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Exhibit 4.5
EXECUTION COPY
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COLLATERAL PLEDGE AND SECURITY AGREEMENT
Dated as of April 13, 1998
Between
LONG DISTANCE INTERNATIONAL INC.
and
THE BANK OF NEW YORK
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COLLATERAL PLEDGE AND SECURITY AGREEMENT
This COLLATERAL PLEDGE AND SECURITY AGREEMENT (this "Pledge
Agreement") is made and entered into as of April 13, 1998 by LONG DISTANCE
INTERNATIONAL INC., a Florida corporation (the "Pledgor"), having its principal
office at 000 Xxxxx Xxxxxxx Xxxxxx, Xxxxx 000, Xxxx Xxxxxxxxxx, Xxxxxxx 00000,
in favor of THE BANK OF NEW YORK, a New York banking corporation, having an
office at 000 Xxxxxxx Xxxxxx, 00 Xxxx, Xxx Xxxx, Xxx Xxxx, 00000, as trustee
(the "Trustee") for the holders (the "Holders") of the Notes (as defined herein)
issued by the Pledgor under the Indenture referred to below. Capitalized terms
used herein and not otherwise defined herein shall have the meanings given to
such terms in the Indenture.
W I T N E S S E T H
WHEREAS, the Pledgor and The Bank of New York, as Trustee, have
entered into that certain indenture dated as of the date hereof (as amended,
restated, supplemented or otherwise modified from time to time, the
"Indenture"), pursuant to which the Pledgor is issuing on the date hereof
$225,000,000 in aggregate principal amount of 12.25% Senior Notes due 2008 (the
"Notes"); and
WHEREAS, the Pledgor has agreed, pursuant to the Indenture, to (i)
purchase or cause the purchase of Pledged Securities (as defined herein) in an
amount that will be sufficient upon receipt of scheduled interest and principal
payments in respect thereof to provide for the payment of the first six
scheduled interest payments due on the Notes (assuming any interest that may be
payable if the Exchange Offer is not consummated and the Shelf Registration
Statement is not declared effective) and (ii) place such Pledged Securities (or
cause them to be placed) in an account held by the Trustee for the benefit of
Holders of the Notes; and
WHEREAS, to secure the obligations of the Pledgor under the
Indenture and the Notes to pay in full each of the first six scheduled interest
payments on the Notes and to secure repayment of the principal, premium (if any)
and interest on the Notes in the event that the Notes become due and payable
prior to such time as the first six scheduled interest payments thereon shall
have been paid in full (collectively, the "Obligations"), the Pledgor has agreed
(i) to pledge to the Trustee for its benefit and the ratable benefit of the
Holders of the Notes, a security interest in the Pledged Securities (as defined
herein) and related collateral and (ii) to execute and deliver this Pledge
Agreement in order to secure the payment and performance by the Pledgor of all
the Obligations; and
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WHEREAS, it is a condition precedent to the initial purchase of the
Notes by the initial Holders thereof that the Pledgor shall have granted the
security interest and made the pledge contemplated by this Pledge Agreement; and
WHEREAS, unless otherwise defined herein or in the Indenture, terms
used in Articles 8 or 9 of the Uniform Commercial Code ("UCC") as in effect in
the State of New York are used herein as therein defined.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual promises herein
contained, and in order to induce the Holders of the Notes to purchase the
Notes, the Pledgor hereby agrees with the Trustee, for the benefit of the
Trustee and for the ratable benefit of the Holders of the Notes, as follows:
SECTION 1. Pledge and Grant of Security Interest. The Pledgor hereby
pledges to the Trustee for its benefit and for the ratable benefit of the
Holders of the Notes, and hereby grants to the Trustee for its benefit and for
the ratable benefit of the Holders of the Notes, a continuing first priority
security interest in and to all of the Pledgor's right, title and interest in,
to and under the following (hereinafter collectively referred to as the
"Collateral"), whether characterized as investment property, general intangibles
or otherwise: (a) the United States Treasury securities identified by CUSIP No.
in Annex 1 to Exhibit A to this Pledge Agreement (the "Pledged Securities"), (b)
any and all applicable security entitlements to the Pledged Securities, (c) The
Bank of New York account in the name of "BNY, Trustee, LDI Collateral Pledge
A/C", Administrative Account No. 015175 (the "Pledge Account") established and
maintained by the Trustee pursuant to this Pledge Agreement, (d) any and all
related securities accounts in which security entitlements to the Pledged
Securities are carried, (e) all notes, certificates of deposit, deposit
accounts, checks and other instruments from time to time hereafter delivered to
or otherwise possessed by the Trustee for or on behalf of the Pledgor in
substitution for or in addition to any or all the then existing Collateral, (f)
all interest, dividends, cash, instruments and other property from time to time
received, receivable or otherwise distributed in respect of or in exchange for
any or all of the then existing Collateral, and (g) all proceeds of any and all
of the foregoing Collateral (including, without limitation, proceeds that
constitute property of the types described in clauses (a) - (f) of this Section
1) and, to the extent not otherwise included, all cash.
SECTION 2. Security for Obligation. This Pledge Agreement and the
grant of a security interest in the Pledged Securities and the Pledge Account
hereunder secures the prompt and complete payment and performance when due
(whether at stated maturity, by acceleration or otherwise) of all the
Obligations, whether for principal, interest, fees or otherwise, now or
hereafter existing, under this Pledge Agreement, the Notes or the Indenture (all
such Obligations
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being the "Secured Obligations"). Without limiting the generality of the
foregoing, this Pledge Agreement and the grant of a security interest in the
Pledged Securities and the Pledge Account hereunder secures the payment of all
amounts that constitute part of the Secured Obligations and would be owed by the
Pledgor to the Trustee or the Holders under the Notes or the Indenture but for
the fact that they are unenforceable or not allowable due to the existence of a
bankruptcy, reorganization or similar proceeding involving the Pledgor.
SECTION 3. Maintaining the Pledge Account. So long as any Secured
Obligation shall remain outstanding:
(a) The Pledgor will maintain separately the Pledge Account with The
Bank of New York.
(b) It shall be a term and condition of the Pledge Account,
notwithstanding any term or condition to the contrary in any other
agreement relating to the Pledge Account, and except as otherwise provided
by the provisions of Section 5 and Section 15.9, that no amount shall be
paid or released to or for the account of, or withdrawn by or for the
account of, the Pledgor or any other Person from the Pledge Account.
The Pledge Account shall be subject to such applicable laws, and
such applicable regulations of the Board of Governors of the Federal Reserve
System and of any other appropriate banking or governmental authority, as may
now or hereafter be in effect.
