Exhibit 10.5
EXECUTION COPY
PLEDGE AGREEMENT
This PLEDGE AGREEMENT ("PLEDGE AGREEMENT"), dated as of September 29,
1997, is executed by and between KMC Telecom Holdings, Inc., a Delaware
corporation (the "PLEDGOR"), and AT&T Commercial Finance Corporation (the
"LENDER"). Capitalized terms used herein and not otherwise defined herein shall
have the respective meanings given to such terms in the "Amended and Restated
Loan Agreement" (as defined below).
WITNESSETH:
WHEREAS, the Pledgor's wholly-owned subsidiary KMC Telecom Inc. (the
"BORROWER"), a Delaware corporation, KMC Telecom II, Inc. and Lender have
entered into a certain Amended and Restated Loan and Security Agreement dated as
of September 22, 1997 (as amended, restated, supplemented or otherwise modified
from time to time, the "AMENDED AND RESTATED LOAN AGREEMENT"), pursuant to which
Lender has agreed, subject to certain conditions precedent, to make loans to the
Borrower from time to time;
WHEREAS, the Pledgor owns all of the issued and outstanding common
stock of the Borrower and Pledgor will derive direct and indirect economic
benefit from the loans made to the Borrower under the Amended and Restated Loan
Agreement;
WHEREAS, the Pledgor has executed on behalf of Lender that certain
Guaranty of even date herewith (as the same may be amended, restated,
supplemented or otherwise modified from time to time, the "Guaranty") pursuant
to which the Pledgor has agreed, among other things, to guarantee all of the
"Obligations" (as such term is defined in the Amended and Restated Loan
Agreement); and
WHEREAS, it is a condition precedent to the making of loans by the
Lender under the Amended and Restated Loan Agreement that the Pledgor shall have
granted a first priority security interest in the "Pledged Collateral" (as
hereinafter defined below) in order to secure the prompt and complete payment,
observance and performance of all of the Pledgor's obligations under the
Guaranty (such obligations and liabilities being hereinafter referred to as the
"LIABILITIES");
NOW, THEREFORE, in consideration of the premises set forth herein and
in order to induce the Lender to make loans, advances and other financial
accommodations under the Amended and Restated Loan Agreement, and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Pledgor and the Lender hereby agree as follows:
1. PLEDGE. The Pledgor hereby pledges to the Lender, and grants to
the Lender a security interest in, the following (collectively, the "PLEDGED
COLLATERAL"):
(a) all shares of the capital stock of the Borrower, and the
certificates representing all shares of such capital stock (as identified on
EXHIBIT A attached hereto and made a part hereof), all options and warrants for
the purchase of shares of the stock of the Borrower now or hereafter held in the
name of the Pledgor and relating to such specified shares of capital stock (all
of said capital stock, options and warrants and all capital stock held in the
name of the Pledgor as a result of the exercise of such options or warrants
being hereinafter collectively referred to as the "PLEDGED STOCK"), herewith
delivered to the Lender accompanied by stock powers in the form of EXHIBIT B
attached hereto and made a part hereof ("POWERS") duly executed in blank, and
all 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 such shares;
(b) all additional shares of stock of the Borrower from time to time
acquired by the Pledgor in any manner as a result of the ownership of the shares
of capital stock described on EXHIBIT A, and the certificates representing such
additional shares (any such additional shares shall constitute part of the
Pledged Stock and shall be listed on EXHIBIT A), and all options, warrants,
dividends, cash, instruments and other rights and options from time to time
received, receivable or otherwise distributed in respect of or in exchange for
any or all of such shares;
(c) the property and interests in property described in SECTION 3
below; and
(d) all proceeds of any of the foregoing.
2. SECURITY FOR THE LIABILITIES. The Pledged Collateral secures the
prompt payment, performance and observance of the Liabilities.
