EXHIBIT 4.6
PLEDGE AGREEMENT
PLEDGE AGREEMENT ("Pledge Agreement"), dated as of May 19, 1999, by and
among TELEHUB COMMUNICATIONS CORPORATION, a Nevada corporation ("TCC"), TELEHUB
TECHNOLOGIES CORPORATION, a Nevada corporation (("TTC, and together with TCC,
collectively, the "Pledgors"), and STATE STREET BANK AND TRUST COMPANY ("SSB"),
as collateral agent (the "Collateral Agent"), for the holders of the Notes (as
defined herein).
W I T N E S S E T H:
WHEREAS, TCC, TeleHub Network Services Corporation, an Illinois
corporation, TTC, TeleHub Leasing Corporation, a Nevada corporation and SSB, as
Trustee (the "Parties"), are a party to that certain Indenture dated as of July
30, 1998 (as amended, restated, supplemented or otherwise modified from time to
time, the "Indenture"), pursuant to which TCC issued $125,000,000 aggregate
principal amount of 13-7/8% Senior Discount Notes due 2005 (the "Notes");
WHEREAS, on the date hereof, TCC is the sole legal and beneficial owner
of certain shares of common stock of TTC, as more particularly described in
Exhibit A hereto (the ("TTC Pledged Securities");
WHEREAS, on the date hereof, TTC is the legal and beneficial owner of
certain shares of common stock of Terabridge Corporation, a Nevada corporation
(("Newco"), as more particularly described in Exhibit B hereto (the ("Newco
Pledged Securities," and, together with the TTC Pledged Securities,
collectively, the ("Pledged Securities");
WHEREAS, the TTC Pledged Securities represent, on the date hereof, 100%
of the outstanding shares of Capital Stock of TTC and the Newco Pledged
Securities represent, on the date hereof, 81% of the outstanding shares of
Capital Stock of Newco;
WHEREAS, the Parties, on the date hereof, are entering into the
Supplemental Indenture, and in connection therewith, the Pledgors are required
to execute and deliver this Pledge Agreement; and
WHEREAS, to secure the payment and performance by TCC, TTC and the
other Guarantors of their respective obligations under the Indenture, the Notes
and this Pledge Agreement (collectively, the "Obligations"), including without
limitation, the due and punctual payment of principal of and interest on the
Notes when and as the same shall be due and payable whether on an interest
payment date, at maturity, by acceleration, repurchase, redemption or otherwise,
and on overdue principal of and interest on the Notes, the Pledgors have agreed
to place the Pledged Securities in the Pledge Account (as defined herein) to be
held by the Collateral Agent for the ratable benefit of Holders of the Notes and
to pledge and grant to the Collateral Agent for the ratable benefit of the
Holders of the Notes a security interest in the Pledged Securities and the
Pledge Account and to execute and deliver this Pledge Agreement.
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NOW, THEREFORE, Pledgors and Collateral Agent, intending legally to be
bound, hereby agree as follows:
1. Pledge and Grant of Security Interest.
(a) The Pledgors hereby pledge and deliver to the Collateral Agent for
the ratable benefit of the Holders of the Notes, and hereby grant to the
Collateral Agent for the ratable benefit of the Holders of the Notes a
continuing first priority security interest in and to, (i) all of the Pledgors'
rights, title and interest in, to and under the Pledged Securities and the
Pledge Account, (ii) all certificates or other evidences of ownership
representing the Pledged Securities (including one or more undated stock powers
executed in blank by the appropriate Pledgor), and (iii) all products and
proceeds of any of the Pledged Securities and/or Pledged Account, including
without limitation, all dividends, interest, principal payments, cash, options,
warrants, rights, instruments, subscriptions and other property or proceeds from
time to time received, receivable or otherwise distributed or distributable in
respect of or in exchange for any or all of the Pledged Securities (the "Initial
Collateral") and collectively, with any additional Collateral pledged or
required to be pledged under Section 1(b), and the products and proceeds
thereof, the "Collateral").