SECTION 4. Delivery of Collateral; Pledge Account; Interest. (a) The
Pledged Securities shall be pledged and transferred to the Trustee and the
Trustee shall become the holder of a security entitlement to the Pledged
Securities, through action by the Federal Reserve Bank of New York ("FRBNY"),
The Bank of New York or another securities intermediary, as confirmed (in
writing or electronically or otherwise in accordance with standard industry
practice) to the Trustee by FRBNY, The Bank of New York or such other securities
intermediary (i) indicating by book-entry that the Pledged Securities or a
security entitlement thereto has been credited to the Trustee's account, or (ii)
acquiring the Pledged Securities or a security entitlement thereto for the
Trustee and accepting the same for credit to a securities account of the
Trustee.
(b) With respect to any Collateral that constitutes a security and
is not represented or evidenced by a certificate or an instrument, the
Pledgor shall cause the issuer thereof either (i) to register the Trustee
as the registered owner of such security or (ii) to agree in writing with
the Pledgor and the Trustee that such issuer will comply with instructions
with respect to such security originated by the Trustee without further
consent of the Pledgor, such agreement to be in form and substance
satisfactory to the Trustee.
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(c) With respect to any Collateral that constitutes a security
entitlement, the Pledgor shall cause the securities intermediary with
respect to such security entitlement either (i) to identify in its records
the Trustee as having such security entitlement against such securities
intermediary or (ii) to agree in writing with the Pledgor and the Trustee
that such securities intermediary will comply with entitlement orders
(that is, notifications communicated to such securities intermediary
directing transfer or redemption of the financial asset to which the
Pledgor has a security entitlement) originated by the Trustee without
further consent of the Pledgor, such agreement to be in form and substance
satisfactory to the Trustee.
(d) With respect to any Collateral that constitutes a securities
account, the Pledgor will comply with subsection (c) of this Section 4
with respect to all security entitlements carried in such securities
account.
(e) Prior to or concurrently with the execution and delivery hereof
and prior to the transfer to the Trustee of the Pledged Securities (or
acquisition by the Trustee of any security entitlement thereto), as
provided in subsection (a) of this Section 4, the Trustee shall establish
the Pledge Account on its books as an account segregated from all other
custodial or collateral accounts at its office at 000 Xxxxxxx Xxxxxx, 21
West, New York, New York, 10286, Attention: Xxxxx Xxxxxxx, Corporate Trust
Administration. Upon transfer of the Pledged Securities to the Trustee (or
the Trustee's acquisition of a security entitlement thereto), as confirmed
to the Trustee by FRBNY, The Bank of New York or another securities
intermediary, the Trustee shall make appropriate book entries indicating
that the Pledged Securities and/or such security entitlements have been
credited to and are held in the Pledge Account. Subject to the other terms
and conditions of this Pledge Agreement, all funds or other property held
by the Trustee pursuant to this Pledge Agreement shall be held in the
Pledge Account subject (except as expressly provided in Sections 5(a),
(b), (c), (d) and (e) hereof) to the exclusive dominion and control of the
Trustee and exclusively for the benefit of the Trustee and for the ratable
benefit of the Holders of the Notes and segregated from all other funds or
other property otherwise held by the Trustee.
(f) All Collateral shall be retained in the Pledge Account pending
disbursement pursuant to the terms hereof.
(g) Concurrently with the execution and delivery of this Pledge
Agreement, the Trustee is delivering to the Pledgor, Xxxxxx Xxxxxxx & Co.
Incorporated and SBC Warburg Dillon Read Inc., a duly executed
Notification and Control Agreement ("Control Agreement"), in the form of
Exhibit A hereto, of an officer of the Trustee, confirming the Trustee's
establishment and separate maintenance of the Pledge Account, its receipt
and holding of the Pledged Securities or any security entitlement thereto
and the crediting of
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the Pledged Securities or such security entitlements to the Pledge
Account, all in accordance with this Pledge Agreement.
(h) Concurrently with the execution and delivery of this Pledge
Agreement, the Pledgor is delivering to the Trustee acknowledgment copies
or stamped receipt copies of proper financing statements, duly filed on or
before the Closing Date under the UCC of the State of Florida, covering
the Collateral described in this Pledge Agreement.
SECTION 5. Disbursements. (a) Three business days prior to the due
date of any of the first six scheduled interest payments on the Notes, the
Pledgor may, pursuant to written instructions given by the Pledgor to the
Trustee (an "Issuer Order"), direct the Trustee to release from the Pledge
Account and pay to the Holders of the Notes proceeds sufficient to provide for
payment in full of such interest then due on the Notes. Upon receipt of an
Issuer Order, the Trustee will release funds in an amount sufficient to provide
for the payment of the interest on the Notes in accordance with such Issuer
Order and the payment provisions of the Indenture to the Holders of the Notes
from (and to the extent of) proceeds of the Pledged Securities in the Pledge
Account. Nothing in this Section 5 shall affect the Trustee's rights to apply
the Collateral to the payments of amounts due on the Notes upon acceleration
thereof.
(b) If the Pledgor makes any interest payment or portion of an
interest payment for which the Collateral is security from a source of
funds other than the Pledge Account ("Pledgor Funds"), the Pledgor may,
after payment in full of such interest payment, direct the Trustee
pursuant to an Issuer Order to release to the Pledgor or to another party
at the direction of the Pledgor (the "Pledgor's Designee") proceeds from
the Pledge Account in an amount less than or equal to the amount of
Pledgor Funds applied to such interest payment. Upon receipt by the
Trustee of such Issuer Order and provided the Trustee has received such
interest payment, the Trustee shall pay over to the Pledgor or the
Pledgor's Designee, as the case may be, the requested amount from proceeds
in the Pledge Account as soon as practicable.
(c) If at any time the principal of and interest on the Pledged
Securities exceeds 100% of the amount sufficient, in the written opinion
of a nationally recognized firm of independent accountants selected by the
Pledgor and delivered to the Trustee, to provide for payment in full of
the remaining first six scheduled interest payments due on the Notes, the
Pledgor may direct the Trustee to release any such excess amount to the
Pledgor or to the Pledgor's Designee. Upon receipt of an Issuer Order
(which shall include a certificate from such nationally recognized firm of
independent accountants stating the amount by which the Pledged Securities
exceeds the amount required to be held in the Pledge Account) the Trustee
shall pay over to the Pledgor or the Pledgor's Designee, as the case may
be, any such excess amount.
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(d) Upon payment in full of the first six scheduled interest
payments on the Notes, the security interest in the Collateral evidenced
by this Pledge Agreement will automatically terminate and be of no further
force and effect and the Collateral shall promptly be paid over and
transferred to the Pledgor. Furthermore, upon the release of any
Collateral from the Pledge Account in accordance with the terms of this
Pledge Agreement, whether upon release of Collateral to Holders as payment
of interest or otherwise, the security interest evidenced by this Pledge
Agreement in such released Collateral will automatically terminate and be
of no further force and effect.
