STOCK PLEDGE AGREEMENT
This STOCK PLEDGE AGREEMENT dated as of April 7, 1997 (the
"Agreement"), by and between Xxxxxxx X. Xxxxxx, an individual having an address
at _____ (the "Pledgor"), and ATC Communications Group, Inc., a Delaware
corporation, having an address of 0000 Xxxxxxxxx Xxxx, Xxxxx 0000, Xxxxxx, Xxxxx
00000 (together with all successors and assigns, the "Lender"):
W I T N E S S E T H:
WHEREAS, Pledgor has borrowed $3,661,505.39 from Lender (the "Loan")
evidenced by a Promissory Note dated September 16, 1997 made by Pledgor and
payable to Lender in the principal amount of $3,661,505.39 (the "Note"), as
amended by that certain Letter Agreement dated as of the date hereof; and
WHEREAS, the Pledgor has agreed to pledge the Pledged Stock (as
defined in Section 1(a) of this Agreement) to Lender as collateral security for
the repayment of the Loan, all upon the terms and subject to the conditions
hereinafter set forth;
NOW, THEREFORE, in consideration of the mutual covenants and
agreements set forth herein, and for other good and valuable consideration, the
receipt and sufficiency whereof are hereby acknowledged, the parties hereby
agree as follows:
Section 1. GRANT OF SECURITY INTERESTS. The Pledgor hereby
pledges, assigns, transfers and delivers to Lender a continuing security
interest in all shares of Common Stock, par value $.01 per share, of Lender
("Lender Common Stock") which the Pledgor owns now or over which the Pledgor in
the future obtains legal or beneficial ownership, including without limitation
all shares of Lender Common Stock received by the Pledgor upon the exercise of
options to acquire shares of Lender Common Stock which have been granted to the
Pledgor on or prior to the date hereof or which may be granted to Pledgor in the
future, together with the proceeds thereof and any other property or money held
hereunder or any part thereof (collectively, the "Pledged Stock"), all upon the
terms and subject to the conditions set forth herein. The Pledged Stock shall
constitute security for the timely and full payment of all amounts due and
payable under the Loan.
Section 2. PLEDGED STOCK DELIVERY AND DOCUMENTATION. Upon the
acquisition by the Pledgor of any Pledged Stock, the Pledgor shall promptly
deliver to
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Lender the original certificates representing the Pledged Stock, endorsed in
blank (which endorsement shall be undated) or with an undated stock
assignment power endorsed in blank.
Section 3. FURTHER ASSURANCES. The Pledgor agrees to do such
further acts and things and to execute and deliver such additional documentation
as Lender from time to time may reasonably request in connection with the
administration or enforcement of this Agreement, or to perfect Lender's security
interest in the additional collateral that constitutes Pledged Stock under this
Agreement, whether related to the Pledged Stock or any part thereof, to
evidence, confirm, perfect or protect any security interest granted or required
to have been granted hereunder or in order better to assure and confirm unto
Lender its rights, powers and remedies hereunder.
Section 4. REPRESENTATIONS AND WARRANTIES. To induce the Lender
to enter into this Agreement, the Pledgor represents and warrants to the Lender
that:
(a) the execution, delivery and performance by him of this
Agreement (i) will not violate or be in conflict with any applicable law
(including, without limitation, any applicable federal or state securities or
similar law) and (ii) will not violate, be in conflict with, result in a breach
of or constitute, with the giving of notice, the passage of time, or both, a
default under any material indenture, agreement or other instrument to which he
is a party or by which he or any of his properties or assets is or may be bound
or subject;
(b) this Agreement constitutes the legal, valid and binding
obligation of the Pledgor, enforceable against the Pledgor in accordance with
its terms;
(c) none of the Pledged Stock is now, or will be in the future,
subject to any security interest, lien or other encumbrance or any adverse claim
of any kind or nature whatsoever, except for the security interest granted
hereunder to Lender, and any assignee of all or any portion of the Pledged Stock
is entitled to receive payments with respect thereto without any defense,
counterclaim, set-off, abatement, reduction, recoupment or other claim of any
kind or nature whatsoever;
(d) there are no actions, suits or proceedings (whether or not
purportedly on behalf of the Pledgor) pending or threatened against the Pledgor
and related to the Pledge Stock or the Pledgor's equity interest therein;
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(e) all consents or approvals, if any, required as a condition
precedent to or in connection with the due and valid execution and delivery by
the Pledgor of this Agreement have been obtained;
(f) the Pledged Stock will only be transferrable under an
effective registration statement under the Securities Act of 1933, as amended,
in compliance with Rule 144 of the rules and regulations under such Act, or
pursuant to any other applicable exception under such Act;
(g) the Pledgor is not engaged principally in, nor has as one of
his important activities, the business of extending credit for the purpose of
purchasing or carrying any "margin stock" (within the meaning of Regulations G,
T, U and X of the Board of Governors of the Federal Reserve System of the United
States of America, as amended to the date hereof) and, if requested by Lender,
the Pledgor will furnish to Lender a statement on Federal Reserve Form U-1; and
(h) no part of the proceeds of the Loan were used, whether
directly or indirectly, and whether incidentally or ultimately, (i) to purchase
or to carry margin stock or to extend credit to others for the purpose of
purchasing or carrying margin stock, or to refund indebtedness originally
incurred for such purposes, or (ii) for any purpose which violates or is
inconsistent with the provisions of Regulations G, T, U and X of the Board of
Governors of the Federal Reserve System.
