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EXHIBIT 4.13
EXECUTION COPY
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COLLATERAL PLEDGE AND
SECURITY AGREEMENT
Dated as of January 28, 1998
from
FACILICOM INTERNATIONAL, INC.,
Pledgor
to
STATE STREET BANK AND TRUST COMPANY,
Trustee
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TABLE OF CONTENTS
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SECTION 1. Definitions, Appointment; Deposit and Investment......................................................2
1.1 Definitions...........................................................................................2
1.2 Appointment of the Trustee............................................................................6
1.3 Pledge and Grant of Security Interest.................................................................6
SECTION 2. Delivery of Collateral; Establishment of Collateral Accounts..........................................6
SECTION 3. Delivery of the Pledged Securities....................................................................7
SECTION 4. Delivery of Collateral Other than U.S. Government Obligations.........................................8
SECTION 5. Investing of Amounts in the Collateral Accounts.......................................................9
SECTION 6. Disbursements.........................................................................................9
SECTION 7. Representations and Warranties.......................................................................11
SECTION 8. Further Assurances...................................................................................13
SECTION 9. Covenants............................................................................................13
SECTION 10. Power of Attorney....................................................................................14
SECTION 11. No Assumption of Duties; Reasonable Care.............................................................14
SECTION 12. Indemnity............................................................................................15
SECTION 13. Remedies upon Event of Default.......................................................................15
SECTION 14. Expenses.............................................................................................16
SECTION 15. Security Interest Absolute...........................................................................16
SECTION 16. FaciliCom Securities Intermediary's Representations,
Warranties and Covenants.............................................................................17
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SECTION 17. Miscellaneous Provisions...........................................................................18
17.1 Notices............................................................................................18
17.2 No Adverse Interpretation of Other Agreements......................................................19
17.3 Severability.......................................................................................19
17.4 Headings...........................................................................................19
17.5 Counterpart Originals..............................................................................19
17.6 Benefits of Pledge Agreement.......................................................................19
17.7 Amendments, Waivers and Consents...................................................................19
17.8 Interpretation of Agreement........................................................................20
17.9 Continuing Security Interest; Termination..........................................................20
17.10 Survival Provisions................................................................................20
17.11 Waivers............................................................................................20
17.12 Authority of the Trustee...........................................................................21
17.13 Final Expression...................................................................................21
17.14 Rights of Holders of the Notes.....................................................................21
17.15 GOVERNING LAW; SUBMISSION TO JURISDICTION;
WAIVER OF JURY TRIAL; WAIVER OF DAMAGES..........................................................21
17.16 Effectiveness......................................................................................23
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Page
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SCHEDULE I: Pledged Securities............................................................................I-1
EXHIBIT A: Officer's Certificate.........................................................................A-1
EXHIBIT B: Independent Public Accountant's Report .......................................................B-1
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This Collateral Pledge and Security Agreement (this "Pledge Agreement")
is made and entered into as of January 28, 1998 by FaciliCom International,
Inc., a Delaware corporation (the "Pledgor"), having its principal offices at
0000 Xxx Xxxx Xxxxxx, X.X., Xxxxxxxxxx, X.X. 00000, in favor of State Street
Bank and Trust Company, a Massachusetts Trust Company having its principal
corporate trust office at 000 Xxxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000,
Attention: Corporate Trust Department, as trustee for the holders (the
"Holders") of the Notes (as defined herein) issued by the Pledgor under the
Indenture referred to below.
W I T N E S S E T H:
WHEREAS, the Pledgor and the Initial Purchasers (as defined in the
Purchase Agreement) are parties to a Purchase Agreement dated January 23, 1998
(the "Purchase Agreement"), pursuant to which the Pledgor will issue and sell to
the Initial Purchasers $300 million aggregate principal amount of 10 1/2 %
Senior Notes due 2008 (the "Notes");
WHEREAS, the Pledgor and the Trustee (as defined herein), have entered
into that certain indenture dated as of the date hereof (as amended, restated,
supplemented or otherwise modified from time to time, the "Indenture"), pursuant
to which the Pledgor is issuing the Notes on the date hereof;
WHEREAS, pursuant to the Indenture, the Pledgor is required to
purchase, or cause the purchase of, and pledge to the Trustee for the benefit of
the Holders of, the Notes on the Closing Date (as defined in the Purchase
Agreement) U.S. Government Obligations (as defined in the Indenture) in an
amount that will be sufficient upon receipt of scheduled interest and principal
payments of such securities, in the opinion of a nationally recognized firm of
independent public accountants selected by the Pledgor and delivered to the
Trustee, to provide for payment in full of the first six scheduled interest
payments due on the Notes to secure the Pledgor's obligation to provide for
payment in full of the first six scheduled interest payments due on the Notes
(such obligation, together with the obligation to repay the principal, premium
(including without limitation any Liquidated Damages (as defined in the
Registration Rights Agreement)) and interest on the Notes in the event that the
Notes become due and payable prior to such time as the first six scheduled
interest payments thereon shall have been paid in full, being collectively
referred to herein as the "Obligations");
WHEREAS, the Pledgor has opened a securities account (the "Pledge
Account") with State Street Bank and Trust Company, as Securities Intermediary
(the "FaciliCom Securities Intermediary"), at its office at 000 Xxxxxxxx Xxxxxx,
Xxxxxx, Xxxxxxxxxxxxx 00000, Account No. GE4407 (designated "Pledge Account
pledged by FaciliCom International, Inc. to State Street Bank and Trust Company
as Trustee and Sole Entitlement Holder"), in the name of the Pledgor
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but under the sole dominion and control of the Trustee and subject to the terms
of this Pledge Agreement;
WHEREAS, the Pledgor has opened a non-interest bearing cash collateral
account (the "Cash Collateral Account") with the FaciliCom Securities
Intermediary, at its office at 000 Xxxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000,
Account No. GE4408 (designated "Cash Collateral Account pledged by FaciliCom
International, Inc. to State Street Bank and Trust Company, as Trustee"), in the
name of the Pledgor but under the sole dominion and control of the Trustee and
subject to the terms of this Pledge Agreement;
WHEREAS, pursuant to the Purchase Agreement it is a condition precedent
to the purchase of the Notes by the Initial Purchasers that the Pledgor apply
certain of the proceeds of the offering of the Notes to purchase the Pledged
Securities (as defined below) and deposit such Pledged Securities into the
Pledge Account to be held therein under the sole dominion and control of the
Trustee and subject to the terms of this Pledge Agreement;
WHEREAS, to secure the Obligations of the Pledgor, the Pledgor has
agreed to execute and deliver this Pledge Agreement and pledge to the Trustee,
for its benefit and the ratable benefit of the Holders of the Notes, the Pledged
Securities and the related Collateral in order to secure the payment by the
Pledgor of all the Obligations.
NOW, THEREFORE, in consideration of the premises herein contained, and
in order to induce the Holders of the Notes to purchase the Notes, the Pledgor
and the Trustee hereby agree, for the benefit of the Trustee and for the ratable
benefit of the Holders of the Notes, as follows:
SECTION 1. Definitions, Appointment; Deposit and Investment.
1.1 Definitions.
(a) Unless otherwise defined in this Pledge Agreement, terms
defined or referenced in the Indenture are used in this Pledge Agreement as such
terms are defined or referenced therein.
(b) Unless otherwise defined in the Indenture or in this
Pledge Agreement, terms defined in Article 8 or 9 of the Uniform Commercial Code
in effect in the State of New York from time to time and/or in Section 357.2 of
the Treasury Regulations (as defined in Section 1.1(c)) are used in this Pledge
Agreement as such terms are defined in such Article 8 or 9 and/or such Section
357.2. Such terms shall include, but not be limited to, "book-entry security,"
"certificated security", "entitlement holder", "CUBES", "entitlement order",
"financial asset", "instrument", "participant's securities account", "proceeds",
"securities account", "securities intermediary", "security", "security
entitlement" and "STRIPS".