(e) At least three Business Days prior to the due date of each of
the first six scheduled interest payments on the Notes, the Pledgor shall
give the Trustee notice (by Issuer Order) as to whether such interest
payment will be made pursuant to Section 4(a) or 4(b) above and the
respective amounts of interest that will be paid from the Pledge Account
and from Pledgor Funds. Any Pledgor Funds to be used to make any interest
payment shall be delivered to the Trustee, in immediately available funds,
prior to 10:00 a.m. (New York City time) on such interest payment date. If
no such notice is given or such Pledgor Funds have not been so delivered,
the Trustee will act pursuant to Section 4(a) above as if it had received
an Issuer Order pursuant thereto for the payment in full of the interest
then due from the Pledge Account.
(f) The Trustee shall liquidate Collateral in the Pledge Account
(pursuant to written instructions from Pledgor) in order to make any
scheduled payment of interest unless there are sufficient funds in the
Pledge Account on such interest payment date.
(g) Nothing contained in this Pledge Agreement shall (i) afford the
Pledgor any right to issue entitlement orders with respect to any security
entitlement to the Pledged Securities or any securities account in which
any such security entitlement may be carried, or otherwise afford the
Pledgor control of any such security entitlement or (ii) otherwise give
rise to any rights of the Pledgor with respect to the Pledged Securities,
any security entitlement thereto or any securities account in which any
such security entitlement may be carried, other than the Pledgor's rights
under this Pledge Agreement as the beneficial owner of collateral pledged
to and subject to the exclusive dominion and control (except as expressly
provided in Sections 5(a), (b) and (c) hereof) of the Trustee in its
capacity as such (and not as a securities intermediary). The Pledgor
acknowledges, confirms and agrees that the Trustee holds a security to the
Pledged Securities solely as Trustee for the Holders of the Notes and not
as a securities intermediary.
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SECTION 6. Representations and Warranties. The Pledgor hereby
represents and warrants that:
(a) The execution and delivery by the Pledgor of, and the
performance by the Pledgor of its obligations under, this Pledge Agreement
will not contravene any provision of applicable law or the Articles of
Incorporation of the Pledgor or any material agreement or other material
instrument binding upon the Pledgor or any of its subsidiaries or any
judgment, order or decree of any governmental body, agency or court having
jurisdiction over the Pledgor or any of its subsidiaries, or result in the
creation or imposition of any Lien on any assets of the Pledgor, except
for the security interests granted under this Pledge Agreement.
(b) No consent of any other person and no approval, authorization,
order of, action by or qualification with, any governmental authority,
regulatory body, agency or other third party is required (i) for the
execution, delivery or performance by the Pledgor of its obligations under
this Pledge Agreement, (ii) for the grant by the Pledgor of the security
interest created hereby, for the pledge by the Pledgor of the Collateral
pursuant to this Pledge Agreement or (iii) except for any such consents,
approvals, authorizations or orders required to be obtained by the Trustee
(or the Holders) for reasons other than the consummation of this
transaction, for the exercise by the Trustee of the rights provided for in
this Pledge Agreement or the remedies in respect of the Collateral
pursuant to this Pledge Agreement.
(c) The Pledgor is the beneficial owner of the Collateral, free and
clear of any Lien or claims of any person or entity (except for the
security interests created by this Pledge Agreement). No financing
statement or instrument similar in effect covering all or any part of the
Pledgor's interest in the Pledged Securities is on file in any public or
recording office, other than the financing statements filed pursuant to
this Pledge Agreement. The Pledgor has no trade names.
(d) This Pledge Agreement has been duly authorized, validly executed
and delivered by the Pledgor and constitutes a valid and binding agreement
of the Pledgor, enforceable against the Pledgor in accordance with its
terms, except as (i) the enforceability hereof may be limited by
bankruptcy, insolvency, fraudulent conveyance, preference, reorganization,
moratorium or similar laws now or hereafter in effect relating to or
affecting creditors' rights or remedies generally, (ii) the availability
of equitable remedies may be limited by equitable principles of general
applicability, (iii) the exculpation provisions and rights to
indemnification hereunder may be limited by U.S. federal and state
securities laws and public policy considerations and (iv) the waiver of
rights and defenses contained in Section 12(b), Section 15.11 and Section
15.15 hereof may be limited by applicable law.
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(e) Upon the transfer to the Trustee of the Pledged Securities and
the acquisition by the Trustee of a security entitlement thereto, in
accordance with Section 3 above, the pledge and grant of a security
interest in the Collateral pursuant to this Pledge Agreement for the
benefit of the Trustee and the Holders of the Notes will constitute a
valid and perfected first priority security interest in such Collateral,
securing the payment of the Secured Obligations enforceable as such
against all creditors of the Pledgor (and any persons purporting to
purchase any of the Collateral from the Pledgor).
(f) There are no legal or governmental proceedings pending or, to
the best of the Pledgor's knowledge, threatened to which the Pledgor or
any of its subsidiaries is a party or to which any of the properties of
the Pledgor or any such subsidiary is subject that would materially
adversely affect the power or ability of the Pledgor to perform its
obligations under this Pledge Agreement or to consummate the transactions
contemplated hereby.
(g) The pledge of the Collateral pursuant to this Pledge Agreement
is not prohibited by law or governmental regulation (including, without
limitation, Regulations G, T, U and X of the Board of Governors of the
Federal Reserve System) applicable to the Pledgor.
(h) No Event of Default (as defined herein) exists.
SECTION 7. Further Assurances. The Pledgor will promptly pay all
costs incurred in connection with this Pledge Agreement within 30 days of
receipt of an invoice therefor. The Pledgor agrees to take all actions that are
necessary to perfect or continue the perfection of, or to protect the first
priority of, the Trustee's security interest in and to the Collateral, including
the filing of all necessary financing and continuation statements, and to
protect the Collateral against the rights, claims or interests of third persons
(other than any such rights, claims or interests created by or arising through
the Trustee).
SECTION 8. Covenants. The Pledgor covenants and agrees with the
Trustee and the Holders of the Notes that from and after the date of this Pledge
Agreement until the earlier of payment in full in cash of (x) each of the first
six scheduled interest payments due on the Notes under the terms of the
Indenture or (y) all obligations due and owing under the Indenture and the Notes
in the event such obligations become due and payable prior to the payment in
full of the first six scheduled interest payments on the Notes:
(a) that (i) it will not (and will not purport to) sell or otherwise
dispose of, or grant any option or warrant with respect to, any of the
Collateral or its beneficial interest therein, and (ii) it will not create
or permit to exist any Lien or other adverse interest in or
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with respect to its beneficial interest in any of the Collateral (except
for the security interests granted under this Pledge Agreement); and
(b) that it will not (i) enter into any agreement or understanding
that restricts or inhibits or purports to restrict or inhibit the
Trustee's rights or remedies hereunder, including, without limitation, the
Trustee's right to sell or otherwise dispose of the Collateral or (ii)
fail to pay or discharge any tax, assessment or levy of any nature with
respect to its beneficial interest in the Collateral not later than five
days prior to the date of any proposed sale under any judgment, writ or
warrant of attachment with respect to such beneficial interest.