Section 5. COVENANTS. The Pledgor covenants and agrees that, from
the date hereof and until payment and performance in full of all amounts due
under the Loan, the Pledgor shall not sell, transfer or otherwise dispose or
agree to dispose of (other than by operation of law, as in the case of Pledgor's
death) all or any portion of the Pledged Stock, without first obtaining the
written consent of Lender to such sale, transfer or disposition; shall not
further pledge, assign or deliver a security interest in the Pledged Stock, or
amend, modify, supplement or waive any provisions of the Pledged Stock; and
shall not suffer or permit any lien or encumbrance to be created upon or with
respect to any of the Pledged Stock, except for the security interest granted
hereunder to Lender.
Section 6. LITIGATION RESPECTING PLEDGED STOCK. In the event any
action, suit or other proceeding at law, in equity, in arbitration or before any
other authority relating to the Pledgor, the Pledged Stock, or the Pledgor's
equity interest therein is contemplated by the Pledgor or is otherwise
commenced, the Pledgor shall give the Lender immediate notice thereof and shall
furnish Lender with such indemnity as may reasonably be requested by Lender.
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Section 7. RIGHTS AND DUTIES OF THE PLEDGOR WITH RESPECT TO THE
PLEDGED STOCK. Subject to the provisions of this Agreement and unless there
shall have occurred an Event of Default pursuant to the Note:
(a) The Pledgor shall be entitled to exercise any and all
voting, waiver or consensual rights and powers relating or pertaining to the
Pledged Stock or any part thereof for any purpose not inconsistent with the
terms of this Agreement.
(b) The Pledgor shall be entitled to receive and retain any and
all cash dividends payable on the Pledged Stock, but any and all stock or
liquidating dividends or other distributions of cash or other assets or
properties made on, in respect of, upon, in redemption of, in exchange for or in
payment of principal of the Pledged Stock (whether resulting from a subdivision,
combination or reclassification of the outstanding capital stock or any issuer
thereof, any merger, consolidation, acquisition or other exchange of assets or
securities to which any such issuer may be a party, any conversion, call or
redemption, or otherwise) shall be and become part of the Pledged Stock pledged
under this Agreement, and, if received by the Pledgor, shall be delivered
immediately to the Lender or its designee (accompanied by the documentation
required under this Agreement) to be held as Pledged Stock pursuant to this
Agreement.
(c) The Lender shall execute and deliver (or cause to be
executed and delivered) to the Pledgor all such proxies, powers of attorney,
dividend orders, interest coupons and other instruments as the Pledgor may
reasonably request for the purpose of enabling the Pledgor to exercise the
voting or consensual rights and powers that it is entitled to exercise pursuant
to subsection (a) of this Section 7 and to receive the dividends and interest
payments that it is authorized to receive and retain pursuant to subsection (b)
of this Section 7.
Section 8. RIGHTS OF LENDER TO THE PLEDGED STOCK.