3. PLEDGED COLLATERAL ADJUSTMENTS. If, during the term of this
Pledge Agreement:
(a) any stock dividend, reclassification, readjustment or other
change is declared or made in the capital structure of the Borrower, or any
option included within the Pledged Collateral is exercised, or both, or
(b) subscription warrants or any other rights or options shall be
issued in connection with the Pledged Collateral, then all new, substituted and
additional shares, warrants, rights, options or other securities, issued by
reason of any of the foregoing, together with stock powers in the form of
EXHIBIT B duly executed in blank (or other comparable instruments) shall be
immediately delivered to and held by the Lender under the terms of this Pledge
Agreement and shall constitute Pledged Collateral hereunder; PROVIDED, HOWEVER,
that nothing contained in this SECTION 3 shall be deemed to permit any stock
dividend, issuance of additional stock, warrants, rights or options,
reclassification, readjustment or other change in the capital structure of the
Borrower which is not expressly permitted in the Amended and Restated Loan
Agreement.
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4. SUBSEQUENT CHANGES AFFECTING PLEDGED COLLATERAL. The Pledgor
represents and warrants that it has made its own arrangements for keeping
informed of changes or potential changes affecting the Pledged Collateral
(including, but not limited to, rights to convert, rights to subscribe, payment
of dividends, reorganization or other exchanges, tender offers and voting
rights), and the Pledgor agrees that the Lender shall have no obligation to
inform the Pledgor of any such changes or potential changes or to take any
action or omit to take any action with respect thereto. The Lender may, after
the occurrence of an Event of Default, without notice and at its option,
transfer or register the Pledged Collateral or any part thereof into its or its
nominee's name with or without any indication that such Pledged Collateral is
subject to the security interest hereunder. In addition, the Lender may at any
time exchange certificates or instruments representing or evidencing Pledged
Shares for certificates or instruments of smaller or larger denominations.
5. REPRESENTATIONS AND WARRANTIES. The Pledgor represents and
warrants as follows:
(a) the Pledgor is the record owner of one hundred percent (100%) of
the issued and outstanding capital stock of the Borrower, free and clear of any
Lien except for the security interest created by this Pledge Agreement which
security interest attaches to all the capital stock of the Borrower, represented
by certificate nos. PA-4 and A-9, and the second priority security interest
created by the Pledge Agreement (the "Junior Pledge") executed in favor of the
Lender under that certain Subordinated Loan and Security Agreement of September
22, 1997 between the Lender and the Borrowers;
(b) the Pledgor has full power and authority (corporate or otherwise)
to enter into this Pledge Agreement;
(c) there are no restrictions upon the voting rights associated with,
or upon the transfer of, any of the Pledged Collateral other than those created
by the Junior Pledge;
(d) the Pledgor has the right to vote, pledge and grant a security
interest in or otherwise transfer such Pledged Collateral free of any Liens
other than those created by the Junior Pledge;
(e) no 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 of the Pledgor's Pledged Collateral pursuant to this Pledge
Agreement or for the execution, delivery or performance of this Pledge Agreement
by the Pledgor or (ii) for the exercise by the Lender of the voting or other
rights provided for in this Pledge Agreement or the remedies in respect of the
Pledged Collateral pursuant to this Pledge Agreement (except as may be required
(x) in connection with such disposition by laws affecting the offering and sale
of securities generally and (y) by the FCC or any PUC);
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(f) the pledge of the Pledgor's Pledged Collateral pursuant to this
Pledge Agreement creates a valid and perfected first priority security interest
in such Pledged Collateral, in favor of the Lender, securing the payment and
performance of the Liabilities; and
(g) the Powers are duly executed and give the Lender the authority
they purport to confer.