SECTION 9. Power of Attorney. The Pledgor hereby appoints and
constitutes the Trustee as the Pledgor's attorney-in-fact (with full power of
substitution), with full authority in the place and stead of the Pledgor and in
the name of the Pledgor or otherwise, from time to time in the Trustee's
discretion to take any action and to execute any instrument that the Trustee may
deem necessary or advisable to accomplish the purposes of this Pledge Agreement;
provided, however, that the Trustee shall have no obligation to perform any of
the foregoing actions. The Trustee's authority under this Section 9 shall
include, without limitation, the authority to execute or endorse (a) any checks
or instruments representing proceeds of Collateral in the name of the Pledgor,
(b) any receipts for any certificate of ownership or any document constituting
Collateral or transferring title to any item of Collateral, (c) any financing
statements (to the extent permitted by applicable law) or (d) any other
documents delivered to the Trustee. This power of attorney is coupled with an
interest and is irrevocable by the Pledgor.
SECTION 10. No Assumption of Duties; Reasonable Care. The rights and
powers conferred on the Trustee hereunder are solely to preserve and protect the
security interest of the Trustee and the Holders of the Notes in and to the
Collateral granted hereby and shall not be interpreted to, and shall not impose
any duties on the Trustee in connection therewith other than those expressly
provided herein or imposed under applicable law. Except as provided by
applicable law or by the Indenture, the Trustee 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 the Trustee accords similar property held by the Trustee for its own
account, it being understood that the Trustee in its capacity as such shall not
have any responsibility for (a) ascertaining or taking action with respect to
calls, conversions, exchanges, maturities or other matters relative to any
Collateral, whether or not the Trustee has or is deemed to have knowledge of
such matters, (b) taking any necessary steps to preserve rights against any
parties with respect to any Collateral or (c) investing or reinvesting any of
the Collateral or any loss on any investment.
SECTION 11. Indemnity; Trustee's Limitation of Liability to Pledgor.
(a) The Pledgor shall indemnify, reimburse, hold harmless and defend the Trustee
and its directors,
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officers, agents and employees, from and against any and all claims, actions,
obligations, liabilities and expenses, including reasonable defense costs,
reasonable investigative fees and costs, and reasonable legal fees and damages
arising from the Trustee's performance or lack of performance as Trustee under
this Pledge Agreement, except to the extent that such claim, action, obligation,
liability or expense is directly attributable to the bad faith, gross negligence
or wilful misconduct of such indemnified person. This indemnity shall be a
continuing obligation of the Pledgor, its respective successors and assigns,
notwithstanding the termination of this Pledge Agreement.
(b) If at any time the Trustee is served with any judicial or
administrative order, judgment, decree, writ or other form of judicial or
administrative process which in any way affects Collateral (including, but not
limited to, orders of attachment or garnishment or other forms of levies or
injunctions or stays relating to the transfer of Collateral), the Trustee is
authorized to comply therewith in any manner as it or its legal counsel of its
own choosing deems appropriate and if the Trustee complies with any such
judicial or administrative order, judgment, decree, writ or other form of
judicial or administrative process, the Trustee shall not be liable to the
Pledgor even though such order, judgment, decree, writ or process may be
subsequently modified or vacated or otherwise determined to have been without
legal force or effect.
(c) The Trustee shall not incur any liability to the Pledgor for not
performing any act or fulfilling any duty, obligation or responsibility
hereunder by reason of any occurrence beyond the control of the Trustee
(including, but not limited to, any act or provision or any present or future
law or regulation or governmental authority, any act of God or war, or the
unavailability of the Federal Reserve Bank wire or telex or other wire or
communication facility).
(d) The Trustee shall not be responsible in any respect for the
form, execution, validity, value or genuineness of documents or securities
deposited hereunder, or for any description therein, or for the identity,
authority or rights of persons executing or delivering or purporting to execute
or deliver any such document, security or endorsement.
SECTION 12. Remedies Upon Event of Default. If any Event of Default
under the Indenture or default hereunder (any such Event of Default or default
being referred to in this Pledge Agreement as an "Event of Default") shall have
occurred and be continuing:
(a) The Trustee and the Holders of the Notes may exercise, in
addition to all other rights given by law or by this Pledge Agreement or
the Indenture, all of the rights and remedies with respect to the
Collateral of a secured party under the UCC in effect in the State of New
York at that time and also may (i) require the Pledgor to, and the Pledgor
hereby agrees that it will at its expense and upon request of the Trustee
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forthwith, assemble all or part of the Collateral as directed by the
Trustee and make it available to the Trustee at a place to be designated
by the Trustee that is reasonably convenient to both parties and (ii)
without notice except as specified below, sell the Collateral or any part
thereof in one or more parcels at any broker's board or at public or
private sale, in one or more sales or lots, at any of the Trustee's
offices or elsewhere, for cash, on credit or for future delivery, and upon
such other terms as the Trustee may deem commercially reasonable. The
Pledgor agrees that, to the extent notice of sale shall be required by
law, at least ten days' notice to the 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. The Trustee shall not be obligated to
make any sale of Collateral regardless of notice of sale having been
given. The Trustee 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. The purchaser of any or all Collateral so sold shall
thereafter hold the same absolutely, free from any claim, encumbrance or
right of any kind whatsoever created by or through the Pledgor. Any sale
of the Collateral conducted in conformity with reasonable commercial
practices of banks, insurance companies, commercial finance companies, or
other financial institutions disposing of property similar to the
Collateral shall be deemed to be commercially reasonable. The Trustee or
any Holder of Notes may, in its own name or in the name of a designee or
nominee, buy any of the Collateral at any public sale and, if permitted by
applicable law, at any private sale. All expenses (including court costs
and reasonable attorneys' fees, expenses and disbursements) of, or
incident to, the enforcement of any of the provisions hereof shall be
recoverable from the proceeds of the sale or other disposition of the
Collateral.
(b) All cash proceeds received by the Trustee in respect of any sale
of, collection from, or other realization upon all or any part of the
Collateral may, in the discretion of the Trustee, be held by the Trustee
as collateral for, and/or then or at any time thereafter applied (after
payment of any amounts payable to the Trustee pursuant to Section 13) in
whole or in part by the Trustee for the ratable benefit of the Holders of
the Notes against, all or any part of the Secured Obligations in such
order as the Trustee shall elect. Any surplus of such cash or cash
proceeds held by the Trustee and remaining after payment in full of all
the Secured Obligations shall be paid over to the Pledgor or to whomsoever
may be lawfully entitled to receive such surplus.
(c) The Trustee may, without notice to the Pledgor except as
required by law and at any time or from time to time, charge, set-off and
otherwise apply all or any part of the Secured Obligations against the
Pledge Account or any part thereof.
