien or
encumbrance on the Pledged Shares except the security interest created by the
Agreement.
(h) Xxxxxxxxx will not (i) permit or suffer DTI to dissolve, liquidate,
retire any of its capital stock, reduce its capital or merge or consolidate
with any other entity, or (ii) vote any of the Pledged Shares in favor of any
of the foregoing. Xxxxxxxxx will permit KLT or its nominee at any time after
the occurrence, and during the continuance, of any event of default (as defined
herein), without notice, to exercise all voting and corporate rights
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relating to the Pledged Shares, including, without limitation, exchange,
subscription or any other rights, privileges or options pertaining to any
shares of the stock pledged as Pledged Shares as if it were the absolute owner
thereof.
(i) Except as hereinafter provided, Xxxxxxxxx will not sell or otherwise
dispose of all or any part of the Pledged Shares during the term of this
Agreement. Notwithstanding the foregoing, subject to the conditions and
restrictions set forth in the Stock Purchase Agreement and that certain
Shareholders Agreement, dated February 14, 1997, by and between Xxxxxxxxx and
KLT, Xxxxxxxxx may sell any or all of the Pledged Shares to the extent but only
to the extent necessary to obtain funds to satisfy obligations Xxxxxxxxx incurs
as a result of (i) the Guaranty Agreement, or (ii) Sections 8.3 and 8.4 of the
Stock Purchase Agreement. Xxxxxxxxx may sell all of the Pledged Shares, as
long as any amounts not needed to satisfy such obligations are deposited in an
escrow satisfactory to KLT to secure any such additional obligations.
4. Default. Xxxxxxxxx shall be in "Default" under this Agreement upon
fulfillment of all of the following: (i) the failure by DTI to keep, observe
or perform any of the provisions of the Stock Purchase Agreement required to be
kept, observed or performed by DTI; (ii) compliance and fulfillment by KLT of
all conditions set forth in Section 8.4 of the Stock Purchase Agreement; (iii)
the determination by an arbitrator of a Dispute (as such term is defined in
Section 8.4 of the Stock Purchase Agreement) on behalf of KLT; and (iv) the
failure of DTI to pay the award within One Hundred and Fifty (150) days
following the arbitrator's award.
5. Remedies Upon Default. Upon an event of "Default" as defined in
Section 4 of this Agreement, KLT shall have the following rights:
(a) KLT may, in its sole and absolute discretion, cause all or any of the
Pledged Shares to be transferred into the name of KLT, or the name or names of
the nominee or nominees of KLT; and
(b) KLT may receive, and Xxxxxxxxx upon request shall assign, pay and/or
deliver to the order of KLT all dividends, interest or other distributions, in
respect of the stock, all of which shall thereafter be held by KLT as
additional collateral hereunder; and
(c) KLT, as Xxxxxxxxx'x attorney-in-fact and proxy, shall have and may
exercise on behalf of Xxxxxxxxx all rights of an owner in respect of any of the
stock then held by KLT hereunder or may, in any respect not contrary to the
provisions of this Agreement, permit such rights to be exercised by Xxxxxxxxx.
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(x) XXX may sell, subject to the requirements of any applicable Federal or
State securities laws, at a public or private sale after giving Xxxxxxxxx any
notices or notification as required by law (by giving, if any, such notice at
least five days before the event, which is the subject of said notice) and the
proceeds of sale shall be applied first to the reasonable expenses of retaking,
holding, preparing for sale, selling and the like and second, to the extent
permitted by law, to reasonable attorneys' fees and legal expenses incurred by
KLT.
Further, KLT shall avail itself all rights with respect to the Pledged
Shares which are provided for in the Uniform Commercial Code as adopted in
Missouri or other state with proper jurisdiction over the Pledged Shares or
this Agreement (hereinafter the "Code"), and shall avail itself of any and all
other remedies at law or equity which may be available to KLT with respect to
the Pledged Shares, Xxxxxxxxx and any co-signer or surety. All rights and
remedies of KLT whether granted hereunder, under the Code or otherwise are
cumulative and not alternative. The exercise, full or partial, or the
commencement of the exercise of any one right or remedy, shall not preclude the
further exercise of it or any other remedy.
