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EXHIBIT 10.7
STOCKHOLDERS' PLEDGE AGREEMENT
AMONG
ALLIED RISER COMMUNICATIONS HOLDINGS, INC.,
EGI-ARC INVESTORS, L.L.C.
(AS COLLATERAL AGENT AND INDIVIDUALLY),
TELECOM PARTNERS II, L.P.,
CRESCENDO WORLD FUND, LLC,
EAGLE VENTURES WF, LLC,
CRESCENDO III, L.P.,
XXXXXXXX EQUITY GROUP, L.L.C.,
AND THE
INDIVIDUALS IDENTIFIED ON SCHEDULE 1 ATTACHED HERETO
NOVEMBER 23, 1998
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STOCKHOLDERS' PLEDGE AGREEMENT
THIS STOCKHOLDERS' PLEDGE AGREEMENT, dated as of November 23, 1998, is
made and entered into by and among each of the Persons (as defined below) listed
on Schedule 1 hereto (each such Person being a "Pledgor"); Allied Riser
Communications Holdings, Inc., a Delaware corporation ("ARC Holdings"), EGI-ARC
Investors, L.L.C. ("EGI-ARC"), a Delaware limited liability company, as
collateral agent (in such capacity, the "Collateral Agent") for the benefit of
(i) EGI-ARC, in its individual capacity, (ii) Telecom Partners II, L.P., a
Delaware limited partnership, ("TP"), (iii) Crescendo World Fund, LLC, a
Delaware limited liability company ("CWF"), (iv) Eagle Ventures WF, LLC, a
Minnesota limited liability company ("EVW"), (v) Crescendo III, L.P., a Delaware
limited partnership ("CIII"), (vi) Xxxxxxxx Equity Group, LLC, a California
limited liability company ("LEG"), (vii) and (vii) each Person who is designated
as a "Financial Sponsor" in accordance with Section 3.13 of the Indemnification
Agreement (as defined below), and (viii) ARC Holdings (each of the entities
identified in the preceding clauses (i) through (viii) being a "Beneficiary"),
EGI-ARC (in its individual capacity), TP, CWF, EVW, CIII and LEG.
WHEREAS, pursuant to that certain Plan of Liquidation adopted by the
respective boards of directors and shareholder of Carrier Direct, Inc., a Texas
corporation, and Allied Riser Communications, Inc., a Texas corporation,
formerly known as RiserCorp, Inc., dated as of November 20, 1998, each has
liquidated into RCH Holdings, Inc., a Texas corporation ("RCH"); and
WHEREAS, pursuant to an Asset Transfer Agreement: (i) RCH has
transferred to ARC Holdings, and ARC Holdings has acquired from RCH, all of the
interest of RCH in substantially all of the assets of RCH, subject to all of the
liabilities of RCH (except for certain liabilities specifically excluded
thereunder) (the "Asset Transfer"); and (ii) ARC Holdings has issued to RCH, and
RCH has acquired from ARC Holdings, 50,191,806 shares of common stock of ARC
Holdings, par value $0.0001 per share ("ARC Holdings Common Stock") representing
100% of ARC Holdings' common stock); and subject to compliance with all
applicable federal and state securities and blue sky laws, RCH shall completely
liquidate pursuant to Section 331 of the Internal Revenue Code of 1986, as
amended, and shall distribute all ARC Holdings Common Stock held by RCH to the
stockholders of RCH; and
WHEREAS, immediately following the Asset Transfer, ARC Holdings has
contributed to Allied Riser Communications, Inc., a Delaware corporation ("New
ARC"), substantially all of ARC Holdings' assets and liabilities in exchange for
1,000 shares of New ARC common stock, par value $1.00 per share (the "ARC
Contribution"), whereupon New ARC became a wholly-owned subsidiary of ARC
Holdings; and
WHEREAS, promptly following the distribution of ARC Holdings Common
Stock to the Pledgors pursuant to the liquidation of RCH, each of EGI-ARC, TP,
CV, CWF, EVW, CIII and LEG (collectively, the "Financial Sponsors"), propose to
enter into Investment Agreements (the "Investment Agreements") with ARC
Holdings, pursuant to which each Financial Sponsor will acquire ARC Holdings
Common Stock and shares of ARC Holdings Series A-1 or Series A-2 Preferred
Stock; and
WHEREAS, to induce ARC Holdings to enter into the Asset Transfer
Agreement and to induce the Financial Sponsors to enter into the respective
Investment Agreements, each of the Pledgors has agreed to indemnify ARC
Holdings, the Financial Sponsors, and certain other
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Indemnitees, pursuant to that certain Indemnification Agreement among each of
the Pledgors, and the beneficiaries thereunder (the "Beneficiaries"), initially
dated as of the date hereof (the "Indemnification Agreement"), against certain
liabilities of RCH and certain predecessor corporations, including breaches of
representations, warranties and covenants set forth in the Asset Transfer
Agreement, with such indemnification obligations secured by, among other things,
the pledges provided for herein.
In consideration of the foregoing, the representations and warranties
set forth herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
ARTICLE I
DEFINITIONS
Section 1.1 Defined Terms As used in this Stockholders' Pledge
Agreement, terms defined in the heading and the recitals shall have their
respective assigned meanings, and the following capitalized terms shall have the
meanings ascribed to them below:
(a) "Act" shall mean the Securities Act of 1933, as amended.
(b) "Collateral" shall have the meaning set forth in Article
II.
(c) "Effective Date" shall mean the date first above written.
(d) "Indemnified Party" shall have the meaning set forth in
Article VIII.
(e) "Loss" shall mean, with respect to any Beneficiary, any
Loss as defined in the Indemnification Agreement.
(f) "Obligations" shall have the meaning set forth in Article
II hereof.
(g) "Person" shall mean any individual, corporation,
partnership, limited liability company, trust, joint stock company, business
trust, unincorporated association, joint venture, governmental authority or
other entity of any nature whatsoever.
(h) "Pledged Stock" shall mean the shares listed on Schedule 1
hereto, as such schedule may be modified from time to time in accordance with
Section 5.1 hereof.
(i) "Proceeds" shall have the meaning set forth in the UCC as
in effect from time to time in the State of Delaware.
(j) "Transaction Documents" shall mean, collectively with this
Stockholders' Pledge Agreement, the agreements and documents listed on Schedule
2 hereto, and any and all other agreements or other documents entered into or
delivered concurrently herewith or subsequent hereto in order to effectuate the
purpose and intent of any such documents and agreements, as the same may be
amended, restated, supplemented or otherwise modified from time to time in
accordance with the provisions thereof.
(k) "UCC" shall mean the Uniform Commercial Code.
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Section 1.2 Headings, etc The headings in this Stockholders' Pledge
Agreement are included for convenience of reference only and shall not limit or
otherwise affect the meaning or interpretation of this Stockholders' Pledge
Agreement. All pronouns and all variations thereof shall be deemed to refer to
the masculine, feminine or neuter, singular or plural, as the identity of the
Person may require.
