Exhibit 99.2
PLEDGE AGREEMENT
PLEDGE AGREEMENT, dated as of January 31, 2001, made by Xxxx.xxx, Inc.,
a Delaware corporation ("Pledgor"), in favor of AT&T Corp., a New York
corporation ("Lender").
WHEREAS, Pledgor is the beneficial owner and record holder of 100% of
the issued and outstanding shares of capital stock (the "Pledged Shares") of ML
Acquisition Corp., a Delaware corporation (the "Company");
WHEREAS, Lender and Swift Telecommunications, Inc., a New York
corporation ("Swift"), have entered into an Asset Purchase Agreement, dated
December 13, 2000 (the "Purchase Agreement");
WHEREAS, pursuant to the Purchase Agreement, Swift has issued to Lender
a promissory note in the original principal amount of $35,000,000 (the "Swift
Note"), and, pursuant to a Security Agreement (the "Swift Security Agreement")
and a Pledge Agreement (the "Swift Pledge Agreement"), granted to Lender a first
priority security interest in the assets and shares of Swift securing all of the
obligations to Lender under the Swift Note;
WHEREAS, Swift, Pledgor, the Company and Xxxxxx Xxx Xxxx have entered
into an Agreement and Plan of Merger, dated as of January 31, 2001 (the "Merger
Agreement"), contemplating the merger (the "Merger") of Swift with and into the
Company;
WHEREAS, contemporaneously herewith Pledgor is executing and delivering
to Lender an Amended and Restated Promissory Note (the "Xxxx.xxx Note"), which
will supersede and replace the Swift Note in the event that Swift merges into
Pledgor or a subsidiary of Pledgor or is acquired by Pledgor or a subsidiary of
Pledgor;
WHEREAS, as a condition precedent to the obligations of Lender under
the Purchase Agreement, including, without limitation, its acceptance of the
Swift Note and the Xxxx.xxx Note, Lender requires Pledgor to pledge, as security
for the obligations owing to Lender under the Swift Note and the Xxxx.xxx Note,
pursuant to the terms set forth herein, all of its shares of capital stock in
the Company (the "Pledged Shares") as security therefor pursuant to the terms
set forth herein;
NOW, THEREFORE, in consideration of the premises and in order to induce
Lender to consummate the transactions contemplated by the Purchase Agreement,
including, without limitation, its acceptance of the Note, and in exchange for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, Pledgor hereby agrees with Lender as follows:
1. Definitions
All capitalized terms used in this Agreement which are not otherwise
defined herein shall have the meanings ascribed to them in the Note or, if not
therein defined, Article 9 of the Uniform Commercial Code (the "Code") currently
in effect in the State of New York, as applicable.
"Note" means (i) prior to the consummation of the Merger, the Swift
Note, and (ii) upon the consummation of the Merger, the Xxxx.xxx Note.
2. Pledge
(a) As security for the prompt payment in full and performance of the
Obligations (as defined in Section 3) when due (whether at stated maturity, by
acceleration or otherwise), Pledgor hereby transfers, grants, bargains, sells,
conveys, hypothecates, pledges, sets over and delivers to Lender, its successors
and assigns, and hereby grants to Lender, its successors and assigns, a Lien and
charge upon and first priority security interest in the following, whether now
owned or hereafter created, acquired or reacquired (the "Collateral"):
(i) the Pledged Shares and any certificates representing the
Pledged Shares, and all dividends, cash, instruments, securities and other
property from time to time received, receivable or otherwise distributed in
respect of, in exchange for, or upon the conversion of any or all of the Pledged
Shares;
(ii) any and all additional shares of capital stock from time to
time acquired by Pledgor by purchase, stock dividend or otherwise;
(iii) all proceeds of any and all of the foregoing Collateral
(including, without limitation, proceeds that constitute property of the types
described above); and
(iv) all books, correspondence, credit files, records, invoices
and other papers, including, without limitation, all tapes, cards, computer runs
and other papers and documents relating to any of the foregoing in the
possession or under the control of Pledgor or any entity from time to time
acting for Pledgor or the Company.
