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Exhibit 10.20
STOCK PLEDGE AGREEMENT
LDI Acquisition Sub Inc.
c/o Long Distance International Inc.
0000 XX 00xx Xxx
Xx. Xxxxxxxxxx, Xxxxxxx 00000
To: Xxxxxxxxx X. XxXxxx
000 XX 00xx Xxxxxx
Xx. Xxxxxxxxxx, Xxxxxxx 00000
July 20, 1999
Gentlemen:
Reference is made to a certain Term Loan Agreement dated of even date herewith
(herein called "Term Loan Agreement") among Long Distance International Inc., a
Florida corporation (herein called "the Company"), the undersigned, the lenders
from time to time parties thereto (the "Lenders") and you, in your capacity as
Collateral Agent for the ratable benefit of yourself and the other Lenders (the
"Collateral Agent"). Capitalized terms used herein and defined in the Term Loan
Agreement shall have the same meanings as set forth therein unless otherwise
specifically defined herein. As security for: the full payment and performance
when due of all now existing and future Obligations of the Company and the
Pledgor arising pursuant to the Term Loan Agreement (all of which are herein
called "Secured Obligations"), the undersigned (hereinafter "Pledgor") hereby
pledges, assigns, transfers, delivers and sets over to the Collateral Agent,
for the ratable benefit of itself and the other Lenders, all of its right,
title and interest in and to the securities listed on the attached Schedule 1,
issued as indicated on said schedule ("Securities").
This pledge includes all right, title and interest in and to and a continuing
lien upon and security interest in, all of said Securities together with any
investment property and security entitlements with respect thereto, including,
without limitation, all dividends, liquidating dividends, splits, dividends
paid in stock, dividends paid in Securities, new or reclassified Securities, or
any other property which the Pledgor is or may hereafter become entitled to
receive on account of such Securities, any and all increments, substitutions,
additions or replacements thereof, and any and all proceeds thereof (all
collectively hereinafter referred to as "Pledged Collateral").
This Stock Pledge Agreement is executed as an inducement to the Lenders to make
the Term Loan to the Company pursuant to the Term Loan Agreement, or otherwise
to extend credit or financial accommodations to the Company or to enter into or
continue financing arrangements with the Company, and is executed in
consideration of the Lenders doing or having done any of the foregoing.
Pledgor shall be in default under this Pledge Agreement upon the occurrence of
any of the following (herein any such default shall be referred to as an "Event
of Default"):
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1. occurrence of any Event of Default under the Term Loan
Agreement;
2. if any warranty, representation or statement contained in
this Stock Pledge Agreement is materially or substantially
breached, or is, or becomes materially or substantially
untrue;
3. commencement by or against the Pledgor of any bankruptcy,
insolvency, arrangement, reorganization, receivership or
similar proceedings under any federal or state law; provided
that any such involuntary proceeding which is commenced
against the Pledgor is not dismissed within sixty (60) days;
or
In the event of the happening of any such Event of Default (which is not cured
by Pledgor to the Collateral Agent's satisfaction or waived by the Collateral
Agent in writing), on ten (10) days prior notice to the Pledgor, without the
curing of such default within such time, the Collateral Agent may, without
demand of performance, advertisement or notice of intention to sell, or of the
time or place of sale, and without notice to redeem, or other notice or demand
whatsoever to or upon the Pledgor (all and each of which demands,
advertisements and/or notices are hereby expressly waived), forthwith or at any
time or times thereafter, transfer to and/or register in the Collateral Agent's
name, or the name of the Collateral Agent's nominee, any or all of the Pledged
Collateral and/or collect, receive, appropriate and realize upon said Pledged
Collateral. In addition, and also without any of the aforesaid demands,
advertisements, and/or notices, upon the occurrence of any Event of Default as
defined herein (which is not cured by Pledgor to the Collateral Agent's
satisfaction or waived by the Collateral Agent in writing), the Collateral
Agent may sell, assign, transfer and deliver the whole or any part of the
Pledged Collateral held by the Collateral Agent under this Stock Pledge
Agreement or subject to this Stock Pledge Agreement in one or more parcels, at
public or private sale or sales, at any Exchange Broker's Board, at the
Collateral Agent's office or elsewhere, on such terms and conditions, and at
such prices as the Collateral Agent may deem advisable, for cash, upon credit,
or for future delivery, with the right on the Collateral Agent's part to become
the purchaser thereof at any such sale or sales, free and clear of any right to
equity of redemption (which right or equity is hereby expressly waived and
released). Any notice of sale, disposition, or other intended action by the
Collateral Agent required by applicable law and sent to the Pledgor at least
ten (10) days prior to such action shall constitute reasonable notice to the
Pledgor.
