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COLLATERAL PLEDGE AND SECURITY AGREEMENT
Dated as of December 23, 0000
Xxxxxxx
XXXXXX/XXXXXX XXXXXXXXXXXXXX XXXXXXX
xxx
XXXXXX XXXXXX TRUST COMPANY 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 December 23, 1998 by XXXXXX/SYGNET
COMMUNICATIONS COMPANY, an Oklahoma corporation (the "PLEDGOR"), having its
principal office at 00000 X. Xxxxxxxx Xxxxxxxxx, Xxxxx 000, Xxxxxxxx Xxxx,
Xxxxxxxx 00000, in favor of UNITED STATES TRUST COMPANY OF NEW YORK, a bank and
trust company organized under the New York banking law, having an office at 000
X. 00xx Xxxxxx, 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 United States Trust Company 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
$200,000,000 in aggregate principal amount of 121/4% Senior Notes due 2008 (the
"NOTES"); and
WHEREAS, the Pledgor has agreed, pursuant to the Indenture, to
deposit on the date hereof (the "CLOSING DATE") $67,561,539 (the "FUNDS") with
the Trustee to be held by the Trustee for the benefit of the Holders of the
Notes; and
WHEREAS, the Pledgor has opened a non-interest bearing collateral
account (the "COLLATERAL ACCOUNT") with United States Trust Company of New York
at its office at 000 X. 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Account No.
00000000 in the name of "XXXXXX/SYGNET COLLATERAL" but under the sole dominion
and control of the Trustee and subject to the terms of this Pledge Agreement;
and
WHEREAS, to secure the obligations of the Pledgor under the
Indenture and the Notes to provide for payment in full of the first six
scheduled interest payments due on the Notes and (ii) 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 (a) to pledge to the Trustee for its
benefit and the ratable benefit of the Holders of the Notes, a security interest
in the Collateral (as defined herein) and (b) to execute and deliver this Pledge
Agreement in order to secure the payment and performance by the Pledgor of all
the Obligations; and
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. CERTAIN DEFINITIONS; APPOINTMENT OF THE TRUSTEE;
PLEDGE AND GRANT OF SECURITY INTEREST; DEPOSIT OF FUNDS
1.1 CERTAIN DEFINITIONS.
"CASH EQUIVALENTS" means, to the extent owned free and clear of all
liens other than liens created hereunder, Government Securities.
"GOVERNMENT BOOK-ENTRY SECURITY" means Government Securities
maintained in book-entry form through the United States Federal Reserve
Banks pursuant to (A) the United States Treasury Department regulations
codified at 31 C.F.R. Part 357, as modified by the amendments promulgated
at 61 Fed. Reg. 43, 626-43, 638 (Aug. 23, 1996), or (B) substantially
identical regulations promulgated by any other agency or instrumentality of
the United States whose securities qualify as "Government Securities"
hereunder.
"GOVERNMENT SECURITIES" means direct obligations of, obligations
fully guaranteed by, or participations in pools consisting of obligations
of or obligations guaranteed by, the United States of America for the
payment of which guarantee or obligations the full faith and credit of the
United States of America is pledged and which are not callable or
redeemable at the option of the issuer thereof.
1.2 APPOINTMENT OF THE TRUSTEE. The Pledgor hereby appoints
United States Trust Company of New York as Trustee in accordance with the terms
and conditions set forth herein and the Trustee hereby accepts such appointment.
1.3 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
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following (hereinafter collectively referred to as the "COLLATERAL"), whether
characterized as investment property, general intangibles or otherwise: (a)
the Collateral Account, all funds held therein and all certificates and
instruments, if any, from time to time representing or evidencing the
Collateral Account, and all Collateral Investments (as hereinafter defined)
and all certificates and instruments, if any, representing or evidencing the
Collateral Investments, and any and all security entitlements to the
Collateral Investments, and any and all related securities accounts in which
security entitlements to the Collateral Investments are carried, (b) 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, (c) 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 (d) all proceeds of any and all of
the foregoing Collateral (including, without limitation, proceeds that
constitute property of the types described in clauses (a) - (d) of this
Section 1) and, to the extent not otherwise included, all cash.