(b) If either Pledgor or any other Subsidiary of the Company shall make
any additional Investments in Newco, at any time or from time to time after the
date hereof, such Pledgor or Subsidiary as the case may be, will forthwith (i)
pledge and deposit such Investments as additional Collateral hereunder with the
Collateral Agent and deliver to the Collateral Agent certificates therefor
accompanied by undated stock or bond powers duly executed in blank by the
appropriate Pledgor or Subsidiary, as the case may be, or such other instruments
of transfer as are acceptable to the Collateral Agent, and will promptly
thereafter deliver to the Collateral Agent a certificate executed by any of the
President, any Vice President, or the Treasurer of TCC describing such
Investments and certifying that the same has been duly pledged with the
Collateral Agent hereunder and (ii) take such other and further actions as may
be required under the terms of the Indenture in connection therewith.
(c) This Pledge Agreement and the Collateral secure the Obligations.
2. Delivery of Collateral; Pledge Account; Interest; Substitution of
Collateral; Release of Collateral.
(a) All certificates or instruments representing or evidencing any
Collateral shall be delivered to and held by or on behalf of the Collateral
Agent pursuant hereto and shall be in suitable form for transfer and delivery,
and shall be accompanied by undated instruments of transfer or assignment, duly
executed in blank, all in form and substance satisfactory to the Collateral
Agent.
(b) Concurrent with the execution and delivery of this Pledge
Agreement, the Collateral Agent shall establish an account entitled the
("TELEHUB PLEDGE ACCOUNT" for the deposit of the Collateral (the "Pledge
Account") at its xxxxxx xx Xxx Xxxxxxxxxxxxx Xxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000.
Subject to the other terms and conditions of this Pledge Agreement, all funds or
other property accepted by the Collateral Agent pursuant to this Pledge
Agreement shall be held in the Pledge Account for the ratable benefit of the
Holders of the Notes, and any proceeds of or constituting Collateral shall
remain on deposit in the Pledge Account until withdrawn in accordance with this
Pledge Agreement.
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(c) All stock dividends and other securities issued with respect to or
otherwise constituting Collateral shall be retained in the Pledge Account and
shall be accompanied by an instrument of transfer contemplated by Section 2(a).
(d) All interest on or other cash dividends paid with respect to any
Collateral shall be paid over to and retained by the appropriate Pledgor subject
to compliance with Section 4.14 of the Indenture.
(e) Pledgors shall have the right at any time after the date hereof to
transfer, assign, sell or otherwise dispose of any or all of the Collateral (a
"Collateral Sale"); provided that (i) no Default or Event of Default shall have
occurred and be continuing or shall occur as a result thereof, (ii) without
limiting the generality of the foregoing, such Collateral Sale shall be in
compliance with the Asset Sale Offer provisions of Section 4.14 of the
Indenture, and (iii) Pledgors shall give ten (10) days prior written notice to
Collateral Agent of the terms, conditions and proposed date of such Collateral
Sale. In such event, the Collateral Agent shall (i) make available to Pledgors
at the closing of such Collateral Sale certificates representing the Collateral
proposed to be sold in such Collateral Sale; and (ii) release the Security
Interest in such Collateral against delivery of the proceeds from such
Collateral Sale (net of the out-of-pocket costs incurred in connection with such
Collateral Sale). The proceeds of any such Collateral Sale shall be immediately
transferred to the Pledge Account. Promptly (but in any case within 30 days)
after receipt of such proceeds, the Company shall make offers to Holders of
Notes consistent with the Asset Sale Offer provisions of Section 4.14 of the
Indenture. If any proceeds remain after compliance with such Asset Sale Offer
provisions, the Collateral Agent shall transfer such proceeds to the Company,
which may use such remaining proceeds for working capital and general corporate
purposes.
3. Representations and Warranties. The Pledgors, jointly and severally,
hereby represent and warrant that:
(a) The execution, delivery and performance by the Pledgors of this
Pledge Agreement has been duly authorized by the Pledgors and does not
contravene or constitute a default under any provision of applicable law,
regulation or the certificate of incorporation or bylaws of either of the
Pledgors, or of any judgment, injunction, order, decree or any material
agreement or instrument binding upon the Pledgors, and does not result in the
creation of imposition of any Lien on any asset of the Pledgors, except for the
security interests granted under this Pledge Agreement.