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(c) In this Pledge Agreement the following terms have
the following meanings (such meanings to be equally applicable to both the
singular and plural forms of the terms defined):
"Adverse Claim" has the meaning specified in UCC ss.
8-102(a)(1).
"Cash Collateral Account" has the meaning specified in
Preliminary Statements hereof.
"Cash Equivalents" means any of the following, to the extent
owned by the Pledgor free and clear of all liens other than liens created
hereunder: (a) U.S. Government Obligations, (b) insured certificates of deposit
of, or time deposits with, any commercial bank that (i) is a member of the
Federal Reserve System, (ii) issues (or the parent of which issues) commercial
paper rated as described in clause (c), (iii) is organized under the laws of the
United States of America or any State thereof and (iv) has combined capital and
surplus of at least $500 million, (c) commercial paper in an aggregate amount of
no more than $5 million per issuer outstanding at any time, issued by any
corporation organized under the laws of any State of the United States of
America and rated at least "Prime-1" (or the then equivalent grade) by Xxxxx'x
Investors Service, Inc. or "A-l" (or the then equivalent grade) by Standard &
Poor's Ratings Group, a division of The XxXxxx-Xxxx Companies or (d) overnight
repurchase agreements (including overnight repurchase agreements between the
Trustee and the FaciliCom Securities Intermediary) secured by U.S. Government
Obligations.
"Certificated Security" has the meaning specified in Section
8-103(a)(4) of the UCC.
"CFR" means U.S. Code of Federal Regulations.
"Collateral" has the meaning specified in Section 1.3.
"Collateral Accounts" means the Pledge Account and the Cash
Collateral Account.
"Deposit Account" has the meaning specified in Section
9-105(e) of the UCC.
"Entitlement Holder" has the meaning specified in UCC ss.
8-102(a)(7).
"Entitlement Order" has the meaning specified in UCC ss.
8-102(a)(8).
"FaciliCom Securities Intermediary" has the meaning specified
in the preliminary statements.
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"Financial Asset" has the meaning specified in UCC ss.
8-102(a)(9).
"FRBB" means Federal Reserve Bank of Boston.
"FRBB Account" means the participant's securities account
maintained in the name of the FaciliCom Securities Intermediary by the FRBB.
"FRBB Member": any Person that is eligible to maintain (and
that maintains) with the FRBB one or more FRBB Member Securities Accounts in
such Person's name.
"FRBB Member Securities Account": in respect of any Person, an
account in the name of such Person at the FRBB, to which account U.S. Government
Obligations held for such Person are or may be credited.
"General Intangibles" has the meaning specified in Section
9-106 of the UCC.
"Instruments" has the meaning specified in Section 9-105 of
the UCC.
"Investment Property" has the meaning specified in UCC ss.
9-115(l)(f).
"Lien": any lien, mortgage, security interest, charge, Adverse
Claim or encumbrance of any kind, including the rights of a vendor, lessor, or
similar party under any conditional sale agreement or other title retention
agreement or lease substantially equivalent thereto.
"Money" has the meaning specified in Section 1-201(24) of the
UCC.
"Pledgor" has the meaning specified in the recital of the
parties hereto.
"Proceeds": all "proceeds" as such term is defined in Section
9-306(1) of the UCC and, in any event, shall include without limitation, all
interest, dividends or other earnings, income or distributions from or in
respect of, or from or in respect of investments or reinvestments of, the cash
and Cash Equivalents and Investment Property from time to time on deposit in the
Collateral Accounts, all collections and distributions with respect to the U.S.
Government Obligations and all other proceeds of Collateral.
"Securities Account" has the meaning specified in UCC ss.
8-501(a).
"Securities Control": shall mean "control" as defined in UCC
ss. 9-115(l)(e).
"Securities Intermediary": a Person that is a "securities
intermediary" (as
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defined in UCC ss. 8-102(a)(14)) and, in respect of any book-entry security, a
"securities intermediary" (as defined in 31 C.F.R. ss. 357.2 or, as applicable
to such Book-Entry Security, the corresponding Federal Book-Entry Regulations).
"Security" has the meaning specified in Section 8-102(a)(15)
of the UCC.
"Security Certificate" has the meaning specified in Section
8-102(a)(16) of the UCC.
"Security Entitlement": as defined in UCC ss. 8-102(a)(17) or,
in respect of any book-entry security, as defined in 31 C.F.R. ss. 357.2 (or, as
applicable to such book-entry security, the corresponding Federal Book-Entry
Regulations).
"Settlement Date" means, as to any U.S. Government
Obligations, the date on which the purchase of such U.S. Government Obligations
shall have been settled.
"Termination Date" means the earlier of (a) the date of the
payment in full in cash of each of the first six scheduled interest payments due
on the Notes under the terms of the Indenture and (b) the date of the payment in
full of all obligations due and owing under this Pledge Agreement, the Indenture
and the Notes, in the event such obligations become due and payable prior to the
payment of the first six scheduled interest payments on the Notes.
"Treasury Regulations" means (a) the federal regulations
contained in 31 CFR Part 357 (including, without limitation, Section 357.2,
Section 357.10 through Section 357.14 and Section 357.41 through Section 357.44
of 31 CFR) and (b) to the extent substantially identical to the federal
regulations referred to in clause (a) above (as in effect from time to time) the
federal regulations governing other U.S. Government Obligations.
"Trustee" means the Person named as the "Trustee" in the first
paragraph of this Pledge Agreement until a successor Trustee shall have become
such, and thereafter "Trustee" shall mean the Person who is then the Trustee
hereunder.
"UCC" means, unless otherwise specified herein, the Uniform
Commercial as in effect in New York State.
"Uncertificated Security" has the meaning specified in Section
8-102(a)(18) of the UCC.
"U.S. Government Obligations" means Securities (including,
without limitation, United States Treasury Securities, including Treasury bills,
Treasury notes, Treasury bonds, STRIPS and CUBES) and the Security Entitlements
in, and Financial Assets based on such Securities maintained in the form of
entries in the commercial book-entry system of the FRBB
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and held for the related Entitlement Holder by a FRBB Member pursuant to the
Treasury Regulations.
1.2 Appointment of the Trustee. The Pledgor hereby appoints the
Trustee as Trustee in accordance with the terms and conditions set forth herein
and the Trustee hereby accepts such appointment.
1.3 Pledge and Grant of Security Interest. As security for the
prompt and complete payment and performance when due (whether at the stated
maturity, by acceleration or otherwise) of the Obligations, the Pledgor hereby
grants to the Trustee for its benefit and for the ratable benefit of the Holders
of the Notes, a lien on and security interest in all of the Pledgor's right,
title and interest in, to and under the following property, (whether
characterized as Certificated Securities or Uncertificated Securities, Financial
Assets, Security Entitlements, Deposit Accounts, banks accounts, Securities
Accounts, Money, Proceeds, Investment Property, General Intangibles or
otherwise): (a) the U.S. Government Obligations identified by CUSIP No. in
Schedule I to this Pledge Agreement (the "Pledged Securities"), the scheduled
payments of principal and interest of which will be sufficient to provide for
payment in full of the first six scheduled interest payments due on the Notes,
(b) any and all applicable Security Entitlements to the Pledged Securities, (c)
the Pledge Account, all funds held therein and all certificates and instruments,
if any, from time to time representing or evidencing the Pledge Account, (d) all
Collateral Investments (as hereinafter defined) and all certificates and
instruments, if any, representing or evidencing the Collateral Investments, and
any and all Security Entitlements to the Collateral Investments, and any and all
related Securities Accounts in which any Security Entitlements to the Collateral
Investments is carried, (e) the Cash Collateral Account, (f) all notes,
certificates of deposit, Deposit Accounts, checks and other instruments, if any,
from time to time hereafter delivered to or otherwise possessed by the Trustee
for or on behalf of the Pledgor in substitution for or in addition to any or all
of the then existing Collateral, (g) all interest, dividends, cash, instruments
and other property, if any, from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of the then existing
Collateral and (h) except as otherwise provided herein, all proceeds of any and
all of the foregoing Collateral (including, without limitation, proceeds that
constitute property of the types described in clauses (a) - (g) of this Section
1.3) (such property being collectively referred to herein as the "Collateral").