1.4 DEPOSIT OF FUNDS. On the Closing Date, the Pledgor shall
direct that the Funds be deposited into the Collateral Account.
SECTION 2. SECURITY FOR OBLIGATION. This Pledge Agreement and
the grant of a security interest in the Collateral hereunder secures the prompt
payment and performance when due (whether at stated maturity, by acceleration or
otherwise) of all the Obligations. Without limiting the generality of the
foregoing, this Pledge Agreement and the grant of a security interest in the
Collateral hereunder secures the payment of all amounts that constitute part of
the 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. DELIVERY OF COLLATERAL. (a) All certificates or
instruments representing or evidencing the Collateral, including, without
limitation, amounts invested as provided in Section 5, shall be delivered to (as
set forth in Section 6) and held by or on behalf of the Trustee pursuant hereto
and shall be in suitable form for transfer by delivery, or shall be accompanied
by duly executed instruments of transfer or assignment in blank, all in form and
substance sufficient to establish and maintain in favor of the Trustee a valid
security interest in such Collateral, and shall be credited to the Collateral
Account. In addition, the Trustee shall have the right at any time to exchange
certificates or instruments representing or evidencing the Collateral for
certificates or instruments of smaller or larger denominations.
(b) Concurrently with the execution and delivery of this Pledge
Agreement, the Trustee is delivering to the Pledgor and NationsBanc
Xxxxxxxxxx Securities LLC a duly executed Notification and Control
Agreement ("CONTROL AGREEMENT"), substantially in the form of EXHIBIT A
hereto, confirming the Trustee's establishment and separate maintenance of
the Collateral Account, all in accordance with this Pledge Agreement.
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SECTION 4. MAINTAINING THE COLLATERAL ACCOUNT. (a) So long as any
Obligation shall remain unpaid, the Trustee will maintain separately the
Collateral Account with United States Trust Company of New York, which account
shall at all times be under the sole dominion and control of the Trustee and
subject to the terms and conditions of this Pledge Agreement.
(b) It shall be a term and condition of the Collateral Account,
notwithstanding any term or condition to the contrary in any other
agreement relating to the Collateral Account, and except as otherwise
provided by the provisions of Section 7 and Section 14 hereof, that no
amount (including interest on Collateral Investments) 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 Collateral Account.
The Collateral 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 5. INVESTING OF AMOUNTS IN THE COLLATERAL ACCOUNT. If
directed by the Pledgor in writing, the Trustee will, subject to the provisions
of Section 7 and Section 14 hereof, from time to time (a) invest amounts on
deposit in the Collateral Account in such Cash Equivalents, each in the name of
or for the account of the Trustee, as the Pledgor may select and the Trustee may
approve and (b) invest interest paid on the Cash Equivalents referred to in
clause (a) above, and reinvest other proceeds of any such Cash Equivalents that
may mature or be sold, in each case in such Cash Equivalents, each in the name
of or for the account of the Trustee, as the Pledgor may select and the Trustee
may approve (the Cash Equivalents referred to in clauses (a) and (b) above being
collectively "COLLATERAL INVESTMENTS"). The amount on deposit in the Collateral
Account must include Government Securities sufficient, in the opinion of a
nationally recognized firm of independent public accountants selected by the
Pledgor, to provide for the payment in full of the first six scheduled interest
payments on all of the Notes then outstanding. Interest and proceeds that are
not invested or reinvested in Collateral Investments as provided above shall be
deposited and held in the Collateral Account. The Trustee shall in no event be
liable for any loss in the investment or reinvestment of amounts held in the
Collateral Account.