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(d) The Pledgor further agrees to use its reasonable best efforts to
do or cause to be done all such other acts as may be necessary to make
such sale or sales of all or any portion of the Collateral pursuant to
this Section 12 valid and binding and in compliance with any and all other
applicable requirements of law. The Pledgor further agrees that a breach
of any of the covenants contained in this Section 12 will cause
irreparable injury to the Trustee and the Holders of the Notes, that the
Trustee and the Holders of the Notes have no adequate remedy at law in
respect of such breach and, as a consequence, that each and every covenant
contained in this Section 12 shall be specifically enforceable against the
Pledgor, and the Pledgor hereby waives and agrees not to assert any
defenses against an action for specific performance of such covenants
except for a defense that no Event of Default has occurred.
SECTION 13. Expenses. The Pledgor will upon demand pay to the
Trustee the amount of any and all reasonable expenses, including, without
limitation, the reasonable fees, expenses and disbursements of its counsel,
experts and agents retained by the Trustee, that the Trustee may incur in
connection with (a) the review, negotiation and administration of this Pledge
Agreement, (b) the custody or preservation of, or the sale of, collection from,
or other realization upon, any of the Collateral, (c) the exercise or
enforcement of any of the rights of the Trustee and the Holders of the Notes
hereunder or (d) the failure by the Pledgor to perform or observe any of the
provisions hereof.
SECTION 14. Security Interest Absolute. All rights of the Trustee
and the Holders of the Notes and security interests hereunder, and all
obligations of the Pledgor hereunder, shall be absolute and unconditional
irrespective of:
(a) any lack of validity or enforceability of the Indenture or Notes
or any other agreement or instrument relating thereto;
(b) any change in the time, manner or place of payment of, or in any
other term of, all or any of the Secured Obligations, or any other
amendment or waiver of or any consent to any departure from the Indenture;
(c) any taking, exchange, surrender, release or non-perfection of
any Liens on any other collateral for all or any of the Secured
Obligations;
(d) any manner of application of collateral, or proceeds thereof, to
all or any of the Secured Obligations, or any manner of sale or other
disposition of any collateral for all or any of the Secured Obligations or
any other assets of the Pledgor;
(e) any change, restructuring or termination of the corporate
structure or existence of the Pledgor; or
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(f) to the extent permitted by applicable law, any other
circumstance which might otherwise constitute a defense available to, or a
discharge of, the Pledgor in respect of the Secured Obligations or of this
Pledge Agreement.
SECTION 15. Miscellaneous Provisions.
Section 15.1. Notices. Any notice or communication given hereunder
shall be sufficiently given if in writing and delivered in person or mailed by
first class mail, commercial courier service or telecopier communication,
addressed as follows:
if to the Pledgor:
Long Distance International Inc.
000 Xxxxx Xxxxxxx Xxxxxx
Xxxxx 000
Xxxx Xxxxxxxxxx, Xxxxxxx 00000
Fax: (000) 000-0000
Attention: Chief Financial Officer
if to the Trustee:
The Bank of New York
000 Xxxxxxx Xxxxxx
00 Xxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax: 212) 000-0000
Attention: Xxxxx Xxxxxxx, Corporate Trust Administration
All such notices and other communications shall be effective when received.
Section 15.2. No Adverse Interpretation of Other Agreements. This
Pledge Agreement may not be used to interpret another pledge, security or debt
agreement of the Pledgor or any subsidiary thereof. No such pledge, security or
debt agreement (other than the Indenture) may be used to interpret this Pledge
Agreement.
Section 15.3. Severability. The provisions of this Pledge Agreement
are severable, and if any clause or provision shall be held invalid, illegal or
unenforceable in whole or in part in any jurisdiction, then such invalidity or
unenforceability shall affect in that jurisdiction only such clause or
provision, or part thereof, and shall not in any manner affect such clause or
provision in any other jurisdiction or any other clause or provision of this
Pledge Agreement in any jurisdiction.
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Section 15.4. Headings. The headings in this Pledge Agreement have
been inserted for convenience of reference only, are not to be considered a part
hereof and shall in no way modify or restrict any of the terms or provisions
hereof.
Section 15.5. Counterpart Originals. This Pledge Agreement may be
signed in two or more counterparts, each of which shall be deemed an original,
but all of which shall together constitute one and the same agreement.
Section 15.6. Benefits of Pledge Agreement. Nothing in this Pledge
Agreement, 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.
Section 15.7. Amendments, Waivers and Consents. Any amendment or
waiver of any provision of this Pledge Agreement and any consent to any
departure by the Pledgor from any provision of this Pledge Agreement shall be
effective only if made or duly given in compliance with all of the terms and
provisions of the Indenture, and then such waiver or consent shall be effective
only in the specific instance and for the specific purpose for which given.
Neither the Trustee nor any Holder of Notes shall be deemed, by any act, delay,
indulgence, omission or otherwise, to have waived any right or remedy hereunder
or to have acquiesced in any Default or Event of Default or in any breach of any
of the terms and conditions hereof. Failure of the Trustee or any Holder of
Notes to exercise, or delay in exercising, any right, power or privilege
hereunder shall not preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. A waiver by the Trustee or any
Holder of Notes of any right or remedy hereunder on any one occasion shall not
be construed as a bar to any right or remedy that the Trustee or such Holder of
Notes would otherwise have on any future occasion. The rights and remedies
herein provided are cumulative, may be exercised singly or concurrently and are
not exclusive of any rights or remedies provided by law.
Section 15.8. Interpretation of Agreement. As long as the Trustee
acts in good faith to the extent a term or provision of this Pledge Agreement
conflicts with the Indenture, the Indenture shall control with respect to the
subject matter of such term or provision. Notwithstanding the foregoing and any
other provision of this Pledge Agreement or the Indenture, the Trustee shall
have no fiduciary responsibility under this Pledge Agreement.
Section 15.9. Continuing Security Interest; Termination. (a) This
Pledge Agreement shall create a continuing security interest in and to the
Collateral and shall, unless otherwise provided in this Pledge Agreement, remain
in full force and effect until the payment in full in cash of the Secured
Obligations. This Pledge Agreement shall be binding upon the Pledgor, its
transferees, successors and assigns, and shall inure, together with the rights
and
16
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remedies of the Trustee hereunder, to the benefit of the Trustee, the Holders of
the Notes and their respective successors, transferees and assigns.