ARTICLE II
PLEDGE AND SECURITY INTEREST
In order to secure the full and complete payment and performance by
each Pledgor of each of its obligations under the Indemnification Agreement
(regardless of whether or not such stock is restricted) (collectively, the
"Obligations"), each Pledgor hereby pledges and grants to the Collateral Agent,
for the benefit of the Beneficiaries, a continuing lien and first security
interest in (a) all of the outstanding shares of common stock, options, warrants
and all other securities of RCH and ARC Holdings currently or hereafter owned or
acquired by each such Pledgor, including, without limitation, the Pledged Stock,
(b) all securities, dividends, options, warrants, subscription I rights, cash,
instruments and other distributions and all other rights or property at any time
and from time to time receivable or otherwise distributed in respect of or in
exchange for any or all of the Pledged Stock and any other property substituted
or exchanged therefor or for any Collateral, and (c) any and all Proceeds
(including, without limitation, Proceeds of, and substitutions and replacements
for, the foregoing (all of the property and rights described in the foregoing
clauses (a) through (c) being herein collectively called the "Collateral").
ARTICLE III
DEPOSIT OF CERTIFICATES FOR PLEDGED STOCK
Each of the Pledgors shall deliver or cause to be delivered (and
authorize the delivery) to the Collateral Agent, concurrently with the execution
of this Stockholders' Pledge Agreement, the certificates representing the
Pledged Stock, endorsed in blank or accompanied by appropriate instruments of
transfer or assignments duly endorsed in blank. The Collateral Agent shall not
have any duty to assure that all certificates representing the Pledged Stock
have been delivered to it or any obligation whatsoever with respect to the care,
custody or protection of any certificates or instruments which may be delivered
to it except only to exercise the same care in physically safekeeping such
certificates or instruments as it would exercise in the ordinary course of its
own business. Neither the Collateral Agent, any Beneficiary, nor any of their
respective directors, members, officers, employees or agents shall be liable for
any failure, or be obligated, to preserve or protect any rights with respect to
the Pledged Stock or to receive or give any notice with respect thereto whether
or not the Collateral Agent or Beneficiary is deemed to have knowledge of such
matters.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
Each of the Pledgors represents and warrants to the Collateral Agent
and to each of the Beneficiaries as of the date of each pledge and delivery
hereunder that:
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Section 4.1 Transferability; Title Matters. The Collateral is free and
clear of all liens, options, warrants, puts, calls, or other rights of third
persons, and restrictions (including, without limitation, restrictions on
voting), other than (i) those liens arising under this Stockholders' Pledge
Agreement, (ii) restrictions on transferability imposed by applicable state and
federal securities laws, and (iii) restrictions under the Transaction Documents.
Upon the delivery to the Collateral Agent of the Pledged Stock, the security
interests granted to the Collateral Agent hereunder will constitute perfected
security interests therein superior and prior to all liens.
Section 4.2 Ownership of Pledged Stock. Each of the Pledgors is the
holder of record and the beneficial owner of the number of shares of issued and
outstanding ARC Holdings Common Stock or other Collateral that is set forth
opposite such Pledgor's name on Schedule 1 hereto. Such common stock or other
Collateral has been duly and validly issued and is fully paid and nonassessable.
Section 4.3 Investment; Securities Compliance. Each of the Pledgors (I)
understands that the ARC Holdings Common Stock has not been, and will not be,
registered under the Securities Act of 1933, as amended, or under any state
securities or blue sky laws, and has been issued to such Pledgor in reliance
upon federal and state exemptions for transactions not involving any public
offering, (ii) acquired the ARC Holdings Common Stock solely for its own account
for investment purposes, and not with a view to the distribution thereof, (iii)
is a sophisticated investor with knowledge and experience in business and
financial matters, (iv) has received certain information concerning ARC Holdings
and New ARC and has had the opportunity to obtain additional information as
desired in order to evaluate the merits and the risks inherent in holding the
ARC Holdings Common Stock, and (v) is able to bear the economic risk and lack of
liquidity inherent in holding the ARC Holdings Common Stock. Each Pledgor
further acknowledges that it is, as a result of being an officer, employee
and/or long standing shareholder of RCH and/or its predecessor businesses,
familiar with the business and operations of RCH (and such predecessor
businesses) and the business as proposed to be conducted by ARC Holdings and New
ARC, including the market, financial, technology and other risks associated
therewith. Each Pledgor further acknowledges and agrees that in addition to the
restrictions imposed on such Pledgor's Pledged Stock hereunder, such Pledged
Stock is further subject to, among other things, all of the restrictions on
transfer and otherwise imposed on such Pledged Stock pursuant to the
Stockholders' Agreement (as amended from time to time, the "Stockholders'
Agreement"), the applicable Subscription Agreement (as amended from time to
time, the "Subscription Agreement") and the applicable Employment Agreement (if
any) (as amended from time to time, the "Employment Agreement") to which such
Pledgor is or shall become a party, as well as all applicable federal and state
securities and blue sky laws.
Section 4.4 Title and Power to Pledge the Collateral. Each Pledgor has
good and marketable title to the Collateral and has all requisite rights, power,
and authority to execute, deliver and comply with the terms of this
Stockholders' Pledge Agreement and to pledge and deliver the Collateral to the
Collateral Agent pursuant hereto. No authorization, consent or approval of, and
no notice to or filing with, any Person is required in connection with the
execution, delivery and performance of this Stockholders' Pledge Agreement or
the exercise by the Collateral Agent of voting or other rights or remedies
provided for in this Stockholders' Pledge Agreement which has not been obtained.
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Section 4.5 Binding Effect. This Stockholders' Pledge Agreement
constitutes the legal, valid and binding obligation of each Pledgor enforceable
against each Pledgor in accordance with its terms.
ARTICLE V
COVENANTS
So long as any Obligations remain outstanding, each of the Pledgors
covenants and agrees with the Collateral Agent as follows:
Section 5.1 Pledge and Additional Stock. If any of the Pledgors shall
at any time acquire any additional shares of ARC Holdings Common Stock, any
other Pledged Stock or any option, warrant or other right with respect thereto,
whether such acquisition shall be by purchase, exchange, reclassification,
dividend, or otherwise, any such Pledgor shall forthwith (and without the
necessity for any request or demand by the Collateral Agent) pledge and deliver
the certificates representing such shares to the Collateral Agent, in the same
manner as described in Article III hereof and shall promptly thereafter deliver
to the Collateral Agent a certificate (which shall in each case be deemed to
supplement Schedule 1 attached hereto to reflect such additional shares)
executed by such Pledgor describing such Pledged Stock and certifying that the
same has been duly pledged with the Collateral Agent hereunder. Any such
additional shares shall constitute part of the Pledged Stock.