SECTION 6. DELIVERY OF COLLATERAL INVESTMENTS. (a) The Trustee
shall become the holder of the Collateral Investments (and any applicable
security entitlements thereto) through the following delivery procedures:
(i) in the case of Collateral Investments which are certificated securities in
registered form, delivery of the applicable certificate(s), specially endorsed
to the Trustee or registered in the name of the Trustee or accompanied by duly
executed instruments of transfer or assignment in blank, all in form and
substance satisfactory to the Trustee, to the possession of (A) the Trustee,
(B) a securities intermediary or financial intermediary acting on behalf of the
Trustee, or (C) another person, other than a securities intermediary or
financial intermediary, which person acknowledges that it holds for the Trustee;
(ii) in the case of Collateral
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Investments which are uncertificated securities, registration of one of the
following as owner of such uncertificated securities: the Trustee or a person
designated by the Trustee, or person other than a securities intermediary or
financial intermediary, that becomes the registered owner of such
uncertificated securities and acknowledges that it holds the same for the
Trustee; and (iii) in the case of Collateral Investments in the form of
Government Book-Entry Securities, the making by a financial intermediary or
securities intermediary (other than a clearing corporation) to whose account
such Government Book-Entry Securities have been credited on the books of a
Federal Reserve Bank (or on the books of another such financial intermediary
or securities intermediary (other than a clearing corporation)), of book
entries indicating that such Government Book-Entry Securities have been
credited to an account of the Trustee, and the sending by such financial
intermediary or securities intermediary to the Trustee of confirmation of
such transfer to the Trustee's account.
(b) Upon delivery of any Collateral Investments to the Trustee
(or the Trustee's acquisition of a security entitlement thereto), the
Trustee shall make appropriate book entries indicating that such Collateral
Investment and/or such security entitlement has been credited to and is
held in the Collateral Account. Subject to the terms and conditions of
this Pledge Agreement, all Collateral Investments held by the Trustee
pursuant to this Pledge Agreement shall be held in the Collateral Account
under the exclusive dominion and control of the Trustee and for the benefit
of the Trustee and the ratable benefit of the Holders of the Notes and
segregated from all other funds or other property otherwise held by the
Trustee.
SECTION 7. DISBURSEMENTS. The Trustee shall hold the assets in
the Collateral Account and release the same, or a portion thereof, only as
follows:
(a) At least 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 executed by the Pledgor (an "ISSUER
ORDER"), direct the Trustee to release from the Collateral Account, and if
necessary liquidate Collateral Investments in the Collateral Account and
pay to the Holders of the Notes funds sufficient to provide for payment in
full of such interest then due on the Notes. Upon receipt of an Issuer
Order, the Trustee will take any action necessary to provide for the
payment of the interest on the Notes in accordance with the payment
provisions of the Indenture to the Holders of the Notes from (and to the
extent of) funds available in the Collateral Account.
(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 Collateral Account ("PLEDGOR FUNDS"), the Pledgor may,
after payment in full of such interest payment or portion thereof from
proceeds of the Collateral or such Pledgor Funds or both, direct the
Trustee to release to the Pledgor or to another party at the direction of
the Pledgor (a "PLEDGOR DESIGNEE") funds from the Collateral Account, and
if necessary liquidate
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Collateral Investments in the Collateral Account, in an amount less than
or equal to the amount of Pledgor Funds applied to such interest
payment. Upon receipt of an Issuer Order by the Trustee, the Trustee
shall pay over to the Pledgor or the Pledgor's Designee, as the case may
be, the requested amount from funds in the Collateral Account.
Concurrently with any release of funds to the Pledgor pursuant to this
Section 7(b), the Pledgor shall deliver to the Trustee a certificate
signed by an officer of the Pledgor stating that such release has been
duly authorized by the Pledgor and will not contravene any provision of
applicable law or the Certificate 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 interest
granted under this Pledge Agreement.
(c) 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 or a Pledgor Designee. In addition, upon the
release of any Collateral from the Collateral Account in accordance with
the terms of this Pledge Agreement, the security interest evidenced by this
Pledge Agreement in such released Collateral will automatically terminate
and be of no further force and effect.