(b) Pledgor agrees that the pledge hereunder shall continue to be
effective or shall be reinstated, as the case may be, if at any time any payment
(in whole or in part) of any of the Obligations is rescinded or must otherwise
be restored by Lender, including upon the insolvency, bankruptcy or
reorganization of the Company, all as though such payment had not been made.
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3. Security for Obligations
This Agreement and the security interest created hereby in the Pledged
Shares constitutes continuing collateral security for all of the following
obligations, whether now existing or hereafter incurred (the "Obligations"):
(a) the prompt payment by (i) Swift, as and when due and payable, of
all amounts from time to time owing by Swift in respect of the Swift Note, the
Swift Pledge Agreement and the Swift Security Agreement, in each case, as the
same may be amended from time to time (ii) Pledgor, as and when due and payable,
of all amounts from time to time owing by Pledgor in respect of this Agreement
and the Xxxx.xxx Note, in each case, as the same may be amended from time to
time, and (iii) Swift EasyLink Co., Inc., a Delaware corporation ("SECI"), as
and when due and payable, of all amounts from time to time owing by SECI in
respect of the Security Agreement entered into as of the date hereof between
SECI and Lender (collectively, the "Loan Documents"), whether for principal,
interest, costs, fees, expenses, indemnifications, or otherwise as and when the
same shall become due and payable in accordance with the terms thereof, whether
at maturity or by prepayment, acceleration, declaration of default or otherwise;
and
(b) the due performance and observance by Pledgor of all of its other
obligations from time to time existing in respect of all Loan Documents.
Without limiting the generality of the foregoing, this Agreement
secures the payment of all amounts that constitute part of the Obligations,
including, without limitation, amounts that would be owed by Company under the
Note but for the fact that they are unenforceable due to the existence of a
bankruptcy, reorganization or similar proceeding involving Company.
4. Delivery of Collateral
All certificates or instruments from time to time representing or
evidencing the Collateral shall be delivered to and held by or on behalf of
Lender pursuant hereto and shall be in suitable form for transfer by delivery,
or shall be accompanied by duly executed instruments of transfer or assignment
in blank, all in form and substance satisfactory to Lender. Lender shall have
the right, at any time in its discretion and without notice to Pledgor, to
transfer to or to register in the name of Lender or any of its nominees any or
all of the Collateral, subject only to the rights specified in Section 7(a);
provided, that notwithstanding the foregoing, until any transfer of beneficial
ownership with respect to the Collateral pursuant to any exercise of remedies
under Section 11, Pledgor shall continue to be the beneficial owner of the
Collateral. In addition, Lender shall have the right at any time to exchange
certificates or instruments representing or evidencing Collateral for
certificates or instruments of smaller or larger denominations. Pledgor will
promptly give to Lender copies of any notices or other communications received
by it with respect to the Collateral.
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5. Representations and Warranties and Covenants
Pledgor represents, warrants and covenants to Lender as follows:
(a) Pledgor is a corporation duly organized, validly existing and in
good standing under the laws of the jurisdiction of its organization and has all
requisite corporate power and lawful authority to carry on its business as it is
currently being conducted.
(b) Pledgor has all requisite corporate power and authority to execute
and deliver this Agreement and to perform fully its obligations hereunder. The
execution, delivery and performance of this Agreement by Pledgor have been duly
authorized by all necessary corporate action of Pledgor, and no other board of
directors, shareholder or other corporate proceeding by or on behalf of Pledgor
is necessary to authorize the execution, delivery or performance of this Pledge.
(c) This Agreement constitutes the valid and legally binding obligation
of Pledgor, enforceable against Pledgor in accordance with its terms, subject to
(i) bankruptcy, insolvency, reorganization, fraudulent conveyance or transfer,
moratorium or similar laws affecting creditors' rights generally; and (ii)
general principles of equity (regardless of whether such enforceability is
considered in a proceeding at law or in equity).
(d) The execution, delivery and performance of this Agreement by
Pledgor will not: (i) violate or conflict with any provision of the certificate
of incorporation or by-laws of Pledgor or Company, each as amended; (ii) violate
any of the terms, conditions or provisions of any Applicable Law (as defined in
the Purchase Agreement); or (iii) conflict with or result in a violation or
breach of, or constitute (with or without due notice or lapse of time or both) a
default under any of the terms, conditions or provisions of any agreement,
arrangement or understanding to which Pledgor is a party. No authorization,
approval, order, license, permit, franchise or consent of, and no registration,
declaration or filing with, any Governmental Authority, is required in
connection with Pledgor's execution, delivery and performance of this Agreement.