Net proceeds of any such disposition as aforesaid, after deduction of all
costs, including reasonable attorneys' fees and expenses of every kind incurred
therein, shall be applied to the payment in whole or in part, in such order as
the Collateral Agent may elect, of any of the Secured Obligations. The
Collateral Agent agrees to pay over and return any remaining balance to the
Pledgor or to any person entitled thereto, upon proper demand being made
therefor, and if there be any deficiency, Pledgor and the Company shall
continue to be fully liable for same.
Further, the Collateral Agent is hereby expressly granted the right and
irrevocable proxy, in the event of the happening of any Event of Default (as
defined herein) (which is not cured by Pledgor to the Collateral Agent's
satisfaction or waived by the Collateral Agent in writing), and on ten (10)
days prior notice to the Pledgor, without the curing by the Pledgor or the
waiving by the Collateral Agent of such Event of Default within such time, to
transfer to the Collateral Agent or to the Collateral Agent's nominee any or
all of the Pledged Collateral or to register same in the Collateral Agent's
name on the books of the company or entity issuing same; to receive cash
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dividends, coupons and income thereon and to hold the same as additional
collateral security hereunder, or to apply it against the Secured Obligations
and to exercise any voting rights with respect to said Collateral for any
purposes as the Collateral Agent in its discretion deems advisable, and to
otherwise exercise as to such Pledged Collateral all rights, powers and
remedies as the owner thereof.
Pledgor hereby represents and warrants that the Pledged Collateral is owned by
the Pledgor absolutely, and is free and clear of all liens and encumbrances
except for the pledge in favor of the Collateral Agent and except for Permitted
Encumbrances (as defined in the Financing Agreement); that there are no
restrictions (other than pursuant to applicable securities laws, if any) upon
the pledge or transfer of any of the Pledged Collateral; that the Pledgor has
full right to pledge and transfer the same in accordance with the terms and
conditions of this Stock Pledge Agreement, free of all encumbrances (except
said Permitted Encumbrances) and without the consent of any or person, firm,
entity or corporation and without the need to notify the issuing company and/or
obtain their consent to the pledge; and that said Pledged Collateral is not
subject to any assessment. Pledgor further represents and warrants that the
issuers of the Securities do not have outstanding any options, warrants or
other rights to purchase capital stock of such issuers and that the Securities
pledged hereunder represent all the issued and outstanding shares of capital
stock of such issuers (the "Issuers"). Pledgor covenants that it will cause the
Issuers not to issue any securities other than the Securities pledged
hereunder; provided that additional securities of the Issuers may be issued so
long as such new securities are pledged to the Collateral Agent and become a
part of the Pledged Collateral.
Pledgor hereby agrees (a) to do all acts that may be necessary to maintain,
preserve, and protect the Pledged Collateral; (b) to appear in and defend any
action or proceeding that may affect its title to or the Collateral Agent's
interest in the Pledged Collateral; and (c) not to surrender or lose possession
of (other than to the Collateral Agent), sell, encumber, lease, rent, or
otherwise dispose of or transfer any Pledged Collateral or right or interest
therein except as hereinafter provided, and to keep the Pledged Collateral free
of all security interests or other liens or charges except those approved in
writing by the Collateral Agent.