(a) In the event of an occurrence of an Event of Default under
the Note, the Lender in its sole and absolute discretion may take any or more of
the following actions:
(i) further notify all parties, if any, interested in any
of the Pledged Stock of the interest of the Lender therein and of any
action proposed to be taken with respect thereto, and inform any of those
parties that all payments otherwise payable to the Pledgor with respect
thereto shall be made to the Lender until all amounts due under the Loan
have been paid in full;
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(ii) receive and retain all payments of any kind with
respect to any and all of the Pledged Stock;
(iii) take such action with respect to the sale, assignment
and delivery of the whole of, or from time to time anyone or more items
of, the Pledged Stock, including, without limitation, to sell, assign and
deliver the whole of, or from time to time any part of, the Pledged Stock
at any private sale or at public auction, for cash, for credit or for other
property, for immediate or future delivery, and for such price or prices
and on such terms as the Lender in its sole and absolute discretion may
determine, and the Lender may bid for and purchase the whole or any portion
of the Pledged Stock so sold free from any right or equity of redemption;
to adjourn any such sale or cause the same to be adjourned at the time and
place fixed for the sale; and to carry out any agreement to sell all or
any portion of the Pledged Stock in accordance with the terms of such
agreement, any requirement of reasonable notice imposed by law to be
deemed met if such notice is in writing and is mailed, telegraphed or
hand delivered to the Pledgor at least three days prior to the sale,
disposition or other event giving rise to such notice requirement;
(iv) otherwise use or deal from time to time with the
Pledged Stock, in whole or in part, in all respects as if the Lender were
the outright owner thereof; and
(v) in addition to, and not by way of limitation of, any of
the rights specified above, exercise any and all rights and remedies
afforded to the Lender as a secured party in possession of collateral or
otherwise, under any and all provisions of applicable law, including, but
not limited to, the Uniform Commercial Code as adopted by the State of
Texas.
(b) The Lender shall collect the cash proceeds received from any
sale or other disposition or from any other source contemplated by subsection
(a) of this Section 8 and shall apply the full proceeds in accordance with the
provisions of this Agreement.
(c) If all amounts due and payable under the Note have not been
repaid to Lender on or prior to March 31, 1999, Pledgor, upon the written
request of Lender (which written request may be delivered any time after March
31, 1999), shall exercise all options to purchase shares of Lender Common Stock
which (i) have vested as of the date of such written request and (ii) have an
exercise price per share which is lower than the market price per share on the
date of such written request; PROVIDED, HOWEVER,
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that any such exercise of a stock option shall only be required only to the
extent that terms of the relevant option agreement or related stock option
plan permit the "cashless exercise" of such stock option. All shares of
Lender Common Stock received upon any such exercise of a stock option shall
be delivered to Lender in accordance with the provisions of this Agreement.
(d) Notwithstanding the foregoing, none of the provisions of
this Section 8 shall confer on the Lender any rights or privileges that are not
permissible under applicable law.
(e) In connection with the provisions of this Agreement, the
Pledgor from time to time shall promptly execute and deliver, or cause to be
executed and delivered, to the Lender such reasonable documents and instruments,
shall join in such notices and shall take, or cause to be taken, such other
reasonable and lawful action as the Lender shall deem necessary or desirable to
enable it to exercise any of the rights with respect to the Pledged Stock
granted to it pursuant to this Agreement.
Section 9. APPLICATION OF FUNDS. In the event that an Event of
Default has occurred under the Note and all amounts due thereunder have not been
paid in full by the Pledgor, any funds received from or on behalf of the Pledgor
under this Agreement by the Lender shall be applied to the following items:
(a) to payment of all amounts due under the Loan; and
(b) to return any remainder to the Pledgor.
Section 10. POWER OF ATTORNEY. With respect to the Pledged Stock
that the Lender or its designee holds hereunder, the Pledgor hereby irrevocably
makes, constitutes and appoints, effective upon the occurrence of an Event of
Default under the Note and all amounts due thereunder being declared due and
payable and not being paid by the Pledgor, the Lender and each of the Lender's
officers and each of them, with full power of substitution, as the Pledgor's
true and lawful attorneys-in-fact with full power, from time to time, in the
Pledgor's name, place and stead, subject to Section 8 hereof, to (a) transfer
the Pledged Stock on the books of Lender, in whole or in part, to the name of
the Lender or such other person or persons as the Lender may designate; (b) take
possession of an endorse any one or more checks, drafts, bills of exchange,
money orders or any other documents received on account of the Pledged Stock;
(c) collect, xxx for and give acquittances for monies due on account of the
foregoing; (d) withdraw any claims, suites or proceedings pertaining to or
arising out of the foregoing; (e) execute and record or file on behalf of the
Pledgor any evidence of a security interest contemplated by this
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Agreement or any refiling, continuation or extension thereof; (f) take any
other action contemplated by this Agreement; and (g) sign, execute,
acknowledge, swear to, verify, deliver, file, record and publish any one or
more of the foregoing. This power of attorney is hereby declared to be
irrevocable, with full power of substitution and coupled with interest. This
power of attorney shall survive the bankruptcy of the Pledgor and shall
extend to and be binding upon the Pledgor's successors or assigns. This
power of attorney may be exercised by any one of the above named
attorneys-in-fact, or by an substitute designated by any of those
attorneys-in-fact. A facsimile signature shall be effective if so affixed.
Section 11. TERMINATION OF SECURITY INTEREST. The security
interest of the Lender hereunder shall terminate when all amounts due and
payable under the Loan shall have been fully paid and satisfied. Upon such
complete satisfaction Lender shall reassign, release and/or deliver to the
Pledgor all Pledged Stock then held by the Lender.
Section 12. NOTICES. All notices, certificates or other
communications permitted or required to be given hereunder shall be sufficiently
given and shall be deemed given when delivered or when mailed by registered or
certified mail, postage prepaid to the addressee thereof at their respective
addresses as set forth below or at such other address as either party hereto may
designate to the other party hereto by notice given in accordance with this
Section 12.
If to the Pledgor: Xxxxxxx X. Xxxxxx
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If to the Lender: ATC Communications Group, Inc.
0000 Xxxxxxxxx Xxxx
Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attn: Chief Financial Officer
Section 13. SECTION HEADINGS; DEFINITIONS. The Section headings
contained in this Agreement are for reference purposes only and shall not affect
the meaning or interpretation of this Agreement.
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Section 14. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of Texas and applicable
federal law, without regard to principles of conflict of laws.
Section 15. SEVERABILITY. In the event that any provision of this
Agreement shall be determined to be superseded, invalid or otherwise
unenforceable pursuant to applicable law, such determination shall not affect
the validity of the balance of this Agreement, and the remaining provisions of
this Agreement shall be enforced as if the invalid provisions were deleted.
Section 16. SURVIVAL OF REPRESENTATIONS, ETC. All representations,
warranties, covenants and other agreements made herein shall survive the
execution and delivery of this Agreement and shall continue in full force and
effect until all amounts due and payable under the Loan shall have been paid in
full. This Agreement shall remain and continue in full force and effect without
regard to any modification, extension, renewal, amendment or waiver of any
provision of the Note.
Section 17. COUNTERPARTS. This Agreement may be executed in two or
more counterparts, each of which shall be an original and all of which shall
constitute but one and the same instrument.
Section 18. SUCCESSORS AND ASSIGNS. Whenever in this Agreement
reference is made to any party, such reference shall be deemed to include the
successors and assigns of that part, and, without limiting the generality of the
foregoing, all covenants, agreements, representations and warranties made by or
on behalf of the Pledgor in this Agreement shall inure to the successors and
assigns of the Lender; provided, however, that nothing herein shall be deemed to
authorize or permit the Pledgor to assign any of his rights or obligations
hereunder to any other person or entity and the Pledgor agrees that he shall not
make any such assignment.
Section 19. NO WAIVER BY INACTION, ETC. Any waiver or consent
respecting any covenant, representation, warranty or other term or provision of
this Agreement shall be effective only in the specified instance and for the
specific purpose for which given and shall not be deemed regardless of frequency
given, to be a further or continuing waiver or consent. The failure or delay of
the Lender at any time or times to require performance of, or to exercise its
rights with respect to any representation, warranty, covenant or other term or
provision of this Agreement in no manner shall affect its right at a later time
to enforce any such provision. No notice to or demand on a party in any case
shall entitle such party to any other or further notice or demand in the same,
similar or other circumstances.
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Section 20. MODIFICATION, AMENDMENT, ETC. Each and every
modification and amendment of this Agreement shall be in writing and signed by
the parties hereto and each and every waiver of, and consent to any departure
from, any covenant, representation, warranty or other provision of this
Agreement shall be in writing and signed by the party adversely affected by such
waiver or consent.
Section 21. ENTIRE AGREEMENT. This Agreement contains the entire
agreement of the parties and supersedes all other representations, agreements
and understandings, oral or otherwise, between the parties with respect to the
matters contained herein.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed as of the date first written above.
PLEDGOR:
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Xxxxxxx X. Xxxxxx
LENDER:
ATC Communications Group, Inc.
By:
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Title:
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