(b) So long as no Event of Default shall have occurred and be
continuing, this Pledge Agreement (other than Pledgor's obligations under
Sections 11 and 13) shall terminate upon the earlier of (i) the payment in
full in cash of the Secured Obligations and (ii) the payment in full in
cash of the first six scheduled interest payments on all of the Notes. At
such time, the Trustee shall, pursuant to an Issuer Order, reassign and
redeliver to the Pledgor all of the Collateral hereunder that has not been
sold, disposed of, retained or applied by the Trustee in accordance with
the terms of this Pledge Agreement and the Indenture and take all actions
that are necessary to release the security interest created by this Pledge
Agreement in and to the Collateral, including the execution and delivery
of all termination statements necessary to terminate any financing or
continuation statements filed with respect to the Collateral. Such
reassignment and redelivery shall be without warranty by or recourse to
the Trustee in its capacity as such, except as to the absence of any Liens
on the Collateral created by or arising through the Trustee, and shall be
at the reasonable expense of the Pledgor.
Section 15.10. Survival of Representations and Covenants. All
representations, warranties and covenants of the Pledgor contained herein shall
survive the execution and delivery of this Pledge Agreement, and shall terminate
only upon the termination of this Pledge Agreement.
Section 15.11. Waivers. The Pledgor waives presentment and demand
for payment of any of the Obligations, protest and notice of dishonor or default
with respect to any of the Obligations, and all other notices to which the
Pledgor might otherwise be entitled, except as otherwise expressly provided
herein or in the Indenture.
Section 15.12. Authority of the Trustee. (a) The Trustee shall have
and be entitled to exercise all powers hereunder that are specifically granted
to the Trustee by the terms hereof, together with such powers as are reasonably
incident thereto. The Trustee 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. Except as otherwise expressly provided in this
Pledge Agreement or the Indenture, neither the Trustee nor any director,
officer, employee, attorney or agent of the Trustee shall be liable to the
Pledgor for any action taken or omitted to be taken by the Trustee, in its
capacity as Trustee, hereunder, except for its own bad faith, gross negligence
or willful misconduct, and the Trustee shall not be responsible for the
validity, effectiveness or sufficiency hereof or of any document or security
furnished pursuant hereto. The Trustee and its directors, officers, employees,
attorneys and agents shall be entitled to rely on any communication,
17
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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 Pledgor acknowledges that the rights and responsibilities of
the Trustee under this Pledge Agreement with respect to any action taken
by the Trustee or the exercise or non-exercise by the Trustee 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 Trustee 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 Trustee and the Pledgor,
the Trustee 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 Pledgor shall not be obligated or entitled to make
any inquiry respecting such authority.
Section 15.13 Final Expression. This Pledge Agreement, together with
the Indenture and any other agreement executed in connection herewith, is
intended by the parties as a final expression of this Pledge Agreement and is
intended as a complete and exclusive statement of the terms and conditions
thereof.
Section 15.14. Rights of Holders of the Notes. No Holder of Notes
shall have any independent rights hereunder other than those rights granted to
individual Holders of the Notes pursuant to Section 6.07 of the Indenture;
provided that nothing in this subsection shall limit any rights granted to the
Trustee under the Notes or the Indenture.
Section 15.15. GOVERNING LAW; SUBMISSION TO JURISDICTION; WAIVER OF
JURY TRIAL; WAIVER OF DAMAGES. (a) THIS PLEDGE AGREEMENT SHALL BE GOVERNED BY
AND INTERPRETED UNDER THE LAWS OF THE STATE OF NEW YORK, AND ANY DISPUTE ARISING
OUT OF, CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP
ESTABLISHED BETWEEN THE PLEDGOR, THE TRUSTEE AND THE HOLDERS OF THE NOTES IN
CONNECTION WITH THIS PLEDGE AGREEMENT, AND WHETHER ARISING IN CONTRACT, TORT,
EQUITY OR OTHERWISE, SHALL BE RESOLVED IN ACCORDANCE WITH THE LAWS OF THE STATE
OF NEW YORK. NOTWITHSTANDING THE FOREGOING: THE MATTERS IDENTIFIED IN 31 C.F.R.
PART 357, 61 FED. REG. 43626 AUG. 23, 1996), INCLUDING REVISED ARTICLE 8, SHALL
BE GOVERNED SOLELY BY THE LAWS SPECIFIED THEREIN.
(b) THE PLEDGOR HEREBY APPOINTS LOEB & LOEB LLP, 000 XXXX XXXXXX,
XXX XXXX, XX 00000 AS ITS AGENT FOR SERVICE OF PROCESS IN ANY SUIT, ACTION OR
PROCEEDING WITH RESPECT TO THIS PLEDGE AGREEMENT AND FOR ACTIONS BROUGHT UNDER
U.S. FEDERAL OR STATE SECURITIES LAWS
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BROUGHT IN ANY FEDERAL OR STATE COURT LOCATED IN THE CITY OF NEW YORK AND AGREES
TO SUBMIT TO THE JURISDICTION OF ANY SUCH COURT.
(c) THE PLEDGOR AGREES THAT THE TRUSTEE SHALL, IN ITS CAPACITY AS
TRUSTEE OR IN THE NAME AND ON BEHALF OF ANY HOLDER OF NOTES, HAVE THE RIGHT, TO
THE EXTENT PERMITTED BY APPLICABLE LAW, TO PROCEED AGAINST THE PLEDGOR OR THE
COLLATERAL IN A COURT IN ANY LOCATION REASONABLY SELECTED IN GOOD FAITH (AND
HAVING PERSONAL OR IN REM JURISDICTION OVER THE PLEDGOR OR THE COLLATERAL, AS
THE CASE MAY BE) TO ENABLE THE TRUSTEE TO REALIZE ON SUCH COLLATERAL, OR TO
ENFORCE A JUDGMENT OR OTHER COURT ORDER ENTERED IN FAVOR OF THE TRUSTEE. THE
PLEDGOR AGREES THAT IT WILL NOT ASSERT ANY COUNTERCLAIMS, SETOFFS OR CROSSCLAIMS
IN ANY PROCEEDING BROUGHT BY THE TRUSTEE TO REALIZE ON SUCH PROPERTY OR TO
ENFORCE A JUDGMENT OR OTHER COURT ORDER IN FAVOR OF THE TRUSTEE, EXCEPT FOR SUCH
COUNTERCLAIMS, SETOFFS OR CROSSCLAIMS WHICH, IF NOT ASSERTED IN ANY SUCH
PROCEEDING, COULD NOT OTHERWISE BE BROUGHT OR ASSERTED. THE PLEDGOR WAIVES ANY
OBJECTION THAT IT MAY HAVE TO THE LOCATION OF THE COURT IN THE CITY OF NEW YORK
ONCE THE TRUSTEE HAS COMMENCED A PROCEEDING DESCRIBED IN THIS PARAGRAPH
INCLUDING, WITHOUT LIMITATION, ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON
THE GROUNDS OF FORUM NON CONVENIENS.