SECTION 2. Delivery of Collateral; Establishment of Collateral
Accounts. (a) The Trustee has established with the FaciliCom Securities
Intermediary, and at all times until the Termination Date, the Pledgor shall
maintain with the FaciliCom Securities Intermediary, each of the Cash Collateral
Account and the Pledge Account. The following provisions shall apply to the
establishment and maintenance of each such Collateral Account:
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(i) The Trustee shall cause each Collateral Account to
be, and each Collateral Account shall be, separate from all other
accounts maintained by the Trustee.
(ii) The Trustee shall, in accordance with all applicable
laws, have sole dominion and control (including, without limitation,
Securities Control) over each Collateral Account, and it shall be a
term and condition of each Collateral Account and the Pledgor
irrevocably instructs the Trustee, notwithstanding any other term or
condition to the contrary in any other agreement, that no Collateral
shall be released to or for the account of, or withdrawn by or for the
account of, the Pledgor or any other Person except as expressly
provided in this Pledge Agreement.
(iii) The Trustee shall, in accordance with and subject to
all applicable laws, be the sole Entitlement Holder of, and have the
power to originate Entitlement Orders with respect to, the Pledge
Account and all U.S. Government Obligations, Securities, Security
Entitlements and other Financial Assets held therein, and it shall be a
term and condition of the Pledge Account that the Trustee shall have
the right to issue such Entitlement Orders with respect to the Pledge
Account and such Securities, Security Entitlements and other Financial
Assets without further consent of the Pledgor, and that no Collateral
shall be released to or for the account of, or withdrawn by or for the
account of, the Pledgor or any other Person except as expressly
provided in this Pledge Agreement.
(b) On the Closing Date, the Pledgor shall transfer, or
cause to be transferred, to the Trustee an amount equal to $86,549,914.84 by
depositing all such proceeds into the Cash Collateral Account.
(c) As soon as possible after receipt of the amount
referred to in Section 2(b), (i) the Trustee shall apply such amount to purchase
the U.S. Government Obligations (in the name of the Trustee) listed on Schedule
I hereto, and cause the FaciliCom Securities Intermediary to credit such U.S.
Government Obligations to the Pledge Account as Collateral hereunder; and (ii)
the Trustee shall ensure that, on the Settlement Date, the FRBB credits in the
FRBB Account those U.S. Government Obligations being settled on such date.
(d) The Trustee will, from time to time, reinvest the
proceeds of Collateral that may mature or be sold in such Collateral Investments
(in the name of the Trustee) as it may be directed in writing by the Pledgor,
and cause such Collateral Investments to be credited to the Pledge Account as
Collateral hereunder. Such proceeds that are not so reinvested in Collateral
Investments shall be deposited and held in the Cash Collateral Account.
SECTION 3. Delivery of the Pledged Securities. (a) The
Pledged Securities shall be pledged and delivered to the Pledge Account and the
Trustee and the Trustee shall become the Entitlement Holder of a Security
Entitlement to the Pledged Securities through action by the
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FaciliCom Securities Intermediary, as confirmed (in writing or electronically or
otherwise in accordance with standard industry practice) to the Trustee by the
FaciliCom Securities Intermediary (i) indicating by book-entry that the Pledged
Securities and all Security Entitlements thereto have been credited to the
Pledge Account, or (ii) acquiring the Pledged Securities and all Security
Entitlements thereto for the Trustee and accepting the same for credit to the
Pledge Account.
(b) Prior to or concurrently with the execution and
delivery hereof and prior to the transfer to the Trustee of the Pledged
Securities (or acquisition by the Trustee of any Security Entitlement thereto),
as provided in subsection (a) of this Section 3, the Trustee and the FaciliCom
Securities Intermediary shall establish the Pledge Account on the books of the
FaciliCom Securities Intermediary as Securities Account segregated from all
other custodial or collateral accounts such account to be maintained either (i)
directly at its offices located at 000 Xxxxxxxx Xxxxxx, Xxxxxx Xxxxxxxxxxxxx
00000 or (ii) through a "Securities Account" maintained by the FaciliCom
Securities Intermediary at the FRBB, as Securities Intermediary. Upon transfer
of the Pledged Securities to the Trustee (or the Trustee's acquisition of a
Security Entitlements thereto), as confirmed to the FaciliCom Securities
Intermediary by FRBB or another securities intermediary, the FaciliCom
Securities Intermediary shall make appropriate book entries indicating that the
Pledged Securities and/or such Security Entitlement have been credited to and
are held in the Pledge Account. Subject to the other terms and conditions of
this Pledge Agreement, all funds or other property held by the Trustee pursuant
to this Pledge Agreement shall be held in the Pledge Account or the Cash
Collateral Account subject (except as expressly provided in Section 6 hereof) to
the exclusive dominion and control (including, without limitation, Securities
Control) of the Trustee and exclusively for the benefit of the Trustee and for
the ratable benefit of the Holders of the Notes and segregated from all other
funds or other property otherwise held by the Trustee.
(c) All Collateral shall be retained in the Pledge
Account or the Cash Collateral Account pending disbursement pursuant to the
terms hereof.
(d) Concurrently with the execution and delivery of this
Pledge Agreement, the Trustee is delivering to the Pledgor and the Initial
Purchasers a duly executed certificate, in the form of Exhibit A hereto, of an
officer of the Trustee, confirming the Trustee's establishment and maintenance
of the Pledge Account with the FaciliCom Securities Intermediary and its receipt
and holding of the Pledge Securities or a Security Entitlement thereto and the
crediting of the Pledged Securities or such Security Entitlement to the Pledge
Account, all in accordance with this Pledge Agreement.
(e) Concurrently with the execution and delivery of this
Pledge Agreement, the Pledgor is delivering to the Trustee an opinion of a
nationally recognized firm of independent public accountants, selected by the
Pledgor, substantially in the form of Exhibit C hereto.
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(f) Concurrently with the execution and delivery of this
Pledge Agreement, the Pledgor is delivering to the Trustee financing statements
in form acceptable for filing under the UCC of the State of New York,
Commonwealth of Massachusetts and the District of Columbia, covering the
Collateral described in this Pledge Agreement.
SECTION 4. Delivery of Collateral Other than U.S.
Government Obligations. (a) Collateral consisting of cash will be deemed to be
delivered to the Trustee (such that the Trustee will have an enforceable lien
and security interest thereon and therein), when it has been (and for so long as
it shall remain) deposited in or credited to the Cash Collateral Account.
(b) Collateral consisting of Cash Equivalents (other
than U.S. Government Obligations) will be deemed to be delivered to the Trustee
(such that the Trustee will have an enforceable lien and security interest
thereon and therein), when they have been (and for so long as they shall remain)
deposited in or credited to either Collateral Account.
(c) Collateral consisting of Securities (other than U.S.
Government Obligations) will be deemed delivered to the Trustee when the
FaciliCom Securities Intermediary (A) shall indicate by book entry that such
Securities have been credited to the Pledge Account or (B) shall receive such
Security (or a Financial Asset based on such Security) for the Trustee, from or
at the direction of the Pledgor, and shall accept such Security (or such
Financial Asset) for credit to such Collateral Account;
(d) Collateral consisting of Securities and represented
or evidenced by certificates or instruments, will be deemed delivered to the
Trustee when all such certificates or instruments representing or evidencing the
Collateral, including, without limitation, amounts invested as provided in
Section 5, shall be delivered to the FaciliCom Securities Intermediary and held
by or on behalf of the Trustee pursuant hereto and shall be in registered form
and specially indorsed to the Trustee by an effective indorsement, all in form
and substance sufficient to convey a valid security interest in such Collateral
to the Trustee or shall be credited to the Pledge Account.
SECTION 5. Investing of Amounts in the Collateral
Accounts. If at any time, any amounts shall exist in the Collateral Accounts
uninvested, and if directed in writing by the Pledgor, the Trustee will, subject
to the provisions of Section 6 and Section 13, (a) invest such amounts on
deposit in the Collateral Accounts in such Cash Equivalents in the name of the
Trustee as the Pledgor may select and (b) invest interest paid on the Cash
Equivalents referred to in clause (a) above, and reinvest other proceeds of any
such Cash Equivalents that may mature or be sold, in each case in such Cash
Equivalents in the name of the Trustee, as the Pledgor may select and the
Trustee may approve (the Cash Equivalents referred to in clauses (a) and (b)
above, together with the Pledged Securities, being collectively referred to
herein as "Collateral Investments"); provided, however, that the amount in cash
and Pledged Securities on deposit in
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the Collateral Accounts, collectively, at any time during the term of this
Pledge Agreement, must be sufficient to provide for the payment in full of the
remaining interest payments at such time on the Notes up to and including the
sixth scheduled interest payment. Except as otherwise provided in Sections 11
and 12, the Trustee shall not be liable for any loss in the investment or
reinvestment of amounts held in the Collateral Accounts.
SECTION 6. Disbursements. The Trustee shall hold the
Collateral in the Collateral Accounts and release the same, or a portion
thereof, only as follows:
(a) At least one Business Day prior to the due date of
any of the first six scheduled interest payments on the Notes, the Pledgor may,
pursuant to written instructions executed by the Pledgor (an "Issuer Order"),
direct the Trustee to release from the Collateral Accounts and pay to the
Holders of the Notes proceeds sufficient to provide for payment in full of such
interest then due on the Notes; provided, however, that in the event Collateral
is required to be liquidated, the Pledgor will give the Trustee at least three
Business Days' notice. Upon receipt of an Issuer Order, the Trustee will take
any action necessary to provide for the payment of the interest on the Notes to
the Holders of the Notes in accordance with the payment provisions of the
Indenture from (and to the extent of) proceeds of the Collateral in the
Collateral Accounts. Nothing in this Section 6 shall affect the Trustee's rights
to apply the Collateral to the payments of amounts due on the Notes upon
acceleration thereof.
(b) If the Pledgor makes any interest payment or portion
of an interest payment for which the Collateral is security from a source of
funds other than the Collateral Accounts ("Pledgor Funds"), the Pledgor may,
after payment in full of such interest payment or portion thereof from proceeds
of the Collateral or such Pledgor Funds or both, direct the Trustee by Issuer
Order to release to the Pledgor or to another party at the direction of the
Pledgor (the "Pledgor's Designee") proceeds from the Collateral Accounts in an
amount less than or equal to the amount of Pledgor Funds applied to such
interest payment. Upon receipt of such Issuer Order by the Trustee, the Trustee
shall pay over to the Pledgor or the Pledgor's Designee, as the case may be, the
requested amount from proceeds in the Collateral Accounts. Concurrently with any
release of funds to the Pledgor pursuant to this Section 6(b), the Pledgor shall
deliver to the Trustee a certificate signed by an officer of the Pledgor stating
that the Pledgor has made the interest payment from a source of funds other than
the Pledge Account, and that such release has been duly authorized by the
Pledgor and will not contravene any provision of applicable law or Certificate
of Incorporation or the By-laws of the Pledgor or any material agreement or
other material instrument binding upon the pledgor or any of its subsidiaries or
any judgment, order or decree of any governmental body, agency or court having
jurisdiction over the Pledgor or any of its subsidiaries or result in the
creation or imposition of any Lien on any assets of the Pledgor, except for the
security interest granted under the Pledge Agreement.
(c) At least one Business Day prior to the due date of
any of the first six scheduled interest payments on the Notes, the Pledgor
covenants to give the Trustee (by Issuer
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Order) notice as to whether payment of interest will be made pursuant to Section
6(a) or 6(b) and as to the respective amounts of interest that will be paid
pursuant to Section 6(a) or 6(b); provided, however, that, in the event
Collateral is required to be liquidated, the Pledgor will give the Trustee at
least three Business Days' notice. If no such notice is given, the Trustee will,
subject to Section 6(d), act pursuant to Section 6(a) as if it had received an
Issuer Order pursuant thereto for the payment in full of the interest then due.
(d) The Trustee shall not be required to liquidate any
Collateral Investments in order to make any scheduled payment of interest or any
release hereunder unless instructed to do so by Issuer Order or pursuant to
Section 13 hereof.
(e) Upon the Termination Date, the security interest in
the Collateral evidenced by this Pledge Agreement will automatically terminate
and be of no further force and effect and the Collateral, upon receipt by the
Trustee of an Issuer Order, shall promptly be paid over and transferred to the
Pledgor.
(f) In the event that the Collateral held in the Pledge
Account exceeds 100% of the amount sufficient, in the opinion of a nationally
recognized firm of independent public accountants selected by the Pledgor, to
provide for payment in full of the first six scheduled interest payments due on
the Notes (or, in the event an interest payment or payments have been made, an
amount sufficient to provide for payment in full of all interest payments
remaining, up to and including the sixth scheduled interest payment), the
Trustee shall release to the Pledgor, at the Pledgor's written request,
accompanied by an opinion prepared by a nationally recognized firm of
independent public accountants, any such excess Collateral.
(g) Upon the release of any Collateral from the Pledge
Account, in accordance with the terms of this Pledge Agreement, the security
interest evidenced by this Pledge Agreement in such released Collateral will
automatically terminate and be of no further force and effect.
(h) Nothing contained in Section 1, Section 13, this
Section 6 or any other Provision of this Pledge Agreement shall (i) afford the
Pledgor any right to issue Entitlement Orders with respect to any Security
Entitlement to the Pledge Securities or Collateral Investments or any Securities
Account in which any such Security Entitlement may be carried, or otherwise
afford the Pledgor control of any such Security Entitlement or (ii) otherwise
give rise to any rights of the Pledgor with respect to the Collateral
Investments, any Security Entitlement thereto or any Securities Account in which
any such Security Entitlement may be carried, other than the Pledgor's rights
under this Pledge Agreement as the beneficial owner of Collateral pledged to and
subject to the exclusive dominion and control (including, without limitation,
Securities Control) (except as expressly provided in this Section 6) of the
Trustee in its capacity as such (and not as a Securities Intermediary). The
Pledgor acknowledges, confirms and agrees
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that the Trustee holds a Security Entitlement to the Collateral Investments
solely as trustee for the Holders of the Notes and not as a Securities
Intermediary for the Pledgor.
SECTION 7. Representations and Warranties. The
Pledgor hereby represents and warrants, as of the date hereof, that:
(a) The execution and delivery by the Pledgor of, and the
performance by the Pledgor of its obligations under, this Pledge
Agreement will not contravene any provision of applicable law or the
Certificate of Incorporation or By-laws of the Pledgor or any material
agreement or other material instrument binding upon the Pledgor or any
of its subsidiaries or any judgment, order or decree of any
governmental body, agency or court having jurisdiction over the Pledgor
or any of its subsidiaries, or result in the creation or imposition of
any Lien on any assets of the Pledgor, except for the security
interests granted under this Pledge Agreement; no consent, approval,
authorization or order of, or qualification with, any governmental body
or agency is required (i) for the performance by the Pledgor of its
obligations under this Pledge Agreement, (ii) for the pledge by the
Pledgor of the Collateral pursuant to this Pledge Agreement or (iii)
except for any such consents, approvals, authorizations or orders
required to be obtained by the Trustee (or the Holders) for reasons
other than the consummation of this transaction, for the exercise by
the Trustee of the rights provided for in this Pledge Agreement or the
remedies in respect of the Collateral pursuant to this Pledge
Agreement.
(b) The Pledgor is the beneficial owner of the
Collateral, free and clear of any Lien or claims of any person or
entity (except for the security interests granted under this Pledge
Agreement). No financing statement covering the Pledgor's interest in
the Collateral is on file in any public office other than the financing
statements, if any, filed pursuant to this Pledge Agreement.
(c) This Pledge Agreement has been duly authorized,
validly executed and delivered by the Pledgor and (assuming the due
authorization and valid execution and delivery of this Pledge Agreement
by the Trustee and enforceability of the Pledge Agreement against the
Trustee in accordance with its terms) constitutes a valid and binding
agreement of the Pledgor, enforceable against the Pledgor in accordance
with its terms, except as (i) the enforceability hereof may be limited
by bankruptcy, insolvency, fraudulent conveyance, preference,
reorganization, moratorium or similar laws now or hereafter in effect
relating to or affecting the rights or remedies of creditors generally,
(ii) the availability of equitable remedies may be limited by equitable
principles of general applicability and the discretion of the court
before which any proceeding therefor may be brought, (iii) the
exculpation provisions and rights to indemnification hereunder may be
limited by U.S. federal and state securities laws and public policy
considerations
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and (iv) the waiver of rights and defenses contained in Section 13(b),
Section 17.11 and Section 17.15 hereof may be limited by applicable
law.
(d) Upon the delivery to the Trustee of the Collateral
in accordance with the procedures described in Section 3 and Section 4
hereof, the pledge of and grant of a security interest in the
Collateral securing the payment of the Obligations for the benefit of
the Trustee and the Holders of the Notes will constitute a valid, first
priority, perfected security interest in such Collateral (except, with
respect to Proceeds, only to the extent permitted by Section 9-306 of
the UCC), enforceable as such against all creditors of the Pledgor and
any persons purporting to purchase any of the Collateral from the
Pledgor, except in each case as enforcement may be affected by general
equitable principles (whether considered in a proceeding in equity or
at law) and other than as permitted by the Indenture.
(e) There are no legal or governmental proceedings
pending or, to the best of the Pledgor's knowledge, threatened to which
the Pledgor or any of its subsidiaries is a party or to which any of
the properties of the Pledgor or any of its subsidiaries is subject
that would materially adversely affect the power or ability of the
Pledgor to perform its obligations under this Pledge Agreement or to
consummate the transactions contemplated hereby.
(f) The pledge of the Collateral pursuant to this Pledge
Agreement is not prohibited by law or governmental regulation
(including, without limitation, Regulations G, T, U and X of the Board
of Governors of the Federal Reserve System) applicable to the Pledgor.
(g) No Event of Default (as defined herein) exists.
SECTION 8. Further Assurances. The Pledgor will,
promptly upon the request by the Trustee (which request the Trustee may submit
at the direction of the Holders of a majority in aggregate principal amount of
the Notes then outstanding), execute and deliver or cause to be executed and
delivered, or use its reasonable best efforts to procure, all assignments,
instruments and other documents, all in form and substance reasonably
satisfactory to the Trustee, deliver any instruments to the Trustee and take any
other actions that are necessary or desirable to perfect, continue the
perfection of, or protect the first priority of the Trustee's security interest
in and to the Collateral, to protect the Collateral against the rights, claims
or interests of third persons (other than any such rights, claims or interests
created by or arising through the Trustee) or to effect the purposes of this
Pledge Agreement. The Pledgor also hereby authorizes the Trustee to file any
financing or continuation statements in the United States with respect to the
Collateral without the signature of the Pledgor (to the extent permitted by
applicable law). The Pledgor will promptly pay all reasonable costs incurred in
connection with
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any of the foregoing within 45 days of receipt of an invoice therefor. The
Pledgor also agrees, whether or not requested by the Trustee, to use its
reasonable best efforts to perfect or continue the perfection of, or to protect
the first priority of, the Trustee's security interest in and to the Collateral,
and to protect the Collateral against the rights, claims or interests of third
persons (other than any such rights, claims or interests created by or arising
through the Trustee).
SECTION 9. Covenants. The Pledgor covenants and agrees
with the Trustee and the Holders of the Notes that from and after the date of
this Pledge Agreement until the Termination Date:
(a) that it will not (i) (and will not purport to) sell
or otherwise dispose of, or grant any option or warrant with respect
to, any of the Collateral nor (ii) create or permit to exist any Lien
upon or with respect to any of the Collateral (except for the security
interests granted under this Pledge Agreement and any Lien created by
or arising through the Trustee) and at all times will be the sole
beneficial owner of the Collateral; and
(b) that it will not (i) enter into any agreement or
understanding that restricts or inhibits or purports to restrict or
inhibit the Trustee's rights or remedies hereunder, including, without
limitation, the Trustee's right to sell or otherwise dispose of the
Collateral or (ii) fail to pay or discharge any tax, assessment or levy
of any nature with respect to the Collateral not later than five days
prior to the date of any proposed sale under any judgment, writ or
warrant of attachment with respect to the Collateral.
SECTION 10. Power of Attorney. In addition to all of the
powers granted to the Trustee pursuant to the Indenture, subject to the terms of
this Pledge Agreement, the Pledgor hereby appoints and constitutes the Trustee
as the Pledgor's attorney-in-fact (with full power of substitution) to exercise
to the fullest extent permitted by law all of the following powers upon and at
any time after the occurrence and during the continuance of an Event of Default:
(a) collection of proceeds of any Collateral; (b) conveyance of any item of
Collateral to any purchaser thereof; (c) giving of any notices or recording of
any Liens under Section 3 hereof; and (d) paying or discharging taxes or Liens
levied or placed upon the Collateral, the legality or validity thereof and the
amounts necessary to discharge the same to be determined by the Trustee in its
sole reasonable discretion, and such payments made by the Trustee to become part
of the Obligations of the Pledgor to the Trustee, due and payable immediately
upon demand. The Trustee's authority under this Section 10 shall include,
without limitation, the authority to endorse and negotiate any checks or
instruments representing proceeds of Collateral in the name of the Pledgor,
execute and give receipt for any certificate of ownership or any document
constituting Collateral, transfer title to any item of Collateral, sign the
Pledgor's name on all financing statements (to the extent permitted by
applicable law) or any other documents deemed necessary or appropriate by the
Trustee in its reasonable discretion to preserve, protect or perfect the
security interest in the Collateral and to file the same, prepare, file and sign
the Pledgor's
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name on any notice of Lien, and to take any other actions arising from or
incident to the powers granted to the Trustee in this Pledge Agreement. This
power of attorney is coupled with an interest and is irrevocable by the Pledgor.
SECTION 11. No Assumption of Duties; Reasonable Care.
The rights and powers granted to the Trustee hereunder are being granted in
order to preserve and protect the security interest of the Trustee and the
Holders of the Notes in and to the Collateral granted hereby and shall not be
interpreted to, and shall not impose any duties on, the Trustee in connection
therewith other than those expressly provided herein or imposed under applicable
law. Except as provided by applicable law or by the Indenture, the Trustee shall
be deemed to have exercised reasonable care in the custody and preservation of
the Collateral in its possession if the Collateral is accorded treatment
substantially equal to that which the Trustee accords similar property held by
the Trustee for similar accounts, it being understood that the Trustee in its
capacity as such shall not have any responsibility for (a) ascertaining or
taking action with respect to calls, conversions, exchanges, maturities or other
matters relative to any Collateral, whether or not the Trustee has or is deemed
to have knowledge of such matters, (b) taking any necessary steps to preserve
rights against any parties with respect to any Collateral or (c) investing or
reinvesting any of the Collateral; provided, however, that nothing contained in
this Pledge Agreement shall relieve the Trustee of any responsibilities as a
securities intermediary under applicable law.
SECTION 12. Indemnity. The Pledgor shall indemnify, hold
harmless and defend the Trustee and its directors and officers from and against
any and all claims, actions, obligations, liabilities and expenses, including
reasonable defense costs, reasonable investigative fees and costs, and
reasonable legal fees and damages arising from the Trustee's performance as
Trustee under this Pledge Agreement, except to the extent that such claim,
action, obligation, liability or expense is directly attributable to the bad
faith, gross negligence or wilful misconduct of such indemnified person. The
provisions of this Section 12 shall survive termination of this Pledge Agreement
and the resignation and removal of the Trustee.
SECTION 13. Remedies upon Event of Default. If any Event
of Default under the Indenture or default hereunder (any such Event of Default
or default being referred to in this Pledge Agreement as an "Event of Default")
shall have occurred and be continuing:
(a) The Trustee and the Holders of the Notes shall have,
in addition to all other rights given by law or by this Pledge
Agreement or the Indenture, all of the rights and remedies with respect
to the Collateral of a secured party under the UCC in effect in the
State of New York and the District of Columbia at that time. In
addition, with respect to any Collateral that shall then be in or shall
thereafter come into the possession or custody of the Trustee, the
Trustee may and, at the direction of the Holders of a majority in
aggregate principal amount of the Notes then outstanding, shall appoint
a broker or
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other expert to 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 such broker or other expert may deem best, for cash or
on credit or for future delivery, without assumption of any credit
risk. The purchaser of any or all Collateral so sold shall thereafter
hold the same absolutely, free from any claim, encumbrance or right of
any kind whatsoever created by or through the Pledgor. Unless any of
the Collateral threatens, in the reasonable judgment of the Trustee, to
decline speedily in value, the Trustee will give the Pledgor reasonable
notice of the time and place of any public sale thereof, or of the time
after which any private sale or other intended disposition is to be
made. Any sale of the Collateral conducted in conformity with
reasonable commercial practices of banks, insurance companies,
commercial finance companies, or other financial institutions disposing
of property similar to the Collateral shall be deemed to be
commercially reasonable. Any requirements of reasonable notice shall be
met if such notice is mailed to the Pledgor as provided in Section 17.1
hereof at least ten (10) days before the time of the sale or
disposition. The Trustee or any Holder of Notes may, in its own name or
in the name of a designee or nominee, buy any of the Collateral at any
public sale and, if permitted by applicable law, at any private sale.
All expenses (including court costs and reasonable attorneys' fees,
expenses and disbursements) of, or incident to, the enforcement of any
of the provisions hereof shall be recoverable from the proceeds of the
sale or other disposition of the Collateral.
(b) The Pledgor further agrees to use its reasonable best
efforts to do or cause to be done all such other acts as may be
necessary to make such sale or sales of all or any portion of the
Collateral pursuant to this Section 13 valid and binding and in
compliance with any and all other applicable requirements of law. The
Pledgor further agrees that a breach of any of the covenants contained
in this Section 13 will cause irreparable injury to the Trustee and the
Holders of the Notes, that the Trustee and the Holders of the Notes
have no adequate remedy at law in respect of such breach and, as a
consequence, that each and every covenant contained in this Section 13
shall be specifically enforceable against the Pledgor, and the Pledgor
hereby waives and agrees not to assert any defenses against an action
for specific performance of such covenants except for a defense that no
Event of Default has occurred.
SECTION 14. Expenses. The Pledgor will upon demand pay
to the Trustee the amount of any and all reasonable expenses, including, without
limitation, the reasonable fees, expenses and disbursements of its counsel,
experts and agents retained by the Trustee, that the Trustee may incur in
connection with (a) the review, negotiation and administration of this Pledge
Agreement, (b) the custody or preservation of, or the sale of, collection from,
or other realization upon, any of the Collateral, (c) the exercise or
enforcement of any of the rights of the Trustee and the Holders of the Notes
hereunder or (d) the failure by the Pledgor to perform or observe any of the
provisions hereof.
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SECTION 15. Security Interest Absolute. All rights of
the Trustee and the Holders of the Notes and security interests hereunder, and
all obligations of the Pledgor hereunder, shall be absolute and unconditional
irrespective of:
(a) any lack of validity or enforceability of the
Indenture or any other agreement or instrument relating thereto;
(b) any change in the time, manner or place of payment
of, or in any other term of, all or any of the Obligations, or any
other amendment or waiver of or any consent to any departure from the
Indenture;
(c) any exchange, surrender, release or non-perfection of
any Liens on any other collateral for all or any of the Obligations; or
(d) to the extent permitted by applicable law, any other
circumstance which might otherwise constitute a defense available to,
or a discharge of, the Pledgor in respect of the Obligations or of this
Pledge Agreement.
SECTION 16. FaciliCom Securities Intermediary's
Representations, Warranties and Covenants. The FaciliCom Securities Intermediary
represents and warrants that it is as of the date hereof, and it agrees that for
so long as it maintains the Collateral Accounts and acts as the Securities
Intermediary pursuant to this Pledge Agreement it shall be a Securities
Intermediary and a FRBB Member. In furtherance of the foregoing the FaciliCom
Securities Intermediary hereby:
(a) represents and warrants that it is a corporation that
in the ordinary course of its business maintains securities accounts
for others and is acting in that capacity hereunder and with respect to
the Pledge Account;
(b) represents and warrants that it maintains a FRBB
Member Securities Account with the FRBB;
(c) agrees that the Pledge Account shall be an account to
which Financial Assets may be credited, and the FaciliCom Securities
Intermediary undertakes to treat the Trustee as entitled to exercise
rights that comprise (and entitled to the benefits of) such Financial
Assets, and entitled to exercise the rights of an Entitlement Holder in
the manner contemplated by the UCC;
(d) hereby represents that it has not granted, and
covenants that so long as it acts as a Securities Intermediary
hereunder it shall not grant, control (including without
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limitation, Securities Control) over or with respect to any Collateral
credited to any Collateral Account from time to time to any other
Person other than the Trustee.
(e) covenants that in its capacity as FaciliCom
Securities Intermediary hereunder and with respect to the Collateral
Accounts, it shall not take any action inconsistent with, and
represents and covenants that it is not and so long as this Pledge
Agreement remains in effect will not become party to any agreement the
terms of which are inconsistent with the provisions of this Pledge
Agreement;
(f) agrees that any item of property credited to the
Pledge Account shall be treated as a Financial Asset;
(g) agrees that any item of Collateral credited to any
Collateral Account shall not be subject to any security interest, Lien
or right of set-off in favor of the FaciliCom Securities Intermediary,
except as may be expressly permitted under the Indenture (and the
FaciliCom Securities Intermediary shall take such actions as shall be
necessary and appropriate to cause such Collateral to remain free of
any Lien or security interest of any underlying Securities Intermediary
through which the FaciliCom Securities Intermediary holds such
Collateral or any Security Entitlement thereto);
(h) agrees, so long as it serves as FaciliCom Securities
Intermediary pursuant to this Pledge Agreement, to maintain the
Collateral Accounts and maintain appropriate books and records in
respect thereof in accordance with its usual procedures and subject to
the terms of this Pledge Agreement; and
(i) agrees, with the other parties to this Pledge
Agreement, that the FaciliCom Security Intermediary's jurisdiction, for
purposes of Section 8-110(e) of the UCC as it pertains to this Pledge
Agreement, the Collateral Accounts and the Security Entitlements
relating thereto, shall be the State of New York.
SECTION 17. Miscellaneous Provisions.
17.1 Notices. Any notice, approval, consent or other
communication shall be sufficiently given if in writing and delivered in person
or mailed by first class mail, commercial courier service or telecopier
communication, addressed as follows:
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if to the Pledgor:
FaciliCom International, Inc.
0000 Xxx Xxxx Xxxxxx, X.X.
Xxxxxx Xxxxx
Xxxxxxxxxx, X.X. 00000
Attention: Xxxxxxxxxxx X. Xxxx
Telecopier No.: (000) 000-0000
with a copy to:
Xxxxxxx & Berlin
0000 X Xxxxxx, X.X.
Xxxxx 000
Xxxxxxxxxx, X.X. 00000-0000
Attention: Xxxxxx X. XxXxx, Xx., Esq.
Telecopier No.: (000) 000-0000
if to the Trustee:
State Street Bank and Trust Company
000 Xxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Corporate Trust Department
Telecopier No.: (000) 000-0000
17.2 No Adverse Interpretation of Other Agreements. This
Pledge Agreement may not be used to interpret another pledge, security or debt
agreement of the Pledgor or any subsidiary thereof. No such pledge, security or
debt agreement (other than the Indenture) may be used to interpret this Pledge
Agreement.
17.3 Severability. The provisions of this Pledge Agreement
are severable, and if any clause or provision shall be held invalid, illegal or
unenforceable in whole or in part in any jurisdiction, then such invalidity or
unenforceability shall affect in that jurisdiction only such clause or
provision, or part thereof, and shall not in any manner affect such clause or
provision in any other jurisdiction or any other clause or provision of this
Pledge Agreement in any jurisdiction.
17.4 Headings. The headings in this Pledge Agreement have
been inserted for convenience of reference only, are not to be considered a part
hereof and shall in no way modify or restrict any of the terms or provisions
hereof.
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17.5 Counterpart Originals. This Pledge Agreement may be
signed in two or more counterparts, each of which shall be deemed an original,
but all of which shall together constitute one and the same agreement.
17.6 Benefits of Pledge Agreement. Nothing in this Pledge
Agreement, express or implied, shall give to any person, other than the parties
hereto and their successors hereunder, and the Holders of the Notes, any benefit
or any legal or equitable right, remedy or claim under this Pledge Agreement.
17.7 Amendments, Waivers and Consents. Any amendment or
waiver of any provision of this Pledge Agreement and any consent to any
departure by the Pledgor from any provision of this Pledge Agreement shall be
effective only if made or duly given in compliance with all of the terms and
provisions of the Indenture, and neither the Trustee nor any Holder of Notes
shall be deemed, by any act, delay, indulgence, omission or otherwise, to have
waived any right or remedy hereunder or to have acquiesced in any Default or
Event of Default or in any breach of any of the terms and conditions hereof.
Failure of the Trustee or any Holder of Notes to exercise, or delay in
exercising, any right, power or privilege hereunder shall not preclude any other
or further exercise thereof or the exercise of any other right, power or
privilege. A waiver by the Trustee or any Holder of Notes of any right or remedy
hereunder on any one occasion shall not be construed as a bar to any right or
remedy that the Trustee or such Holder of Notes would otherwise have on any
future occasion. The rights and remedies herein provided are cumulative, may be
exercised singly or concurrently and are not exclusive of any rights or remedies
provided by law.
17.8 Interpretation of Agreement. All terms not defined
herein or in the Indenture shall have the meaning set forth in the UCC, except
where the context otherwise requires. To the extent a term or provision of this
Pledge Agreement conflicts with the Indenture, the Indenture shall control with
respect to the subject matter of such term or provision. Acceptance of or
acquiescence in a course of performance rendered under this Pledge Agreement
shall not be relevant to determine the meaning of this Pledge Agreement even
though the accepting or acquiescing party had knowledge of the nature of the
performance and opportunity for objection.
17.9 Continuing Security Interest; Termination. (a) This
Pledge Agreement shall create a continuing security interest in and to the
Collateral and shall, unless otherwise provided in the Indenture or in this
Pledge Agreement, remain in full force and effect until the payment in full in
cash of the Obligations. This Pledge Agreement shall be binding upon the
Pledgor, its transferees, successors and assigns, and shall inure, together with
the rights and remedies of the
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Trustee hereunder, to the benefit of the Trustee, the Holders of the Notes and
their respective successors, transferees and assigns.
(b) In addition to the provisions of Section 6(e) hereof
and subject to the provisions of Section 17.10 hereof, this Pledge Agreement
shall terminate upon the payment in full in cash of the Obligations. At such
time, and subject to Section 12, the Trustee shall, pursuant to an Issuer Order,
reassign and redeliver to the Pledgor all of the Collateral hereunder that has
not been sold, disposed of, retained or applied by the Trustee in accordance
with the terms of this Pledge Agreement and the Indenture. Such reassignment and
redelivery shall be without warranty by or recourse to the Trustee in its
capacity as such, except as to the absence of any Liens on the Collateral
created by or arising through the Trustee, and shall be at the reasonable
expense of the Pledgor.
17.10 Survival Provisions. All representations, warranties
and covenants of the Pledgor contained herein shall survive the execution and
delivery of this Pledge Agreement, and shall terminate only upon the termination
of this Pledge Agreement. The obligations of the Pledgor under Sections 12 and
14 hereof shall survive the termination of this Pledge Agreement.
17.11 Waivers. The Pledgor waives presentment and demand
for payment of any of the Obligations, protest and notice of dishonor or default
with respect to any of the Obligations, and all other notices to which the
Pledgor might otherwise be entitled, except as otherwise expressly provided
herein or in the Indenture.
17.12 Authority of the Trustee. (a) The Trustee shall have
and be entitled to exercise all powers hereunder that are specifically granted
to the Trustee by the term hereof, together with such powers as are reasonably
incident thereto. The Trustee may perform any of its duties hereunder or in
connection with the Collateral by or through agents or employees and shall be
entitled to retain counsel and to act in reliance upon the advice of counsel
concerning all such matters. Except as otherwise expressly provided in this
Pledge Agreement or the Indenture, neither the Trustee nor any director,
officer, employee, attorney or agent of the Trustee shall be liable to the
Pledgor for any action taken or omitted to be taken by the Trustee, in its
capacity as Trustee, hereunder, except for its own bad faith, gross negligence
or willful misconduct, and the Trustee shall not be responsible for the
validity, effectiveness or sufficiency hereof or of any document or security
furnished pursuant hereto. The Trustee and its directors, officers, employees,
attorneys and agents shall be entitled to rely on any communication, instrument
or document believed by it or them to be genuine and correct and to have been
signed or sent by the proper person or persons. The Trustee shall have no duty
to cause any financing statement or continuation statement to be filed in
respect of the Collateral.
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(b) The Pledgor acknowledges that the rights and
responsibilities of the Trustee under this Pledge Agreement with respect to any
action taken by the Trustee or the exercise or non-exercise by the Trustee of
any option, right, request, judgment or other right or remedy provided for
herein or resulting or arising out of this Pledge Agreement shall, as between
the Trustee and the Holders of the Notes, be governed by the Indenture and by
such other agreements with respect thereto as may exist from time to time among
them, but, as between the Trustee and the Pledgor, the Trustee shall be
conclusively presumed to be acting as agent for the Holders of the Notes with
full and valid authority so to act or refrain from acting, and the Pledgor shall
not be obligated or entitled to make any inquiry respecting such authority.
17.13 Final Expression. This Pledge Agreement, together
with the Indenture and any other agreement executed in connection herewith, is
intended by the parties as a final expression of this Pledge Agreement and is
intended as a complete and exclusive statement of the terms and conditions
thereof.
17.14 Rights of Holders of the Notes. No Holder of Notes
shall have any independent rights hereunder other than those rights granted to
individual Holders of the Notes pursuant to Section 607 of the Indenture;
provided that nothing in this subsection shall limit any rights granted to the
Trustee under the Notes or the Indenture.
17.15 GOVERNING LAW; SUBMISSION TO JURISDICTION; WAIVER OF
JURY TRIAL; WAIVER OF DAMAGES. (a) THIS PLEDGE AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AND ANY
DISPUTE ARISING OUT OF, CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE
RELATIONSHIP ESTABLISHED BETWEEN THE PLEDGOR, THE TRUSTEE AND THE HOLDERS OF THE
NOTES IN CONNECTION WITH THIS PLEDGE AGREEMENT, AND WHETHER ARISING IN CONTRACT,
TORT, EQUITY OR OTHERWISE, SHALL BE RESOLVED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK. NOTWITHSTANDING THE FOREGOING, THE MATTERS IDENTIFIED IN 31
C.F.R. xx.xx. 357.0 AND 357.11 (AS IN EFFECT ON THE DATE OF THIS PLEDGE
AGREEMENT) SHALL BE GOVERNED SOLELY BY THE LAWS SPECIFIED THEREIN.
(b) THE PLEDGOR HEREBY APPOINTS CORPORATION SERVICE
COMPANY AS ITS AGENT FOR SERVICE OF PROCESS IN ANY SUIT, ACTION OR PROCEEDING
WITH RESPECT TO THIS PLEDGE AGREEMENT AND FOR ACTIONS BROUGHT UNDER THE U.S.
FEDERAL OR STATE SECURITIES LAWS BROUGHT IN ANY FEDERAL OR STATE COURT LOCATED
IN THE CITY OF NEW YORK (EACH A "NEW YORK COURT"). EACH OF THE PARTIES HERETO
SUBMITS TO THE JURISDICTION OF ANY NEW YORK COURT AND TO THE COURTS OF ITS
CORPORATE DOMICILE WITH RESPECT TO ANY ACTIONS BROUGHT AGAINST IT
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AS DEFENDANT IN ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF, CONNECTED WITH,
RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED BETWEEN THE PLEDGOR,
THE TRUSTEE AND THE HOLDERS OF THE NOTES IN CONNECTION WITH THIS PLEDGE
AGREEMENT, AND EACH OF THE PARTIES HERETO WAIVES ANY OBJECTION THAT IT MAY HAVE
TO THE LAYING OF VENUE, INCLUDING ANY PLEADING OF FORUM NON CONVENIENS, WITH
RESPECT TO ANY SUCH ACTION AND WAIVES ANY RIGHT TO WHICH IT MAY BE ENTITLED ON
ACCOUNT OF PLACE OF RESIDENCE OR DOMICILE.
(c) THE PLEDGOR AGREES THAT THE TRUSTEE SHALL, IN ITS
CAPACITY AS TRUSTEE OR IN THE NAME AND ON BEHALF OF ANY HOLDER OF NOTES, HAVE
THE RIGHT, TO THE EXTENT PERMITTED BY APPLICABLE LAW, TO PROCEED AGAINST THE
PLEDGOR OR THE COLLATERAL IN A COURT IN ANY LOCATION REASONABLY SELECTED IN GOOD
FAITH (AND HAVING PERSONAL OR IN REM JURISDICTION OVER THE PLEDGOR OR THE
COLLATERAL, AS THE CASE MAY BE) TO ENABLE THE TRUSTEE TO REALIZE ON SUCH
COLLATERAL, OR TO ENFORCE A JUDGMENT OR OTHER COURT ORDER ENTERED IN FAVOR OF
THE TRUSTEE. THE PLEDGOR AGREES THAT IT WILL NOT ASSERT ANY COUNTERCLAIMS,
SETOFFS OR CROSSCLAIMS IN ANY PROCEEDING BROUGHT BY THE TRUSTEE TO REALIZE ON
SUCH PROPERTY OR TO ENFORCE A JUDGMENT OR OTHER COURT ORDER IN FAVOR OF THE
TRUSTEE, EXCEPT FOR SUCH COUNTERCLAIMS, SETOFFS OR CROSSCLAIMS WHICH, IF NOT
ASSERTED IN ANY SUCH PROCEEDING, COULD NOT OTHERWISE BE BROUGHT OR ASSERTED.
(d) THE PLEDGOR AGREES THAT NEITHER ANY HOLDER OF NOTES
NOR (EXCEPT AS OTHERWISE PROVIDED IN THIS PLEDGE AGREEMENT OR THE INDENTURE) THE
TRUSTEE IN ITS CAPACITY AS TRUSTEE SHALL HAVE ANY LIABILITY TO THE PLEDGOR
(WHETHER ARISING IN TORT, CONTRACT OR OTHERWISE) FOR LOSSES SUFFERED BY THE
PLEDGOR IN CONNECTION WITH, ARISING OUT OF, OR IN ANY WAY RELATED TO, THE
TRANSACTIONS CONTEMPLATED AND THE RELATIONSHIP ESTABLISHED BY THIS PLEDGE
AGREEMENT, OR ANY ACT, OMISSION OR EVENT OCCURRING IN CONNECTION THEREWITH,
UNLESS IT IS DETERMINED BY A FINAL AND NONAPPEALABLE, JUDGMENT OF A COURT THAT
IS BINDING ON THE TRUSTEE OR SUCH HOLDER OF NOTES, AS THE CASE MAY BE, THAT SUCH
LOSSES WERE THE RESULT OF ACTS OR OMISSIONS ON THE PART OF THE TRUSTEE OR SUCH
HOLDERS OF NOTES, AS THE CASE MAY BE, CONSTITUTING BAD FAITH, GROSS NEGLIGENCE
OR WILLFUL MISCONDUCT.
(e) TO THE EXTENT PERMITTED BY APPLICABLE LAW, THE
PLEDGOR WAIVES THE POSTING OF ANY BOND OTHERWISE REQUIRED OF THE
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24
TRUSTEE OR ANY HOLDER OF NOTES IN CONNECTION WITH ANY JUDICIAL PROCESS OR
PROCEEDING TO ENFORCE ANY JUDGMENT OR OTHER COURT ORDER PERTAINING TO THIS
PLEDGE AGREEMENT OR ANY RELATED AGREEMENT OR DOCUMENT ENTERED IN FAVOR OF THE
TRUSTEE OR ANY HOLDER OF NOTES, OR TO ENFORCE BY SPECIFIC PERFORMANCE, TEMPORARY
RESTRAINING ORDER OR PRELIMINARY OR PERMANENT INJUNCTION, THIS PLEDGE AGREEMENT
OR ANY RELATED AGREEMENT OR DOCUMENT BETWEEN THE PLEDGOR, ON THE ONE HAND, AND
THE TRUSTEE AND/OR THE HOLDERS OF THE NOTES, ON THE OTHER HAND.
17.16 Effectiveness. This Pledge Agreement shall become
effective upon the effectiveness of the Indenture.
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IN WITNESS WHEREOF, the Pledgor and the Trustee have each
caused this Pledge Agreement to be duly executed and delivered as of the date
first above written.
Pledgor:
FACILICOM INTERNATIONAL, INC.
By:
----------------------------------------
Name:
Title:
Trustee:
STATE STREET BANK AND TRUST COMPANY,
as Trustee
By:
----------------------------------------
Name:
Title:
STATE STREET BANK AND TRUST
COMPANY,
as Securities Intermediary, for purposes
of Section 16 only
By:
----------------------------------------
Name:
Title:
30
SCHEDULE I
PLEDGED SECURITIES
Description Original Cost at
of Debt CUSIP No(s). Final Maturity Principal Amount Closing Date
------- ------------ -------------- ---------------- ------------
Treasury Note 000000X00 7/15/98 14,206,000.00 14,446,925.77
Treasury Note 000000X00 1/15/99 14,792,000.00 14,986,023.33
Treasury Note 912627F98 7/15/99 15,263,000.00 15,535,970.28
Treasury Strip 00000XXX0 1/15/00 15,750,000.00 14,223,403.06
Treasury Strip 00000XXX0 7/15/00 15,750,000.00 13,857,246.27
Treasury Strip 00000XXX0 1/15/01 15,750,000.00 13,499,857.98
I-1