(b) No financing statement covering any Collateral is on file in any
public office, other than financing statements filed pursuant to this Pledge
Agreement.
(c) The pledge of the Initial Collateral pursuant to this Pledge
Agreement constitutes, and upon the delivery to the Collateral Agent of the
certificates, or other evidences, of any additional Collateral constituting
("securities" under the Uniform Commercial Code (("UCC"), and the filing of
financing statements required by the UCC with respect to other additional
Collateral the pledge of such other Collateral pursuant to this Pledge Agreement
will constitute, a valid and perfected first priority security interest in and
to the Collateral, securing the payment and performance of the Obligations for
the ratable benefit of the Holders of the Notes, enforceable as such against all
creditors of the Pledgors and any persons purporting to purchase any of the
Collateral from the Pledgors.
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(d) No consent of any other Person and no consent, authorization,
approval, or other action by, and no notice to or filing with, any governmental
authority or regulatory body, is required either (i) for the pledge by the
Pledgors of the Collateral pursuant to this Pledge Agreement or for the
execution, delivery or performance of this Pledge Agreement by the Pledgors or
(ii) for the exercise by the Collateral Agent of the rights provided for in this
Pledge Agreement of the remedies in respect of the Collateral pursuant to or in
connection with this Pledge Agreement.
(e) The pledge of the Collateral pursuant to this Pledge Agreement is
not prohibited by any applicable law or government regulation, release,
interpretation or opinion of the Board of Governors of the Federal Reserve
System or other regulatory agency (including, without limitation, Regulations G,
T, U and X of the Board of Governors of the Federal Reserve System).
(f) The statements made in the six "Whereas" clauses hereinabove are
true, correct and complete.
(g) Except for the Stockholders Agreement (as defined below), a true,
correct and complete copy of which has been delivered to the Collateral Agent on
or prior to the date hereof, there is no agreement or instrument binding upon
the Collateral Agent (including, without limitation, the charter and by-laws of
Newco) that restricts or purports to restrict the ability and power of the
Collateral Agent hereunder from taking ownership and control of any Collateral
or from effecting a Disposition thereof (as defined in the Stockholders
Agreement).
4. Further Assurances. The Pledgors agree to promptly take such other and
further actions and to execute and deliver or cause to be executed and
delivered, such other and further stock or bond powers, proxies, assignments,
instruments and writings, as the Collateral Agent may from time to time
reasonably request, all in form and substance satisfactory to the Collateral
Agent, deliver any instruments to the Collateral Agent and take any other
actions that are necessary to perfect, continue the perfection of, confirm
evidence, and/or assure the first priority of the Collateral Agent's security
interest in the Collateral, to protect the Collateral against the rights, claims
or interests of third Persons, and/or or to otherwise effect the purposes of
this Pledge Agreement. Notwithstanding the foregoing, the Collateral Agent shall
have no duty or obligation to ensure the maintenance or perfection of any
security interest hereunder.
5. Covenants. The Pledgors, jointly and severally, hereby covenant and
agree with the Collateral Agent for the benefit of the Holders of the Notes, as
follows:
(a) The Pledgors (i) will not create or permit to exist any Lien upon
or with respect to any of the Collateral, except for the Liens created pursuant
to this Pledge Agreement, and (ii) will at all times be the sole record and
beneficial owner of the Collateral.
(b) The Pledgors will not (i) enter into, approve or permit to exist
any agreement, instrument or understanding (including without limitation, the
charter and by-laws of Newco, but excluding the Stockholders Agreement) that
purports to or may restrict or inhibit the Collateral Agent's rights or remedies
hereunder, including, without limitation, the Collateral Agent's right to sell
or otherwise Dispose of the Collateral, or (ii) with regard to the Collateral,
fail to pay or discharge any tax, assessment or levy of any nature then due and
payable with respect thereto later than five days prior to the date of any
proposed sale under any judgment, writ or warrant of attachment.