Section 5.2 Applications, Approvals and Consents. Each Pledgor will, at
the expense of ARC Holdings, so long as (i) no claims have been made and remain
unresolved in full under the Indemnification Agreement, and (ii) no Pledgor
shall be in breach of any obligations thereunder, hereunder or under such
Pledgor's Employment Agreement (if any), Subscription Agreement or Stockholders'
Agreement (the "Expense Condition"), and otherwise, at such Pledgor's expense,
promptly execute and deliver, or cause the execution and delivery of, all
applications, certificates, instruments, registration statements, and all other
documents and papers the Collateral Agent may reasonably request in connection
with the obtaining of any consent, approval, registration, qualification, or
authorization of any Person necessary or appropriate for the effective exercise
of any rights under this Stockholders' Pledge Agreement. Without limiting the
generality of the foregoing, each of the Pledgors agrees that in the event the
Collateral Agent shall exercise its right to sell, transfer, or otherwise
dispose of or take any other action in connection with any of the Collateral
pursuant to this Stockholders' Pledge Agreement, each of the Pledgors shall
execute and deliver all applications, certificates, and other documents the
Collateral Agent may request and shall otherwise promptly, fully, and diligently
cooperate with the Collateral Agent and any other necessary Persons, in making
any application for the prior consent or approval of any Person to the exercise
by the Collateral Agent of any of such rights relating to all or any part of the
Collateral.
Section 5.3 Security Interest and Lien. Each of the Pledgors (A) will
preserve, warrant, and defend title to and ownership of the Pledged Stock and
the lien and security interest created hereby in the Collateral against the
claims of all Persons whomsoever and maintain and preserve such lien and
security interest at all times during the term of this Stockholders' Pledge
Agreement; (B) will not at any time sell, assign, pledge, transfer or otherwise
dispose of or contract to sell, assign, transfer or otherwise dispose of its
right, title and interest in and to any of the Collateral; (C) will not at any
time, directly or indirectly, create, assume, or suffer to exist any lien,
warrant, put, option, or other rights of third Persons and restrictions, other
than the liens created by this Stockholders' Pledge
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Agreement and the Stockholders' Agreement, in and to the Collateral or any part
thereof; and (D) will not do or suffer any matter or thing whereby the lien
created by this Stockholders' Pledge Agreement in and to the Collateral might or
could be impaired.
ARTICLE VI
THE AGENT
Section 6.1 Authorization and Action. Each of the Beneficiaries hereby
designates and appoints EGI-ARC to act as its collateral agent hereunder, and
authorizes the Collateral Agent to take such actions as agent on such
Beneficiary's behalf and to exercise such powers as are delegated to the
Collateral Agent by the terms of this Stockholders' Pledge Agreement together
with such powers as are reasonably incidental thereto. The Collateral Agent
shall not have any duties or responsibilities, except those expressly set forth
herein, or any fiduciary relationship with any of the Beneficiaries, and no
implied covenants, functions, responsibilities, duties, obligations or
liabilities on the part of the Collateral Agent shall be read into this
Stockholders' Pledge Agreement or otherwise exist for the Collateral Agent. In
performing its functions and duties hereunder, the Collateral Agent shall act
solely in its own behalf as a Beneficiary and as agent for the Beneficiaries and
does not assume nor shall be deemed to have assumed any obligation or
relationship of trust or agency with or for any Pledgor or any of the Pledgors'
successors or assigns. The Collateral Agent shall not be required to take any
action which exposes the Collateral Agent to personal liability or which is
contrary to this Stockholders' Pledge Agreement, any other Transaction Document
or applicable law. The appointment and authority of the Collateral Agent
hereunder shall terminate upon the indefeasible payment in full of all
Obligations or the termination of this Stockholders' Pledge Agreement, whichever
shall first occur. Each of the Beneficiaries hereby authorizes the Collateral
Agent to execute each of the UCC financing statements on behalf of each of the
Beneficiaries (the terms of which shall be binding on each of the
Beneficiaries).
Section 6.2 Delegation of Duties. The Collateral Agent may execute any
of its duties under this Stockholders' Pledge Agreement by or through agents or
attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties.
Section 6.3 Successor Agent. The Collateral Agent (other than ARC
Holdings, if ARC Holdings becomes the Collateral Agent hereunder in accordance
with this Section 6.3) may, upon five days' notice to the Beneficiaries, resign
as Collateral Agent. If the Collateral Agent shall resign, then a majority of
the Beneficiaries during such five-day period shall appoint a successor
collateral agent. If for any reason no successor Collateral Agent is appointed
during such five-day period, then effective upon the termination of such five
day period, ARC Holdings shall perform all of the duties of the Collateral Agent
hereunder and under the other Transaction Documents, subject to removal as
Collateral Agent by vote of Beneficiaries holding a majority in number of issued
and outstanding shares of ARC Holdings Series A-1 and A-2 Preferred Stock. After
the effectiveness of any retiring Collateral Agent's resignation hereunder as
Collateral Agent, the retiring Collateral Agent shall be discharged from its
duties and obligations and the provisions of this Article VI shall continue in
effect for its benefit with respect to any actions taken or omitted to be taken
by it while it was Collateral Agent under this Stockholders' Pledge Agreement.
Section 6.4 General Immunity. Neither the Collateral Agent nor any of
its respective shareholders, members, directors, partners, officers, agents,
attorneys or employees shall be liable to any of the Beneficiaries for any
action taken or omitted to be taken by it or them hereunder or
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under any other Transaction Document or in connection herewith or therewith
except for its or their own gross negligence or willful misconduct as finally
determined in a judgment of a court of competent jurisdiction.
Section 6.5 Collateral Agent's Reimbursement and Indemnification. Each
Beneficiary agrees to reimburse and indemnify the Collateral Agent for such
Beneficiary's pro rata share (based on the number of issued and outstanding
shares of ARC Holdings Series A-1 and A-2 Preferred Stock owned by such
Beneficiary relative to the total number of all such preferred securities issued
and outstanding) of any expenses incurred by the Collateral Agent on behalf of
any of the Beneficiaries, in connection with the administration and enforcement
of, this Stockholders' Pledge Agreement or the liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind and nature whatsoever which may be imposed on, incurred by or
asserted against such Collateral Agent in its capacity as such in any way
relating to or arising out of this Stockholders' Pledge Agreement, any other
Transaction Document or any other document delivered in connection with this
Stockholders' Pledge Agreement or any other Transaction Document or the
transactions contemplated hereby or thereby by the enforcement of any of the
terms hereof or of any other Transaction Document or of any such other
documents; provided that no Beneficiary shall be liable for any of the foregoing
to the extent they arise from the gross negligence or willful misconduct of the
Collateral Agent as finally determined in a final judgment of a court of
competent jurisdiction.
ARTICLE VII
RIGHTS OF THE PLEDGOR AND THE COLLATERAL AGENT
Section 7.1 Dividends and Other Distributions.
