Exhibit 4.8
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PLEDGE AND SECURITY AGREEMENT
by and among
ONEPOINT COMMUNICATIONS CORP.,
XXXXXX TRUST AND SAVINGS BANK,
as Trustee
and
XXXXXX TRUST AND SAVINGS BANK
as Collateral Agent
May 21, 1998
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PLEDGE AND SECURITY AGREEMENT
PLEDGE AND SECURITY AGREEMENT, dated as of May 21, 1998 (the "Pledge
Agreement") by and among OnePoint Communications Corp., a Delaware corporation
(the "Pledgor"), the Trustee (as defined below) and Xxxxxx Trust and Savings
Bank, as collateral agent (the "Collateral Agent"), for the Trustee on behalf of
the holders of the Notes (as defined herein).
RECITALS
A. The Pledgor, the Subsidiary Guarantors (as defined in the
Indenture) and Xxxxxx Trust and Savings Bank, as Trustee (the "Trustee") have
entered into that certain Indenture dated as of May 21, 1998 (as amended,
restated, supplemented or otherwise modified from time to time, the
"Indenture"), pursuant to which the Pledgor issued 175,000 Units consisting of
$175,000,000 in aggregate principal amount of 14 1/2% Notes due 2008 (the
"Notes") and warrants to purchase an aggregate of 111,125 shares of common
stock, $.01 par value (the "Warrants"). Each Unit consists of $1,000 principal
amount of Notes and one Warrant to purchase 0.635 shares of common stock of
Pledgor.
B. The Pledgor has agreed, pursuant to a Purchase Agreement dated May
15, 1998 by and among the Pledgor, the Subsidiary Guarantors, Bear, Xxxxxxx &
Co. Inc. and NationsBanc Xxxxxxxxxx Securities LLC, to (i) purchase a portfolio
of securities consisting of Government Securities (as defined herein)
(collectively, the "Pledged Securities") in an amount sufficient, upon receipt
of the scheduled interest and principal payments in respect of the Pledged
Securities, in the opinion of a nationally recognized firm of independent
certified public accountants selected by the Pledgor, to provide for payment of
the first seven scheduled interest payments due on the Notes, and (ii) place
such Pledged Securities in the Pledge Account (as defined herein) held by the
Collateral Agent for the benefit of the holders of the Notes.
C. The Pledgor is the sole legal and beneficial owner of the Pledged
Securities.
D. To secure the payment and performance by the Pledgor of its
obligations under the Indenture and the Notes (collectively, the "Obligations"),
the Pledgor has agreed to (i) pledge to the Collateral Agent for the benefit of
the Trustee and the ratable benefit of the holders of the Notes a security
interest in the Pledged Securities and the Pledge Account, and (ii) execute and
deliver this Pledge Agreement.
AGREEMENT
NOW, THEREFORE, in order to induce the holders of Notes to purchase
the Notes, and for good and valuable consideration, the receipt of which is
hereby acknowledged, the Pledgor hereby agrees with the Collateral Agent for the
benefit of the Trustee and for the ratable benefit of the holders of Notes as
follows:
1. Defined Terms. All capitalized terms used but not defined herein
shall have the meanings ascribed to them in the Indenture. In addition to any
other defined terms used herein, the following terms shall constitute defined
terms for purposes of this Pledge Agreement and shall have the meanings set
forth below:
"Collateral" has the meaning given in Section 2 hereof.
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"Government Securities" means direct obligations of, or obligations
fully guaranteed by, the United States of America for the payment of which
guarantee or obligations the full faith and credit of the United States is
pledged.
"UCC" means, with respect to the validity and perfection and the
effect of perfection or non-perfection of the security interest, the Uniform
Commercial Code as in effect on the date hereof in the State of New York.
2. Pledge and Grant of Security Interest
(a) The Pledgor hereby pledges and grants to the Trustee, for the
ratable benefit of the holders of the Notes, a continuing first priority
security interest in and to (i) all of the Pledgor's right, title and interest
in the Pledged Securities and the Pledge Account, (ii) all certificates or other
evidence of ownership representing the Pledged Securities and the Pledge
Account, and (iii) all products and proceeds of any of the Pledged Securities,
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 (collectively, the "Collateral").
(b) The Pledgor shall have no right to remove or withdraw from the
Pledge Account any financial asset, cash or other property now or hereafter
credited to the Pledge Account without the prior written consent of the Trustee,
except as provided in Section 5(b) herein. If at any time the Collateral Agent
shall receive any entitlement order from the Trustee (including, without
limitation, any order directing the sale, transfer or redemption of any
financial asset relating to, or cash or other item credited to, the Pledge
Account), the Collateral Agent shall comply with such entitlement order, without
further consent by the Pledgor or any other Person.