(e) Pledgor is, and will at all times continue to be, the legal and
beneficial owner of the presently existing Collateral pledged by Pledgor
hereunder, free and clear of any prior or pari passu Lien except for the
security interest created by this Agreement. Pledgor will make no assignment,
pledge, hypothecation or transfer of, or create or permit to exist any prior or
pari passu security interest in, or other prior or pari passu Lien on, the
Collateral, other than pursuant hereto.
(f) The pledge of the Pledged Shares pursuant to this Agreement,
together with the delivery of the Pledged Shares pursuant to Section 4, creates,
and will continue to create, a valid and perfected first priority Lien upon and
security interest in the Collateral, in favor of Lender and securing the payment
of the Obligations, enforceable as such against all creditors of Pledgor and any
persons purporting to purchase or otherwise
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acquire any capital stock of the Company from Pledgor. Pledgor (i) has the power
and authority to pledge the Collateral in the manner hereby done or contemplated
and (ii) will defend its title or interest thereto or therein against any and
all Liens (other than the Lien created by this Agreement), however arising.
(g) No consent of any other Person (including, without limitation,
stockholders or creditors of Pledgor) and no consent, authorization, approval,
or other action by, and no notice to or filing with, any Governmental Authority
is or was required (i) for the pledge by it of the Collateral pursuant to this
Agreement or for the execution, delivery or performance of this Agreement by it,
(ii) for the perfection or maintenance of the security interest created hereby
(including the first priority nature of such security interest) or (iii) for the
exercise by Lender of the voting or other rights provided for in this Agreement
or the remedies in respect of the Collateral pursuant to this Agreement (except
as may be required in connection with any disposition of the Pledged Shares by
laws affecting the offering and sale of securities generally).
(h) Pledgor shall cause the Company to perform fully and timely its
obligations under the Loan Documents.
(i) The Pledged Shares represent all of the issued and outstanding
shares of capital stock of the Company. There are no (i) securities convertible
into or exchangeable for any shares of capital stock of the Company, or any
options, warrants, rights, calls, rights or exchange, conversion rights or other
commitments entitling any person to purchase or otherwise acquire any shares of
capital stock of the Company, issued and outstanding; (ii) restrictions on the
transferability of the Collateral to Lender or with respect to the foreclosure,
transfer or disposition thereof by Lender (other than any applicable Federal or
state securities laws); or (iii) shareholders agreements, voting trusts, proxy
agreements or other agreements or understandings which affect or relate to the
voting or giving of written consents with respect to any of the Collateral.
(j) All of the Pledged Shares have been duly authorized and validly
issued and are fully paid and nonassessable, and all information set forth
herein relating to the Pledged Shares is accurate and complete in all material
respects as of the date hereof.
6. Further Assurances
Pledgor agrees that at any time and from time to time, at its expense,
it will promptly execute and deliver all further instruments and documents, and
take all further action, that may be necessary, or that Lender may at any time
reasonably request, in order to more fully perfect and protect any security
interest granted or purported to be granted hereby or to preserve and defend
against any Person its title to the Collateral and the rights purported to be
granted therein by this Agreement to Lender or to enable Lender to exercise and
enforce its rights and remedies hereunder with respect to any Collateral,
including, without limitation, all rights and remedies action specified in
Section 11. In addition, Pledgor covenants, as to itself and the Collateral
pledged by it hereunder, that it will not, by action or omission, cause the
Company or any of its Subsidiaries to violate any of the provisions of this
Agreement, the Note or the other Loan Documents and that
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it will take all actions, including, without limitation, the voting of its
shares of capital stock in the Company, or refrain from taking any action, as
the case may be, so as to effect the provisions of this Agreement, the Note and
the other Loan Documents.