(a) Unless and until a Loss shall occur and be
continuing, the Pledgor shall be entitled to receive directly (subject to each
Pledgor's obligations under Section 5.1), but shall retain as part of the
Collateral:
(i) all cash dividends on the Pledged Stock;
(ii) all other or additional stock or securities or
property paid or distributed by way of dividend, exercise, or
conversion in respect of the Collateral;
(iii) all other or additional stock or other
securities or property (including cash) paid or distributed in
respect of the Collateral by way of stock-split, spin-off,
split-up, reclassification, combination of shares or similar
rearrangement; and
(iv) all other or additional stock or other
securities or property which may be paid in respect of the
Collateral by reason of any consolidation, merger, exchange of
stock, conveyance of assets, liquidation or similar corporate
reorganization or other disposition of the Collateral.
(b) If a Loss has occurred and is continuing, the
Collateral Agent shall continue, in accordance with Section 5.1 hereof, to be
entitled to receive all payments or distributions of whatever kind made upon or
with respect to any Collateral and all such sums, dividends,
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distributions and other such payments shall be paid to the Collateral Agent. All
such sums, dividends, distributions and other such payments shall, if received
by any Person other than the Collateral Agent after the occurrence of a Loss, be
held in trust for the benefit of the Collateral Agent and shall forthwith be
delivered to the Collateral Agent in the exact form received (accompanied by
proper instruments of assignment and/or undated stock and/or bond powers
executed by each of the Pledgors in accordance with the Collateral Agent's
instructions) to be held subject to the terms of this Stockholders' Pledge
Agreement.
Section 7.2 Voting Rights. Unless and until a Loss shall occur and be
continuing, the Pledgors shall have the sole and exclusive right to vote and
give consents with respect to all the Collateral and to consent to, ratify, or
waive notice of any and all meetings of the shareholders of ARC Holdings (to the
extent such Collateral would entitle the Pledgor thereof to vote); provided,
however, that none of the Pledgors shall cast any vote or give any consent,
waiver or ratification or take any other action which would violate or be
inconsistent with the terms of the Indemnification Agreement, this Stockholders'
Pledge Agreement, any Subscription Agreement, any Employment Agreement, any
Investment Agreement or any of the terms of any of the other Transaction
Documents or any instrument or agreement relating to the Obligations, or which
would have the effect of impairing the position or interests of the Collateral
Agent. Upon the occurrence and during the continuance of a Loss, all such rights
of each of the Pledgors to vote and to give consents, waivers and ratifications
shall cease and all such rights shall thereupon become vested in the Collateral
Agent and the Collateral Agent shall have the sole right to exercise such
rights.
Section 7.3 Right of Sale after a Loss. Upon the occurrence and during
the continuance of a Loss, unless such Loss is timely paid pursuant to the terms
of the Indemnification Agreement, subject to compliance with applicable law, the
Collateral Agent may (i) transfer, convey and assign to ARC Holdings, and/or
(ii) sell (including, without limitation, to any or all of the Beneficiaries),
in each case, without recourse to judicial proceedings, with the right to bid
for and buy, the Collateral or any part thereof, upon 10 days' notice (which
notice is agreed to be reasonable notice for the purposes hereof) to each of the
Pledgors of the time and place of sale, for cash, upon credit or for future
delivery, at the Collateral Agent's option and in the Collateral Agent's
complete discretion:
(a) At public sale, including a sale at any broker's board or
exchange;
(b) At private sale in any commercially reasonable manner
which will not require the Collateral, or any part thereof, to be registered in
accordance with the Act or the rules and regulations promulgated thereunder, or
any other law or regulation. The Collateral Agent is also hereby authorized, but
not obligated, to take such actions, give such notices, obtain such consents,
and do such other things as it may deem required or appropriate in the event of
sale or disposition of any of the Collateral, and each of the Pledgors agrees
that the Collateral Agent shall not be liable or accountable to any of the
Pledgors for any discount allowed by reason of the fact that such Collateral is
sold in compliance with any applicable limitation or restriction of any
governmental regulatory authority or official. Each of the Pledgors understands
that the Collateral Agent may in its discretion approach a restricted number of
potential purchasers and that a sale under such circumstances may yield a lower
price for the Collateral, or any portion thereof, than would otherwise be
obtainable if the same were registered and sold in the open market. Any such
private sale shall not by reason thereof be deemed not to have been made in a
commercially reasonable manner. In the event of any such sale under the
circumstances described in this Section 7.3(b), the Collateral Agent shall not
incur any responsibility or liability for selling the whole or any part of the
Collateral at a price which the Collateral Agent may deem reasonable under the
circumstances,
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notwithstanding the possibility that a substantially higher price might be
realized if any such sale were a public sale. Each of the Pledgors agrees that
in the event the Collateral Agent shall so sell the Collateral, or any portion
thereof, at such private sale or sales, the Collateral Agent shall have the
right to rely upon the advice and opinion of any Person who regularly deals in
or evaluates stock of the type constituting the Collateral as to the price
obtainable in a commercially reasonable manner upon such a private sale thereof.
In the case of any sale by the Collateral Agent of the
Collateral on credit or for future delivery, the Collateral sold may be retained
by the Collateral Agent until the selling price is paid by the purchaser, but
the Collateral Agent shall not incur liability in case of failure of the
purchaser to take up and pay for the Collateral so sold.
In connection with the sale of any of the Collateral, the
Collateral Agent is authorized, but not obligated, to limit prospective
purchasers to the extent deemed necessary or desirable by the Collateral Agent
to render such sale exempt from the registration requirements of the Act and any
applicable state securities laws. In the event that, in the opinion of the
Collateral Agent, it is necessary or advisable to have such securities
registered under the provisions of such Act, or any similar law relating to the
registration of securities, each of the Pledgors agrees, at its own expense, to
(i) execute and deliver all such instruments and documents, and to do or cause
to be done such other acts and things, as may be necessary or, in the opinion of
the Collateral Agent, advisable, to register such securities under the
provisions of such Act or any applicable similar law relating to the
registration of securities, and each of the Pledgors will use its best efforts
to cause the registration statement relating thereto to become effective and to
remain effective for such period as the Collateral Agent shall reasonably
request, and to make all amendments thereof and/or to the related prospectus
which, in the opinion of the Collateral Agent, are necessary or desirable, all
in conformity with the requirements of such Act or any applicable similar law
relating to the registration of securities and the rules and regulations of the
Securities and Exchange Commission applicable thereto; (ii) use its best efforts
to qualify such securities under state "blue sky" and securities laws, all as
reasonably requested by the Collateral Agent; (iii) at the request of the
Collateral Agent, indemnify and hold harmless the Collateral Agent, any
shareholders, members, directors, underwriters, employees, officers, agents,
attorneys and accountants (collectively, the "Indemnified Parties") from and
against any loss, liability, claim, damage, and expense (including, without
limitation, reasonable fees and expenses of counsel incurred in connection
therewith) under such Act or otherwise, insofar as such loss, liability, claim,
damage, or expense arises out of or is based upon any untrue statement or
alleged untrue statement of any material fact contained in any registration
statement under which such securities were registered under such Act or other
securities laws, any preliminary prospectus or final prospectus contained
therein, or arises out of or is based upon any omission or alleged omission to
state therein a material fact required to be stated or necessary to make the
statements therein not misleading, such indemnification to remain operative
regardless of any investigation made by or on behalf of any Indemnified Party;
provided, however, that the Pledgors shall not be liable in any case to the
extent that any such loss, liability, claim, damage, or expense arises out of or
is based upon an untrue statement or alleged untrue statement or an omission or
an alleged omission made in reliance upon and in conformity with written
information furnished to the Pledgors by an Indemnified Party specifically for
use in such registration statement or preliminary or final prospectus; (iv) use
best efforts to cause ARC Holdings to make available to its security holders, as
soon as practicable, an earnings statement that will satisfy the provisions of
Section 11(a) of such Act; and (v) do or cause to be done all such other acts
and things as may be necessary to make such sale of the Collateral or any part
thereof valid and binding and in compliance with applicable law.