6. VOTING RIGHTS. During the term of this Pledge Agreement, and
except as provided in this SECTION 6 below, the Pledgor shall have the right to
exercise all corporate rights associated with the Pledged Collateral and vote
the Pledged Stock on all corporate questions in a manner not inconsistent with
the terms of this Pledge Agreement, the Guaranty, the Amended and Restated Loan
Agreement and any other agreement, instrument or document executed pursuant
thereto or in connection therewith. The Lender shall at the sole cost and
expense of the Pledgor, execute and deliver (or cause to be executed and
delivered) to the Pledgor all such proxies and other instruments the Pledgor may
reasonably request for the purpose of enabling such Pledgor to exercise the
voting or other rights that it is entitled to exercise. Subject to the
provisions of SECTION 9(G), after the occurrence and during the continuation of
an Event of Default, the Lender may, at the Lender's option and following
written notice from the Lender to the Pledgor, exercise all voting powers and
corporate rights pertaining to the Pledged Collateral, and until all of the
Obligations have been paid in full (in cash), the Pledgor irrevocably
constitutes and appoints Lender as the proxy and attorney-in-fact of the
Pledgor, with full power of substitution to exercise such voting powers and
corporate rights; PROVIDED, HOWEVER that Lender will not take any action
pursuant to this Pledge Agreement which would constitute or result in any
assignment of a FCC or PUC license or any change of control of the Borrower if
such assignment or change of control would require under then existing law
(including the written rules and regulations promulgated by the FCC or any PUC),
the prior approval of the FCC or any PUC, without first obtaining such approval
of the FCC or any PUC.
7. DIVIDENDS AND OTHER DISTRIBUTIONS.
(a) So long as no Event of Default shall have occurred and be
continuing:
(i) the Pledgor shall be entitled to receive and retain any and all
dividends and interest paid in respect of the Pledged Collateral to the
extent the Borrower is permitted to make such payments under the Amended
and Restated Loan Agreement, PROVIDED, HOWEVER, that any and all
(A) dividends and interest paid or payable other than in cash
with respect to, and instruments and other property received,
receivable or otherwise distributed with respect to, or in exchange
for, any of the Pledged Collateral; and
(B) dividends and other distributions paid or payable in cash
with respect to any of the Pledged Collateral on account of a partial
or total liquidation or
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dissolution or in connection with a reduction of capital, capital
surplus or paid-in surplus; or in redemption of, or in exchange for,
any of the Pledged Collateral;
shall be, and shall be forthwith delivered to the Lender to hold as,
Pledged Collateral and shall, if received by the Pledgor, be received in
trust for the Lender, be segregated from the other property or funds of the
Pledgor, and be delivered immediately to the Lender as Pledged Collateral
in the same form as so received (with any necessary endorsement); and
(ii) the Lender shall execute and deliver (or cause to be executed
and delivered) to the Pledgor all such proxies and other instruments as the
Pledgor may reasonably request for the purpose of enabling the Pledgor to
receive the dividends or interest payments which it is authorized to
receive and retain pursuant to paragraph (i) above.
(b) Subject to the provisions of SECTION 9(G), after the occurrence
and during the continuation of an Event of Default:
(i) All rights of the Pledgor to receive the dividends and interest
payments which it would otherwise be authorized to receive and retain
pursuant to SECTION 7(A)(I) hereof shall cease, and all such rights shall
thereupon become vested in the Lender, which shall thereupon have the sole
right to receive and hold as Pledged Collateral such dividends and interest
payments;
(ii) all dividends and interest payments which are received by the
Pledgor contrary to the provisions of paragraph (i) of this SECTION 7(B)
shall be received in trust for the Lender, shall be segregated from other
funds of the Pledgor and shall be paid over immediately to the Lender as
Pledged Collateral in the same form as so received (with any necessary
endorsements); and
(iii) the Pledgor shall, upon the request of the Lender, at Pledgor's
expense, use its best efforts to do or cause to be done all such other acts
and things as may be necessary to make the sale of the Pledged Collateral
or any part thereof valid and binding and in compliance with applicable
law. The Pledgor will reimburse the Lender for all expenses incurred by
the Lender in connection with the foreclosure on or sale of the Pledged
Collateral, including, without limitation, reasonable attorneys' and
accountants' fees and expenses in connection with any of the foregoing.
8. TRANSFERS AND OTHER LIENS. The Pledgor agrees that it will not
(i) sell or otherwise dispose of, or grant any option with respect to, any of
the Pledged Collateral without the prior written consent of the Lender, or (ii)
create or permit to exist any Lien upon or with respect to any of the Pledged
Collateral, except for the security interest under this Pledge Agreement and the
Junior Pledge.