7. Voting Rights; Dividends; Etc.
(a) So long as no Event of Default under the Note has occurred and is
continuing:
(i) Pledgor shall be entitled to exercise or refrain from
exercising any and all voting and other consensual rights pertaining to
the Collateral or any part thereof for any purpose not inconsistent
with the terms of this Agreement or the other Loan Documents; provided,
however, that Pledgor will not be entitled to exercise any such right
if such exercise could materially and adversely affect the rights
inuring to a holder of the Pledged Shares or the rights and remedies of
Lender under this Agreement or the ability of Lender to exercise the
same; and
(ii) Pledgor shall be entitled to receive and retain any and
all cash dividends and interest, cash, instruments and other property
paid in respect of the Collateral, to the extent and only to the extent
that such are permitted by, and otherwise paid in accordance with, the
terms and conditions of the Loan Documents and applicable laws, and
provided that any and all
(A) dividends and interest paid or payable other than
in cash in respect of, and instruments and other property
received, receivable or otherwise distributed in respect of,
or in exchange for, any Collateral,
(B) dividends and other distributions paid or payable
in cash in respect of any Collateral in connection with a
partial or total liquidation or dissolution or in connection
with a reduction of capital, return of capital, capital
surplus or paid-in-surplus,
(C) cash paid, payable or otherwise distributed in
respect of principal of, or in redemption of, or in exchange
for, any Collateral, and
(D) other distributions made on or in respect of the
Pledged Shares, whether paid or payable in cash or otherwise,
whether resulting from a subdivision, combination or
reclassification of the outstanding capital stock of the
Company or received in exchange for Pledged Shares or any part
thereof, or in redemption thereof, or as a result of any
merger, consolidation, acquisition or other exchange of assets
to which the Company may be a party or otherwise,
shall be, and shall be forthwith delivered to Lender to hold as,
Collateral in accordance with Section 4 and shall, if received by
Pledgor, be received in trust for the benefit of Lender, be segregated
from the other property or funds of Pledgor, and be forthwith delivered
to Lender as Collateral in the same form as so
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received (with any necessary endorsement or assignment) in accordance
with Section 4.
(b) In the event that an Event of Default under the Note shall have
occurred and be continuing, upon notice from Lender:
(i) All rights of Pledgor with respect to the Pledged Shares
to exercise or refrain from exercising the voting and other consensual
rights which Pledgor would otherwise be entitled to exercise pursuant
to Section 7(a)(i), and to receive the cash dividends, interest, cash,
instruments and other property which it would otherwise be authorized
to receive and retain pursuant to Section 7(a)(ii), shall cease, and
all such rights shall thereupon become vested in Lender, who shall
thereupon have the sole right to exercise or refrain from exercising
such voting and other consensual rights and to receive and hold as
Collateral such cash dividends and interest payments; and
(ii) All dividends and interest payments received by Pledgor
contrary to Section 7(b)(i) shall be received in trust for the benefit
of Lender, shall be segregated from other funds of Pledgor and shall be
forthwith paid over to Lender as Collateral in the same form as so
received (with any necessary endorsement or assignment).
(c) Pledgor shall execute and deliver (or cause to be executed and
delivered) to Lender all such proxies and other instruments as Lender may
reasonably request for the purpose of enabling Lender to exercise the voting and
other rights which it is entitled to exercise pursuant to Section 7(b)(i) and to
receive the cash dividends or interest payments that it is authorized to receive
and retain pursuant to Sections 7(a)(ii) and 7(b)(ii).
8. Lender Appointed Attorney-in-Fact
If at any time the Company or Pledgor shall fail to pay in full when
due or otherwise timely perform any of the Obligations, Lender shall
automatically and without further action become Pledgor's attorney-in-fact, with
full authority in the place and stead of Pledgor and in the name of Pledgor or
otherwise, from time to time in the discretion of Lender to take any action and
to execute any instrument which Lender deems to be necessary or advisable for
accomplishing the purposes of this Agreement (subject to the rights of Pledgor
under Section 7), including, without limitation, to receive, endorse, collect,
ask for, demand, and xxx for all moneys due or to become due or instruments made
payable to Pledgor representing any dividend, interest payment or other
distribution in respect of the Collateral or any part thereof and to give full
discharge for the same, to settle, compromise, prosecute or defend any action,
claim or proceeding with respect thereto, and to sell, assign, endorse, pledge,
transfer and to make any agreement respecting, or otherwise deal with, the same.