(c) The Trustee appoints the Collateral Agent as its agent and
securities intermediary hereunder, and the Collateral Agent accepts such
appointment and agrees to act as agent and securities intermediary for the
Trustee with respect to the Pledged Securities, without cost or expense to the
Trustee. The Collateral Agent will, no later than the Business Day immediately
following the date hereof, completely and accurately identify on its books and
records the Pledged Securities being held in the Pledge Account. In addition,
the Collateral Agent will, upon the Trustee's written request given at any time
to the Collateral Agent, either (a) deliver to the Trustee possession of duly
issued certificates evidencing the Pledged Securities registered in the name of
the Trustee or its nominee or designee, or (b) transfer the Pledged Securities
to an account at the Collateral Agent or to another financial intermediary
designated by the Trustee in the name of the Trustee. In the event that the
Pledgor shall be entitled to receive or acquire any distribution, in any form
whatsoever, including, without limitation, cash and non-cash dividends and
interest, in respect of the Pledged Securities, the Collateral Agent agrees that
it shall hold the same as agent and securities intermediary for the Trustee
subject to the terms hereof and the written instructions of the Trustee.
3. Security for Obligations. This Pledge Agreement and the
Collateral secure the prompt and complete payment and performance when due
(whether at stated maturity, by acceleration or otherwise) of all of the
Obligations.
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4. Delivery of Collateral; Pledge Account; Interest; Substitution of
Collateral
(a) If and to the extent the Pledged Securities comprise
"certificated securities," as defined in Section 8-102 of the UCC, such
securities shall be registered in the name of the Collateral Agent or its
nominee for the benefit of the holders of the Notes and delivered to the
Collateral Agent or its custodian in the State of New York, and possession
thereof shall be maintained by the Collateral Agent within the State of New
York.
(b) All Government Securities included in the Collateral shall be
registered in the name of the Collateral Agent or its nominee for the benefit of
the holders of the Notes on the records of the Federal Reserve Bank of New York
and credited in the books and records of the Collateral Agent to the Pledge
Account. All other uncertificated securities, if any, included in the
Collateral shall be registered on the books of the issuer of such uncertificated
securities in the name of the Collateral Agent or its nominee for the benefit of
the holders of the Notes, and credited in the books and records of the
Collateral Agent to the Pledge Account.
(c) Concurrently with the execution and delivery of this Pledge
Agreement, the Collateral Agent shall establish an account entitled the "PLEDGE
ACCOUNT FOR THE BENEFIT OF HOLDERS OF 14 1/2% NOTES DUE 2008 OF ONEPOINT
COMMUNICATIONS CORP." for the deposit of the Pledged Securities (the "Pledge
Account") at its office at 000 Xxxx Xxxxxx, Xxxxxxx, Xxxxxxxx 00000. The Pledge
Account is and shall be maintained as a "securities account" within the meaning
of Article 8 of the UCC, and the Collateral Agent will treat all property held
by it in the Pledge Account as "financial assets" under Article 8-501(a) of the
UCC. 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. All proceeds of the Pledged Securities shall remain on
deposit in the Pledge Account until withdrawn in accordance with this Pledge
Agreement.
(d) All proceeds of, interest earned on and other distributions or
amounts paid with respect to, any Collateral shall be credited to and retained
in the Pledge Account, and the Collateral Agent shall invest and reinvest the
same as directed from time to time in writing by the Pledgor; provided, however,
that such proceeds and other amounts must be invested in Government Securities
except as otherwise provided in this Section 4(d). Prior to the Collateral
Agent's receipt of written instructions from the Pledgor, the Collateral Agent
shall invest any such proceeds and other amounts in cash or Cash Equivalents (as
defined in the Indenture). In all events, any monies so invested or reinvested
and any securities acquired thereby shall be (i) held as Collateral in the
Pledge Account, (ii) subject in all respects to the security interest created
hereby and shall be and remain under the control of the Collateral Agent, and
(iii) otherwise subject to the terms hereof.
(e) The parties acknowledge that the Collateral Agent shall not be
responsible for any diminution in the Pledge Account due to losses resulting
from investments. The Collateral Agent may use its own Bond Department in
executing purchases and sales of permissible investments.
5. Disbursements
(a) The Collateral Agent shall transfer, on each date when one of the
first seven scheduled interest payments is due on the Notes and without notice
from the Pledgor, from the Pledge Account to the Paying Agent under the
Indenture, funds necessary to provide for payment in full or of
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any portion of the next scheduled interest payment on the Notes and the Paying
Agent shall apply the proceeds to such interest payment.