9. REMEDIES.
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(a) The Lender shall have, in addition to any other rights given
under this Pledge Agreement or by law, all of the rights and remedies with
respect to the Pledged Collateral of a secured party under the Uniform
Commercial Code as in effect in the State of New Jersey. In addition, after the
occurrence and during the continuation of an Event of Default, the Lender shall
have such powers of sale and other powers as may be conferred by applicable law.
With respect to the Pledged Collateral or any part thereof which shall then be
in or shall thereafter come into the possession or custody of the Lender or
which the Lender shall otherwise have the ability to transfer under applicable
law, the Lender may, in its sole discretion, without notice except as specified
below, after the occurrence and during the continuation of an Event of Default,
sell or cause the same to be sold at any exchange, broker's board or at public
or private sale, in one or more sales or lots, at such price as the Lender may
deem best, for cash or on credit or for future delivery, without assumption of
any credit risk, and the purchaser of any or all of the Pledged Collateral so
sold shall thereafter own the same, absolutely free from any claim, encumbrance
or right of any kind whatsoever. The Lender may, in its own name, or in the
name of a designee or nominee, buy the Pledged Collateral at any public sale
and, if permitted by applicable law, buy the Pledged Collateral at any private
sale. The Pledgor shall be liable to the Lender for all reasonable expenses
(including, without limitation, court costs and reasonable attorneys' and
paralegals' fees and expenses) of, or incident to, the enforcement of any of the
provisions hereof. The Lender agrees to distribute any proceeds of the sale of
the Pledged Collateral in accordance with the Amended and Restated Loan
Agreement.
(b) Unless any of the Pledged Collateral threatens to decline
speedily in value or is or becomes of a type sold on a recognized market, the
Lender will 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 Pledged Collateral
conducted in conformity with reasonable commercial practices of banks,
commercial finance companies, insurance companies or other financial
institutions disposing of property similar to the Pledged Collateral shall be
deemed to be commercially reasonable. Notwithstanding any provision to the
contrary contained herein, any requirements of reasonable notice shall be met if
such notice is received by the Pledgor as provided in SECTION 19 below, at least
five (5) Business Days before the time of the sale or disposition. Any other
requirement of notice, demand or advertisement for sale is waived, to the extent
permitted by law.
(c) In view of the fact that federal and state securities laws may
impose certain restrictions on the method by which a sale of the Pledged
Collateral may be affected after an Event of Default, the Pledgor agrees that
after the occurrence of an Event of Default, the Lender may, from time to time,
attempt to sell all or any part of the Pledged Collateral by means of a private
placement restricting the bidders and prospective purchasers to those who are
qualified and will represent and agree that they are purchasing for investment
only and not for distribution. In so doing, the Lender may solicit offers to
buy the Pledged Collateral, or any part of it, from a limited number of
investors deemed by the Lender, in its reasonable judgment, to be financially
responsible parties who might be interested in purchasing the Pledged
Collateral. If the Lender solicits such offers from not less than three (3)
such investors, then the acceptance by the Lender
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of the highest offer obtained therefrom shall be deemed to be a commercially
reasonable method of disposing of such Pledged Collateral.
(d) In connection with the enforcement by the Lender of any remedies
available to the Lender as a result of any Event of Default, the Pledgor agrees
to, and to use its best efforts to cause the Borrower to join and cooperate
fully, in each case at the Lender's election, with the Lender, any receiver
referred to below and/or the successor bidder or bidders at any foreclosure sale
in a filing of an application (and furnishing any additional information that
may be required in connection with such application) with the FCC, any PUC and
all applicable federal, state and local governmental authorities, requesting
their prior approval of (i) the operation and/or abandonment of all or any
portion of any System and/or (ii) the transfer of control of the Borrower or any
of its Systems or assignment of all licenses, certificates, authorizations,
approvals and permits, issued to the Borrower by the FCC, any PUC or any such
authorities with respect to its System(s) and the operation thereof. In
connection with the foregoing, the Pledgor agrees to, and agrees to use its best
efforts to cause the Borrower to, take such further actions, and execute all
such instruments, as the Lender reasonably deems necessary or desirable. The
Pledgor agrees that the Lender may enforce any obligations of the Pledgor as set
forth in this Section by an action for specific performance.