All acts of such attorney or designee are hereby ratified and approved, and such
attorney or designee shall not be liable for any acts of omission or commission
(other than acts or omissions constituting gross negligence or willful
misconduct as determined by a final judgment or a court of
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competent jurisdiction). This power is coupled with an interest and is
irrevocable until all of the Obligations are paid in full.
9. Lender May Perform
If Pledgor fails to perform any agreement or obligation contained
herein, Lender may (without obligation to do so and without releasing Pledgor
from its obligation to do so) itself perform, or cause performance of, such
agreement or obligation, in the name of Pledgor or Lender, and the expenses of
Lender incurred in connection therewith, together with interest on such amounts
from the date of payment or incurrence, at a rate of interest per annum equal to
the interest then in effect under the Note, shall constitute additional
Obligations secured by this Agreement and shall be payable by Pledgor under
Section 12, including, without limitation, any costs or expenses of litigation
associated therewith.
10. Lender's Duties
The powers conferred on Lender hereunder are solely to protect its
interest in the Collateral and shall not impose any duty upon it to exercise any
such powers. Lender shall have no duty as to any Collateral, as to ascertaining
or taking action with respect to calls, conversions, exchanges, maturities,
tenders or other matters relative to any Collateral, whether or not Lender has
or is deemed to have knowledge of such matters, or as to the taking of any
necessary steps to preserve rights against any parties or any other rights
pertaining to any Collateral. Lender has no obligation to perform any of the
obligations or duties of Pledgor as a shareholder of the Company.
11. Remedies Upon Default
In the event that an Event of Default under the Note shall have
occurred and be continuing:
(a) Lender may (but shall not be obligated to) exercise in respect of
the Collateral, in addition to other rights and remedies provided for herein or
otherwise available to it, all of the rights and remedies of a secured party in
default under the Uniform Commercial Code in effect in the State of New York (or
such other applicable jurisdiction as Lender may determine) at that time (the
"Code"), and may also, without demand of performance or other demand,
advertisement or notice except as specified below (all of which demands,
advertisements, and/or notices are hereby expressly waived by Pledgor), sell the
Collateral or any part thereof in one or more parcels at public or private sale,
at any exchange, broker's board or at any of Lender's offices or elsewhere, for
cash, on credit or for future delivery, and upon such other terms as Lender may
deem appropriate. Lender shall be authorized at any such sale (if it deems
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 for investment and not with a view to distribution or sale thereof,
and upon consummation of any such sale Lender shall have the right to assign,
transfer and deliver to the purchaser or purchasers thereof the 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, to the
extent permitted
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by applicable law, the Pledgor hereby waives all rights of redemption, stay,
valuation and appraisal Pledgor now has or may at any time in the future have
under any rule of law or statute now existing or hereinafter enacted. Pledgor
agrees that, to the extent notice of sale shall be required by law, at least ten
days' notice to Pledgor of the time and place of any public sale or the time
after which any private sale is to be made shall constitute reasonable
notification. Lender shall not be obligated to make any sale of Collateral
regardless of notice of sale having been given. Lender 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.
(b) Any cash held by Lender as Collateral and all cash proceeds
received by Lender in respect of any sale of, collection from, or other
realization upon, all or any part of the Collateral after payment from such
proceeds of Lender's out-of-pocket costs and expenses in connection with such
sale, including, without limitation, reasonable attorneys' fees and expenses,
may, in the discretion of Lender, be held by Lender as collateral for, and/or
then or at any time thereafter be applied in whole or in part by Lender against,
all or any part of the Obligations in such manner as Lender may elect in its
sole discretion.
(c) In the event that the proceeds of any such sale, collection or
realization are insufficient to pay all amounts to which Lender is legally
entitled, Pledgor shall be liable for, and shall promptly pay, the deficiency,
together with interest thereon at the applicable interest rate under the Note or
such other rate as shall be fixed by applicable law, together with the costs of
collection and the reasonable fees, costs, expenses and other client charges of
any attorneys employed by Lender to collect such deficiency. In the event that
the proceeds of any such sale, collection or realization are sufficient to pay
all amounts to which Lender is legally entitled, Pledgor shall be entitled to
receive any such proceeds over and above such amounts.