(b) If at any time the amount of Collateral exceeds the amount
sufficient, in the opinion of a nationally recognized firm of independent
certified public accountants selected by the Pledgor, to provide for payment in
full of the first seven scheduled interest payments due on the Notes then
outstanding (or, in the event any of the first seven interest payments have been
made on the Notes, an amount sufficient to provide for payment in full of all
interest payments then remaining up to and including the seventh scheduled
interest payment on the Notes then outstanding), the Pledgor may direct the
Collateral Agent in writing to release to the Pledgor, or as the Pledgor
directs, an amount less than or equal to such excess. Upon receipt of such
written direction from the Pledgor, together with the opinion of a nationally
recognized firm of independent certified public accountants with respect to the
value of the Pledged Securities, the Collateral Agent shall take such action as
is necessary to provide for the payment to the Pledgor of the amount requested
from the Pledge Account.
(c) Immediately following the earlier of (i) the payment in full of
the first seven scheduled interest payments on the Notes, and (ii) the day on
which all of the Notes have been repurchased, redeemed or defeased, if no
Default or Event of Default is continuing, the security interest in the
Collateral evidenced by this Pledge Agreement shall terminate and be of no
further force and effect, and any and all Collateral in the Pledge Account shall
be released and transferred by the Collateral Agent to the Pledgor in accordance
with the Pledgor's written instructions. Furthermore, upon release of any
Collateral from the Pledge Account in accordance with the terms of this Pledge
Agreement, whether upon release of Collateral to the Paying Agent, to the
Pledgor or otherwise, the security interest evidenced by this Pledge Agreement
in the Collateral so released shall terminate and be of no further force and
effect.
6. Representations and Warranties. The Pledgor hereby represents and
warrants that:
(a) The execution, delivery and performance by the Pledgor of this
Pledge Agreement has been duly authorized by all necessary corporate action and
does not contravene or constitute a default under any provision of applicable
law, regulation or the certificate of incorporation or the bylaws of the
Pledgor, or of any judgment, injunction, order, decree or any material agreement
or instrument binding upon the Pledgor, and does not result in the creation or
imposition of any Lien on any asset of the Pledgor, except for the security
interests granted under this Pledge Agreement.
(b) This Pledge Agreement has been duly executed and delivered by the
Pledgor and constitutes a valid and binding obligation of the Pledgor,
enforceable against the Pledgor in accordance with its terms, except as such
enforceability may be limited by the effect of any applicable bankruptcy,
insolvency, reorganization, fraudulent conveyances, moratorium or other similar
laws affecting creditors' rights generally or general principles of equity.
(c) The Pledgor is the record and beneficial owner of the Collateral,
free and clear of any Lien or claims of any Person (except for the security
interest granted under this Pledge Agreement). No financing statement covering
the Pledged Securities is on file in any public office, other than financing
statements filed pursuant to this Pledge Agreement.
(d) Upon the delivery to the Collateral Agent of the certificates, if
any, representing the Pledged Securities, any filing of financing statements
required by the UCC and notation on the
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records of the Collateral Agent that it holds the Pledged Securities as pledgee,
the pledge of the Collateral pursuant to this Pledge Agreement creates 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
Pledgor and any Persons purporting to purchase any of the Collateral from the
Pledgor.
(e) 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
Pledgor of the Collateral pursuant to this Pledge Agreement or for the
execution, delivery or performance of this Pledge Agreement by the Pledgor
(except for any filings and notations necessary to perfect the security interest
created hereby in the Collateral) or (ii) for the exercise by the Collateral
Agent of the rights provided for in this Pledge Agreement or the remedies in
respect of the Collateral pursuant to this Pledge Agreement.
(f) No litigation, proceeding or investigation of or before any
arbitrator or governmental authority is pending or, to the knowledge of the
Pledgor, threatened by or against the Pledgor with respect to this Pledge
Agreement or any of the transactions contemplated hereby.
(g) 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 T,
U and X of the Board of Governors of the Federal Reserve System).
7. Further Assurances. The Pledgor agrees promptly to take such
actions and to execute and deliver or cause to be executed and delivered, or use
its best efforts to procure, such stock or bond powers, proxies, assignments,
instruments and such other or different writings as the Collateral Agent may
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 and
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, or to otherwise effect the purposes of this Pledge Agreement.
The Pledgor also hereby authorizes the Collateral Agent to file any financing or
continuation statements with respect to the Collateral without the signature of
the Pledgor (to the extent permitted by applicable law). The Pledgor will pay
all costs incurred by the Collateral Agent in connection with any of the
foregoing.