(e) Notwithstanding any other provision of this Pledge Agreement to
the contrary, the exercise of any rights hereunder by the Lender that may
require FCC or any PUC approval shall be subject to obtaining such approval.
Pending obtaining FCC or such PUC approval the Pledgor will not do anything to
delay, hinder, interfere or obstruct the exercise of the Lender's rights
hereunder in obtaining such approvals.
(f) In connection with the exercise of its remedies under this
Agreement, Lender may, upon the occurrence and during the continuation of an
Event of Default obtain the appointment of a receiver or trustee to assume, upon
receipt of all necessary judicial, FCC, PUC or other governmental authority,
consents or approvals, control of or ownership of any Pledged Collateral. Such
receiver or trustee shall have all rights and powers provided to it by law or by
court order or provided to Lender under this Pledge Agreement. Upon the
appointment of such trustee or receiver, the Pledgor agrees to cooperate, to the
extent necessary or appropriate, in the expeditious preparation, execution and
filing of an application to the FCC or any PUC for consent to the transfer of
control or assignment of the Borrower's Authorizations to the receiver or
trustee.
(g) If an Event of Default has occurred and Lender demands payment of
the Obligations pursuant to SECTION 9.02 of the Amended and Restated Loan
Agreement, then Lender shall forebear from foreclosing on the Pledged Collateral
for five (5) Business Days following Lender's demand for payment of the
Obligations pursuant to SECTION 9.02 of the Amended and Restated Loan Agreement,
and if within such five (5) Business Day period the Pledgor or Borrower pays to
Lender all of the Obligations (without any Prepayment Premium) in cash, then
Lender shall return to Pledgor the Pledged Stock and the Powers, and this Pledge
Agreement shall terminate.
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10. SECURITY INTEREST ABSOLUTE. All rights of the Lender and
security interests hereunder, and all obligations of the Pledgor hereunder,
shall be absolute and unconditional irrespective of:
(i) any lack of validity or enforceability of the Amended and
Restated Loan Agreement or any other agreement or instrument relating thereto;
(ii) 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 Amended and Restated Loan Agreement;
(iii) any exchange, release or non-perfection of any other
collateral, or any release or amendment or waiver of or consent to departure
from any guaranty, for all or any of the Obligations; or
(iv) to the extent permitted by law, any other circumstance which
might otherwise constitute a defense available to, or a discharge of, the
Pledgor in respect of the Obligations or of this Pledge Agreement other than
indefeasible payment in full (in cash).
11. LENDER APPOINTED ATTORNEY-IN-FACT. The Pledgor hereby appoints
the Lender its attorney-in-fact, with full authority, in the name of the Pledgor
or otherwise, after the occurrence and during the continuation of an Event of
Default, from time to time in the Lender's discretion, to take any action and to
execute any instrument which the Lender may deem necessary or advisable to
accomplish the purposes of this Pledge Agreement, including, without limitation,
to receive, endorse and collect all instruments made payable to the Pledgor
representing any dividend, interest payment or other distribution in respect of
the Pledged Collateral or any part thereof and to give full discharge for the
same and to arrange for the transfer of all or any part of the Pledged
Collateral on the books of the Borrower to the name of the Lender or the
Lender's nominee.
12. WAIVERS. The Pledgor waives presentment and demand for payment
of any of the Liabilities, protest and notice of dishonor or Event of Default
with respect to any of the Liabilities and all other notices to which the
Pledgor might otherwise be entitled except as otherwise expressly provided
herein or in the Amended and Restated Loan Agreement.