12. Expenses
Without limiting the generality of the foregoing, Pledgor will upon
demand pay to Lender the amount of any and all costs and expenses, including the
fees, costs, expenses and other client charges of counsel for Lender and of any
experts and agents (including, without limitation, any Person which may act as
agent of Lender), that Lender may incur in connection with (i) the
administration of this Agreement, (ii) the custody or preservation of, or the
sale of, collection from, or other realization upon, any of the Collateral,
(iii) the exercise or enforcement of any of the rights of Lender hereunder or
(iv) the failure by Pledgor to perform or observe any of the provisions hereof.
Any amounts payable under this Section 12 shall be included in the Obligations
and shall bear interest from the payment of such costs or expenses at a rate
equal to the lower of 18% per annum or the highest interest rate permitted under
applicable law.
13. Continuing Security Interest; Termination
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(a) All rights of Lender hereunder, the grant of a security interest in
the Collateral and all obligations of Pledgor hereunder, shall be absolute and
unconditional irrespective of (i) any agreement with respect to any of the
Obligations or any instrument relating to the foregoing, (ii) any change in the
time, manner or place of payment of, or in any other term of, all or any of the
Obligations, or any other amendment or waiver of or any consent to any departure
from any Loan Document or any other agreement or instrument relating to any of
the foregoing, (iii) any exchange, release or nonperfection of any other
collateral, or any release or amendment or waiver of or consent to or departure
from any guaranty, for all or any of the Obligations or (iv) any other
circumstance that might otherwise constitute a defense available to, or a
discharge of, Pledgor in respect of the Obligations or in respect of this
Agreement.
(b) This Agreement shall create a continuing security interest in the
Collateral and shall (i) remain in full force and effect until the earlier of
(A) the date Pledgor has indefeasibly paid in full in cash all of the
Obligations or (B) the date the Pledged Shares have been transferred to Lender
or its designee, (ii) be binding upon Pledgor and its successors and assigns,
and (iii) inure, together with the rights and remedies of Lender hereunder, to
the benefit of, and be enforceable by, Lender and its successors and assigns.
Pledgor agrees that the security interest in the Collateral shall continue to be
effective or shall be reinstated, as the case may be, if at any time any payment
(in whole or in part) of any of the Obligations is rescinded or must otherwise
be restored by Lender for any reason, all as though such payment had not been
made. Subject to the foregoing, upon the satisfaction in full of the
Obligations, the Agreement and the security interest granted hereby shall
terminate and all rights to the Collateral shall revert to Pledgor. Upon any
such termination, Lender will, at Pledgor's request and expense, release to
Pledgor all Collateral then held by it and execute and deliver to Pledgor such
documents as Pledgor shall reasonably request to evidence such termination. Any
execution and delivery of documents pursuant to this Section 13 shall be without
recourse to or warranty by Lender.
14. Amendments, Etc.
No amendment or waiver of any provision of this Agreement, and no
consent to any departure by Pledgor herefrom, shall in any event be effective
unless the same shall be in writing and signed by Pledgor and Lender, and then
such waiver or consent shall be effective only in the specific instance and for
the specific purpose for which given.
15. Notices
All notices and other communications under this Agreement shall be in
writing and shall be deemed given when delivered personally, mailed by
registered or certified mail, return receipt requested, sent by recognized
overnight delivery service (signature of receipt requested) or, to the extent
receipt is confirmed, by telecopy or telefax (provided that such party also
sends a copy by personal delivery or registered or certified mail, return
receipt requested, or recognized overnight delivery service, signature of
receipt requested), to the following addresses (or to such other address as a
party may have specified by notice given to the other party pursuant to this
provision):
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Pledgor:
Xxxx.xxx, Inc.
Xxxxx 000
00 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: CEO
With a copy to:
Xxxx.xxx, Inc.
Xxxxx 000
00 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxx X. Xxxxxxxx
Fax Number 000-000-0000
Lender:
AT&T Corp.
000 Xxxxx Xxxxx Xxxxxx
Xxxx 0000X0
Xxxxxxx Xxxxx, XX 00000
Attention: Xxxxxxx X. Xxxx
Fax Number: 000-000-0000
With a copy to:
Xxxxxxx Xxxxxxxxxx
General Attorney
AT&T Corp.