8. Covenants. The Pledgor covenants and agrees with the Collateral
Agent and the holders of the Notes from and after the date of this Pledge
Agreement until the earlier of payment in full in cash of (A) each of the first
seven scheduled interest payments due on the Notes under the terms of the
Indenture or (B) all Obligations due and owing under the Indenture and the Notes
in the event such Obligations become due and payable prior to the payment of the
first seven scheduled interest payments on the Notes, as follows:
(a) The Pledgor agrees that it (i) will not sell or otherwise dispose
of, or grant any option or other interest with respect to, any of the
Collateral, (ii) 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 (iii) will at all times be the sole beneficial owner of
the Collateral.
(b) The Pledgor agrees that it will not (i) enter into any agreement
or understanding that purports to or may restrict or inhibit the Collateral
Agent's rights or remedies hereunder, including,
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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 due with respect thereto later than
five days prior to the date of any proposed sale under any judgment, writ or
warrant of attachment.
9. Power of Attorney
(a) The Pledgor hereby appoints and constitutes the Collateral Agent
as the Pledgor's attorney-in-fact with full power of substitution 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:
(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
Section 7 hereof;
(iv) making any payments or taking any acts pursuant to Section 10
hereof;
(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 Pledgor to the Collateral Agent, due and payable immediately
upon demand; and
(vi) taking any acts pursuant to Section 13 hereof.
(b) The Collateral Agent's authority under this Section 9 shall
include, without limitation, the authority to endorse and negotiate any checks
or instruments representing proceeds of Collateral in the name of the Pledgor,
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 Pledgor's names on all 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 Pledgor's name 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
Pledgor.
(c) The Pledgor acknowledges 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 this
Pledge Agreement, but, as between the Collateral Agent and the Pledgor, 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 Pledgor shall not be obligated or entitled to make any inquiry
respecting such authority.
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(d) 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 the Pledgor or the holder of any Note.
(e) The 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 reasonably satisfactory to the Collateral Agent. The 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 not responsibility concerning the value or validity of the Collateral or
the validity or perfection of the pledge thereof or any security interest
therein. The provisions of Section 7.02(a)(i) of the Indenture are incorporated
herein by reference.
(f) The Collateral Agent may at any time on 30 days notice to the
Pledgor and the holders of the Notes resign hereunder. Upon any such
resignation the Pledgor shall promptly appoint another financial institution
reasonably satisfactory to the holders of a majority in principal amount or the
outstanding Notes to act as Collateral Agent hereunder and such resignation
shall become effective upon the acceptance of the appointment by the successor.
(g) 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 a prudent
financial institution similarly situated would accord 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.
10. Collateral Agent May Perform. If the Pledgor fails to perform
any agreement contained herein, the Collateral Agent may, but shall not be
obligated to, itself perform or cause performance of such agreement, and the
expenses incurred by or on behalf of the Collateral Agent in connection
therewith shall be payable by the Pledgor under Section 14 hereof.
11. No Assumption of Duties. 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 and 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 in connection therewith other than
those imposed under applicable law.
12. Indemnity. The Pledgor shall indemnify, defend and hold harmless
the Collateral Agent and its directors, officers, agents and employees from and
against all claims, actions, obligations, losses, liabilities and expenses,
including reasonable costs, fees and disbursements of counsel, the costs of
investigations, and claims for damages, arising from the Collateral Agent's
performance under this Pledge Agreement, except insofar as the same may have
been caused by the gross negligence or willful misconduct of such indemnified
Person. The obligations of the Pledgor under this Section 12 shall survive the
resignation or removal of the Collateral Agent or the termination of this Pledge
Agreement.
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13. Remedies upon Event of Default. If an Event of Default shall
have occurred:
(a) Upon the acceleration of the Notes in accordance with the terms
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, and as otherwise granted herein or under any other
applicable law or under any other agreement executed by Pledgor, 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 the 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. 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. Unless any of
the Collateral threatens, in the reasonable judgment of the Collateral Agent, to
decline speedily in value or is or becomes of a type sold on a recognized
market, the Collateral Agent shall give the Pledgor reasonable notice of the
time and place of any public sale thereof, or of the time after which any
private sale or other intended disposition is to be made. 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. Any requirements of reasonable notice shall be met
if such notice is mailed to the Pledgor as provided in Section 17 herein, at
least fifteen (15) days before the time of the sale or disposition. The
Collateral Agent 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) The Pledgor further agrees to use its 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 13 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 13 will cause irreparable injury to the Collateral Agent and the
holders of Notes, that the Collateral Agent and the holders of 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 13 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.
