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EXHIBIT 10.Y
STOCK PLEDGE AGREEMENT
STOCK PLEDGE AGREEMENT dated as of February 1, 2001 is made and entered
into by and between El Paso Energy Corporation, a Delaware corporation (the
"Parent"), and the undersigned (the "Pledgor").
RECITALS
A. Simultaneously herewith the Pledgor is purchasing shares of Common
Stock, par value $.01 per share, of El Paso Global Networks Company (the
"Shares"). The proceeds received by the Pledgor from the Parent pursuant to a
Recourse Secured Promissory Note (the "Recourse Note") shall be used as partial
consideration for the purchase of the Shares.
B. As a condition to the purchase of the Shares, the Pledgor and the
Company have entered into a Subscription Agreement, dated as of the date hereof
(the "Subscription Agreement"), which sets forth certain rights and restrictions
pursuant to which the Pledgor holds the Shares.
C. The Pledgor wishes to grant further security and assurance to the
Parent in order to secure all of the Pledgor's obligations under the Recourse
Note, including, without limitation, the prompt payment when due of the
principal of and interest on the Recourse Note (collectively, the
"Obligations"), by pledging to the Parent, simultaneously with the Pledgor's
delivery of the Recourse Note, the Shares.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing and for other good
and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the parties hereto agree as follows:
1. Pledge. The Pledgor hereby delivers to the Parent the Shares and the
certificate evidencing the same (together with any securities to be delivered to
the Pledgor pursuant to Section 2(b) hereof, the "Pledged Securities"), and
hereby grants to the Parent a first priority security interest in the Pledged
Securities, and in any other property to be delivered to the Pledgor pursuant to
Section 2(b) hereof (collectively, the "Pledged Collateral") as collateral
security for the prompt and complete payment when due (whether at the stated
maturity, acceleration or otherwise) of the Obligations.
The Pledgor hereby delivers to the Parent appropriate undated security
transfer powers duly executed in blank for the Shares and will deliver
appropriate undated security transfer powers duly executed in blank for any
additional Pledged Securities to be pledged hereunder from time to time
hereafter.
The Pledgor shall immediately upon request by the Parent and in
confirmation of the security interests hereby created, execute and deliver to
the Parent such further instruments,
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in form and substance as the Parent shall request, required under Texas law or
any other applicable law, to protect the security interests created hereunder.
2. Administration of Security. The following provisions shall govern
the administration of the Pledged Collateral:
(a) So long as no Event of Default has occurred and is continuing
(as used herein, "Event of Default" shall mean the occurrence of any Event of
Default under the Recourse Note), the Pledgor shall be entitled to act with
respect to the Pledged Collateral in any manner not inconsistent with this Stock
Pledge Agreement, the Subscription Agreement or the Recourse Note.
(b) If while this Stock Pledge Agreement is in effect, the Pledgor
shall become entitled to receive or shall receive any debt or equity security
certificate (including, without limitation, any certificate representing a stock
dividend or a distribution in connection with any reclassification, increase or
reduction of capital, or issued in connection with any reorganization), option
or right, or any other property, whether as a dividend or distribution or other
issuance in respect of, in substitution of, or in exchange for any Pledged
Securities, or any non-cash proceeds from any sale, transfer or other
disposition (collectively, a "Sale") of any Pledged Securities, the Pledgor
agrees to accept the same as the Parent's agent and to hold the same in trust on
behalf of and for the benefit of the Parent and to deliver the same forthwith to
the Parent in the exact form received, with the endorsement of the Pledgor when
necessary and/or appropriate undated security transfer powers duly executed in
blank, to be held by the Parent, subject to the terms of this Stock Pledge
Agreement, as additional collateral security for the Obligations.
Notwithstanding the foregoing, it is agreed that the Pledgor may exercise any
option or right received as contemplated in the preceding sentence, and the
Parent will exercise any such option or right upon receipt of written
instructions to that effect and any required payments or documents from the
Pledgor, and the securities received upon such exercise of any such option or
right shall thereafter be held by the Parent as contemplated by the preceding
sentence.
(c) Subject to any Sale by the Parent of the Pledged Collateral
pursuant to this Stock Pledge Agreement and subject to the terms of the
Subscription Agreement, the Pledged Collateral shall be returned to the Pledgor
upon payment in full of all Obligations.
(d) The Parent's sole duty with respect to the custody, safekeeping
and physical preservation of any of the Pledged Collateral in its possession
shall be to deal with them in the same manner as the Parent deals with similar
securities and property for its own account. Neither the Parent nor any of its
directors, officers, employees or agents shall be liable for failure to demand,
collect or realize upon any of the Pledged Collateral or for any delay in doing
so nor shall they be under any obligation to sell or otherwise dispose of any of
the Pledged Collateral upon the request of the Pledgor or otherwise.
3. Remedies in Case of an Event of Default.
(a) In case an Event of Default shall have occurred and be
continuing, the Parent shall have the right, in its sole discretion, to sell,
resell, assign and deliver, all or, from
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time to time, any part of the Pledged Collateral or any interest in or option or
right to purchase any part thereof, on any securities exchange on which the
Pledged Securities may be listed, at any private sale or at public auction, with
or without demand of performance or other demand, advertisement or notice of the
time or place of sale or adjournment thereof or otherwise (except that the
Parent shall give ten days' notice to the Pledgor of the time and place of any
sale pursuant to this Section 3), for cash, on credit or for other property, for
immediate or future delivery, and for such price or prices and on such terms as
the Parent shall, in its sole discretion, determine, the Pledgor hereby waiving
and releasing any and all right or equity of redemption whether before or after
sale hereunder. At any such sale, the Parent may bid for and purchase the whole
or any part of the Pledged Collateral so sold free from any such right or equity
of redemption. The Parent shall apply the proceeds of any sale first to the
payment of all costs and expenses, including reasonable attorneys' fees,
incurred by the Parent in enforcing its rights under this Stock Pledge
Agreement, and second to the payment of accrued and unpaid interest on and then
of unpaid principal of the Recourse Note. Notwithstanding the foregoing, (i)
Pledgor shall be personally liable for 25% of the entire unpaid principal amount
plus 100% of any accrued but unpaid interest owing as of the occurrence of such
Event of Default (the "Specified Amount"), (ii) Parent shall have all the
remedies of a secured party under the Texas Uniform Commercial Code to satisfy
the Specified Amount and (iii) nothing shall require Parent to exercise its
rights with respect to the Pledged Collateral prior to or simultaneously with
any exercise of its rights against Pledgor.
(b) The Pledgor recognizes that the Parent may be unable to effect a
public sale of all or a part of any Pledged Securities constituting part of the
Pledged Collateral by reason of certain prohibitions contained in the Securities
Act of 1933 or in the rules and regulations promulgated thereunder or in
applicable state securities or "blue sky" laws, but may be compelled to resort
to one or more private sales to a restricted group of purchasers who will be
obliged to agree, among other things, to acquire the Pledged Securities for
their own account, for investment and not with a view to the distribution or
resale thereof. The Pledgor agrees that private sales so made may be at prices
and on other terms less favorable to the seller than if the Pledged Securities
were sold at public sale, and that the Parent has no obligation to delay the
sale of the Pledged Securities for the period of time necessary to permit the
registration of the Pledged Securities for public sale under the Securities Act
of 1933 and under applicable state securities or "blue sky" laws. The Pledgor
agrees that a private sale or sales made under the foregoing circumstances shall
be deemed to have been made in a commercially reasonable manner.
(c) If any consent, approval or authorization of any state,
municipal or other governmental department, agency or authority should be
necessary to effectuate any sale or disposition by the Parent pursuant to this
Section 3 of the Pledged Collateral, the Pledgor will execute all such
applications and other instruments as may be required in connection with
securing any such consent, approval or authorization and will otherwise use the
Pledgor's best efforts to secure the same.
4. Pledgor's Obligations Not Affected. The obligations of the Pledgor
under this Stock Pledge Agreement shall remain in full force and effect without
regard to, and shall not be impaired or affected by: (a) any subordination,
amendment or modification of or addition or supplement to the Subscription
Agreement, the Recourse Note, or any assignment or transfer of any thereof; (b)
any exercise or non-exercise by the Parent or any affiliate of the Parent of any
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right, remedy, power or privilege under or in respect of this Stock Pledge
Agreement, the Subscription Agreement, the Recourse Note, or any waiver of any
such right, remedy, power or privilege; (c) any waiver, consent, extension,
indulgence or other action or inaction in respect of this Stock Pledge
Agreement, the Subscription Agreement, the Recourse Note, or any assignment or
transfer of any thereof; or (d) any bankruptcy, insolvency, reorganization,
arrangement, readjustment, composition, liquidation or the like, of the Parent,
whether or not the Pledgor shall have notice of any of the foregoing.
5. Transfers by Pledgor. The Pledgor will not sell, assign, transfer or
otherwise dispose of, grant any option with respect to, or mortgage, pledge or
otherwise encumber any of the Pledged Collateral or any interest therein, except
to the extent allowed or required by the Subscription Agreement.
6. Attorney-in-Fact. The Parent is hereby appointed the
attorney-in-fact of the Pledgor for the purpose of carrying out the provisions
of this Stock Pledge Agreement and taking any action and executing any
instrument which the Parent reasonably may deem necessary or advisable to
accomplish the purposes hereof, which appointment as attorney-in-fact is
irrevocable as one coupled with an interest.
7. Termination. Upon payment in full of all Obligations and upon the
due performance of and compliance with and subject to all the provisions of the
Subscription Agreement and the Recourse Note, this Stock Pledge Agreement shall
terminate and the Pledgor shall be entitled to the return of such of the Pledged
Collateral as has not theretofore been sold, released or otherwise applied
pursuant to the provisions of this Stock Pledge Agreement.
8. Notices. All notices or other communications required or permitted
to be given hereunder shall be delivered as provided in the Subscription
Agreement.
9. Binding Effect, Successors and Assigns. This Stock Pledge Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns.
10. Miscellaneous. The Parent and its assigns shall have no obligation
in respect of the Pledged Collateral under this Stock Pledge Agreement, except
to hold and dispose of the same in accordance with the terms of this Stock
Pledge Agreement. Neither this Stock Pledge Agreement nor any provision hereof
may be amended, modified, waived, discharged or terminated orally, but only by
an instrument in writing signed by the party against which enforcement of the
amendment, modification, waiver, discharge or termination is sought. The
captions in this Stock Pledge Agreement are for convenience of reference only
and shall not define or limit the provisions hereof. This Stock Pledge Agreement
shall be governed by and construed and enforced in accordance with the laws of
the State of Texas, without regard to the conflicts of law rules thereof. The
provisions of Section 14(l) of the Subscription Agreement are incorporated by
reference herein.
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IN WITNESS WHEREOF, the parties hereto have caused this Stock Pledge
Agreement to be executed and delivered on the date first above written.
EL PASO ENERGY CORPORATION
By:
--------------------------
Name:
Title:
PLEDGOR:
-----------------------------
Name:
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RECOURSE SECURED PROMISSORY NOTE
("RECOURSE NOTE")
$________ February 1, 2001
FOR VALUE RECEIVED, the undersigned (the "Stockholder") hereby promises
to pay to the order of El Paso Energy Corporation, a Delaware corporation (the
"Parent"), or to any assignee of this Recourse Note at the time of payment, on
the Maturity Date (as hereinafter defined), the principal sum of
[____________________ _____________________] ($________) in lawful money of the
United States of America, and to pay simple interest at a rate of 5.07% per
annum (the "Interest Rate") (computed on the basis of a 365 or 366 day year, as
the case may be) on the unpaid principal amount hereof from and after the date
of this Recourse Note until the entire principal amount hereof has been paid in
full. Accrued but unpaid interest shall be paid on December 31 of each year and
upon payment (including prepayment) of the principal amount hereof.
This Recourse Note has been entered into to obtain a portion of the
funds necessary to finance the purchase by the Stockholder of shares of Common
Stock, par value $.01 per share (the "Common Stock"), of El Paso Global Networks
Company ("EPGN"). In connection with the Stockholder's purchase of shares of
Common Stock, EPGN and the Stockholder entered into a Subscription Agreement,
dated as of the date hereof, which sets forth certain rights and restrictions
pursuant to which the Stockholder holds such shares (the "Subscription
Agreement"). Payment of the principal of and interest on this Recourse Note is
secured pursuant to the terms of a Stock Pledge Agreement, dated as of the date
hereof, between the Stockholder and the Parent (the "Pledge Agreement"),
reference to which is made for a description of the collateral provided thereby
and the rights of the Parent and any other holder of this Recourse Note in
respect of such collateral. Under the terms of Section 3(a) of the Pledge
Agreement, the Stockholder is personally liable for 25% of the entire unpaid
principal amount plus 100% of any accrued but unpaid interest owing as of the
occurrence of an Event of Default.
The "Maturity Date" shall mean the fifth anniversary of the date
hereof. If the date set for payment of principal or interest hereunder is a
Saturday, Sunday or legal holiday, then such payment shall be made on the next
succeeding business day.
This Recourse Note is subject to the following further terms and
conditions:
1. Mandatory Prepayment. If there shall be a Liquidation Event (as
hereinafter defined), the Stockholder shall prepay the outstanding principal
amount of this Recourse Note (together with interest accrued and unpaid
thereon), within 5 business days thereafter. "Liquidation Event" shall mean (i)
any transaction or series of transactions in which any Person
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or group, other than an affiliate of Parent, becomes the beneficial owner of 50%
or more of the then outstanding capital stock of EPGN, (ii) the sale of all or
substantially all of the assets of EPGN, (iii) the liquidation of EPGN, (iv) the
combination of EPGN with another entity, as a result of which (A) the
stockholders of EPGN hold less than 50% of the total of all voting shares
outstanding or (B) the directors of Parent constitute less than a majority of
the Board of Directors of the combined entity or (v) the consummation of EPGN's
initial registered public offering pursuant to the Securities Act of 1933, as
amended.
2. Payment and Prepayment. All payments and prepayments of principal
and interest on this Recourse Note shall be made to the Parent or its order (or
to any other holder of this Recourse Note or such holder's order), in lawful
money of the United States of America at the principal offices of the Parent (or
at such other place as the holder hereof shall notify the Stockholder in
writing). The Stockholder may, at the Stockholder's option, prepay this Recourse
Note in whole or in part at any time or from time to time without penalty or
premium. Any prepayments of any portion of the principal amount of this Recourse
Note shall be accompanied by payment of all interest accrued but unpaid on the
principal amount being prepaid.
3. Events of Default. Upon the occurrence of any of the following
events ("Events of Default"):
(a) Failure to pay any principal of this Recourse Note when
due; or
(b) Failure to pay any interest under this Recourse Note when
due which shall remain unremedied for ten days following the date when
such interest was due hereunder; or
(c) Failure to comply with any of the terms of the
Subscription Agreement; or
(d) An involuntary case or other proceeding shall be commenced
against the Stockholder seeking liquidation, reorganization or other
relief with respect to it or its debts under any applicable Federal,
State or non-United States bankruptcy, insolvency, reorganization or
similar law now or hereafter in effect or seeking the appointment of a
custodian, receiver, liquidator, assignee, trustee, sequestrator or
similar official of it or any substantial part of its property, and
such involuntary case or other proceeding shall remain undismissed and
unstayed, or an order or decree approving or ordering any of the
foregoing shall be entered and continued unstayed and in effect, in any
such event, for a period of 60 days; or
(e) The commencement by the Stockholder of a voluntary case or
proceeding under any applicable Federal, State or non-United States
bankruptcy, insolvency, reorganization or other similar law or of any
other case or proceeding to be adjudicated a bankrupt or insolvent, or
the consent by it to the entry of a decree or order for relief in
respect of the Stockholder in an involuntary case or
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proceeding under any applicable Federal, State or non-United States
bankruptcy, insolvency, reorganization or other similar law or to the
commencement of any bankruptcy or insolvency case or proceeding against
it, or the filing by it of a petition or answer or consent seeking
reorganization or relief under any applicable Federal, State or
non-United States law, or the consent by it to the filing of such
petition or to the appointment of or taking possession by a custodian,
receiver, liquidator, assignee, trustee, sequestrator or similar
official of the Stockholder or any substantial part of its property, or
the making by it of an assignment for the benefit of creditors, or the
admission by it in writing of inability to pay its debts generally as
they become due, or the taking of corporate action by the Stockholder
in furtherance of any such action,
then, and in any such event, the holder of this Recourse Note may declare, by
notice of default given to the Stockholder, the entire principal amount of this
Recourse Note to be forthwith due and payable, whereupon the entire principal
amount of this Recourse Note outstanding and any accrued and unpaid interest
hereunder shall become due and payable without presentment, demand, protest,
notice of dishonor and all other demands and notices of any kind, all of which
are hereby expressly waived. Upon the occurrence of an Event of Default, the
accrued and unpaid interest hereunder shall thereafter bear the same rate of
interest as on the principal hereunder, but in no event shall such interest be
charged which would violate any applicable usury law. If an Event of Default
shall occur hereunder, the Stockholder shall pay costs of collection, including
reasonable attorneys' fees, incurred by the holder in the enforcement hereof.
No delay or failure by the holder of this Recourse Note in the exercise
of any right or remedy shall constitute a waiver thereof, and no single or
partial exercise by the holder hereof of any right or remedy shall preclude
other or future exercise thereof or the exercise of any other right or remedy.
4. Miscellaneous.
(a) The provisions of this Recourse Note shall be governed by
and construed in accordance with the laws of the State of Texas,
without regard to the conflicts of law rules thereof. The provisions of
Section 14(l) of the Subscription Agreement are incorporated by
reference herein.
(b) All notices and other communications hereunder shall be in
writing and will be deemed to have been duly given if delivered or
mailed in accordance with the Subscription Agreement.
(c) All of Parent's rights and obligations under this Recourse
Note may be assigned by Parent at any time to an affiliate of Parent.
Stockholder may not assign any of its rights or obligations under this
Recourse Note.
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(d) The headings contained in this Recourse Note are for
reference purposes only and shall not affect in any way the meaning or
interpretation of the provisions hereof.
IN WITNESS WHEREOF, this Recourse Note has been duly executed and
delivered by the Stockholder on the date first above written.
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Stockholder:
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LISTING OF SELECT EXECUTIVE PARTICIPANTS
PARTICIPANT NUMBER OF SHARES LOAN AMOUNT
----------------- ---------------- -----------
Austin, X. Xxxxx 200,000 $ 400,000
Xxxx, Xxxxx 600,000 $1,200,000
Xxxxxxxxxxx, Xxxx 400,000 $ 800,000
Xxxx, Xxxxxxx X 2,000,000 $4,000,000
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