(d) THE PLEDGOR AGREES THAT NEITHER ANY HOLDER OF NOTES NOR (EXCEPT
AS OTHERWISE PROVIDED IN THIS PLEDGE AGREEMENT OR THE INDENTURE) THE TRUSTEE IN
ITS CAPACITY AS TRUSTEE SHALL HAVE ANY LIABILITY TO THE PLEDGOR (WHETHER ARISING
IN TORT, CONTRACT OR OTHERWISE) FOR LOSSES SUFFERED BY THE PLEDGOR IN CONNECTION
WITH, ARISING OUT OF, OR IN ANY WAY RELATED TO, THE TRANSACTIONS CONTEMPLATED
AND THE RELATIONSHIP ESTABLISHED BY THIS PLEDGE AGREEMENT, OR ANY ACT, OMISSION
OR EVENT OCCURRING IN CONNECTION THEREWITH, UNLESS IT IS DETERMINED BY A FINAL
AND NONAPPEALABLE JUDGMENT OF A COURT THAT IS BINDING ON THE TRUSTEE OR SUCH
HOLDER OF NOTES, AS THE CASE MAY BE, THAT SUCH LOSSES WERE THE RESULT OF ACTS OR
OMISSIONS ON THE PART OF THE TRUSTEE OR SUCH HOLDERS OF NOTES, AS THE CASE MAY
BE, CONSTITUTING BAD FAITH, GROSS NEGLIGENCE OR WILLFUL MISCONDUCT.
(e) TO THE EXTENT PERMITTED BY APPLICABLE LAW, THE PLEDGOR WAIVES
THE POSTING OF ANY BOND OTHERWISE REQUIRED OF THE TRUSTEE OR ANY HOLDER OF NOTES
IN CONNECTION WITH ANY JUDICIAL
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PROCESS OR PROCEEDING TO ENFORCE ANY JUDGMENT OR OTHER COURT ORDER PERTAINING TO
THIS PLEDGE AGREEMENT OR ANY RELATED AGREEMENT OR DOCUMENT ENTERED IN FAVOR OF
THE TRUSTEE OR ANY HOLDER OF NOTES, OR TO ENFORCE BY SPECIFIC PERFORMANCE,
TEMPORARY RESTRAINING ORDER OR PRELIMINARY OR PERMANENT INJUNCTION, THIS PLEDGE
AGREEMENT OR ANY RELATED AGREEMENT OR DOCUMENT BETWEEN THE PLEDGOR ON THE ONE
HAND AND THE TRUSTEE AND/OR THE HOLDERS OF THE NOTES ON THE OTHER HAND.
[The remainder of this page left intentionally blank.]
20
IN WITNESS WHEREOF, the Pledgor and the Trustee have each caused
this Pledge Agreement to be duly executed and delivered as of the date first
above written.
Pledgor:
LONG DISTANCE INTERNATIONAL INC.
By:
--------------------------------
Name:
Title:
Trustee:
THE BANK OF NEW YORK
By:
--------------------------------
Name:
Title:
21
EXHIBIT A
NOTIFICATION AND CONTROL AGREEMENT
THIS NOTIFICATION AND CONTROL AGREEMENT (the "Agreement")
dated as of April 13, 1998 by and among Long Distance International Inc. (the
"Pledgor") and The Bank of New York, a New York banking corporation, in its
capacity as trustee (the "Trustee") and in its capacity as a bank (the "Bank")
at which the Pledgor maintains the Pledge Account (as defined herein).
A. The Pledgor has granted to the Trustee a security interest in
certain U.S. Treasury securities and security entitlements related thereto (the
"Pledged Securities") maintained by the Pledgor with the Bank and carried in an
account in the name of "BNY, Trustee, LDI Collateral Pledge A/C" (the "Pledge
Account") and all additions thereto and substitutions and proceeds thereof
(collectively, the "Collateral"), pursuant to, and as more particularly
described in, a Collateral Pledge and Security Agreement dated as of April 13,
1998 among the Pledgor and the Trustee (as the same may hereafter be amended,
supplemented or otherwise modified from time to time, the "Pledge Agreement";
terms defined in the Pledge Agreement and not otherwise defined herein are used
herein as therein defined).
B. Terms defined in Articles 8 or 9 of the Uniform Commercial Code
as in effect in the State of New York (the "UCC") are used in this Agreement
(including, without limitation, paragraph A above) as defined in Articles 8 or
9, respectively, of the UCC.
C. Pursuant to the Pledge Agreement, the Trustee has required the
execution and delivery of this Agreement.
NOW, THEREFORE, for valuable consideration and intending to be
legally bound, the parties hereto agree and acknowledge as follows:
1. Notice of Security Interest. The Pledgor and Trustee are entering
into this Agreement to perfect, and confirm the first priority lien of, the
Trustee's security interest in the Collateral. The Bank agrees to promptly make
all necessary entries or notations in its books and records to reflect the
Trustee's security interest in the Collateral and to apply any value distributed
on account of any Pledged Securities as directed by the Trustee without further
consent from the Pledgor. The Bank acknowledges that the Trustee has control
over the Pledge Account and all Pledged Securities contained therein from time
to time.
2. Separate Pledge Account; Trustee Representations and Warranties.
(a) The Trustee hereby instructs the Bank, and the Bank hereby confirms and
agrees that,
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unless the Trustee shall otherwise direct the Bank in writing, (i) the Pledge
Account is to be maintained separately at all times and (ii) the Pledged
Securities shall be carried only in the Pledge Account.
(b) The Trustee hereby represents and warrants that it has acquired
its security interest in, and security entitlement to, the Collateral for value
and without notice of any adverse claim thereto. Without limiting the generality
of the foregoing, the Collateral is not, to the Trustee's knowledge, subject to
any Lien granted by the Trustee in favor of any securities intermediary
(including, without limitation, the Bank or the Federal Reserve Bank of New
York) and the Trustee has not knowingly or purposefully caused or permitted the
Collateral to become subject to any Lien created by or arising through the Bank.
3. Control. The Bank hereby agrees, upon written direction from the
Trustee and without further consent from the Pledgor, (a) to comply with all
instructions, entitlement orders and directions of any kind originated by the
Trustee concerning the Collateral, to liquidate or otherwise dispose of the
Collateral as and to the extent directed by the Trustee and pay over to the
Trustee all proceeds and other value therefrom or otherwise distributed with
respect thereto without any set off or deduction, and (b) except as otherwise
directed by the Trustee, not to comply with the instructions or directions of
the Pledgor or any other person.
4. Other Agreements; Termination; Successor Trustees. The Bank shall
simultaneously send to the Trustee copies of all notices given and statements
rendered pursuant to the Pledge Account. So long as the Pledge Agreement remains
in effect, neither the Pledgor nor the Bank shall terminate the Pledge Account
without thirty (30) days' prior written notice to the other party and the
Trustee. In the event of any conflict between the provisions of this Agreement
and any other agreement governing the Pledge Account, the provisions hereof
shall control. In the event the Trustee no longer serves as Trustee for the
Collateral, the Pledge Account and Pledged Securities carried therein shall be
transferred to a successor trustee satisfactory to the Trustee, provided that
prior to such transfer, such successor trustee executes an agreement that is in
all material respects the same as this Agreement or is otherwise in form and
substance satisfactory to the Trustee.