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Section 7.4 Remedies. If a Loss shall have occurred and be continuing,
the Collateral Agent shall be entitled to exercise all of the rights, powers and
remedies (whether vested in it by this Stockholders' Pledge Agreement, the
Indemnification Agreement, by law, in equity, by statute or otherwise,
including, without limitation, all rights and remedies of a secured party of a
debtor in default under the UCC in effect in the applicable jurisdiction from
time to time or any other relevant jurisdiction at that time) for the protection
and enforcement of its rights in respect of the Collateral, and, to the extent
permitted by applicable law, the Collateral Agent shall be entitled, without
limitation, to exercise the following rights, which each of the Pledgors hereby
agrees to be commercially reasonable:
(a) to exercise all of the rights, powers, and remedies in
respect of the Collateral otherwise exercisable under Section 7.3 above and this
Section 7.4 by each of the Pledgors;
(b) to transfer all or any part of the Collateral into the
Collateral Agent's name or the name or names of its nominee or nominees without
any indication that such Collateral is subject to the security interest
hereunder;
(c) to vote all or any part of the Collateral and give all
consents, waivers and ratifications in respect of the Collateral and otherwise
act with respect thereto as though it were the outright owner thereof, and in
furtherance thereof each of the Pledgors shall, at the request of the Collateral
Agent, execute and deliver to the Collateral Agent irrevocable proxies, in form
and substance satisfactory to the Collateral Agent, authorizing the Collateral
Agent to vote the Collateral;
(d) at any time or from time to time to sell, assign and
deliver, or grant options to purchase, all or any part of the Collateral in one
or more parcels, or any interest therein, at any public or private sale at any
exchange, broker's board or at any of the Collateral Agent's offices or
elsewhere, without demand of performance, advertisement or notice of intention
to sell or of the time or place of sale or adjournment thereof or to redeem or
otherwise (all of which are hereby expressly and irrevocably waived by each of
the Pledgors) except as may be required by mandatory provisions of law, for
cash, on credit or for other property, for immediate or future delivery without
any assumption of credit risk, and for such price or prices and on such terms as
the Collateral Agent may determine. Each of the Pledgors agrees, to the extent
that notice of sale shall be required by law, that 10 days' notice to each of
the Pledgors 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;
provided, however, that the Collateral Agent may give any shorter notice that is
commercially reasonable under the circumstances;
(e) to settle, adjust, compromise and arrange all accounts,
controversies, questions, claims and demands whatsoever in relation to all or
any part of the Collateral;
(f) with respect to the Collateral, to execute all such
contracts, agreements, deeds, documents and instruments, to bring, defend and
abandon all such actions, suits and proceedings, and to take all actions in
relation to all or any part of the Collateral as the Collateral Agent may
determine;
(g) to appoint managers, agents and officers for any of the
purposes mentioned in the foregoing provisions of this Article VII and to
dismiss the same, all as the Collateral Agent may determine; and
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(h) generally, to take all such other action as the Collateral
Agent may determine as incidental or conducive to any of the matters or powers
mentioned in the foregoing provisions of this Section 7.4 and which the
Collateral Agent may lawfully do and to use the name of each of the Pledgors for
the purposes aforesaid and in any proceedings arising therefrom.
Section 7.5 Application of Proceeds. The Collateral Agent shall apply
the proceeds of the Collateral, including the proceeds of any sales or other
disposition of the Collateral, or any part thereof, under this Article VII, as
follows:
(a) first, to the reasonable costs and expenses (including
reasonable attorneys' fees) of holding, processing and preparing for sale or
other transfer, selling, collecting and liquidating the Collateral, and the
like, to the extent not recovered from the Pledgors hereunder;
(b) second, to the extent that any such proceeds remain after
the application described in the immediately preceding clause (a), to the
satisfaction of all Obligations of each of the Pledgors to ARC Holdings,
pursuant to the Indemnification Agreement; and
(c) third, to the extent that any such proceeds remain after
the application described in the immediately preceding clause (b), to the
satisfaction of all Obligations of each of the Pledgors to the Financial
Sponsors and Beneficiaries pursuant to Section 2.6(c) of the Indemnification
Agreement.
Section 7.6 Governance. All rights and remedies available to the
Collateral Agent with respect to the grant, foreclosure and enforcement of the
security interest and lien granted hereby and with respect to any action
permitted hereunder may be exercised solely by the Collateral Agent.
ARTICLE VIII
INDEMNITY
Each of the Pledgors shall: (i) pay all reasonable out-of-pocket costs
and expenses of the Collateral Agent, each of the Beneficiaries, and each of
their respective members, shareholders, partners, officers, directors,
employees, representatives, attorneys and agents, other than such costs and
expenses of the other shareholders, partners, officers, directors, employees,
representatives, attorneys and agents of ARC Holdings to the extent such person
is a Pledgor or Pledgor representative (each such Person whose costs and
expenses are provided for above being hereinafter referred to as an "Indemnified
Party") incurred in connection with (a) the enforcement of, or (b) any
renegotiation or restructuring of, this Stockholders' Pledge Agreement and any
amendment, waiver or consent relating thereto (including, without limitation,
the fees and disbursements of counsel for each Indemnified Party); (ii) pay and
hold each Indemnified Party harmless from and against any and all present and
future stamp or documentary taxes or any other excise or property taxes, charges
or similar levies which arise from any payment made hereunder or from the
execution, delivery or registration of, or otherwise with respect to, this
Stockholders' Pledge Agreement and save the Collateral Agent and each
Indemnified Party harmless from and against any and all liabilities with respect
to or resulting from any delay or omission (other than to the extent
attributable to the Indemnified Parties) to pay any such taxes, charges or
levies; and (iii) indemnify the Collateral Agent and each Indemnified Party from
and hold the Collateral Agent and each Indemnified Party harmless against any
and all costs, losses, liabilities, claims, damages or expenses actually
incurred by any of them (whether or not any of them is designated a party
thereto) arising out of or by reason of any investigation, litigation or other
proceeding related to this
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Stockholders' Pledge Agreement or any transaction contemplated hereby,
including, without limitation, the fees and disbursements of counsel incurred in
connection with any such investigation, litigation or other proceeding.
Notwithstanding anything in this Stockholders' Pledge Agreement to the contrary,
none of the Pledgors shall be responsible to any Indemnified Party, for any
losses, damages, liabilities or expenses which result solely from such
Indemnified Party's gross negligence or willful misconduct as determined in a
final judgment of a court of competent jurisdiction. Each of the Pledgors'
obligations under this Article VIII shall survive any termination of this
Stockholders' Pledge Agreement. Notwithstanding clauses (i) and (ii) above, so
long as the Expense Condition is satisfied, ARC Holdings shall pay and hold each
Pledgor harmless from and against any and all costs and expenses referred to in
clause (i) (b) (to the extent that such renegotiation is primarily for the
benefit of the Collateral Agent and Beneficiaries, and initiated by, the
Collateral Agent) and clause (ii) of this Article VIII to the extent otherwise
payable by Pledgors pursuant to such clause.
ARTICLE IX
COVENANT NOT TO ISSUE UNCERTIFICATED SECURITIES
Each of the Pledgors represents and warrants to the Collateral Agent
that all of the common stock forming part of the Pledged Stock is in
certificated form (as contemplated by Article 8 of the Uniform Commercial Code
as in effect in the State of Delaware), and covenants to the Collateral Agent
that it will not seek to convert all or any part of its existing common stock
into uncertificated form (as contemplated by Article 8 of the UCC as in effect
in the State of Delaware).
ARTICLE X
MISCELLANEOUS
Section 10.1 Further Assurances. Each of the Pledgors, at its expense,
shall from time to time execute and deliver to the Collateral Agent all such
other assignments, certificates, supplemental documents, and financing
statements, and shall do all other acts or things as the Collateral Agent may
reasonably request in order to more fully create, evidence, perfect, continue,
and preserve the validity and priority of the lien and security interest herein
created or to otherwise obtain the full benefits of this Stockholders' Pledge
Agreement.
Section 10.2 Term. This Stockholders' Pledge Agreement and the lien
arising hereunder (i) shall become effective as of the date hereof upon the
execution hereof, and (ii) shall continue in full force and effect until the
first to occur of (x) a Qualifying Public Offering (as defined in ARC Holdings'
Certificate of Incorporation), (y) a sale of ARC Holdings securities such that
no Beneficiary continues to own any ARC Holdings securities or a sale (directly
or indirectly) of all or substantially all of the assets of ARC Holdings, and
(z) the second year anniversary of the date of execution of this Stockholders'
Pledge Agreement. Notwithstanding clauses (x), (y), and (z) above in this
Section 10.2, or the occurrence of any of the events or circumstances described
therein, this Stockholders' Pledge Agreement and the lien arising hereunder,
shall, in the event notice of any claimed loss under the Indemnification
Agreement is given prior to such occurrence, continue in full force and effect
until the indefeasible payment in full of all of the Obligations to the
Collateral Agent and Beneficiaries in respect of indemnification claims made
within the two (2) year period commencing on the date of execution of this
Stockholders' Pledge Agreement. Upon the release of such lien as described in
the preceding sentence, the Collateral Agent, at the request and sole expense of
each
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of the Pledgors, shall execute and deliver such documents and instruments as may
be necessary to evidence such termination and release.
Section 10.3 Waivers. Except to the extent expressly otherwise provided
herein or in the Indemnification Agreement, each of the Pledgors waives, to the
extent permitted by applicable law, (i) any right to require the Collateral
Agent to proceed against any other person, to exhaust its rights in any other
Collateral, or to pursue any other right which the Collateral Agent may have,
(ii) with respect to the Obligations, presentment and demand for payment,
protest, notice of protest and non-payment, and notice of the intention to
accelerate, and (iii) all rights of marshalling in respect of any and all of the
Collateral.
Section 10.4 Obligations Not Affected. The obligations of each of the
Pledgors hereunder shall be continuing and irrevocable, absolute and
unconditional, primary and original, immediate and not contingent and shall
remain in full force and effect without regard to and shall not be released,
discharged or in any way affected by any circumstance or condition including,
without limitation, the occurrence of any one or more of the following events:
(a) any lack of the validity or enforceability of any of the
Obligations under any of the Transaction Documents or any provision thereof or
the absence of any action to enforce the same;
(b) any change in the time, manner or place of performance or
payment of, or in any other term of, all or any of the Obligations or any other
modification, supplement or amendment of or any consent to any departure from
the terms and conditions of any of the Transaction Documents;
(c) any exchange, release or nonperfection of any security for
any Obligation or the acceptance of any security therefor;
(d) the waiver by any Beneficiary of, or any extension by any
Beneficiary of the time for, payment, performance, discharge or observance by
any Pledgor of any Obligation or of any default in any of the above, or any
extension, indulgence or renewal of any Obligation by any Beneficiary;
(e) any bankruptcy, insolvency, winding up, dissolution,
liquidation, receivership, or reorganization of, or similar proceedings
affecting any Pledgor or its respective assets or any resulting release or
discharge of any of the Obligations;
(f) the recovery of any judgment against any Person or any
action to enforce the same;
(g) any failure, omission or delay in the enforcement of the
obligations of any Person under any Transaction Document (or any other
agreement) or any provision thereof;
(h) any set-off, counterclaim, deduction, defense, abatement,
suspension, deferment, diminution, recoupment, limitation or termination
available with respect to any Obligation, and, to the extent permitted by
applicable law, irrespective of any other circumstances that might otherwise
limit recourse by or against any Pledgor or any other Person;
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(i) the obtaining, amendment or release of or consent to any
departure from the obligation of any other Person, in addition to any Pledgor,
with respect to any Obligation;
(j) any compromise, alteration, amendment, modification,
extension, renewal, release or other change, or consent or other action, or
delay or omission or failure to act, in respect of any of the terms, covenants
or conditions of any Transaction Document or Obligation, or any other agreement
or any related document referred to therein, or any assignment or transfer of
any thereof;
(k) any other circumstance that might otherwise constitute a
legal or equitable defense available to or a discharge of a guarantor or surety
with respect to any Obligation;
(l) 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 any Pledgor, or any furnishing or acceptance of additional Collateral
or any release of any existing security;
(m) any regulatory change or other governmental action
(whether or not adverse);
(n) the partial payment or performance of the Obligations
(whether as a result of the exercise of any right, remedy, power or privilege or
otherwise) shall be accepted or received; or
(o) any default, failure or delay, whether as a result of
actual or alleged force majeure, commercial impracticability or otherwise, in
the performance of the Obligations, or by any other act or circumstance (other
than performance) which may or might in any manner or to any extent vary the
risk of any Pledgor, or which would otherwise operate as a discharge of the
Pledgor as a matter of law.
Section 10.5 Financing Statement. The Collateral Agent shall be
entitled at any time to file this Stockholders' Pledge Agreement or a carbon,
photographic, or other reproduction of this Stockholders' Pledge Agreement, as a
financing statement, but the failure of the Collateral Agent to do so shall not
impair the validity or enforceability of this Stockholders' Pledge Agreement.
Section 10.6 Survival of Representations and Warranties. The
representations and warranties of each Pledgor set forth in Article IV shall
survive the effective date of this Stockholders' Pledge Agreement indefinitely.
Section 10.7 Notices. Any notice or other communication required or
permitted to be given hereunder shall be in writing and shall be effective (a)
when transmitted by telecopy (with an acknowledgment of receipt) or personally
delivered on a business day during normal business hours, (b) on the business
day following the date of dispatch by overnight courier or (c) on the third
business day following the date of mailing by registered or certified mail, with
postage prepaid, return receipt requested, in each case addressed to (i) any of
the Pledgors at the respective address set forth opposite such Pledgor's name on
Schedule 1, or (ii) any of the Beneficiaries or the Collateral Agent at the
respective address set forth below, or in any such case to such other address as
such Pledgor, such Beneficiary or the Collateral Agent shall have last
designated to the other party by notice given in accordance with this Section
10.7; provided, however, that a notice
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of a change of address shall not be deemed to have been given until actually
received by the addressee.
(a) Notice Address for EGI-ARC and/or the Collateral Agent:
EGI-ARC Investors, L.L.C.
c/o EGI Corporate Investments
Xxx Xxxxx Xxxxxxxxx Xxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxxx 00000
Fax: (000) 000-0000
(000) 000-0000
Attention to each of:
Xxxxxx Xxxxxxxxxxx, and
Xxxxxxx X. Xxxxx III
With a copy to:
Xxxxxxxxx & Xxxxxxxxxxx, P.C.
Xxx Xxxxx Xxxxxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Fax: (000) 000-0000
Attention: Xxx Xxxxxxxxx
And copies to each of the Financial Sponsors.
(b) Notice Address for ARC Holdings:
ARC Holdings, Inc.
Xxx Xxxxx Xxxxxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Fax: (000) 000-0000
Attention: President
With copies to:
Xxxxxx & Xxxxxxx, L.L.P.
000 X. Xxxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Fax: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxxx
And copies to each of the Financial Sponsors.
(c) Notice Address for TP:
Telecom Partners II, L.P.
0000 Xxxxxx Xxxxx Xxxxx Xxxxx, Xxxxx 000
Xxxxxx, Xxxxxxxx 00000
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Fax: (000) 000-0000
Attention: Xxxxx Xxxxxxx
With a copy to:
Holland & Xxxx LLP
000 Xxxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxx 00000
Fax: (000) 000-0000
Attention: Xxxxxxx X. Xxxxx
(d) Notice Address for CWF, EVW and CIII:
x/x Xxxxxxxxx Xxxxxxx
Management, L.L.C.
000 XxXxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxxxx, Xxxxxxxxx 00000
Fax: (000)000.0000
Attention: Xxxxx Xxxxxx
With a copy to:
Xxxxxxxx & Xxxxxx
0000 Xxxxx Xxxxxx Tower
000 X. Xxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
Fax: (000) 000-0000
Attention: Xxxxx Xxxxxx
(e) Notice Address for LEG:
Xxxxxxxx Equity Group, LLC,
c/o Xxxxxx X. Xxxxxxx,
0000 Xxxxxxx Xxxx Xxxxxxx
Xxxxxxxx, Xxxxxxxxxx 00000
Fax: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxx
(f) Notice Address for the Financial Sponsors:
Notice as provided in each of (a), (c), (d), and (e),
as provided above.
Section 10.8 Amendments. This Stockholders' Pledge Agreement may be
amended, and the observance of any term hereof may be waived, only by a written
instrument signed by (a) the Collateral Agent, (b) Financial Sponsors holding
not less than 50% of the ARC Holdings Common Stock held by all Financial
Sponsors party hereto, and (c) Pledgors holding not less than 50% of the ARC
Holdings Common Stock held by all Pledgors.
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Section 10.9 Inconsistent Agreements. No Pledgor shall enter with any
Person into any agreement or other arrangement of any kind which is inconsistent
with the provisions of this Stockholders' Pledge Agreement or which may impair
its ability to comply with this Stockholders' Pledge Agreement.
Section 10.10 Successors and Assigns. This Stockholders' Pledge
Agreement shall be binding upon and inure to the benefit of each of the
Pledgors, the Collateral Agent, each of the Beneficiaries, all future holders of
the Obligations and each of their respective successors and assigns, except that
none of the Pledgors may assign or transfer any of its rights or obligations
under this Stockholders' Pledge Agreement without the prior written consent of
the Collateral Agent.
Section 10.11 Severability. Each provision of this Stockholders' Pledge
Agreement shall be considered severable and if for any reason any provision
which is not essential to the effectuation of the basic purposes of this
Stockholders' Pledge Agreement is determined by a court of competent
jurisdiction to be invalid, unenforceable or contrary to existing or future
applicable law, such invalidity, unenforceability or illegality shall not impair
the operation of or affect those provisions of this Agreement which are valid,
enforceable and legal. In that case, this Stockholders' Pledge Agreement shall
be construed so as to limit any term or provision to the minimum extent
necessary so as to make it valid, enforceable and legal within the requirements
of any applicable law, and, in the event such term or provision cannot be so
limited, this Stockholders' Pledge Agreement shall be construed to omit such
invalid, unenforceable or illegal provisions.
Section 10.12 Counterparts. This Stockholders' Pledge Agreement may be
executed in any number of counterparts and by the different parties hereto on
separate counterparts, each of which when so executed and delivered shall be an
original, but all of which shall together constitute one and the same
instrument.
Section 10.13 Governing Law. This Stockholders' Pledge Agreement shall
be governed by the laws of the State of Delaware (other than its rules of
conflicts of law to the extent that the application of the laws of another
jurisdiction would be required thereby).