Pledgor agrees that the Collateral Agent will have no obligation to defend or
protect the Pledged Collateral
Pledgor recognizes that the Collateral Agent may be unable to effect a public
sale of any or all of the Collateral, by reason of certain prohibitions
contained in the Securities Act of 1933 and applicable state securities law or
otherwise, and may be compelled to resort to one or more private sales thereof
to a restricted group of purchasers which will be obligated to agree, among or
things, to acquire such securities for their own account for investment and not
with a view to the distribution or resale thereof. Pledgor acknowledges and
agrees that any such private sale may result in prices and or terms less
favorable to the Collateral Agent than if such sale were a public sale and
agrees that such circumstances shall not, in and of themselves, result in a
determination that such sale was not made in a commercially reasonable manner.
The Collateral Agent shall be under no obligation to delay a sale of any of the
Pledged Collateral for the period of time necessary to permit the issuer to
register such securities for public sale under the Securities Act of 1933, or
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under applicable state securities laws, even if the issuer agrees to do so.
Additionally, if not prohibited by law, the Collateral Agent shall have the
right to bid for the Pledged Collateral at any such sale.
The Collateral Agent agrees that until the occurrence and continuance of an
Event of Default, the Pledgor shall retain all voting rights with respect to
the Pledged Collateral and shall be entitled to all dividends, distributions
and other rights with respect thereto.
It is understood and agreed that the rights and remedies herein enumerated are
not intended to be exhaustive but are in addition to any other rights or
remedies at law or in equity. The Collateral Agent shall have the absolute
right in its sole discretion to determine the order in which its rights and
remedies are to be exercised, and the Collateral Agent's exercise of any right
or remedy shall not preclude the exercise of any other rights or remedies or be
deemed to be a waiver thereof. No act of forbearance, or agreement to forebear
the enforcement of, or extension of the date of maturity of, any Secured
Obligation, shall in any way constitute a release of, or a waiver or
relinquishment of any of the Collateral Agent's rights or remedies.
All notices and other communications provided for hereunder shall, unless
otherwise stated herein, be in writing (including by telex or telecopier) and
mailed, sent or delivered to the respective parties hereto at or to their
respective addresses or telex or telecopier numbers set forth below their names
on the signature pages of the Term Loan Agreement, or at or to such other
address or telex or telecopier number as shall be designated by either party in
a written notice to the other party hereto. All such notices and communications
shall be effective (a) if delivered by hand, upon delivery; (b) if sent by
mail, upon the date of receipt; (c) if sent by telex, upon receipt by the
sender of an appropriate answerback; and (d) if sent by telecopy, upon receipt.
This Stock Pledge Agreement may be executed in one or more Counterparts, each
of which shall be deemed to be an original as against the party executing the
same and all of which together shall be deemed to constitute one and the same
agreement.
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This Stock Pledge Agreement is to be governed by the laws of the State of New
York and shall be binding on the successors and assigns of the Pledgor, and
shall inure to the Collateral Agent's benefit and the benefit of its successors
and assigns.
Very truly yours,
LDI ACQUISITION SUB INC.
By: /s/ Xxxxx X. Xxxx
---------------------------------------
Xxxxx X. Xxxx
Chief Executive Officer
AGREED:
/s/ Xxxxxxxxx X. XxXxxx
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Xxxxxxxxx X. XxXxxx, as Collateral Agent
SIGNATURE PAGE TO STOCK PLEDGE AGREEMENT
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Schedule 1
SUBSIDIARIES
1. 1,200 shares of common stock, $1.00 par value of Dynamic Telecom
International Inc. - Florida
2. All of the issued and outstanding capital stock of LDI
Telecommunications - GmBH
3. One (1) ordinary share of LDI Communications Limited - United
Kingdom
4. All of the issued and outstanding capital stock of LDI Denmark ApS
- Denmark
5. All of the issued and outstanding capital stock of NETnet
International AB, subject to the prior liens in favor of Skandinaviska Enskilda
Xxxxxx XX and Finans Skandic AB
6. All of the issued and outstanding capital stock of LDI Telecom SA -
France
7. 156,250 ordinary shares of Long Distance International Limited -
United Kingdom
8. 788,287,456 ordinary shares of Newgate Communications - United
Kingdom