(c) All rights to marshaling of assets of the Pledgor, including any
such right with respect to the Collateral, are hereby waived by the Pledgor.
The Pledgor shall not contest or support any other Person in contesting the
validity or priority of the security interests created under this Pledge
Agreement.
14. Fees and Expenses. The Pledgor shall, upon demand, pay to the
Collateral Agent the amount of its fees (which shall be in an amount previously
agreed by the Pledgor and the Collateral Agent) and any and all 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
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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 Pledgor to perform or
observe any of the provisions hereof.
15. 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 Pledgor hereunder, shall be absolute and unconditional
irrespective of:
(a) any lack of validity or enforceability of the Indenture 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 Obligations, or any other amendment or waiver
of or any consent to any departure from the Indenture;
(c) any exchange, surrender, release or non-perfection of any Liens
on any other Collateral for all or any of the Obligations; or
(d) any other circumstance that might otherwise constitute a defense
available to, or a discharge of, the Pledgor in respect of the Obligations or of
this Pledge Agreement.
16. Authority of the Collateral Agent. 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 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 any
holder of the Notes shall be liable to the Pledgor for any action taken or
omitted to be taken by it or them hereunder, except for its own bad faith, gross
negligence or willful misconduct, nor shall the Collateral Agent be responsible
for the legality, 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. The Collateral Agent and its directors, officers, employees, attorneys
and agents shall be entitled to rely on the opinion of a nationally recognized
firm of independent certified public accountants with respect to the dollar
amount of the Pledged Securities.
17. Notices. Any communication, notice or demand to be given
hereunder shall be duly given hereunder if given in the form and manner, and
delivered to the address 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.
18. 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 of 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 or other agreement shall be cumulative and not exclusive the
one of any other, and may be exercised by the Collateral Agent from time to
time.
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19. 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.
20. 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 LAWS OF
THE STATE OF NEW YORK. TO INDUCE THE COLLATERAL AGENT TO ENTER INTO THIS PLEDGE
AGREEMENT, THE PLEDGOR HEREBY IRREVOCABLY AGREES THAT, SUBJECT TO THE COLLATERAL
AGENT'S SOLE AND ABSOLUTE ELECTION, ALL ACTIONS OR PROCEEDINGS THAT 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 HAVING SITUS WITHIN THE COUNTY OF
NEW YORK, STATE OF NEW YORK. THE PLEDGOR HEREBY CONSENTS TO THE JURISDICTION OF
ANY STATE OR FEDERAL COURT LOCATED WITHIN THE COUNTY OF NEW YORK, STATE OF NEW
YORK. THE PLEDGOR HEREBY IRREVOCABLY CONSENTS 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 PLEDGOR'S NOTICE ADDRESS
AS SPECIFIED HEREIN. THE PLEDGOR HEREBY WAIVES ANY RIGHT IT 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 PLEDGOR AND THE
COLLATERAL AGENT HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE 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 20 ARE A MATERIAL INDUCEMENT FOR
THE COLLATERAL AGENT ENTERING INTO THIS PLEDGE AGREEMENT AND THE TRANSACTIONS
CONTEMPLATED HEREBY. THE PLEDGOR HEREBY ACKNOWLEDGES THAT IT HAS REVIEWED THE
PROVISIONS OF THIS SECTION 20 WITH INDEPENDENT COUNSEL.
21. Calculation of Interest. For purposes of this Pledge Agreement,
all calculations of the first seven scheduled interest payments on the Notes
shall be calculated on the basis that interest will accrue on the Notes at the
rate of 14 1/2% per annum and will be payable semi-annually in arrears on
December 1, 1998, June 1, 1999, December 1, 1999, June 1, 2000, December 1,
2000, June 1, 2001 and December 1, 2001. Interest on the Notes will be computed
on the basis of a 360-day year comprised of twelve 30-day months.
22. 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.
23. 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
10
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 pursuant to written
instructions of the Company.
Signature page follows
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IN WITNESS WHEREOF, the parties hereto have executed and delivered
this Pledge and Security Agreement as of the day first written above.
OnePoint Communications Corp.,
as Pledgor
By: /s/ Xxxxx X. Xxxxxxxxx
---------------------------------------
Name: Xxxxx X. Xxxxxxxxx
Title: Chairman and Chief Executive Officer
XXXXXX TRUST AND SAVINGS BANK,
as Trustee and Collateral Agent
By: /s/ X. Xxxxxxxxx
---------------------------------------
Name: X. Xxxxxxxxx
Title: Vice President