5. Indemnity. The Pledgor shall indemnify and hold the Trustee and
the Bank harmless from any and all losses, claims, damages, liabilities,
expenses and fees, including reasonable counsel fees, resulting from the
execution of or performance under this Agreement and delivery by the Trustee of
all or any part of the Collateral to the Bank pursuant to this Agreement, except
claims, losses or liabilities resulting from the Trustee's or the Bank's gross
negligence, bad faith or willful misconduct as determined by a final judgment of
a court of competent jurisdiction. This indemnification shall survive the
termination of this Agreement.
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6. Protection of Bank. Except as required by Paragraph 3 hereof, the
Bank shall have no duty to determine that the amount and form of assets
constituting Collateral comply with any applicable requirements. The Bank may
rely and shall be protected in acting upon any notice, instruction, or other
communication which it reasonably believes to be genuine and authorized.
7. Termination/Release of Collateral. This Agreement shall terminate
automatically upon receipt by the Bank of written notice executed by two
officers of the Trustee holding titles of Vice President or higher that (a) all
of the obligations secured by the Collateral have been satisfied, or (b) all of
the Collateral has been released, whichever is sooner, and the Bank shall
thereafter be relieved of all duties and obligations hereunder.
8. Waiver and Subordination of Rights. The Bank hereby waives its
right to set off any obligations of the Pledgor to the Bank against any or all
assets held by the Trustee as Collateral, and hereby agrees that any and all
liens, encumbrances, claims or security interests which the Bank may have
against the Collateral, either now or in the future are and shall be subordinate
and junior to the prior payment in full of all obligations of the Pledgor now or
hereafter existing under the Indenture, Notes and all other documents related
thereto whether for principal, interest (including, without limitation,
interest, as provided in the Notes, whether or not such interest accrues after
the filing of such petition for purposes of the Bankruptcy Code or is an allowed
claim in such proceeding), indemnities, fees, premiums, expenses or otherwise.
The Bank will not agree with any third party that the Bank will comply with any
instructions or directions of any kind concerning the Collateral originated by
such third party without the prior written consent of the Trustee. Except for
the claims and interests of the Trustee and the Pledgor in the Collateral, the
Bank does not know of any claim to or security interest or other interest in the
Collateral.
9. Expenses. The Pledgor shall pay upon demand all fees, costs and
expenses (including reasonable fees and expenses of counsel) of enforcing the
Bank's rights and remedies upon any breach (by the Trustee or the Pledgor) of
any of the provisions of this Agreement.
10. Notices. All notices, demands, requests, consents, approvals and
other communications required or permitted hereunder must be in writing and will
be effective upon receipt if delivered personally, or if sent by facsimile
transmission with confirmation of delivery, or by nationally recognized
overnight courier service, to the Pledgor's and the Trustee's addresses as set
forth in the Pledge Agreement, and to the Bank's address as set forth below, or
to such other address as any party may give to the others in writing for such
purpose.
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11. Changes in Writing. No modification, amendment or waiver of any
provision of this Agreement nor consent to any departure by any party therefrom
will be effective unless made in writing signed by the parties hereto, and then
such waiver or consent shall be effective only in the specific instance and for
the purpose for which given.
12. Entire Agreement. This Agreement (including the documents and
instruments referred to herein) constitutes the entire agreement and supersedes
all other prior agreements and understandings, both written and oral, among the
parties with respect to the subject matter hereof.
13. Counterparts. This Agreement may be signed in any number of
counterpart copies and by the parties hereto on separate counterparts (including
by facsimile transmission), but all such copies shall constitute one and the
same instrument.
14. Successors and Assigns. This Agreement will be binding upon and
inure to the benefit of the parties hereto and their respective heirs,
executors, administrators, successors and assigns.
15. Governing Law and Jurisdiction. This Agreement has been
delivered to and accepted by the Trustee and will be deemed to be made in the
State of New York. THIS AGREEMENT WILL BE INTERPRETED AND THE RIGHTS AND
LIABILITIES OF THE PARTIES HERETO DETERMINED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK. Each of the parties hereby irrevocably submits for itself and
its property in any legal action or proceeding relating to this Agreement, or
for recognition and enforcement of any judgment in respect thereof, to the
non-exclusive general jurisdiction and venue of the courts of the State of New
York, the courts of the United States of America in New York, and appellate
courts from any thereof.
16. WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO IRREVOCABLY
WAIVES ANY AND ALL RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY ACTION,
PROCEEDING OR CLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) OF ANY NATURE
RELATING TO THIS AGREEMENT, ANY DOCUMENTS EXECUTED IN CONNECTION WITH THIS
25
5
AGREEMENT OR ANY TRANSACTION CONTEMPLATED IN ANY OF SUCH DOCUMENTS. EACH PARTY
HERETO ACKNOWLEDGES THAT THE FOREGOING WAIVER IS KNOWING AND VOLUNTARY.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their respective officers thereunto duly authorized, as of the
date first above written.
PLEDGOR:
LONG DISTANCE INTERNATIONAL INC.
By:
--------------------------------
Name:
------------------------------
Title:
-----------------------------
Trustee:
THE BANK OF NEW YORK, as Trustee
By:
--------------------------------
Name:
------------------------------
Title:
-----------------------------
Trustee:
Bank's Address for Bank:
Notices:
THE BANK OF NEW YORK
000 Xxxxxxx Xxxxxx By:
00 Xxxx --------------------------------
Xxx Xxxx, XX 00000
Name:
------------------------------
Title:
-----------------------------
Attention: Xxxxx Xxxxxxx,
Corporate Trust Administration
Facsimile Number: (000) 000-0000
26
ANNEX 1
Pledged Securities
--------------------------------------------------------------------------------
Security CUSIP No. Coupon (%) Maturity Amount
-------- --------- ---------- -------- ------
--------------------------------------------------------------------------------
Xxxxxx Xxxxxx 0000000X0 0 10/15/98 10,856,000
Treasury
--------------------------------------------------------------------------------
Xxxxxx Xxxxxx 000000X00 7 04/15/99 11,830,000
Treasury
--------------------------------------------------------------------------------
Xxxxxx Xxxxxx 000000X00 6 10/15/99 12,245,000
Treasury
--------------------------------------------------------------------------------
Xxxxxx Xxxxxx 000000X00 5.5 04/15/00 12,612,000
Treasury
--------------------------------------------------------------------------------
Xxxxxx Xxxxxx 000000X00 6.125 09/30/00 12,958,000
Treasury
--------------------------------------------------------------------------------
Xxxxxx Xxxxxx
Xxxxxxxx 000000X00 6.375 03/31/01 13,356,000
--------------------------------------------------------------------------------