13. TERM. This Pledge Agreement shall remain in full force and
effect until the Obligations have been fully and indefeasibly paid and satisfied
and the Amended and Restated Loan Agreement and the Guaranty have terminated
pursuant to their respective terms. Upon the termination of this Pledge
Agreement as provided above (other than as a result of the sale of the Pledged
Collateral), the Lender will release the security interest created hereunder and
will deliver the Pledged Stock and the Powers to the Pledgor.
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14. DEFINITIONS. The singular shall include the plural and vice
versa and any gender shall include any other gender as the context may require.
15. SUCCESSORS AND ASSIGNS. This Pledge Agreement shall be binding
upon and inure to the benefit of the Pledgor, the Lender and their respective
successors and assigns. The Pledgor's successors and assigns shall include,
without limitation, a receiver, trustee or debtor in possession of or for the
Pledgor.
16. APPLICABLE LAW; SEVERABILITY. THIS PLEDGE AGREEMENT SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS (AS OPPOSED TO
THE CONFLICT OF LAWS PROVISIONS) AND DECISIONS OF THE STATE OF NEW JERSEY.
Whenever possible, each provision of this Pledge Agreement shall be interpreted
in such manner as to be effective and valid under applicable law, but, if any
provision of this Pledge Agreement shall be held to be prohibited or invalid
under applicable law, such provision shall be ineffective only to the extent of
such prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Pledge Agreement. Furthermore, if
any term or provision hereof is held to be inconsistent with the Communications
Act of 1934, as amended, 47 U.S.C. 151 et seq., or with the Rules and
Regulations of the FCC, or otherwise illegal, unenforceable or invalid for any
reason, such provision shall not affect the remainder hereof, and the parties
shall promptly cooperate in good faith to modify this Pledge Agreement, so as to
avoid any impairment of Lender's security interest in the Pledged Collateral.
17. FURTHER ASSURANCES. The Pledgor agrees that it will cooperate
with the Lender and will execute and deliver, or cause to be executed and
delivered, all such other stock powers, proxies, instruments and documents, and
will take all such other action, including, without limitation, the filing of
financing statements, as the Lender may reasonably request from time to time in
order to carry out the provisions and purposes of this Pledge Agreement.
18. THE LENDER'S DUTY OF CARE. The Lender shall not be liable for
any acts, omissions, errors of judgment or mistakes of fact or law including,
without limitation, acts, omissions, errors or mistakes with respect to the
Pledged Collateral, except for those arising solely out of or solely in
connection with the Lender's (i) gross negligence or willful misconduct, or (ii)
failure to use reasonable care with respect to the safe custody of the Pledged
Collateral in the Lender's possession. Without limiting the generality of the
foregoing, the Lender shall be under no obligation to take any steps necessary
to preserve rights in the Pledged Collateral against any other parties but may
do so at its option. All expenses incurred in connection therewith shall be for
the sole account of the Pledgor, and shall constitute part of the Obligations
secured hereby.
19. NOTICES. All notices and other communications required or
desired to be served, given or delivered hereunder shall be made in the manner
prescribed by the Amended and Restated Loan Agreement and to the following
addresses, facsimile and telephone numbers:
if to the Lender, to
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AT&T Capital Corporation/
Capital Markets Division
00 Xxxxxxxx Xxxx
Xxxxxxxxxx, Xxx Xxxxxx 00000-0000
Attention: Vice President /Credit
Facsimile: 000-000-0000
Confirmation: 000-000-0000
with a copy to:
AT&T Capital Corporation/
Capital Markets Division
00 Xxxxxxxx Xxxx
Xxxxxxxxxx, Xxx Xxxxxx 00000-0000
Attention: Chief Counsel
Facsimile: 000-000-0000
Confirmation: 000-000-0000
if to the Pledgor to:
c/o Kamine Development Corp.
0000 Xxxxx 000
Xxxxxxxxxx, Xxx Xxxxxx 00000
Attention: Xxxxxx Xxxxxx
Facsimile: 000-000-0000
Confirmation: 000-000-0000
20. AMENDMENTS, WAIVERS AND CONSENTS. No amendment or waiver of any
provision of this Pledge Agreement nor consent to any departure by the Pledgor
herefrom, shall in any event be effective unless the same shall be in writing
and signed by the Lender pursuant to the terms of the Amended and Restated Loan
Agreement and then such amendment, waiver or consent shall be effective only in
the specific instance and for the specific purpose for which given.