(d) The Trustee shall not be required to liquidate any Collateral
Investment in order to make any payment hereunder unless instructed to do
so pursuant to an Issuer Order or pursuant to Section 14 hereof.
(e) Nothing contained in Section 1, Section 5, Section 6, this
Section 7 or any other provision of this Pledge Agreement shall (i) afford
the Pledgor any right to issue entitlement orders with respect to any
security entitlement to any of the Collateral Investments 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 any
of the Collateral Investments, any security entitlement thereto or any
securities account in which any such security entitlement may be carried,
other than the Pledgor's beneficial interest under this Pledge Agreement in
collateral pledged to and subject to the exclusive dominion and control
(consistent with this Pledge Agreement) 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 entitlement to the
Collateral Investments solely as trustee for the Holders of the Notes and
not as a securities intermediary or financial intermediary.
(f) Nothing in this Section 7 shall affect the Trustee's rights
to apply the Collateral to the payments of amounts due on the Notes upon
acceleration thereof.
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(g) At least three Business Days prior to the due date of any of
the first six scheduled interest payments on the Notes, the Pledgor
covenants to give the Trustee (by Issuer Order) notice as to whether
payment of interest will be made pursuant to Section 7(a) or Section 7(b)
and as to the respective amounts of interest that will be paid pursuant to
Section 7(a) or Section 7(b). If no such notice is given, the Trustee will
act pursuant to Section 7(a) as if it had received an Issuer Order pursuant
thereto for the payment in full of the interest then due.
SECTION 8. 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
and the Control Agreement will not contravene any provision of applicable
law or the certificate of incorporation or by-laws 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, or filing, declaration or qualification with, any
governmental body or agency is required (i) for the execution, delivery or
performance by the Pledgor of its obligations under either this Pledge
Agreement or the Control Agreement, (ii) for the grant by the Pledgor of
the security interest created hereby or (ii) for the pledge by the Pledgor
of the Collateral pursuant to either this Pledge Agreement or the Control
Agreement, 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 either this Pledge Agreement or the
Control Agreement or the remedies in respect of the Collateral pursuant to
either this Pledge Agreement or the Control 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 Collateral 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
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hereof may be limited by bankruptcy, insolvency or similar laws affecting
creditors' rights 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 14(d), Section 17.11 and Section 17.15 hereof may be limited by
applicable law.
(e) Upon the transfer to the Trustee of the Funds 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
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 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 9. FILING; FURTHER ASSURANCES. (a) 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 in
accordance with the Uniform Commercial Code as in effect in the State of New
York and the State of Oklahoma, covering the categories of Collateral
described in this Pledge Agreement.
(b) The Pledgor agrees that from time to time, at the expense of
the Pledgor, the Pledgor will, promptly upon request by the Trustee (which
request the Trustee may submit at the direction of the holders of a
majority in principal amount of the Notes then outstanding), execute and
deliver or cause to be executed and delivered, or use its reasonable best
efforts to procure, all assignments, instruments and other documents, all
in form and substance satisfactory to the Trustee, deliver any instruments
to the Trustee and take any other actions that may be necessary or, in the
opinion of the Trustee, desirable to perfect, continue the perfection of,
or protect the first priority of the Trustee's security
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interest in and to the Collateral, including the filing of all necessary
financing and continuation statements, 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) or
to effect the purposes of this Pledge Agreement.
(c) The Pledgor hereby authorizes the Trustee to file any
financing or continuation statements in the United States with respect to
the Collateral without the signature of the Pledgor (to the extent
permitted by applicable law). A photocopy or other reproduction of this
Pledge Agreement or any financing statement covering the Collateral or any
part thereof shall be sufficient as a financing statement where permitted
by law.
(d) The Pledgor will promptly pay all costs incurred in
connection with this Pledge Agreement within 45 days of receipt of an
invoice therefor.
SECTION 10. 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 payment in full of all of the Obligations:
(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 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 11. POWER OF ATTORNEY. In addition to all of the
powers granted to the Trustee pursuant to the Indenture, 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, including, without limitation:
(a) to ask for, demand, collect, xxx for, recover, compromise,
receive and give acquittance and receipts for moneys due and to become due
under or in respect of any of the Collateral,
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(b) to receive, indorse and collect any drafts or other
instruments, documents and chattel paper, in connection with clause (a)
above,
(c) to file any claims or take any action or institute any
proceedings that the Trustee may deem necessary or desirable for the
collection of any of the Collateral or otherwise to enforce the rights of
the Trustee with respect to any of the Collateral,
(d) to pay or discharge 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 Trustee in its sole reasonable
discretion, and such payments made by the Trustee to become part of the
Obligations of the Pledgor to the Trustee, due and payable immediately upon
demand, and
(e) to convey any item of Collateral to any purchaser thereof and
give any notices or recordings of any Liens under Section 6 hereof;
PROVIDED, HOWEVER, that the Trustee shall have no obligation to perform any
of the foregoing actions. The Trustee's authority under this Section 11
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 deemed necessary or appropriate by
the Trustee to preserve, protect or perfect the security interest in the
Collateral and to file the same, prepare, file and sign the Pledgor's name on
any notice of Lien, and to take any other actions arising from or incident to
the powers granted to the Trustee in this Pledge Agreement. This power of
attorney is coupled with an interest and is irrevocable by the Pledgor.
SECTION 12. 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.
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SECTION 13. INDEMNITY; TRUSTEE'S LIMITATION OF LIABILITY TO
PLEDGOR. (a) The Pledgor shall indemnify, reimburse, hold harmless and
defend the Trustee and its directors, 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 14. 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
forthwith, assemble
-11-
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 15) 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 Obligations in such order as the
Trustee shall elect or the Holders of at least 25% in aggregate principal
amount of the Notes then outstanding shall request. Any surplus of such
cash or cash proceeds held by the Trustee and remaining after payment in
full of all the Obligations shall be paid over to the Pledgor or to
whomsoever may be lawfully entitled to receive such surplus.
(c) 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 14 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 14 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
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every covenant contained in this Section 14 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 15. 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 16. 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 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 Obligations;
(d) any manner of application of collateral, or proceeds thereof,
to all or any of the Obligations, or any manner of sale or other
disposition of any collateral for all or any of the Obligations or any
other assets of the Pledgor;
(e) any change, restructuring or termination of the corporate
structure or existence of the Pledgor; or
(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 Obligations or of this Pledge
Agreement.
SECTION 17. MISCELLANEOUS PROVISIONS.
Section 17.1. NOTICES. Any notice or communication given
hereunder and any deliveries made hereunder shall be sufficiently given if in
writing and delivered in person or mailed
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by first class mail, commercial courier service or telecopier communication,
addressed as follows:
IF TO THE PLEDGOR:
Xxxxxx/Sygnet Communications Company
00000 X. Xxxxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxxxx Xxxx, Xxxxxxxx 00000
Fax: (000) 000-0000
Attention: Xxxxx X. Xxxxxxxxxxx
WITH A COPY TO:
McAfee & Xxxx
000 Xxxxx Xxxxxxxx
Xxxxx 0000
Xxxxxxxx Xxxx, Xxxxxxxx 00000
Attention: Xxxxxxxx X. Xxxx
IF TO THE TRUSTEE:
United States Trust Company of New York
000 X. 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax: (000) 000-0000
Attention: Xxxxx Xxxxx, Corporate Trust Administration
All such deliveries, notices and other communications shall be effective when
received.
Section 17.2. 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 17.3. 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.
Section 17.4. 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.
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Section 17.5. 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 17.6. 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 17.7. 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 17.8. 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 17.9. 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
Obligations. This Pledge Agreement shall be binding upon the Pledgor, its
transferees, successors and assigns, and shall inure, together with the
rights and 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 13 and 15) shall terminate upon the payment in full in cash of the
Obligations. At such time, the Trustee shall, pursuant to an Issuer
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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 requested by the Pledgor 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 and shall be at the
reasonable expense of the Pledgor.
Section 17.10. 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. The
obligations of the Pledgor under Sections 13 and 15 hereof shall survive the
termination of this Agreement.
Section 17.11. 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 17.12. 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, 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
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entitled to make any inquiry respecting such authority.
Section 17.13 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 17.14. 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 17.15. 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.
(b) THE PLEDGOR HEREBY APPOINTS CT CORPORATION SYSTEM, 0000
XXXXXXXX, XXX XXXX, XXX XXXX 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 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
-17-
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 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.
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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:
XXXXXX/SYGNET COMMUNICATIONS COMPANY
By: /s/ XXXXXXX X. XXXXXX
--------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Chief Executive Officer
Trustee:
UNITED STATES TRUST COMPANY OF NEW YORK
By: /s/ XXXXX X. XXXXX
--------------------------------------
Name: Xxxxx X. Xxxxx
Title: Vice President
-19-
EXHIBIT A
NOTIFICATION AND CONTROL AGREEMENT
THIS NOTIFICATION AND CONTROL AGREEMENT (the "AGREEMENT") dated
as of December 23, 1998 by and among Xxxxxx/Sygnet Communications Company
(the "PLEDGOR") and the United States Trust Company of New York, a bank and
trust company organized under the new York banking law, in its capacity as
trustee (the "TRUSTEE") and in its capacity as a bank (the "BANK") at which
the Pledgor maintains the Collateral Account.
A. The Pledgor has granted to the Trustee a security interest
in the Collateral, pursuant to, and as more particularly described in, a
Collateral Pledge and Security Agreement dated as of December 23, 1998
between 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 Collateral as provided in the Pledge
Agreement without further consent from the Pledgor. The Bank acknowledges
that the Trustee has control over the Collateral Account.
2. SEPARATE ACCOUNT; TRUSTEE REPRESENTATIONS AND WARRANTIES.
(a) The Trustee hereby instructs the Bank, and the Bank hereby confirms and
agrees that, unless the Trustee shall otherwise direct the Bank in writing,
the Collateral Account is to be maintained separately at all times.
(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 in accordance with the terms of the Pledge Agreement,
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 and the Pledgor copies of all
notices given and statements rendered pursuant to the Collateral Account. So
long as the Pledge Agreement remains in effect, neither the Pledgor nor the
Bank shall terminate the Collateral 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 Collateral Account, the provisions hereof shall control. In
the event the Trustee no longer serves as Trustee for the Collateral, the
Collateral Account 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.
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
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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 with confirmation of
delivery, 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.
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.
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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 AGREEMENT OR ANY TRANSACTION CONTEMPLATED IN ANY OF SUCH DOCUMENTS.
EACH PARTY HERETO ACKNOWLEDGES THAT THE FOREGOING WAIVER IS KNOWING AND
VOLUNTARY.
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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:
XXXXXX/SYGNET COMMUNICATIONS COMPANY
By: /s/ Xxxxxxx X. Xxxxxx
----------------------------------------
Name: Xxxxxxx X. Xxxxxx
--------------------------------------
Title: Chief Executive Officer
-------------------------------------
TRUSTEE:
UNITED STATES TRUST COMPANY OF NEW YORK,
AS TRUSTEE
By: /s/ Xxxxx X. Xxxxx
----------------------------------------
Name: Xxxxx X. Xxxxx
--------------------------------------
Title: Vice President
-------------------------------------
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BANK'S ADDRESS FOR BANK:
NOTICES:
UNITED STATES TRUST COMPANY OF NEW YORK
000 X. 00xx Xxxxxx By: /s/ Xxxxx X. Xxxxx
Xxx Xxxx, Xxx Xxxx 00000 ------------------------------------
Attention: Xxxxx Xxxxx Name: Xxxxx X. Xxxxx
Facsimile Number: (000) 000-0000 ----------------------------------
Title: Vice President
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