000 Xxxxx Xxxxx Xxxxxx
Room 3235C2
Xxxxxxx Xxxxx, XX 00000-0000
Fax Number: 000-000-0000
16. Governing Law, Choice Of Forum, No Trial By Jury
(a) THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO ITS
CONFLICT OF LAWS PRINCIPLES, EXCEPT AS REQUIRED BY MANDATORY PROVISIONS OF LAW
AND EXCEPT TO THE EXTENT THAT THE VALIDITY OR PERFECTION OF THE SECURITY
INTEREST CREATED HEREBY, OR REMEDIES HEREUNDER, IN RESPECT OF ANY PARTICULAR
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COLLATERAL ARE GOVERNED BY THE LAWS OF A JURISDICTION OTHER THAN THE STATE OF
NEW YORK.
(b) ANY LEGAL ACTION, SUIT OR PROCEEDING ARISING OUT OF OR RELATING TO
THIS AGREEMENT MAY BE INSTITUTED IN ANY STATE OR FEDERAL COURT LOCATED IN NEW
YORK COUNTY, STATE OF NEW YORK, AND EACH PARTY AGREES NOT TO ASSERT, BY WAY OF
MOTION, AS A DEFENSE, OR OTHERWISE, IN ANY SUCH ACTION, SUIT OR PROCEEDING, ANY
CLAIM THAT IT IS NOT SUBJECT PERSONALLY TO THE JURISDICTION OF SUCH COURTS, THAT
ITS PROPERTY IS EXEMPT OR IMMUNE FROM ATTACHMENT OR EXECUTION, THAT THE ACTION,
SUIT OR PROCEEDING IS BROUGHT IN AN INCONVENIENT FORUM, THAT THE VENUE OF THE
ACTION, SUIT OR PROCEEDING IS IMPROPER OR THAT THIS AGREEMENT OR THE SUBJECT
MATTER HEREOF MAY NOT BE ENFORCED IN OR BY SUCH COURT, AND HEREBY WAIVES ANY
OFFSETS IN ANY SUCH ACTION, SUIT OR PROCEEDING. EACH PARTY FURTHER IRREVOCABLY
SUBMITS TO THE JURISDICTION OF ANY SUCH COURT IN ANY SUCH ACTION, SUIT OR
PROCEEDING. ANY AND ALL SERVICE OF PROCESS AND ANY OTHER NOTICE IN ANY SUCH
ACTION, SUIT OR PROCEEDING SHALL BE EFFECTIVE AGAINST ANY PARTY IF GIVEN
PERSONALLY OR BY REGISTERED OR CERTIFIED MAIL, RETURN RECEIPT REQUESTED, OR BY
ANY OTHER MEANS OF MAIL THAT REQUIRES A SIGNED RECEIPT, POSTAGE PREPAID, MAILED
TO SUCH PARTY AS HEREIN PROVIDED, OR BY PERSONAL SERVICE ON SUCH PARTY WITH A
COPY OF SUCH PROCESS MAILED TO SUCH PARTY BY REGISTERED OR CERTIFIED MAIL,
RETURN RECEIPT REQUESTED, POSTAGE PREPAID. NOTHING HEREIN CONTAINED SHALL BE
DEEMED TO AFFECT THE RIGHT OF ANY PARTY TO SERVE PROCESS IN ANY MANNER PERMITTED
BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST ANY OTHER
PARTY IN ANY JURISDICTION OTHER THAN NEW YORK IN CONNECTION WITH ACTIONS
INITIATED BY THIRD PARTIES IN SUCH OTHER JURISDICTIONS.
(c) BY ITS EXECUTION AND DELIVERY OF THIS AGREEMENT, PLEDGOR HEREBY
KNOWINGLY, VOLUNTARILY AND IRREVOCABLY WAIVES ANY RIGHTS IT MAY HAVE TO A TRIAL
BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER OR
IN CONNECTION WITH, THIS AGREEMENT, THE NOTE OR ANY OTHER LOAN DOCUMENT, ANY OF
THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY OR ANY COURSE OF CONDUCT, COURSE
OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF EITHER PLEDGOR
OR LENDER IN CONNECTION HEREWITH OR THEREWITH. THIS PROVISION IS A MATERIAL
INDUCEMENT FOR LENDER TO MAKE ADVANCES UNDER THE NOTE.