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(c) The Pledgors will not (I) amend or permit the amendment of that
certain Stockholders Agreement, dated May 19, 1999, by and among TTC, Newco, and
Newbridge Networks Corporation (the ("Stockholders Agreement"), in any manner
which would actually or in effect (A) amend Section 14.24 thereof or (B)
otherwise materially adversely affect (i) the Collateral Agent's ability to sell
or otherwise Dispose of any of the Collateral under this Pledge Agreement or to
otherwise exercise its rights and remedies hereunder, (ii) the ability of a
purchaser of any Collateral in any sale contemplated or permitted under Section
10 to acquire the unencumbered title thereto subject only to, in the case of
Newco Pledged Securities or other Equity Interests in Newco, (x) Stockholders
Agreement restrictions on transfer in effect on the date hereof (as affected by
Section 14.24 thereof), and (y) other Stockholder Agreement provisions not
prohibited hereunder, or (iii) the payment or funding requirements and other
liabilities and obligations of the Collateral Agent or any such purchaser as the
direct or indirect transferee, successor and/or assign of TTC; or (II) take any
action, or otherwise permit to exist any other agreement or instrument
(including, without limitation, the charter and by-laws of Newco) having that
purpose or effect.
(d) The Pledgors will provide the Collateral Agent with a copy of any
notice delivered to or by either of the Pledgors under Sections 5, 7, 9 or 13 or
after a Default or Event of Default shall have occurred and be continuing,
Sections 2.3 or 3 of the Stockholders Agreement, within five (5) business days
of the delivery of any such notice.
6. Power of Attorney.
(a) Each Pledgor hereby constitutes and appoints the Collateral Agent
as such Pledgor's agent and attorney-in-fact to exercise, to the fullest extent
permitted by law, all of the following powers upon and at any time after the
occurrence and during the continuance of an Event of Default or upon Pledgors'
failure to take any of the following actions:
(i) collection of proceeds of any Collateral;
(ii) conveyance of any item of Collateral to any purchaser thereof
as specified herein;
(iii) giving of any notices or recording of any Liens pursuant to
Sections 1, 2 or 4 hereof;
(iv) taking any other acts required to be taken by the Pledgors
pursuant to this Pledge Agreement; and
(v) paying or discharging taxes or Liens levied or placed upon the
Collateral, the legality or validity thereof and the amounts
necessary to discharge the same to be determined by the
Collateral Agent in its sole discretion, and any such payments
made by the Collateral Agent shall become Obligations of the
Pledgors to the Collateral Agent, due and payable immediately
upon demand.
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(b) The Collateral Agent's authority under this Section 6 shall
include, without limitation, the authority to endorse and negotiate any checks
or instruments representing proceeds of Collateral in the names of the Pledgors,
execute and give receipt for any certificate of ownership or any document
constituting Collateral, transfer title to any item of Collateral, to the extent
permitted by applicable law, sign the Pledgors' names on all stock powers, bond
powers, or other instruments of assignment or transfer, financing statements or
any other documents deemed necessary or appropriate by the Collateral Agent to
preserve, process or perfect the security interest in the Collateral, and to
file the same, and to prepare, sign the names of the Pledgors and file any
notice of Lien, and to take any other actions arising from or incident to the
powers granted to the Collateral Agent in this Pledge Agreement. This power of
attorney is coupled with an interest and shall be irrevocable by the Pledgors.
7. Collateral Agent May Perform. If the Pledgors fail to perform any
agreement contained herein, the Collateral Agent may, but shall not be obligated
to, itself perform or cause performance of such agreement (as agent and
attorney-in-fact under Section 6 hereof, or otherwise), and the expenses
incurred by or on behalf of the Collateral Agent in connection therewith shall
be payable by the Pledgors under Section 10 hereof.
8. No Assumption of Duties; Reasonable Care. The rights and powers granted
to the Collateral Agent hereunder are being granted in order to preserve and
protect the security interest of the Collateral Agent for the ratable benefit of
the Holders of Notes in and to the Collateral granted hereby and shall not be
interpreted to, and shall not, impose any duties on the Collateral Agent or such
holders in connection therewith.
9. Indemnity. The Pledgors shall pay to the Collateral Agent from time to
time reasonable compensation for its acceptance of this Pledge Agreement and
services hereunder. Except as otherwise expressly provided herein, the Pledgors
shall reimburse the Collateral Agent promptly upon request for all reasonable
disbursements, advances and expenses incurred or made by it in addition to the
compensation for its services in accordance with any provision of this Pledge
Agreement (including, without limitation, the reasonable compensation, expenses
and disbursements of its counsel and of all agents and other persons not
regularly in its employ (A) in connection with the preparation, execution and
delivery of this Pledge Agreement, any waiver or consent hereunder, any
modification or termination hereof, or any Event of Default or alleged Event of
Default; (B) if an Event of Default occurs, in connection with such Event of
Default and collection, bankruptcy, insolvency and other enforcement proceedings
relating thereto; (C) in connection with the administration of the Collateral
Agent's rights pursuant hereto; or (D) in connection with any removal of the
Collateral Agent, except such disbursements, advances and expenses as may be
attributable to its gross negligence or bad faith.
The Pledgors shall indemnify the Collateral Agent against any and all
losses, liabilities, obligations, damages, penalties, judgments, actions, suits,
proceedings, reasonable costs and expenses (including reasonable fees and
disbursements of counsel) of any kind whatsoever which may be incurred by the
Collateral Agent in connection with any investigative, administrative or
judicial proceeding (whether or not such indemnified party is designated a party
to such proceeding) arising out of or in connection with the acceptance or
administration of its duties under this Pledge Agreement; PROVIDED, HOWEVER,
that the Pledgors need not reimburse any expense or indemnify against any loss,
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obligation, damage, penalty, judgment, action, suit, proceeding, reasonable cost
or expense (including reasonable fees and disbursements of counsel) of any kind
whatsoever which may be incurred by the Collateral Agent in connection with any
investigative, administrative or judicial proceeding (whether or not such
indemnified party is designated a party to such proceeding) in which it is
determined that the Collateral Agent acted with gross negligence, bad faith or
willful misconduct. The Collateral Agent shall notify the Pledgors promptly of
any claim for which it may seek indemnity. Failure by the Collateral Agent to so
notify the Pledgors shall not relieve the Pledgors of their respective
obligations hereunder. The Pledgors shall defend the claim and the Collateral
Agent shall cooperate in the defense. Unless otherwise set forth herein, the
Collateral Agent may have separate counsel and the Pledgors shall pay the
reasonable fees and expenses of such counsel. Pledgors need not pay for any
settlement made without its consent, which consent shall not be unreasonably
withheld.
The obligations of the Company under this Section 9 shall survive the
satisfaction and discharge of this Pledge Agreement.
When the Collateral Agreement incurs expenses or renders services after
an Event of Default, the expenses and the compensation for the services are
intended to constitute expenses of administration under any applicable
Bankruptcy Law.
10. Remedies upon Event of Default.
(a) Upon the occurrence of a ("Default" or ("Event of Default" under
the Indenture, including as a result of a default by the Pledgors under this
Pledge Agreement (as further described in Sections 6.1(10)(a), (b) and (c) of
the Indenture), the Collateral Agent shall have and may exercise with reference
to the Collateral any or all of the rights and remedies of a secured party under
the UCC in effect in the Commonwealth of Massachusetts, and as otherwise granted
herein or under any other applicable law, including, without limitation, the
right and power to sell, at public or private sale or sales, or otherwise
dispose of, or otherwise utilize the Collateral and any part or parts thereof,
in any manner authorized or permitted under said UCC after default by a debtor,
and to apply the proceeds thereof toward payment of any costs and expenses and
attorneys' fees and expenses thereby incurred by the Collateral Agent and toward
payment of the Obligations in such order or manner as the Collateral Agent may
elect. Specifically, and without limiting the foregoing, the Collateral Agent
shall have the right to take possession of all or any part of the Collateral or
any security therefor and of all books, records, papers and documents of the
Pledgors or in the Pledgors' possession or control relating to the Collateral
that are not already in the Collateral Agent's possession, and for such purpose
may enter upon any premises upon which any of the Collateral or any security
therefor or any of said books, records, papers and documents are situated and
remove the same therefore without any liability for trespass or damages thereby
occasioned. The Collateral Agent shall give Pledgors twenty (20) days notice,
given in the manner provided in Section 16 hereof before the time of any such
sale or disposition. Pledgors agree that such notice shall be deemed reasonable
and shall fully satisfy any requirement for giving of said notice. The
Collateral Agent shall not be obligated to make any sale of Collateral
regardless of notice of sale having been given. The Collateral Agent may adjourn
any public or private sale. The Pledgors further agree to use their respective
best efforts to do or cause to be done all such other acts as may be necessary
to effect the intention of this Section 10.
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(b) All rights to marshalling of assets of the Pledgors, including any
such right with respect to the Collateral, are hereby waived by the Pledgors.
The Pledgors shall not contest or support any other person in contesting the
validity or priority of the security interests created under this Pledge
Agreement.
11. Fees and Expenses. The Pledgors shall, upon demand, pay to the
Collateral Agent the amount of the fees (which shall be in an amount previously
agreed by the Pledgors and the Collateral Agent) and any and all reasonable
expenses (including, without limitation, the reasonable fees, expenses and
disbursements of counsel, experts and agents retained by the Collateral Agent)
that the Collateral Agent may incur in connection with (i) the administration of
this Pledge 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 the Collateral Agent and the
holders of the Notes hereunder, or (iv) the failure by the Pledgors to perform
or observe any of the provisions hereof.
12. Security Interest Absolute. All rights of the Collateral Agent and the
holders of the Notes, and the security interests created hereunder, and all
obligations of the Pledgors hereunder, shall be absolute and unconditional
irrespective of any:
(a) invalidity or unenforceability of the Indenture, the Supplemental
Indenture, the Notes, any of the Guarantees, or any other agreement or
instrument relating thereto;
(b) 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 the Indenture or Notes;
(c) exchange, surrender, release or non-perfection of any Liens on any
other collateral for all or any of the Obligations or any release of any
Guarantor; or
(d) other action, event or circumstances that might otherwise
constitute a defense available to, or a discharge of, Pledgors in respect to
Obligations or of this Pledge Agreement.
13. Continuing Security Interest; Termination.
(a) This Pledge Agreement shall create a first priority continuing
security interest in and to the Collateral and shall, unless otherwise provided
in the Indenture or in this Pledge Agreement, be released (i) upon the payment
in full of all Obligations due and owing or (ii) to the extent of any Collateral
Sale in compliance with Section 2(e). This Pledge Agreement shall be binding
upon the Pledgors, their respective successors and assigns, and shall inure,
together with the rights and remedies of the Collateral Agent hereunder, to the
benefit of the Collateral Agent and the holders of the Notes and their
respective successors, transferees and assigns.
(b) This Pledge Agreement shall terminate upon the earlier of (i)
payment in full in cash of all Obligations; and (ii) the sale of all of the
Collateral pursuant to a Collateral Sale in compliance with Section 2(e). At
such time, the Collateral Agent shall, at the written request of the Pledgors,
reassign and redeliver to the Pledgors all of the Collateral hereunder that has
not been sold, disposed of, retained or applied by the Collateral Agent in
accordance with the terms of this Pledge Agreement and the Indenture. Such
reassignment and redelivery shall be without warranty (either express or
implied) by or recourse to the Collateral Agent, except as to the absence of any
prior assignments by the Collateral Agent of its interest in the Collateral, and
shall be at the expense of the Pledgors.
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14. Authority of the Collateral Agent.
(a) The Collateral Agent shall have and be entitled to exercise all
powers hereunder that are specifically granted to the Collateral Agent by the
terms hereof, together with such powers as are reasonably incident thereto. The
Collateral Agent may perform any of its duties hereunder or in connection with
the Collateral by or through agents or employees and shall be entitled to retain
counsel and to act in reliance upon the advice of counsel concerning all such
matters. None of the Collateral Agent, any director, officer, employee, attorney
or agent of the Collateral Agent nor the holders of the Notes shall be liable to
the Pledgors for any action taken or omitted to be taken by Pledgors or either
of them hereunder, except for Pledgors' or their own bad faith, gross negligence
or willful misconduct, nor shall the Collateral Agent be responsible for the
validity, effectiveness or sufficiency hereof or of any document or security
furnished pursuant hereto. The Collateral Agent and its directors, officers,
employees, attorneys and agents shall be entitled to rely on any communication,
instrument or document believed by it or them to be genuine and correct and to
have been signed or sent by the proper Person or Persons.
(b) The Pledgors acknowledge that the rights and responsibilities of
the Collateral Agent under this Pledge Agreement with respect to any action
taken by the Collateral Agent or the exercise or non-exercise by the Collateral
Agent of any option, right, request, judgment or other right or remedy provided
for herein or resulting or arising out of this Pledge Agreement shall, as
between the Collateral Agent and the holders of the Notes, be governed by the
Indenture and by such other agreements with respect thereto as may exist from
time to time among them, but, as between the Collateral Agent and the Pledgors,
the Collateral Agent shall be conclusively presumed to be acting as agent for
the holders of the Notes with full and valid authority so to act or refrain from
acting, and the Pledgors shall not be obligated or entitled to make any inquiry
respecting such authority.
(c) The Collateral Agent undertakes to perform such duties and only
such duties as are specifically set forth in this Pledge Agreement and no
implied covenants or obligations shall be read into this Pledge Agreement
against the Collateral Agent. The Collateral Agent shall not be deemed to have
knowledge of an Event of Default under the Indenture unless informed in writing
by a Pledgor or the Holder of any Note.
(d) Collateral Agent shall not be required to exercise any remedies
hereunder unless requested in writing to do so by the holders of a majority in
principal amount of the outstanding Notes and only if furnished with indemnity
satisfactory to the Collateral Agent. Collateral Agent may consult with counsel
and shall not be liable for any action taken in good faith in reliance upon
advice of counsel, except for gross negligence or willful misconduct. The
Collateral Agent makes no representation or warranty and shall have no
responsibility concerning the value or validity of the Collateral or the
validity or perfection of the pledge thereof.
(e) The Collateral Agent shall be deemed to have exercised reasonable
care in the custody and preservation of the Collateral in its possession if the
Collateral is accorded treatment substantially equal to that which an ordinary
person accords its own property, it being understood that neither the Collateral
Agent nor the holders of the Notes shall have responsibility for (i)
ascertaining or taking action with respect to calls, conversions, exchanges,
maturities, tenders or other matters relative to any Collateral, whether or not
any such Person has or is deemed to have knowledge of such matters, or (ii)
taking any necessary steps to preserve rights against any parties with respect
to any Collateral.
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(f) Any resignation or removal of the Collateral Agent and appointment
of a successor Collateral Agent shall become effective only in accordance with
the provisions of Section 7.8 of the Indenture.
15. Notices. Any communication, notice or demand to be given hereunder
shall be duly given hereunder if given in the form and manner required by the
Indenture, and delivered to any recipient's address as set forth in the
Indenture, or in such other form and manner or to such other address as shall be
designated by any party hereto to each other party hereto in a written notice
delivered in accordance with the terms of the Indenture.
16. No Waiver; Cumulative Rights. No failure on the part of the Collateral
Agent to exercise and no delay in exercising any right, remedy or power
hereunder shall operate as a waiver thereof, nor shall any single or partial
exercise by the Collateral Agent or any right, remedy or power hereunder
preclude any other or future exercise of any other right, remedy or power. Each
and every right, remedy and power hereby granted to the Collateral Agent or
allowed it by law under this Pledge Agreement or under any other agreement shall
be cumulative and not exclusive, and may be exercised by the Collateral Agent
from time to time.
17. Benefits of Pledge Agreement.
Nothing in this Pledge Agreement, whether express or implied, shall
give to any Person other than the parties hereto and their successors hereunder,
and the holders of the Notes, any benefit or any legal or equitable right,
remedy or claim under this Pledge Agreement.
18. Voting. Unless and until a Default or Event of Default shall have
occurred and be continuing, the Pledgors shall be entitled to vote any and all
Pledged Securities and to give consents, waivers or ratifications in respect
thereof, provided that no vote shall be cast or any consent, waiver or
ratification given or any action taken which would violate or be inconsistent
with any of the terms of this Pledge Agreement. In the event that a Default or
Event of Default shall have occurred and be continuing, all such rights of the
Pledgors to vote and to give consents, waivers and ratifications shall cease,
and shall be exercisable exclusively by the Collateral Agent.