21. NO STRICT CONSTRUCTION. The parties hereto have participated,
jointly in the negotiation and drafting of this Pledge Agreement. In the event
of any ambiguity or question of intent or interpretation arises, this Pledge
Agreement shall be construed as if drafted jointly by the parties hereto and no
presumption or burden of proof shall arise favoring or disfavoring any party by
virtue of authorship of any provisions of this Pledge Agreement.
22. SECTION HEADINGS. The section headings herein are for
convenience of reference only, and shall not affect in any way the
interpretation of any of the provisions hereof.
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23. EXECUTION IN COUNTERPARTS. This Pledge Agreement may be executed
in any number of counterparts, each of which shall be an original, but all of
which shall together constitute one and the same agreement.
IN WITNESS WHEREOF, the Pledgor and the Lender have executed and
delivered this Pledge Agreement by their respective duly authorized officers as
of the 29th day of September, 1997.
KMC TELECOM HOLDINGS, INC.
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By:
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Title:
AT&T COMMERCIAL FINANCE CORPORATION
By:
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Title:
ACKNOWLEDGMENT
The undersigned hereby acknowledges receipt of a copy of the foregoing
Pledge Agreement, agrees promptly to note on its books the security interests
granted under such Pledge Agreement, and waives any rights or requirement at any
time hereafter to receive a copy of such Pledge Agreement in connection with the
registration of any Pledged Collateral in the name of the Lender or its nominee
or the exercise of voting rights by the Lender.
KMC TELECOM INC.
By:
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Title:
EXHIBIT A
to
PLEDGE AGREEMENT
dated as of September 29, 1997
PLEDGED STOCK CERTIFICATES
Percentage of Issued and Shares of Capital
Name of Outstanding Capital Stock Stock owned by Pledgor
Borrower owned by Pledgor Subject to Pledge
KMC Telecom Inc. 100% 123,800 Preferred Stock
627,670 Class A Common
Stock
EXHIBIT B
to
PLEDGE AGREEMENT
dated as of September 29, 1997
FORM OF STOCK POWER
STOCK POWER
FOR VALUE RECEIVED, the undersigned does hereby sell, assign and
transfer to ________________________________________ 123,800 Shares of Preferred
Stock and 627,670 Shares of Class A Common Stock of KMC Telecom Inc., a Delaware
corporation, represented by Certificate Nos. PA-4 and A-9 (the "Stock"),
standing in the name of the undersigned on the books of said corporation and
does hereby irrevocably constitute and appoint ________________________ as the
undersigned's true and lawful attorney, for it and in its name and stead, to
sell, assign and transfer all or any of the Stock, and for that purpose to make
and execute all necessary endorsements or other acts of assignment and transfer
thereof; and to substitute one or more persons with like full power, hereby
ratifying and confirming all that said attorney or substitute or substitutes
shall lawfully do by virtue hereof.
Dated:
KMC TELECOM HOLDINGS, INC.
By:
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Title:
STOCK POWER
FOR VALUE RECEIVED, the undersigned does hereby sell, assign and
transfer to ________________________________________ 123,800 Shares of Preferred
Stock and 627,670 Shares of Class A Common Stock of KMC Telecom Inc., a Delaware
corporation, represented by Certificate Nos. PA-4 and A-9(the "Stock"), standing
in the name of the undersigned on the books of said corporation and does hereby
irrevocably constitute and appoint ________________________________________ as
the undersigned's true and lawful attorney, for it and in its name and stead, to
sell, assign and transfer all or any of the Stock, and for that purpose to make
and execute all necessary endorsements or other acts of assignment and transfer
thereof; and to substitute one or more persons with like full power, hereby
ratifying and confirming all that said attorney or substitute or substitutes
shall lawfully do by virtue hereof.
Dated:
KMC TELECOM HOLDINGS, INC.
By:
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Title:
