PLEDGE AGREEMENT
THIS PLEDGE AGREEMENT (this "Agreement") is made and entered into as of
February 5, 1998, by UNITED INTERNATIONAL HOLDINGS, INC., a Delaware corporation
(the "Pledgor"), having its principal office at 0000 Xxxxx Xxxxxx Xxxxxx,
Xxxxxx, Xxxxxxxx 00000, in favor of XXXXXX XXXXXXX & CO. INCORPORATED, as
collateral agent (the "Collateral Agent"), having an office at 000 Xxxxxxxxxx
Xxxxxx, Xxx Xxxxxxxxx, Xxxxxxxxxx 00000, for the trustee (the "Trustee") under
the Indenture (as defined below). Capitalized terms issued and not 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 is the legal and beneficial owner of (i) all of the
issued and outstanding shares of capital stock set forth on Schedule I hereto
(the "Pledged Shares") of Joint Venture, Inc., a Delaware corporation and a
direct wholly owned subsidiary of Pledgor (the "Issuer"), and (ii) each
intercompany promissory note issued by the Issuer in favor of the Pledgor (the
"Pledged Notes"), all of which Pledged Notes shall be in the form of Exhibit A
hereto; and
WHEREAS, the Pledgor and Firstar Bank of Minnesota N.A., as trustee, have
entered into that certain indenture dated as of January 5, 1998 (as amended,
amended and restated, supplemented or otherwise modified from time to time, the
"Indenture"), pursuant to which the Pledgor issued $1,375 million in aggregate
principal amount at maturity of 10-3/4% Senior Secured Discount Notes due 2008
(together with any notes or debentures issued in replacement thereof or in
exchange or substitution therefor, the "Original Notes"); and
WHEREAS, pursuant to the terms of the Indenture, the Pledgor is permitted
to issue additional notes ranking PARI PASSU with the Original Notes, (the
"Additional Notes" and, together with the Original Notes, the "Notes"); and
WHEREAS, the terms of the Indenture requires that the Pledgor (i) pledge to
the Collateral Agent for the benefit of the Trustee, and grant to the Collateral
Agent for the benefit of the Trustee a security interest in, the Pledged
Collateral (as defined herein) and (ii) execute and deliver a pledge agreement
in order to secure the payment and performance by the Pledgor of all of the
Obligations of the Pledgor under the Indenture and the Notes (the
"Obligations").
AGREEMENT
NOW, THEREFORE, in consideration of the premises, and in order to induce
those who propose to become the Holders of the Original Notes and Additional
Notes to purchase such Original Notes and such Additional Notes, respectively,
the Pledgor and the Collateral Agent hereby enter into this Agreement, and the
Pledgor hereby agrees with the Collateral Agent for its benefit and the benefit
of such Trustee as follows:
SECTION 1. PLEDGE. Pledgor hereby pledges to the Collateral Agent for its
benefit and for the benefit of the Trustee, and grants to the Collateral Agent
for the benefit of the Trustee, a continuing first priority security interest in
all of its right, title and interest in the following (the "Pledged
Collateral"):
(a) the Pledged Shares and the certificates representing the Pledged
Shares, and all products and proceeds of any of the Pledged Shares, including,
without limitation, all dividends, cash, options, warrants, rights, instruments,
subscriptions and other property or proceeds from time to time received,
receivable or otherwise distributed in respect of or in exchange for any or all
of the Pledged Shares or any of the foregoing; and
(b) all additional shares of, and all securities convertible into and all
war rants, options or other rights to purchase, Capital Stock of, or other
Equity interests in, the Issuer from time to time acquired by the Pledgor in any
manner, and the certificates representing such additional shares and Equity
Interests (any such additional shares and Equity Interests and other items shall
constitute part of the Pledged Shares under and as defined in this Agreement),
and all products and proceeds of any of the foregoing, including, without
limitation, all dividends, cash, options, warrants, rights, instruments,
subscriptions, and other property or proceeds from time to time received,
receivable or otherwise distributed in respect of or in exchange for any or all
of the foregoing; and
(c) the Pledged Notes and the instruments representing the Pledged Notes,
and all products and proceeds of the Pledged Notes, including, without
limitation, all interest, principal and premium payments, and all instruments
and other property from time to time received, receivable or otherwise
distributed in respect of or in exchange for the Pledged Notes or any of the
foregoing; and
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(d) all additional promissory notes of the Issuer from time to time held by
the Pledgor in any manner (any such additional promissory notes shall constitute
part of the Pledged Notes under and as defined in this Agreement) and all
products and proceeds of any of such additional Pledged Notes, including,
without limitation, all interest and principal payments, instruments and other
property from time to time received, receivable or otherwise distributed in
respect of or in exchange for any or all of such additional Pledged Notes or any
of the foregoing.
SECTION 2. SECURITY FOR OBLIGATIONS. This Agreement secures the prompt and
complete payment and performance when due (whether at stated maturity, by
acceleration, by repurchase or otherwise) of all Obligations of the Pledgor
under the Indenture and the Notes (including, without limitation, the Accreted
Value of and premium, if any, on the Notes and any other Obligations accruing
after the date of any filing by the Pledgor of any petition in bankruptcy or the
commencement of any bankruptcy, insolvency or similar proceeding with respect to
the Pledgor).
SECTION 3. DELIVERY OF PLEDGED COLLATERAL. Pledgor hereby agrees that all
certificates or instruments representing or evidencing the Pledged Collateral
shall be immediately delivered to and held at all times by the Collateral Agent
pursuant hereto at the Collateral Agent's office in the State of New York and
shall be in suitable form for transfer by delivery, or issued in the name of
Pledgor and accompanied by instruments of transfer or assignment duly executed
in blank and undated, and in either case having attached thereto all requisite
Federal or state stock transfer tax stamps, all in form and substance
satisfactory to the Collateral Agent. All securities, whether certificated,
uncertificated or book entry, if any, representing or evidencing the Pledged
Collateral shall be registered in the name of the Collateral Agent or any of its
nominees by book entry or in any other appropriate manner that is acceptable to
the Collateral Agent, so as to properly identify the interest of the Collateral
Agent therein. In addition, the Collateral Agent shall have the right, at any
time following the occurrence of an Event of Default (as defined in any of the
Notes or in any of the Indentures with respect to the Notes), in its discretion
to transfer to or to register in the name of the Collateral Agent or any of its
nominees any or all of the Pledged Collateral. The Collateral Agent shall have
the right at any time to exchange certificates or instruments representing or
evidencing all or any portion of the Pledged Collateral for certificates or
instruments of smaller or larger denominations in the same aggregate amount.
SECTION 4. REPRESENTATIONS AND WARRANTIES. The Pledgor hereby makes all
representations and warranties applicable to the Pledgor contained in the
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Indenture. The Pledgor further represents and warrants, to the Collateral Agent
and for the benefit of the Holders, that:
(a) The execution, delivery and performance by the Pledgor of this
Agreement are within the Pledgor's corporate powers, have been duly authorized
by all necessary corporate action, and do not contravene, or constitute a
default under, any provision of applicable law or regulation or of the
certificate of incorporation or bylaws of the Pledgor or of any agreement,
judgment, injunction, order, decree or other instrument binding upon the
Pledgor, or result in the creation or imposition of any Lien on any assets of
the Pledgor, other than the Lien contemplated hereby.
(b) The Pledged Shares have been duly authorized and validly issued and are
fully paid and non-assessable. Each Pledged Note has been duly authorized and
executed by the Issuer and constitutes a legal, valid and binding obligation of
the Issuer, enforceable against the Issuer in accordance with its terms.
(c) The Pledged Shares constitute all of the authorized, issued and
outstanding Equity Interests of the Issuer and constitute all of the Equity
Interests of the Issuer beneficially owned by the Pledgor and there are no other
instruments, certificates, securities or other writings or chattel paper,
evidencing or representing any equity interest in the Issuer.
(d) All intercompany indebtedness of the Issuer to the Pledgor is evidenced
by promissory notes in the form of Exhibit A hereto; the Pledged Notes
constitute all of the promissory notes of the Issuer in favor of the Pledgor.
(e) The Pledgor is the legal, record and beneficial owner of the Pledged
Collateral, free and clear of any Lien or claims of any Person except for the
security interest created by this Agreement.
(f) The Pledgor has full power and authority to enter into this Agreement
and has the right to vote, pledge and grant a security interest in the Pledged
Collateral as provided by this Agreement.
(g) This Agreement has been duly executed and delivered by the Pledgor and
constitutes a legal, valid and binding obligation of the Pledgor, enforceable
against the Pledgor in accordance with its terms.
(h) Upon the delivery to the Collateral Agent of the Pledged Collateral and
(as to certain proceeds therefrom) the filing of Uniform Commercial Code (the
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"UCC") financing statements, the pledge of the Pledged Collateral pursuant to
this Agreement creates a valid and perfected first priority security interest in
the Pledged Collateral, securing the payment of the Obligations for the benefit
of the Collateral Agent and the Holders, and enforceable as such against all
creditors of the Pledgor and any Persons purporting to purchase any of the
Pledged Collateral from the Pledgor.
(i) No consent of any other Person and no consent, authorization, approval,
or other action by, and no notice to or filing with, any governmental authority
or regulatory body is required either (i) for the pledge by the Pledgor of the
Pledged Collateral pursuant to this Agreement or for the execution, delivery or
performance of this Agreement by the Pledgor or (ii) for the exercise by the
Collateral Agent of the voting or other rights provided for in this Agreement or
the remedies in respect of the Pledged Collateral pursuant to this Agreement
(except as may be required in connection with such disposition by laws affecting
the offering and sale of securi ties).
(j) No litigation, investigation or proceeding of or before any arbitrator
governmental authority is pending or, to the best knowledge of the Pledgor,
threatened by or against the Pledgor or against any of its properties or
revenues with respect to this Agreement or any of the transactions contemplated
hereby.
(k) The pledge of the Pledged Collateral pursuant to this Agreement is not
prohibited by any applicable law or governmental regulation, release,
interpretation or opinion of the Board of Governors of the Federal Reserve
System or other regulatory agency (including, without limitation, Regulations G,
T, U and X of the Board of Governors of the Federal Reserve System).
(l) All information set forth herein relating to the Pledged Collateral is
accurate and complete in all material respects.
SECTION 5. FURTHER ASSURANCE. Pledgor will at all times cause the security
interests granted pursuant to this Agreement to constitute valid perfected first
priority security interests in the Pledged Collateral, enforceable as such
against all creditors of Pledgor and (except as otherwise specifically provided
herein) any Persons purporting to purchase any Pledged Collateral from Pledgor.
The Pledgor will, promptly upon request by the Collateral Agent, execute and
deliver or cause to be executed and delivered, or use its best efforts to
procure, all stock powers, proxies, tax stamps, assignments, instruments and
other documents, all in form and substance satisfactory to the Collateral Agent,
deliver any instruments to the Collateral Agent and take any other actions that
are necessary or, in the reasonable opinion of the Collateral Agent, desirable
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to perfect, continue the perfection of, or protect the first priority of the
Collateral Agent's security interest in, the Pledged Collateral, to protect the
Pledged Collateral against the rights, claims, or interests of third persons, to
enable the Collateral Agent to exercise or enforce its rights and remedies
hereunder, or otherwise to effect the purposes of this Agreement. The Pledgor
also hereby authorizes the Collateral Agent to file any financing or
continuation statements with respect to the Pledged Collateral without the
signature of the Pledgor to the extent permitted by applicable law. The Pledgor
will pay all costs incurred in connection with any of the foregoing.
SECTION 6. VOTING RIGHTS DIVIDENDS, ETC.
(a) So long as no Event of Default shall have occurred and be continuing
under the Indenture, the Pledgor shall be entitled to exercise any and all
voting and other consensual rights pertaining to the Pledged Shares or any part
thereof for any purpose not inconsistent with the terms of this Agreement or the
Indenture; PROVIDED, HOWEVER, that the Pledgor shall not exercise or shall
refrain from exercising any such right if such action would have a material
adverse effect on the value of the Pledged Collateral or any part thereof or be
inconsistent with or violate any provisions of this Agreement or the Indenture.
(b) So long as no Event of Default shall have occurred and be continuing
under the Indenture, the Pledgor shall be entitled to receive, and to utilize
(subject to the provisions of the Indenture) free and clear of the Lien of this
Agreement, all cash payments of principal and interest paid from time to time
with respect to any Pledged Notes; PROVIDED, HOWEVER, that the Pledgor will be
entitled to receive interest and other payments from the Issuer sufficient to
permit the Pledgor to satisfy its and JVI's ordinary course operating expenses
whether or not an Event of Default shall have occurred.
(c) So long as no Event of Default shall have occurred and be continuing
under the Indenture, and subject to the other terms and conditions of the
Indenture, the Pledgor shall be entitled to receive, and to utilize (subject to
the provisions of the Indenture) free and clear of the Lien of this Agreement,
all regular and ordinary cash dividends paid from time to time in respect of the
Pledged Shares; PROVIDED, HOW EVER, that the Pledgor will be entitled to receive
dividends from the Issuer sufficient to permit the Pledgor to satisfy its and
JVI's ordinary course operating expenses whether or not an Event of Default
shall have occurred.
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(d) Any and all (i) dividends, other distributions, interest and principal
payments paid or payable in the form of instruments and/or other property (other
than cash payments permitted under Section 6(b) hereof and cash dividends
permitted under Section 6(c) hereof) received, receivable or otherwise
distributed in respect of, or in exchange for, any Pledged Collateral, (ii)
dividends and other distributions paid or payable in cash in respect of any
Pledged Shares in connection with a partial or total liquidation or dissolution
or in connection with a reduction of capital, capital surplus or
paid-in-surplus, and (iii) cash paid, payable or otherwise distributed in
redemption of, or in exchange for, any Pledged Collateral, shall in each case be
forthwith delivered to the Collateral Agent to hold as Pledged Collateral and
shall, if received by the Pledgor, be received in trust for the benefit of the
Collateral Agent and the Holders, be segregated from the other property and
funds of the Pledgor and be forthwith delivered to the Collateral Agent as
Pledged Collateral in the same form as so received (with any necessary
endorsements).
(e) The Collateral Agent shall execute and deliver (or cause to be executed
and delivered) to the Pledgor all such proxies and other instruments as the
Pledgor may reasonably request for the purpose of enabling the Pledgor to
exercise the voting and other rights that it is entitled to exercise pursuant to
Sections 6(a) through 6(c) above.
(f) Upon the occurrence and during the continuance of an Event of Default
under the Indenture, (i) all rights of the Pledgor to exercise the voting and
other consensual rights that it would otherwise be entitled to exercise pursuant
to Section 6(a) shall cease, and all such rights shall thereupon become vested
in the Collateral Agent, which, to the extent permitted by law, shall thereupon
have the sole right to exercise such voting and other consensual rights, and
(ii) all cash interest payments and dividends and other distributions payable in
respect of the Pledged Collateral shall be paid to the Collateral Agent and the
Pledgor's right to receive such cash payments pursuant to Sections 6(b) and 6(c)
hereof shall immediately cease, except as otherwise permitted pursuant to the
provisions of Sections 6(b) and 6(c) hereof.
(g) Upon the occurrence and during the continuance of an Event of Default
under the Indenture, the Pledgor shall execute and deliver (or cause to be
executed and delivered) to the Collateral Agent all such proxies, dividend and
interest payment orders and other instruments as the Collateral Agent may
reasonably request for the purpose of enabling the Collateral Agent to exercise
the voting and other rights that it is entitled to exercise pursuant to Section
6(f) above.
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(h) All payments of interest, principal or premium and all dividends and
other distributions that are received by the P1edgor contrary to the provisions
of this Section 6 shall be received in trust for the benefit of the Collateral
Agent and the Holders, shall be segregated from the other property or funds of
the Pledgor and shall be forthwith delivered to the Collateral Agent as Pledged
Collateral in the same form as so received (with any necessary endorsements).
SECTION 7. [Intentionally Omitted]
SECTION 8. [Intentionally Omitted]
SECTION 9. COVENANTS. The Pledgor hereby covenants and agrees with the
Collateral Agent and the Holders that it will comply with all of the
obligations, requirements and restrictions applicable to the Pledgor contained
in the Indenture. The Pledgor further covenants and agrees, from and after the
date of this Agreement and until the Obligations have been paid in full, as
follows:
(a) The Pledgor agrees that it will not (i) sell, assign, transfer, convey
or otherwise dispose of, or grant any option or warrant with respect to, any of
the Pledged Collateral without the prior written consent of the Collateral
Agent, (ii) create or permit to exist any Lien upon or with respect to any of
the Pledged Collateral, except for the security interest granted under this
Agreement, and at all times will be the sole beneficial owner of the Pledged
Collateral, (iii) enter into any agreement or understanding that purports to or
that may restrict or inhibit the Collateral Agent's rights or remedies
hereunder, including, without limitation, the Collateral Agent's right to sell
or otherwise dispose of the Pledged Collateral, (iv) take any action, or permit
the holding of any action by the Issuer, with respect to the Pledged Collateral
the taking of which would result in a material impairment of the economic value
of the Pledged Collateral as Collateral or a violation of the Indenture or this
Agreement, including, without limitation, the issuance by the Issuer of any
additional Equity Interests or promissory notes or the issuance by the Issuer of
any Indebtedness, in each case to Persons other than the Pledgor (v) without the
prior written consent of the Collateral Agent, enter into any agreement
amending, modifying or supplementing the interest, principal or maturity terms
of the Pledged Notes in a manner adverse to the interests of the Collateral
Agent and the Holders, (vi) fail to give prompt notice to the Collateral Agent
of any notice of default given by or to the Pledgor under or with respect to the
Pledged Notes together with a complete copy of such notice, (vii) permit the
Issuer to merge or consolidate with or into another person or entity or sell or
transfer all or substantially all of its assets to another person or entity,
except as permitted by the Indenture as in effect on the Issue Date, or (viii)
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fail to pay or discharge any tax, assessment or levy of any nature not later
than five days prior to the date of any proposed sale under any judgement, writ
or warrant of attachment with regard to the Pledged Collateral.
(b) The Pledgor agrees that immediately upon becoming the beneficial owner
of any additional shares of Capital Stock, notes, other securities or Equity
Interests of the Issuer (including as a result of the merger or consolidation of
the Issuer with or into another entity) it will pledge and deliver to the
Collateral Agent for its benefit and the ratable benefit of the Holders and
grant to the Collateral Agent for its benefit and the ratable benefit of the
Holders, a continuing first priority security interest in such shares, notes,
other securities or Equity Interests (as well as instruments of transfer or
assignment duly executed in blank and undated and any necessary stock transfer
tax stamps, all in form and substance satisfactory to the Collateral Agent). The
Pledgor further agrees that it will promptly (i) cause the Issuer upon becoming
indebted to the Pledgor to execute a promissory note in the form of Exhibit A
hereto evidencing such debt in order that such promissory note may be promptly
pledged as a Pledged Note pursuant hereto and (ii) deliver to the Collateral
Agent a certificate executed by a principal executive officer of the Pledgor
describing such additional notes and certifying that the same have been duly
pledged and delivered to the Collateral Agent hereunder.
SECTION 10. POWER OF ATTORNEY. In addition to all of the powers granted to
the Collateral Agent pursuant to Section 10.06 of the Indenture, the Pledgor
hereby appoints and constitutes the Collateral Agent as the Pledgor's
attorney-in-fact to exercise all of the following powers upon and at any time
after the occurrence of an Event of Default: (i) collection of proceeds of any
Pledged Collateral; (ii) convey ance of any item of Pledged Collateral to any
purchaser thereof; (iii) giving of any notices or recording of any Liens under
Section 5 hereof; (iv) making of any pay ments or taking any acts under Section
11 hereof and (v) paying or discharging taxes or Liens levied or placed upon or
threatened against the Pledged Collateral, the legality or validity thereof and
the amounts necessary to discharge the same to be determined by the Collateral
Agent in its sole discretion, and such payments made by the Collateral Agent to
become the obligations of the Pledgor to the Collateral Agent, due and payable
immediately without demand. The Collateral Agent's authority hereunder shall
include, without limitation, the authority to endorse and negotiate, for the
Collateral Agent's own account, any checks or instruments in the name of the
Pledgor, execute and give receipt for any certificate of ownership or any
document, transfer title to any item of Pledged Collateral, sign the Pledgor's
name on all financing statements or any other documents deemed necessary or
appropriate to preserve, protect or perfect the security interest in the Pledged
Collateral and to file the same, prepare, file and sign the Pledgor's name on
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any notice of Lien, and prepare, file and sign the Pledgor's name on a proof of
claim in bankruptcy or similar document against any creditor of the Pledgor, and
to take any other actions arising from or incident to the powers granted to the
Collateral Agent in this Agreement. This power of attorney is coupled with an
interest and is irrevocable by the Pledgor.
SECTION 11. COLLATERAL AGENT MAY PERFORM. If the Pledgor fails to perform
any agreement contained herein, the Collateral Agent may itself perform, or
cause performance of, such agreement, and the reasonable expenses of the
Collateral Agent incurred in connection therewith shall be payable by the
Pledgor under Section 16 hereof.
SECTION 12. NO ASSUMPTION OF DUTIES: REASONABLE CARE. The rights and powers
granted to the Collateral Agent hereunder are being given in order to preserve
and protect the Collateral Agent's and the Holders' security interest in and to
the Pledged Collateral granted hereby and shall not be interpreted to, and shall
not, impose any duties on the Collateral Agent in connection therewith. The
Collateral Agent shall be deemed to have exercised reasonable care in the
custody and preservation of the Pledged Collateral in its possession if the
Pledged Collateral is accorded treatment substantially equal to that which the
Collateral Agent accords its own property, it being understood that the
Collateral Agent shall not have any responsibility for (i) ascertaining or
taking action with respect to calls, conversions, exchanges, maturities, tenders
or other matters relative to any Pledged Collateral, whether or not the
Collateral Agent has or is deemed to have knowledge of such matters, or (ii)
taking any necessary steps to preserve rights against any parties with respect
to any Pledged Collateral.
SECTION 13. SUBSEQUENT CHANCES AFFECTING COLLATERAL. The Pledgor represents
to the Collateral Agent and the Holders that the Pledgor has made its own
arrangements for keeping informed of changes or potential changes affecting the
Pledged Collateral (including, but not limited to, rights to convert, rights to
sub scribe, payment of dividends, payments of interest and/or principal,
reorganization or other exchanges, tender offers and voting rights), and the
Pledgor agrees that the Collateral Agent and the Holders shall have no
responsibility or liability for inform ing the Pledgor of any such changes or
potential changes or for taking any action or omitting to take any action with
respect thereto. The Pledgor covenants that it will not, without the prior
written consent of the Collateral Agent, vote to enable, or take any other
action to permit, the Issuer to issue any capital stock or other securities or
to sell or otherwise dispose of, or grant any option with respect to, any of the
Pledged Collateral or create or permit to exist any Lien upon or with respect to
any of the Pledged Collateral, except for the security interests granted under
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this Agreement. The Pledgor will defend the right, title and interest of the
Collateral Agent and the Holders in and to the Pledged Collateral against the
claims and demands of all Persons.
SECTION 14. REMEDIES UPON DEFAULT.
(a) If any Event of Default shall have occurred and be continuing under the
Indenture, the Collateral Agent and the Holders shall have, in addition to all
other rights given by law or by this Agreement or the Indenture, all of the
rights and remedies with respect to the Pledged Collateral of a secured party
under the UCC as in effect in the State of New York at that time. The Collateral
Agent may, without notice and at its option, transfer or register, and the
Pledgor shall register or cause to be registered upon request therefor by the
Collateral Agent, the Pledged collateral or any part thereof on the books of the
issuer into the name of the Collateral Agent or the Collateral Agent's
nominee(s), with or without any indication that such Pledged Collateral is
subject to the security interest hereunder. In addition, with respect to any
Pledged Collateral that shall then be in or shall thereafter come into the
possession or custody of the Collateral Agent, the collateral Agent may sell or
cause the same to be sold at any broker's board or at public or private sale, in
one or more sales or lots, at such price or prices as the Collateral Agent may
deem best, for cash or on credit or for future delivery, without assumption of
any credit risk. The purchaser of any or all Pledged Collateral so sold shall
thereafter hold the same absolutely, free from any claim, encumbrance or right
of any kind whatsoever. Unless any of the Pledged Collateral threatens to
decline speedily in value or is or becomes of a type sold on a recognized
market, the Collateral Agent will give Pledgor reasonable notice of the time and
place of any public sale thereof, or of the time after which any private sale or
other intended disposition is to be made. Any sale of the Pledged Collateral
conducted in conformity with reasonable commercial practices of banks, insurance
companies, commercial finance companies, or other financial institutions
disposing of property similar to the Pledged Collateral shall be deemed to be
commercially reasonable. Any requirements of reasonable notice shall be met if
such notice is mailed to the Pledgor as provided below in Section 20.1, at least
ten days before the time of the sale or disposition. Any other requirement of
notice, demand or adver tisement for sale is, to the extent permitted by law,
waived by the Pledgor. The Collateral Agent or any Holder may, in its own name
or in the name of a designee or nominee, buy any of the Pledged Collateral at
any public sale and, if permitted by a pplicable law, at any private sale.
All expenses (including court costs and reasonabl attorneys' fees and
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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 Pledged Collateral.
(b) If the Collateral Agent shall determine to exercise its right to sell
any or all of the Pledged Shares pursuant to Section 14(a) above, and if in the
opinion of counsel for the Collateral Agent it is necessary, or if in the
opinion of the Collateral Agent it is advisable, to have the Pledged Shares or
that portion thereof to be sold, registered under the provisions of the
Securities Act of 1933, as amended (the "Securities Act"), Pledgor will cause
the Issuer to (i) execute and deliver, and cause its directors and officers to
execute and deliver, all at the Issuer's expense, all such instruments and
documents, and to do or cause to be done all such other acts and things as may
be necessary or, in the opinion of the Collateral Agent, advisable to register
such Pledged Shares under the provisions of the Securities Act, (ii) use its
best efforts to cause the registration statement relating thereto to become
effective and to remain effective for a period of 180 days from the date of the
first public offering of such Pledged Shares, or that portion thereof to be sold
and (iii) make all amendments thereto and/or to the related prospectus that, in
the opinion of the Collateral Agent, are necessary or advisable, all in
conformity with the requirements of the Securities Act and the rules and
regulations of the Securities and Exchange Commission applicable thereto.
Pledgor agrees to cause the Issuer to comply with the provisions of the
securities or "Blue Sky" laws of any jurisdiction that the Collateral Agent
shall designate for the sale of the Pledged Shares and to make available to the
Issuer's security holders, as soon as practicable, an earnings statement (which
need not be audited) that will satisfy the provisions of Section 11(a) of the
Securities Act. The Pledgor will cause such Issuer to furnish to the Collateral
Agent such number of copies as the Collateral Agent may reasonably request of
each preliminary and final prospectus, to notify the Collateral Agent promptly
of the happening of any event as a result of which any then effective prospectus
includes an untrue statement of a material fact or omits to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading in the light of then existing circumstances, and to cause the
Collateral Agent to be furnished with such number of copies as the Collateral
Agent may request of such supplement to or amendment of such prospectus. The
Pledgor will cause the Issuer, to the extent permitted by law, to indemnify,
defend and hold harmless the Collateral Agent and the Holders (and their
respective agents and controlling persons) from and against all losses,
liabilities, expenses or claims (including reasonable legal expenses and the
reasonable costs of investigation) that the Collateral Agent or the Holders (and
their respective agents and controlling persons) may incur under the Securities
Act or otherwise, insofar as such losses, liabilities, expenses or claims arise
out of or are based upon any alleged untrue statement of a material fact
contained in such registration statement (or any amendment thereto) or in any
12
preliminary or final prospectus (or any amendment or supplement thereto), or
arise out of or are based upon any alleged omission to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading, except to the extent that any such losses, liabilities, expenses or
claims arise solely out of or are based upon any such alleged untrue statement
made or such alleged omission to state a material fact included or excluded on
the written direction of the Collateral Agent. Pledgor will cause the Issuer to
bear all costs and expenses of carrying out its obligations hereunder.
(c) In view of the fact that Federal and state securities laws may impose
certain restrictions on the method by which a sale of the Pledged Collateral may
be effected after an Event of Default, Pledgor agrees that upon the occurrence
or existence of any Event of Default, the Collateral Agent may, from time to
time, attempt to sell all or any part of the Pledged Collateral by means of a
private placement, restricting the prospective purchasers to those who will
represent and agree that they are purchasing for investment only and not for
distribution. In so doing, the Collateral Agent may solicit offers to buy the
Pledged Collateral, or any part of it, for cash, from a limited number of
investors who might be interested in purchasing the Pledged Collateral. The
Pledgor acknowledges and agrees that any such private sale may result in prices
and terms less favorable than if such sale were a public sale and,
notwithstanding such circumstances, agrees that any such private sale shall be
deemed to have been made in a commercially reasonable manner. The Collateral
Agent shall be under no obligation to delay a sale of any of the Pledged
Collateral for the period of time necessary to permit the issuer to register
such securities for public sale under the Securities Act, or under applicable
state securities laws, even if the Issuer agrees to do so.
(d) [Intentionally Omitted]
(e) The Pledgor further agrees to use its best efforts to do or cause to be
done all such other acts as may be necessary to make such sale or sales of all
or any portion of the Pledged 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 Collateral Agent and the
Holders, that the Collateral Agent and the Holders have no adequate remedy at
law in respect of such breach and, as a consequence, that each and 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 under the Indenture.
13
(f) If the Collateral Agent deems it appropriate, the Collateral Agent
shall retain an investment bank to perform, or assist it in performing the
obligations set forth in Sections 14(b) and 14(c) hereof, whose usual and
customary fees and expenses shall be paid by the Pledgor in accordance with
Section 16 hereof.
SECTION 15. IRREVOCABLE AUTHORIZATION AND INSTRUCTION TO THE ISSUER. The
Pledgor, will and hereby, authorizes and instructs the Issuer to comply with any
instruction received by the Issuer from the Collateral Agent that (i) states
that an Event of Default has occurred and (ii) is otherwise in accordance with
the terms of this Agreement, without any other or further instructions from the
Pledgor, and the Pledgor agrees that the Issuer shall be fully protected in so
complying.
SECTION 16. FEES AND EXPENSES. The Pledgor will upon demand pay to the
Collateral Agent the amount of any and all reasonable fees and expenses
(including, without limitation, the reasonable fees and disbursements of its
counsel, of any investment banking firm, business broker or other selling agent
and of any other experts and agents retained by the Collateral Agent) that the
Collateral Agent may incur in connection with (i) the administration of this
Agreement, (ii) the custody or preservation of, or the sale of, collection from,
or other realization upon, any of the Pledged Collateral, (iii) the exercise or
enforcement of any of the rights of the Collateral Agent and the Holders
hereunder, or (iv) the failure by the Pledgor to perform or observe any of the
provisions hereof.
SECTION 17. NOTE INTEREST ABSOLUTE. All rights of the Collateral Agent and
the Holders and the security interests created hereunder, and all obligations of
the Pledgor hereunder, shall be absolute and unconditional irrespective of:
(a) any lack of validity or enforce ability of the Indenture or any other
agreement or instrument relating thereto;
(b) any change in the time, manner or place of payment of, or in any other
term of, all or any of the Obligations, or any other amendment or waiver of or
any consent to any departure from the Indenture;
(c) any exchange, surrender, release or non-perfection of any other
collateral, or any release or amendment or waiver of or consent to departure
from any guarantee, for all or any of the Obligations; or
(d) any other circumstance that might otherwise constitute a defense avail
able to, or a discharge of, the Pledgor in respect of the Obligations or of this
Agreement.
14
SECTION 18. APPLICATION OF PROCEEDS. Upon the occurrence and during the
continuance of an Event of Default under the Indenture, the proceeds of any sale
of, or other realization upon (other than the realization described in Sections
6(b) and 6(c), in which case funds may be applied as permitted by such
Sections), all or any part of the Pledged Collateral and any cash held shall be
applied by the Collateral Agent in the following order of priorities:
FIRST, to payment of the expenses of such sale or other realization,
including reasonable compensation to agents and counsel for the Collateral
Agent, and all reasonable expenses, liabilities and advances incurred or made by
the Collateral Agent in connection therewith, and any other unreimbursed fees
and expenses for which the Collateral Agent is to be reimbursed pursuant to
Section 16 hereof;
SECOND, to the ratable payment (based on the Accreted Value of Notes
deemed by the Indenture to be outstanding for purposes of waivers or consents at
the time of distribution) of unpaid Accreted Value of, and premium, if any, on
such outstanding Notes;
THIRD, to the ratable payment (based on the principal amount of Notes
deemed by the Indenture to be outstanding at the time of distribution) of all
other Obligations, until all Obligations shall have been paid in full; and
FINALLY, to payment to the Pledgor or its successors or assigns, or as
a court of competent jurisdiction may direct, of any surplus then remaining from
such proceeds.
SECTION 19. UNCERTIFICATED SECURITIES. Notwithstanding anything to the
contrary contained herein, if any Pledged Collateral (whether now owned or
hereafter acquired) is in the form of an uncertificated security, the Pledgor
shall promptly notify the Collateral Agent, and shall promptly take all actions
required to perfect the security interest of the Collateral Agent under
applicable law (including, in any event, under Sections 8-313 and 8-321 of the
New York Uniform Commercial Code). The Pledgor further agrees to take such
actions as the Collateral Agent deems necessary or desirable to effect the
foregoing and to permit the Collateral Agent to exercise any of its rights and
remedies hereunder, and agrees to provide an Opinion of Counsel satisfactory to
the Pledgee with respect to any such pledge of uncertificated Pledged Collateral
promptly upon request of the Collateral Agent.
15
SECTION 20. MISCELLANEOUS PROVISIONS.
Section 20.1 NOTICES. All notices, approvals, consents or other
communications required or desired to be given hereunder shall be in the form
and manner as set forth in Section 11.02 of the Indenture, and delivered to the
addresses set forth in such Section, or, in the case of the Collateral Agent,
to: Xxxxxx Xxxxxxx & Company Inc., 000 Xxxxxxxxxx Xxxxxx, Xxx Xxxxxxxxx,
Xxxxxxxxxx 00000, Attention: Xxxxxxx Xxxxxxxx, Telephone No. (000) 000-0000.
Section 20.2 CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT. Upon any
request or application by the Pledgor to the Collateral Agent to take any action
or omit to take any action under this Agreement, the Pledgor shall deliver to
the Collateral Agent an Officer's Certificate and/or an Opinion of Counsel in
accordance with the requirements of Section 11.04 of the Indenture.
Section 20.3 ADVERSE INTERPRETATION OF OTHER AGREEMENTS. This Agreement may
not be used to interpret another pledge, security or debt agreement of the
Pledgor, the Issuer or any subsidiary thereof. No such pledge, security or debt
agreement may be used to interpret this Agreement.
Section 20.4 SEVERABILITY. The provisions of this Agreement are severable,
and if any clause or provision shall be held invalid 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 Agreement in any
jurisdiction.
Section 20.5 NO RECOURSE AGAINST OTHERS. No director, officer, employee,
stockholder or affiliate, as such, of the Pledgor or the Issuer shall have any
liability for any obligations of the Pledgor under this Agreement or for any
claim based on, in respect of or by reason of such obligations or their
creation. Each Holder, by accepting a Note, waives and releases all such
liability. The waiver and release are part of the consideration for the issue of
the Notes.
Section 20.6 HEADINGS. The headings of the Articles and Sections of this
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.
Section 20.7 COUNTERPART ORIGINALS. This Agreement may be signed in two or
more counterparts. Each signed copy shall be an original, but all of them
together represent one and the same agreement. Each counterpart may be executed
16
and delivered by Telecopy, if such delivery is promptly followed by the original
manually signed copy sent by overnight courier.
Section 20.8 BENEFITS OF AGREEMENT. Nothing in this Agreement, express or
implied, shall give to any Person, other that the parties hereto and their
successors hereunder, and the Holders, any benefit or any legal or equitable
right, remedy or claim under this Agreement.
Section 20.9 AMENDMENTS, WAIVERS AND CONSENTS. Any amendment or waiver of
any provision of this Agreement and any consent to any departure by the Pledgor
from any provision of this Agreement shall be effective only if made or given in
compliance with all of the terms and provisions of the Indenture, necessary for
amendments or waivers of, or consents to any departure by the Pledgor from any
provision of the Indenture, as applicable, and neither the Collateral Agent nor
any Holder 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 Collateral Agent or any Holder to exercise, or
delay in exercising, any right, power or privilege hereunder shall not operate
as a waiver thereof. No single or partial exercise of any right, power or
privilege hereunder shall preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. A waiver by the Collateral
Agent 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
Collateral Agent 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 20.10 INTERPRETATION OF AGREEMENT. Time is of the essence in each
provision of this Agreement of which time is an element. All terms not defined
herein or in any of the Indentures shall have the meaning set forth in the
applicable UCC, except where the context otherwise requires. To the extent a
term or provision of this Agreement conflicts with the Indenture and is not
dealt with herein with more specificity, the Indenture shall control with
respect to the subject matter of such term or provision. Acceptance of or
acquiescence in a course of performance rendered under this Agreement shall not
be relevant to determine the meaning of this Agreement even though the accepting
or acquiescing party had knowledge of the nature of the performance and
opportunity for objection.
Section 20.11 CONTINUANCE SECURITY INTEREST; TRANSFER OF NOTES. This
Agreement shall create a continuing security interest in the Pledged Collateral
17
and shall (i) remain in full force and effect until the payment in full of all
the Obligations and all the fees and expenses owing to the Collateral Agent,
(ii) be binding upon the Pledgor, its successors and assigns, and (iii) inure,
together with the rights and remedies of the Collateral Agent hereunder, to the
benefit of the Collateral Agent, the holders and their respective successors and
assigns.
Section 20.12 REINSTATEMENT. This Agreement shall continue to be effective
or be reinstated if at any time any amount received by the Collateral Agent or
any Holder of Notes in respect of the Obligations is rescinded or must otherwise
be restored or returned by the Collateral Agent or any Holder of Notes upon the
insolvency, bankruptcy dissolution, liquidation or reorganization of the Pledgor
or upon the appointment of any receiver, intervenor, conservator, trustee or
similar official for the Pledgor or any substantial part of its assets, or
otherwise, all as though such payments had not been made.
Section 20.13 SURVIVAL OF PROVISIONS. All representations, warranties and
covenants of the Pledgor contained herein shall survive the execution and
delivery of this Agreement, and shall terminate only upon the full and final
payment and performance by the Pledgor of the Obligations.
Section 20.14 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 20.15 AUTHORITY OF THE COLLATERAL AGENT.
(a) The Collateral Agent shall have and be entitled to exercise all powers
hereunder that are specifically granted to the Collateral Agent by the terms
hereof, together with such powers as are reasonably incident thereto. The
Collateral Agent may perform any of its duties hereunder or in connection with
the Pledged 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. Neither the Collateral Agent nor any director, officer,
employee, attorney or agent of the Collateral Agent shall be responsible for the
validity, effectiveness or sufficiency hereof or of any document or security
furnished pursuant hereto. The Collateral Agent and its directors, officers,
employees, attorneys and agents shall be entitled to rely on any communication,
instrument or document believed by it or them to be genuine and correct and to
have been signed or sent by the proper person or persons. The Pledgor agrees to
18
indemnify and hold harmless the Collateral Agent, the Holders and any other
Person from and against any and all costs, expenses (including the reasonable
fees and disbursements of counsel (including, the allocated costs of inside
counsel)), claims and liabilities incurred by the Collateral Agent, the Holders
or such Person hereunder, unless such claim or liability shall be due to willful
misconduct or gross negligence on the part of the Collateral Agent, the Holders
or such Person.
(b) The Pledgor acknowledges that the rights and responsibilities of the
Collateral Agent under this Agreement with respect to any action taken by the
Collateral Agent or the exercise or non-exercise by the Collateral Agent of any
option, right, request, judgment or other right or remedy provided for herein or
resulting or arising out of this Agreement shall, as between the Collateral
Agent and the Holders, 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 Collateral Agent and the Pledgor, the Collateral Agent shall be conclusively
presumed to be acting as agent for the Holders with full and valid authority so
to act or refrain from acting, and the Pledgor shall not be obligated or
entitled to make any inquiry respecting such authority.
Section 20.16 RESIGNATION OR REMOVAL OF THE COLLATERAL AGENT. Until such
time as the obligations shall have been paid in full, the Collateral Agent may
at any time, by giving written notice to the Pledgor and Holders, resign and be
discharged of the responsibilities hereby created, such resignation to become
effective upon (i) the appointment of a successor Collateral Agent and (ii) the
acceptance of such appointment by such successor Collateral Agent. As promptly
as practicable after the giving of any such notice, the Holders shall appoint a
successor Collateral Agent, which successor Collateral Agent shall be reasonably
acceptable to the Pledgor. If no successor Collateral Agent shall be appointed
and shall have accepted such appointment within 90 days after the Collateral
Agent gives the aforesaid notice of resignation, the Collateral Agent may apply
to any court of competent jurisdiction to appoint a successor Collateral Agent
to act until such time, if any, as a successor shall have been appointed as
provided in this Section 20.16. Any successor so appointed by such court shall
immediately and without further act be superseded by any successor Collateral
Agent appointed by the Holders, as provided in this Section 20.16.
Simultaneously with its replacement as Collateral Agent hereunder, the
Collateral Agent so replaced shall deliver to its successor all documents,
instruments, certificates and other items of whatever kind (including, without
limitation, the certificates and instruments evidencing the Pledged Collateral
and all instruments of transfer or assignment) held by it pursuant to the terms
19
hereof. The Collateral Agent that has resigned shall be entitled to fees, costs
and expenses to the extent incurred or arising. or relating to events occurring.
before its resignation or removal.
Section 20.17 [Intentionally Omitted]
Section 20.18 RELEASE OF PLEDGED COLLATERAL; TERMINATION OF AGREEMENT.
(a) Subject to the provisions of Section 20.12 hereof, this Agreement shall
terminate upon the earlier of (i) full and final payment and performance of the
Obligations (and upon receipt by the Collateral Agent of the Pledgor's written
certification that all such Obligations have been satisfied) and payment in full
of all fees and expenses owing by the Pledgor to the Collateral Agent or (ii)
the day after the Legal Defeasance of all of the Obligations pursuant to Section
8.02 of the Indenture (other than those surviving Obligations specified
therein). At such time, the Collateral Agent shall, at the request of the
Pledgor, reassign and redeliver to the Pledgor all of the Pledged Collateral
hereunder that has not been sold, disposed of, retained or applied by the
Collateral Agent in accordance with the terms hereof. Such reassignment and
redelivery shall be without warranty by or recourse to the Collateral Agent,
except as to the absence of any prior assignments by the Collateral Agent of its
interest in the Pledged Collateral, and shall be at the expense of the Pledgor.
(b) The Pledgor agrees that it will not, except as permitted by the
Indenture, sell or dispose of, or grant any option or warrant with respect to,
any of the Pledged Collateral.
Section 20.19 FINAL EXPRESSION. This Agreement, together with any other
agreement executed in connection herewith, is intended by the parties as a final
expression of their Agreement and is intended as a complete and exclusive
statement of the terms and conditions thereof.
Section 20.20 GOVERNING LAW; SUBMISSION TO JURISDICTION; WAIVER OF JURY
TRIAL; WAIVER OF DAMAGES.
(i) THIS 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
COLLATERAL AGENT AND THE HOLDERS IN CONNECTION WITH THIS AGREEMENT, AND WHETHER
ARISING IN CONTRACT, TORT, EQUITY OR OTHERWISE, SHALL BE RESOLVED IN ACCORDANCE
20
WITH THE INTERNAL LAWS (AS OPPOSED TO THE CONFLICTS OF LAWS PROVISIONS) AND
DECISIONS OF THE STATE OF NEW YORK.
(ii) EXCEPT AS PROVIDED IN THE NEXT PARAGRAPH AND IN PARAGRAPH (vi) BELOW,
THE PLEDGOR, THE COLLATERAL AGENT AND THE HOLDERS AGREE THAT ALL DISPUTES
BETWEEN OR AMONG THEM ARISING OUT OF, CONNECTED WITH, RELATED TO, OR INCIDENTAL
TO THE RELATIONSHIP ESTABLISHED BETWEEN THEM IN CONNECTION WITH THIS AGREEMENT,
AND WHETHER ARISING IN CONTRACT, TORT, EQUITY, OR OTHERWISE, SHALL BE RESOLVED
ONLY BY STATE OR FEDERAL COURTS LOCATED IN NEW YORK, NEW YORK, BUT THE PLEDGOR,
THE COLLATERAL AGENT AND THE HOLDERS ACKNOWLEDGE THAT ANY APPEALS FROM THOSE
COURTS MAY HAVE TO BE HEARD BY A COURT LOCATED OUTSIDE OF NEW YORK, NEW YORK.
THE PLEDGOR WAIVES IN ALL DISPUTES ANY OBJECTION THAT IT MAY HAVE TO THE
LOCATION OF THE COURT CONSIDERING THE DISPUTE INCLUDING, WITHOUT LIMITATION, ANY
OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON
CONVENIENS.
(iii) THE PLEDGOR AGREES THAT THE COLLATERAL AGENT SHALL, IN ITS OWN NAME
OR IN THE NAME AND ON BEHALF OF ANY HOLDER, HAVE THE RIGHT, TO THE EXTENT
PERMITTED BY APPLICABLE LAW, TO PROCEED AGAINST THE PLEDGOR OR ITS PROPERTY IN A
COURT IN ANY LOCATION REASONABLY SELECTED IN GOOD FAITH TO ENABLE THE COLLATERAL
AGENT TO REALIZE ON SUCH PROPERTY, OR TO ENFORCE A JUDGMENT OR OTHER COURT ORDER
ENTERED IN FAVOR OF THE COLLATERAL AGENT. THE PLEDGOR AGREES THAT IT WILL NOT
ASSERT ANY PERMISSIVE COUNTERCLAIMS IN ANY PROCEEDING BROUGHT BY THE COLLATERAL
AGENT TO REALIZE ON SUCH PROPERTY, OR TO ENFORCE A JUDGMENT OR OTHER COURT ORDER
IN FAVOR OF THE COLLATERAL AGENT. THE PLEDGOR WAIVES ANY OBJECTION THAT IT MAY
HAVE TO THE LOCATION OF THE COURT IN WHICH THE COLLATERAL AGENT 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.
21
(iv) THE PLEDGOR, THE COLLATERAL AGENT AND THE HOLDERS EACH WAIVE ANY RIGHT
TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER GROUNDED IN
CONTRACT, TORT, OR OTHERWISE ARISING OUT OF, CONNECTED WITH, RELATED TO OR
INCIDENTAL TO THE RELATIONSHIP ESTABLISHED BETWEEN THEM IN CONNECTION WITH THIS
AGREEMENT. INSTEAD, ANY DISPUTES RESOLVED IN COURT WILL BE RESOLVED IN A BENCH
TRIAL WITHOUT A JURY.
