Exhibit 4.10
EXECUTIVE INVESTOR STOCK PLEDGE AGREEMENT
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THIS STOCK PLEDGE AGREEMENT (this "Agreement") is made as of November
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27, 1996, by and between Xxxxxx X. Xxxxxx, Xx. ("Pledgor"), and Focal
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Communications Corporation, a Delaware corporation (the "Company").
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The Company and Pledgor are parties to a Stock Purchase Agreement of
even date herewith, pursuant to which Pledgor purchased 230.77 shares of the
Company's Class A Common Stock, $.01 par value (the "Class A Common"), for an
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aggregate purchase price of $11,627.91. The Company has allowed Pledgor to
purchase a portion of the Class A Common by delivery to the Company of a
promissory note (the "Note") in the aggregate principal amount of $5,627.91.
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This Agreement provides the terms and conditions upon which the Note is secured
by a pledge to the Company of the Class A Common and all other Company
securities owned by the Pledgor as of the date hereof (collectively, the
"Pledged Shares").
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NOW, THEREFORE, in consideration of the premises contained herein and
other good and valuable consideration the receipt and sufficiency of which are
hereby acknowledged, and in order to induce the Company to accept the Note as
partial payment for the Class A Common [[partial] payment of the Subsequent
Contribution], Pledgor and the Company hereby agree as follows:
1. Pledge. Pledgor hereby pledges to the Company, and grants to the
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Company a security interest in, the Pledged Shares as security for the prompt
and complete payment when due of the unpaid principal of and interest on the
Note and full payment and performance of the obligations and liabilities of
Pledgor hereunder.
2. Delivery of Pledged Shares. Upon the execution of this
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Agreement, Pledgor shall deliver to the Company the certificate(s) representing
the Pledged Shares, together with duly executed forms of assignment sufficient
to transfer title thereto to the Company.
3. Voting Rights; Cash Dividends. Notwithstanding anything to the
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contrary contained herein, during the term of this Agreement until such time as
there exists a default in the payment of principal or interest on the Note or
any other default under the Note or hereunder, Pledgor shall be entitled to all
voting rights with respect to the Pledged Shares and shall be entitled to
receive all cash dividends paid in respect of the Pledged Shares. Upon the
occurrence of and during the continuance of any such default, Pledgor shall no
longer be able to vote the Pledged Shares and the Company shall retain all such
cash dividends payable on the Pledged Shares as additional security hereunder.
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4. Receipt of Additional Stock; Stock Dividends; Distributions; etc.
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If, while this Agreement is in effect, Pledgor becomes entitled to receive or
receives (i) any securities of the Company, or (ii) any other securities or
other property with respect to, in substitution of, or in exchange for any of
the Pledged Shares (whether as a distribution in connection with any
recapitalization, reorganization or reclassification, a stock dividend or
otherwise), Pledgor shall accept such securities or other property on behalf of
and for the benefit of the Company as additional security for Pledgor's
obligations under the Note and shall promptly deliver such additional security
to the Company together with duly executed forms of assignment, and such
additional security shall be deemed to be part of the Pledged Shares hereunder.
5. Default. If Pledgor defaults in the payment of the principal or
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interest under the Note when it becomes due, or if any other event of default
under the Note or this Agreement occurs (including the bankruptcy or insolvency
of Pledgor), the Company may exercise any and all of the rights, powers and
remedies of any owner of the Pledged Shares (including the right to vote the
shares and receive dividends and distributions with respect to such shares) and
shall have and may exercise without demand any and all the rights and remedies
granted to a secured party upon default under the Uniform Commercial Code of the
State of Illinois or otherwise available to the Company under applicable law.