Section 10.14 Consent to Jurisdiction and Service of Process;
Appointment of Agent for Service of Process. Each Pledgor hereby consents to the
jurisdiction of any state or federal court located within the State of Delaware
and irrevocably agrees that all actions or proceedings arising out of or
relating to this Stockholders' Pledge Agreement shall be litigated in such
courts. Each Pledgor accepts for itself and in connection with its respective
properties, generally and unconditionally, the exclusive jurisdiction and venue
of the aforesaid courts and waives any defense of forum non conveniens, and
irrevocably agrees to be bound by any nonappealable judgment rendered thereby in
connection with this Stockholders' Pledge Agreement. The parties hereto agree to
appoint and failing any such appointment, authorize any other party to appoint
on such Person's behalf and maintain the Corporation Trust Company and such
other persons, in each case within the State of Delaware, as may hereinafter be
selected by them who irrevocably agree in writing to so serve as agent, to
receive, on behalf of the parties hereto, service of all process in any such
proceedings in any such court, such service being hereby acknowledged by the
parties hereto to be effective and binding service in every respect. A copy of
any such process so served shall be mailed by registered mail to the parties
hereto, as provided herein, except that, unless otherwise provided by applicable
law, any failure to mail such copy shall not affect the validity of service of
process. If any agent appointed by the parties hereto refuses to accept service,
the parties hereto agree that service upon the respective party hereto by
registered mail shall constitute sufficient
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service. Nothing herein shall affect the right of the parties hereto to serve
process in any other manner permitted by law.
Section 10.15 Waiver of Jury Trial. Each of the parties hereto hereby
irrevocably waives any and all right to trial by jury in any legal proceeding
arising out of or relating to this Stockholders' Pledge Agreement or the
transactions contemplated hereby.
Section 10.16 No Waiver; Remedies Cumulative. No failure or delay on
the part of the Collateral Agent in exercising any right, power or privilege
hereunder, and no course of dealing between any of the Pledgors and the
Collateral Agent, shall operate as a waiver thereof; nor shall any single or
partial exercise of any right, power or privilege hereunder preclude any other
or further exercise thereof or the exercise of any other right, power or
privilege. A waiver by the Collateral Agent of any right or remedy hereunder on
any one occasion shall not be construed as a bar to any right or remedy that the
Collateral Agent would otherwise have on any future occasion. The rights and
remedies herein expressly provided are cumulative and may be exercised singly or
concurrently and as often and in such order as the Collateral Agent deems
expedient and are not exclusive of any rights or remedies that the Collateral
Agent would otherwise have, whether by security agreement or now or hereafter
existing under applicable law. No notice to or demand on any of the Pledgors in
any case shall entitle any of the Pledgors to any other or further notice or
demand in similar or other circumstances or constitute a waiver of the rights of
the Collateral Agent to any other or future action in any circumstances without
notice or demand.
Section 10.17 Entire Agreement; Nonwaiver. This Stockholders' Pledge
Agreement together with the other Transaction Documents supersedes all prior
agreements between the parties with respect to the subject matter hereof and
contains the entire agreement between the parties with respect to such subject
matter. No delay on the part of any party in exercising any right hereunder
shall operate as a waiver thereof, nor shall any waiver, express or implied, by
any party of any right hereunder or of any failure to perform or breach hereof
by any other party constitute or be deemed a waiver of any other right hereunder
or of any other failure to perform or breach hereof by the same or any other
party, whether of a similar or dissimilar nature.
Section 10.18 Tax Aspects. The parties agree that, for all federal,
state and local income and other tax purposes, (i) each of the Pledgors shall
constitute the owner of the Collateral and (ii) all items of income, gain and
loss in respect of the Collateral shall be income, gain or loss, as the case may
be, of each of the Pledgors, both before and after any Loss.
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IN WITNESS WHEREOF, the parties have caused this Stockholders' Pledge
Agreement to be executed by their respective, duly authorized officers as of the
date first above written.
ALLIED RISER COMMUNICATIONS HOLDINGS, INC.
/s/ XXXX XXXXXXX
------------------------------------
By: Xxxx Xxxxxxx
Its: Chief Financial Officer
EGI-ARC INVESTORS, L.L.C.
(as collateral agent and in its individual
capacity)
By: GAMI Investments, Inc.,
Its Managing Member
/s/ XXXXXX X. XXXXXXXXXXX
------------------------------------
By: Xxxxxx X. Xxxxxxxxxxx
Its: Vice President
TELECOM PARTNERS II, L.P.
By: Telecom Management II, L.L.C.,
Its: General Partner
/s/ XXXXXXX X. XXXXXXX
------------------------------------
By: Xxxxxxx X. Xxxxxxx
Its: Managing Member
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CRESCENDO WORLD FUND, LLC
By: Crescendo Ventures World Fund,
LLC
Its: Managing Member
/s/ XXXXXXX X. XXXXXXXXX
------------------------------------
By: Xxxxxxx X. Xxxxxxxxx
Its: Partner
EAGLE VENTURES WF, LLC
/s/ XXXXXXX X. XXXXXXXXX
------------------------------------
By: Xxxxxxx X. Xxxxxxxxx
Its: Vice President
CRESCENDO III, L.P.
By: Crescendo Ventures III, LLC
Its: General Partner
/s/ XXXXXXX X. XXXXXXXXX
------------------------------------
By: Xxxxxxx X. Xxxxxxxxx
Its: Partner
XXXXXXXX EQUITY GROUP, LLC
/s/ XXXXXX X. XXXXXXX
------------------------------------
By: Xxxxxx X. Xxxxxxx
Its: Vice President
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/s/ XXXXX X. XXXXX
-----------------------------------------
Xxxxx X. Xxxxx
/s/ XXXXX X. XXXXXXXX
-----------------------------------------
Xxxxx X. Xxxxxxxx
/s/ XXXX XXXXXXX
-----------------------------------------
Xxxx Xxxxxxx
/s/ XXXX XXXXXXX
-----------------------------------------
Xxxx Xxxxxxx
/s/ XXXXX XXXXXXXX
-----------------------------------------
Xxxxx Xxxxxxxx
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SCHEDULE 1
LIST OF PLEDGED STOCK ISSUED BY
ALLIED RISER COMMUNICATIONS HOLDINGS, INC.
CERTIFICATE NUMBER OF
NAME ADDRESS NUMBER CLASS SHARES
------------------ -------------------- ------------ ------------------- ----------
Xxxxx X. Xxxxx 000 Xxxxxx Xxxxxx 00 XXX Xxxxxxxx Xxxxxx 3,800,000
Xxxxxxxx, XX 00000 Stock
Xxxxx X. 0000 Xxxxxxxx Xxxx, 24 ARC Holdings 6,600,000
Xxxxxxxx Xxx. #000 Xxxxxx XXxxx
Xxxxxxx, XX
00000
Xxxx Xxxxxxx 0000 Xxxxxx Xxxxxx 31 ARC Holdings 6,529,712
Dallas, TX Common Stock
Xxxx Xxxxxxx 6412 Xxxxxxxxx ARC Holdings 3,850,369
Xxxxxx, XX 00000 99 Common Stock
Xxxxx Xxxxxxxx 0000 Xxxxxxxx Xxxxx, 128 ARC Holdings 4,775,165
Fort Worth TX Common Stock