(v) THE PLEDGOR HEREBY IRREVOCABLY DESIGNATES CT CORPORATION AS THE
DESIGNEE, APPOINTEE AND AGENT OF THE PLEDGOR TO RECEIVE, FOR AND ON BEHALF OF
THE PLEDGOR, SERVICE OF PROCESS IN ANY LEGAL ACTION OR PROCEEDING WITH RESPECT
TO THIS AGREEMENT. IT IS UNDERSTOOD THAT NOTICE AND A COPY OF SUCH PROCESS
SERVED ON SUCH AGENT, WILL BE FORWARDED PROMPTLY TO THE PLEDGOR, BUT THE FAILURE
OF THE PLEDGOR TO RECEIVE SUCH NOTICE AND COPY SHALL NOT AFFECT IN ANY WAY THE
SERVICE OF SUCH PROCESS. THE PLEDGOR FURTHER IRREVOCABLY CONSENTS TO THE SERVICE
OF PROCESS OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING
BY THE MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE
PREPAID, TO THE PLEDGOR AT ITS ADDRESS SET FORTH IN SECTION 11.02 OF THE
INDENTURE, SUCH SERVICE TO BECOME EFFECTIVE FIVE (5) BUSINESS DAYS AFTER SUCH
MAILING.
(vi) NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE COLLATERAL AGENT OR ANY
HOLDER OF NOTES TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO
COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST THE PLEDGOR IN ANY OTHER
JURISDICTION.
(vii) THE PLEDGOR HEREBY AGREES THAT NEITHER THE COLLATERAL AGENT NOR ANY
HOLDER OF NOTES SHALL HAVE ANY LIABILITY TO THE PLEDGOR (WHETHER GROUNDED 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 AGREEMENT, OR ANY ACT, OMISSION OR
EVENT OCCURRING IN CONNECTION THEREWITH, UNTIL IT IS DETERMINED BY A FINAL AND
NONAPPEALABLE JUDGMENT OF A COURT THAT IS BINDING ON THE COLLATERAL AGENT OR
22
SUCH HOLDER OF NOTES, AS THE CASE MAY BE, THAT SUCH LOSSES WERE THE RESULT OF
ACTS OR OMISSIONS ON THE PART OF THE COLLATERAL AGENT OR SUCH HOLDER OF NOTES,
AS THE CASE MAY BE, CONSTITUT1NG GROSS NEGLIGENCE OR WILLFUL MISCONDUCT.
(viii) THE PLEDGOR WAIVES ALL RIGHTS OF NOTICE AND HEARING OF ANY KIND
PRIOR TO THE EXERCISE BY THE COLLATERAL AGENT OR ANY HOLDER OF NOTES OF ITS
RIGHTS DURING THE CONTINUANCE OF AN EVENT OF DEFAULT TO REPOSSESS THE PLEDGED
COLLATED WITH JUDICIAL PROCESS OR TO REPLEVY, ATTACH OR LEVY UPON THE PLEDGED
COLLATERAL OR OTHER SECURITY FOR THE OBLIGATIONS. THE PLEDGOR WAIVES THE POSTING
OF ANY BOND OTHERWISE REQUIRED OF THE COLLATERAL AGENT OR ANY HOLDER OF NOTES IN
CONNECTION WITH ANY JUDICIAL PROCESS OR PROCEEDING TO OBTAIN POSSESSION OF,
REPLEVY, ATTACH OR LEVY UPON PLEDGED COLLATERAL OR OTHER SECURITY FOR THE
OBLIGATIONS, TO ENFORCE ANY JUDGMENT OR OTHER COURT ORDER ENTERED IN FAVOR OF
THE COLLATERAL AGENT OR ANY HOLDER OF NOTES, OR TO ENFORCE BY SPECIFIC
PERFORMANCE, TEMPORARY RESTRAINING ORDER OR PRELIMINARY OR PAYMENT INJUNCTION
THIS AGREEMENT OR ANY OTHER AGREEMENT OR DOCUMENT BETWEEN THE PLEDGOR, THE
COLLATERAL AGENT AND THE HOLDERS.
Section 20.21 ACKNOWLEDGMENTS. The Pledgor hereby acknowledges that:
(a) it has been advised by counsel in the negotiation, execution and
delivery of this Agreement;
(b) neither the Collateral Agent (other than in its cash management
advisory role) nor any Holder of Notes has any fiduciary relationship to the
Pledgor, and the relationship between the Collateral Agent and the Holders, on
the one hand, and the Pledgor, on the other hand, is solely that of a secured
party and a creditor; and
(c) no joint venture exists among the Holders or among the Pledgor and the
Holders.
23
IN WITNESS WHEREOF, the Pledgor and the Collateral Agent have each
caused this Agreement to be duly executed and delivered as of the date first
above written
PLEDGOR:
UNITED INTERNATIONAL HOLDINGS, INC.
a Delaware corporation
By: /s/ J. Xxxxxxx Xxxxx
-----------------------------------------
J. Xxxxxxx Xxxxx
Chief Financial Officer
COLLATERAL AGENT:
XXXXXX XXXXXXX & CO. INCORPORATED
Collateral Agent
By: /s/ Xxxxx X. Xxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxx
Title: Managing Director
24
SCHEDULE I
----------
PLEDGED SHARES
--------------
ISSUER NUMBER OF SHARE CERTIFICATE PERCENTAGE OF
------ --------- ----------------- -------------
PLEDGED SHARES NUMBER OUTSTANDING
-------------- ------ -----------
Joint Venture, Inc. 100 Shares 2 100%
26
EXHIBIT A
FORM OF INTER COMPANY NOTE
________ __, 19___
Denver, Colorado
NOTE
FOR VALUE RECEIVED, Joint Ventures, Inc., a Colorado corporation (the
"Maker"), promises to pay to United International Holdings, Inc., a Delaware
corporation (the "Company'), or order, the amount of principal advanced from
time to time the Company to such Maker as reflected on the books and records of
the Company, together with interest on the unpaid principal amount at a rate per
annum equal to [ ]%, from the date of advance to the date of payment. All
principal and accrued interest under this Note shall due and payable on demand.
This Note may be prepaid in whole or in part at any time without penalty or
premium.
The right to plead any and all statutes of limitations as a defense to
demand hereunder is hereby waived to the extent permitted by law. The Maker, for
itself and its successors assigns, waives presentment, demand, protest and
notice thereof or of dishonor, and waives the right to be released by reason of
any extension of time or change in the terms of payment or any change,
alteration or release of any security given for the payment hereof. The Maker
hereby acknowledges that this Note may be pledged by the Company to the
Collateral Agent named below.
This Note shall be governed by and construed in accordance with the laws of
the State of Colorado.
JOINT VENTURES, INC.
By: __________________________________
Title:
Pay to the Order of:
Xxxxxx Xxxxxxx & Co. Incorporated,
as Collateral Agent
UNITED INTERNATIONAL HOLDINGS, INC.
By: _______________________________
Title:
27