19. Applicable Law; Consent to Jurisdiction; Waiver of Jury Trial.
(a) THIS PLEDGE AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL
LAWS OF THE STATE OF NEW YORK. TO INDUCE THE COLLATERAL AGENT TO ENTER INTO THIS
PLEDGE AGREEMENT, THE PLEDGORS HEREBY IRREVOCABLY AGREE THAT, SUBJECT TO THE
COLLATERAL AGENT'S SOLE AND ABSOLUTE ELECTION, ALL ACTIONS OR PROCEEDINGS THAT
10
IN ANY MANNER ARISE OUT OF OR IN CONNECTION WITH OR ARE IN ANY WAY RELATED TO
THIS PLEDGE AGREEMENT SHALL BE LITIGATED IN COURTS LOCATED WITHIN THE COUNTY OF
NEW YORK, STATE OF NEW YORK. THE PLEDGORS HEREBY CONSENT TO THE JURISDICTION OF
ANY STATE OR FEDERAL COURT LOCATED WITHIN THE COUNTY OF NEW YORK, STATE OF NEW
YORK. THE PLEDGORS HEREBY IRREVOCABLY CONSENT TO THE SERVICE OF PROCESS OF ANY
OF THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF
COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL TO THE PLEDGORS' NOTICE ADDRESS
SPECIFIED HEREIN. THE PLEDGORS HEREBY WAIVE ANY RIGHT THEY MAY HAVE TO TRANSFER
OR CHANGE THE VENUE OF ANY LITIGATION BETWEEN THE PLEDGOR AND THE COLLATERAL
AGENT IN ACCORDANCE WITH THIS PARAGRAPH. EACH OF THE PLEDGORS AND THE COLLATERAL
AGENT HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHT TO TRIAL
BY JURY IN ANY ACTION OR PROCEEDING THAT IN ANY MANNER ARISES OUT OF OR IN
CONNECTION WITH OR IS IN ANY WAY RELATED TO THIS PLEDGE AGREEMENT OR ANY OF THE
TRANSACTIONS CONTEMPLATED HEREIN.
(b) THE PROVISIONS OF THIS SECTION 19 ARE A MATERIAL INDUCEMENT FOR THE
COLLATERAL AGENT ENTERING INTO THIS PLEDGE AGREEMENT AND THE TRANSACTIONS
CONTEMPLATED HEREBY. THE PLEDGORS HEREBY ACKNOWLEDGE THAT THEY HAVE REVIEWED THE
PROVISIONS OF THIS SECTION 19 WITH INDEPENDENT COUNSEL.
20. Execution in Counterparts. This Pledge Agreement may be executed in any
number of counterparts, each of which shall be an original, but such
counterparts shall together constitute one and the same instrument.
21. Settlement. Amounts, if any, held in the Pledge Account pending
settlement of purchase of the Pledged Securities shall constitute Collateral
hereunder, shall be held by the Collateral Agent for the benefit of the Holders
of the Notes and a portion thereof equal to the aggregate price paid for such
Pledged Securities shall be released by the Collateral Agent (without further
direction or instruction required from any other party hereto) against delivery
of such Pledged Securities, and any excess funds remaining in the Pledge Account
after giving effect to such settlement shall be promptly forwarded to the
Pledgors.
22. Defined Terms. Capitalized terms used but not otherwise defined herein
shall have the meanings given to such terms in the Indenture.
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Stock Pledge Agreement
IN WITNESS WHEREOF, the parties hereto have executed this Pledge
Agreement as of the date first above written.
TELEHUB COMMUNICATIONS CORPORATION
By:_________________________________________
Xxxx X. Xxxxxx, Chief Financial Officer
TELEHUB TECHNOLOGIES CORPORATION
By:_________________________________________
Xxxx X. Xxxxxx, III, President
STATE STREET BANK AND TRUST COMPANY,
as Collateral Agent
By:___________________________________________
Xxx Xx
Assistant Vice President