6. Attorneys' Fees. All reasonable attorneys' fees and legal expenses
incurred by KLT in exercising any of its rights and remedies under this
Agreement shall become part of its reasonable expenses of retaking, holding,
preparing for sale and the like and shall become a part of the obligations and
liabilities secured hereby.
7. Waivers and Authorizations of Xxxxxxxxx. Xxxxxxxxx waives any right to
require KLT to proceed against any person, to proceed against or exhaust any
collateral, or to pursue any other remedy in KLT's power before proceeding
against the Pledged Shares as in this Agreement provided.
8. Governing Law. This Agreement shall be construed pursuant to the laws
of the State of Missouri.
9. Notices. All notices provided for by this Agreement shall be made in
writing (1) either by actual delivery or (2) by mailing of the notice in the
United States mail to the last known address of the party entitled thereto,
registered or certified mail, return receipt requested.
10. Amendment. This Agreement may be amended or altered only by the
execution of a written instrument by KLT and Xxxxxxxxx.
11. Descriptive Headings. Titles to paragraphs are for information
purposes only.
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12. Binding Effect. This Agreement is binding upon and inures to the
benefit of KLT, its successors, assigns, and transferees, and to Xxxxxxxxx and
his respective heirs, personal representatives, successors and permitted
assigns and transferees.
13. Choice of Venue. All actions or proceedings with respect to this
Agreement shall instituted only in any state or federal court sitting in
Xxxxxxx County, Missouri, and by execution and delivery of this Agreement, the
parties irrevocably and unconditionally subject to the jurisdiction (both
subject matter and personal) of each such court and irrevocably and
unconditionally waive: (a) any objection that the parties might now or
hereafter have to the venue of any such court; and (b) any claim that any
action or proceeding brought in any such court has been brought in an
inconvenient forum.
14. Facsimile Signatures. The parties hereby agree that, for purposes of
the execution of this Agreement, facsimile signatures shall constitute original
signatures.
15. Assignment. The terms and provisions of this Agreement shall be
binding upon and inure to the benefit of Xxxxxxxxx and KLT and their respective
successors and assigns, except that Xxxxxxxxx shall not have the right to
assign his rights or delegate his obligations under this Agreement or any
interest therein, without the express written consent of KLT.
16. Termination. This Agreement shall terminate thirty-six (36) months
after the Closing Date (as such term is defined in the Stock Purchase
Agreement), unless a claim has been made by KLT pursuant to Section 8.4 of the
Stock Purchase Agreement, in which event this Guaranty Agreement shall expire
after the termination of the time frames outlined in Section 8.4 of the Stock
Purchase Agreement.
17. No Disposition. Xxxxxxxxx is not authorized to sell or otherwise
dispose of the Pledged Shares, and notwithstanding any course of dealing
between Xxxxxxxxx and KLT, no authorization to sell or otherwise dispose of the
Pledged Shares shall be binding upon KLT unless such authorization is in
writing and signed by an authorized officer of KLT.
18. Survival of Representations. All representations and warranties of
Xxxxxxxxx contained in this Agreement shall survive the execution and delivery
of this Agreement.
19. Incorporation by Reference. The preamble and recitals to this
Agreement are hereby incorporated by reference and made a part hereof.
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19. Incorporation by Reference. The preamble and recitals to this
Agreement are hereby incorporated by reference and made a part hereof.
20. JURY WAIVER. THE PARTIES WAIVE TRIAL BY JURY IN ANY ACTION,
PROCEEDING OR COUNTERCLAIM BROUGHT BY ANY PARTY AGAINST THE OTHER ON ANY MATTER
ARISING OUT OF OR IN ANY WAY CONNECTED WITH THIS AGREEMENT OR THE RELATIONSHIP
OF THE PARTIES CREATED HEREUNDER.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day
and year first about written.
KLT TELECOM INC.,
a Missouri corporation
/s/ X. X. Xxxxxx
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Name: X.X. Xxxxxx
Title: President
XXXXXXX X. XXXXXXXXX
/s/ Xxxxxxx X. Xxxxxxxxx
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Name: Xxxxxxx X. Xxxxxxxxx
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EXHIBIT A
Copy of Certificate Evidencing Pledged Shares