Without limiting the foregoing, upon any default the Company is authorized to
sell, assign and deliver at its discretion, from time to time, all or any part
of the Pledged Shares at any private sale or public auction, on not less than
ten days written notice to Pledgor, at such price or prices and upon such terms
as the Company may deem advisable. Pledgor shall have no right to redeem the
Pledged Shares after any such sale or assignment. At any such sale or auction,
the Company may bid for, and become the purchaser of, the whole or any part of
the Pledged Shares offered for sale. In case of any such sale, after deducting
the costs, attorneys' fees and other expenses of sale and delivery, the
remaining proceeds of such sale shall be applied to the principal of and accrued
interest on the Note; provided that after payment in full of the indebtedness
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evidenced by the Note, the balance of the proceeds of sale then remaining shall
be paid to Pledgor and Pledgor shall be entitled to the return of any of the
Pledged Shares remaining in the hands of the Company. Pledgor shall be liable
for any deficiency if the remaining proceeds are insufficient to pay the
indebtedness under the Note in full, including the fees of any attorneys
employed by the Company with respect to such deficiency.
6. Costs and Attorneys' Fees. All costs and expenses (including
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reasonable attorneys' fees) incurred in exercising any right, power or remedy
conferred by this Agreement or in the enforcement thereof, shall become part of
the indebtedness secured hereunder and shall be paid by Pledgor or repaid from
the proceeds of the sale of the Pledged Shares hereunder.
7. Payment of Indebtedness and Release of Pledged Shares. Upon
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payment in full of the indebtedness evidenced by the Note, the Company shall
surrender the Pledged Shares to Pledgor together with all forms of assignment.
8. No Other Liens; No Sales or Transfers. Pledgor hereby represents
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and warrants that he has good and valid title to all of the Pledge Shares, free
and clear of all liens, security interests and other encumbrances (other than
may be created by the Stock Purchase
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Agreement or any of the other agreements contemplated thereby to which Pledgor
is a party), and Pledgor hereby covenants that, until such time as all of the
outstanding principal of and interest on the Note has been repaid (and without
limiting Pledgor's restrictions on transfer set forth in the Stock Purchase
Agreement and the other agreements contemplated thereby), Pledgor shall not (i)
create, incur, assume or suffer to exist any pledge, security interest,
encumbrance, lien or charge of any kind against the Pledged Shares or Pledgor's
rights or a holder thereof, other than pursuant to this Agreement and the Stock
Purchase Agreement or any of the other agreements contemplated thereby to which
Pledgor is a party, or (ii) sell or otherwise transfer any Pledged Shares or any
interest therein (other than to the Company).
9. Further Assurances. Pledgor agrees that at any time and from
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time to time upon the written request of the Company, Pledgor shall execute and
deliver such further documents (including UCC financing statements) and take
such further actions as the Company may reasonably request in order to effect
the purposes of this Agreement.
10. Severability. Any provision of this Agreement which is
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prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
11. No Waiver; Cumulative Remedies. The Company shall not by any
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act, delay, omission or otherwise be deemed to have waived any of its rights or
remedies hereunder, and no waiver shall be valid unless in writing, signed by
the Company, and then only to the extent therein set forth. A waiver by the
Company of any right or remedy hereunder on any one occasion shall not be
construed as a bar to any right or remedy which the Company would otherwise have
on any future occasion. No failure to exercise nor any delay in exercising on
the part of the Company, any right, power or privilege hereunder shall preclude
any other or further exercise thereof or the exercise of any other right, power
or privilege. The rights and remedies herein provided are cumulative and may be
exercised singly or concurrently, and are not exclusive of any rights or
remedies provided by law.
12. Waivers, Amendments; Applicable Law. None of the terms or
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provisions of this Agreement may be waived, altered, modified or amended except
by an instrument in writing, duly executed by the parties hereto. This
Agreement and all obligations of the Pledgor hereunder shall, together with the
rights and remedies of the Company hereunder, inure to the benefit of the
Company and its successors and assigns. This Agreement shall be governed by,
and be construed and interpreted in accordance with, the internal laws (and not
the laws of conflicts) of the State of Illinois.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
FOCAL COMMUNICATIONS CORPORATION
By: /s/ Xxxxxx X. Xxxxxx
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Its: Secretary and Executive Vice President
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/s/ Xxxxxx X. Xxxxxx, Xx.
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Xxxxxx X. Xxxxxx, Xx.
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