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17. Waiver
Pledgor hereby waives promptness, diligence, notice of acceptance and
any other notice with respect to any Obligations or the Pledgor's obligations
hereunder and any requirement that Lender protect, secure, perfect or insure any
security interest or Lien, or any property subject thereto, or exhaust any right
or take any action against the Company, Pledgor or any other Person.
18. Rights Cumulative
No failure on the part of Lender to exercise, and no delay in
exercising, any right or power hereunder shall operate as a waiver thereof; nor
shall any single or partial exercise of any such right or power preclude any
other or further exercise thereof or the exercise of any other right or power.
The rights and remedies of Lender provided herein are cumulative and are in
addition to, and not exclusive of, any rights or remedies provided by law. No
provision for a specific remedy shall be deemed to limit Lender's remedies at
law or in equity. The rights of Lender hereunder are not conditional or
contingent on any attempt by Lender to exercise any of its rights under any
other document against Pledgor or against any other Person.
19. Assignment
This Agreement shall be binding on Pledgor and its successors and
permitted assigns (including any trustee succeeding to the rights of Pledgor
pursuant to Chapter 11 of the Bankruptcy Code or pursuant to any conversion to a
case or cases under Chapter 7 of the Bankruptcy Code), and shall inure, together
with all rights and remedies of Lender hereunder, to the benefit of Lender and
its successors and assigns, provided that Pledgor may not assign any of its
rights or obligations hereunder without the prior written consent of Lender and
any purported assignment without such consent shall be null and void. Lender may
without notice to Pledgor transfer its rights under this Agreement only to an
Affiliate. Any reference to the Company or any other Loan Party within this
Agreement shall be deemed to include any permitted assignee of such Loan Party
and any reference to any Loan Document shall include any amendment thereto.
20. Survival of Representations and Warranties
All representations and warranties of Pledgor contained herein or made
in connection herewith shall survive the making of and shall not be waived by
the execution and delivery of this Agreement or any other Loan Document or any
investigation by Lender. All covenants and agreements of Pledgor contained
herein shall continue in full force and effect from and after the date hereof
until the indefeasible payment in full of the Obligations (subject to Section
2(b) hereof).
21. Severability
Whenever possible each provision of this Agreement shall be interpreted
in such manner as to be effective and valid under applicable law, but if any
provision of this
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Agreement shall be prohibited by, illegal, unenforceable or
invalid under applicable law, such provision shall be ineffective to the extent
of such prohibition, illegality, uneforceability or invalidity under such law,
without invalidating the remainder of such provision or the remaining provisions
of this Agreement.
22. Interpretation
Pledgor and Lender have participated jointly in the negotiation and
drafting of this Agreement. In the event that any ambiguity or question of
intent or interpretation arises, this Agreement shall be construed as if drafted
jointly by the parties hereto and no presumption or burden of proof shall arise
favoring or disfavoring any party by virtue of authorship of any provisions of
this Agreement.
23. Headings
Section headings in this Agreement are included for convenience of
reference only and shall not constitute a part of this Agreement for any other
purpose.
24. Counterparts
This Agreement may be executed in counterparts (and by different
parties hereto on different counterparts), each of which shall constitute an
original, but all of which, when taken together, shall constitute a single
contract. Delivery of an executed counterpart of a signature page to this
Agreement by telecopy shall be as effective as delivery of a manually executed
counterpart of this Agreement.
25. Entire Agreement
This Agreement and the other Loan Documents (together with any
schedules and exhibits hereto and thereto) embody the entire agreement between
the parties hereto and thereto relating to the transactions provided for herein
and therein and supersede all prior understandings and agreements, whether
written or oral, between the parties hereto and thereto with respect to such
transactions.
[Signature page follows]
14
IN WITNESS WHEREOF, Pledgor has executed this Agreement in favor of
Lender as of the date first above written.
XXXX.XXX, INC.
By: /s/ Xxxxx Xxxxxxxx
-------------------------------
Name: Xxxxx Xxxxxxxx
Title: Senior Vice President
ACCEPTED AND AGREED:
AT&T CORP.
By: /s/ Xxxx Xxxx
---------------------------
Name: Xxxx Xxxx
Title: ADIS Vice President
