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PLEDGE AGREEMENT
(SECURITIES)
Pledgor: SA Telecommunications, Inc.
Address: 0000 Xxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxxxx, Xxxxx 00000
Date: February 12, 1997
THIS PLEDGE AGREEMENT ("Pledge Agreement"), dated the above
date, is entered into at between GREYROCK BUSINESS CREDIT, a
Division of NationsCredit Commercial Corporation ("GBC"), whose
address is 00000 Xxxxxxxx Xxxxxxxxx, Xxxxx 000, Xxx Xxxxxxx, XX
00000, and the pledgor named above ("Pledgor"), whose address is
set forth above.
1. PLEDGE OF SECURITIES. Pledgor shall concurrently deliver to
GBC the stock certificates and other securities listed on Exhibit
A hereto, together with duly executed instruments of assignment
thereof to GBC (which, together with all replacements and
substitutions therefor are hereinafter referred to as the
"Securities"). Pledgor hereby pledges to GBC and grants GBC a
security interest in the Securities, and all rights and remedies
relating to, or arising out of, any and all of the foregoing, and
all proceeds thereof (collectively, the "Collateral") to secure
the payment and performance of all "Obligations" (collectively,
the "Obligations"), as defined in the Loan and Security Agreement
between GBC and Pledgor and others dated December 26, 1996, and
all extensions and renewals and modifications thereof (the "Loan
Agreement"). Any and all stock dividends, rights, warrants,
options, puts, calls, conversion rights and other securities and
any and all property and money distributed or delivered with
respect to the Securities or issued upon the exercise of any
puts, calls, conversion rights, options, warrants or other rights
included in or pertaining to the Securities shall be included in
the term "Securities" as used herein and shall be subject to this
Pledge Agreement, and Pledgor shall deliver the same to GBC
immediately upon receipt thereof together with any necessary
instruments of transfer; provided, however, that until an Event
of Default (as hereinafter defined) shall occur, Pledgor may
retain any dividends paid in cash or its equivalent, with respect
to any stock included in the Securities and any interest paid
with respect to any bonds, debentures or other evidences of
indebtedness included in the Securities. Pledgor hereby
acknowledges that the acceptance of the pledge of the Securities
by GBC shall not constitute a commitment of any kind by GBC to
permit Pledgor to incur Obligations.
2. VOTING AND OTHER RIGHTS. Pledgor shall have the right
to exercise all voting rights with respect to the Securities,
provided no Event of Default (as hereinafter defined) has
occurred. Upon the occurrence * of any Event of Default, GBC
shall have the right (but not any obligation) to exercise all
voting rights with respect to the Securities. Provided no Event
of Default has occurred, Pledgor shall have the right to exercise
all puts, calls, straddles, conversion rights, options, warrants,
and other rights and remedies with respect to the Securities,
provided Pledgor obtains the prior written consent of GBC
thereto. GBC shall have no responsibility or liability
whatsoever for the exercise of, or failure to exercise, any puts,
calls, straddles, conversion rights, options, warrants, rights to
vote or consent, or other rights with respect to any of the
Securities. **, GBC shall have the right from time to time to
transfer all or any part of the Securities to GBC's own name or
the name of its nominee.
*and during the continuance
**Upon the occurrence and during the continuance of an Event
of Default
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Greyrock Business Credit Pledge Agreement
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3.REPRESENTATIONS AND WARRANTIES. Pledgor hereby represents
and warrants to GBC that Pledgor now has, and throughout the term
of this Agreement will at all times have, good title to the
Securities and the other Collateral, free and clear of any and
all security interests, liens and claims of any kind whatsoever.
0.XXXXXX OF DEFAULT. If any one or more of the following
events shall occur, any such event shall constitute an Event of
Default and Pledgor shall provide GBC with immediate notice
thereof: (a) Any warranty, representation, statement, report or
certificate made or delivered to GBC by Pledgor or any of
Pledgor's officers, employees or agents now or hereafter is
incorrect, false, untrue or misleading in any material respect;
or (b) Pledgor shall fail to promptly pay or perform when due
part or all of any of the Obligations, or any default or event of
default shall occur under the Loan Agreement or any other present
or future instrument, document or agreement between GBC and
Pledgor.
5.REMEDIES. If an Event of Default shall occur, Pledgor shall
give immediate written notice thereof to GBC. Upon the
occurrence * of an Event of Default, and at any time thereafter,
GBC shall have the right, without notice to or demand upon
Pledgor, to exercise any one or more of the following remedies:
(a) accelerate and declare all or any part of the Obligations to
be immediately due, payable and performable, notwithstanding any
deferred or installment payments allowed by any agreement or
instrument evidencing or relating to any of the same; (b) sell or
otherwise dispose of the Securities, and other Collateral, at a
public or private sale, for cash, or other property, or on
credit, with the authority to adjourn or postpone any such sale
from time to time without notice other than oral announcement at
the time scheduled for sale. GBC may directly or through any
affiliate purchase the Securities, and other Collateral, at any
such public disposition, and if permissible under applicable law,
at any private disposition. Pledgor and GBC hereby agree that it
shall conclusively be deemed commercially reasonable for GBC, in
connection with any sale or disposition of the Securities, to
impose restrictions and conditions as to the investment intent of
a purchaser or bidder, the ability of a purchaser or bidder to
bear the economic risk of an investment in the Securities, the
knowledge and experience in business and financial matters of a
purchaser or bidder, the access of a purchaser or bidder to
information concerning the issuer of the Securities, as well as
legend conditions and stop transfer instructions restricting
subsequent transfer of the Securities, and any other restrictions
or conditions which GBC believes to be necessary or advisable in
order to comply with any state or federal securities or other
laws. Pledgor acknowledges that the foregoing restrictions may
result in fewer proceeds being received upon such sale then would
otherwise be the case. Pledgor hereby agrees to provide to GBC
any and all information ** required by GBC in connection with any
sales of Securities by GBC hereunder. If, after the occurrence
of any Event of Default, Rule 144 promulgated by the Securities
and Exchange Commission (or any other similar rule) is available
for use by GBC in connection with the sales of any Securities
hereunder, Pledgor agrees not to utilize Rule 144 in the sale of
any securities held by Pledgor of the same class as the
Securities, without the prior written consent of GBC. Any and
all attorneys' fees, expenses, costs, liabilities and obligations
incurred by GBC in connection with the foregoing shall be added
to and become a part of the Obligations and shall be due from
Pledgor to GBC upon demand.
*and during the continuance of
**reasonably
6. REMEDIES, CUMULATIVE; NO WAIVER. The failure of GBC to
enforce any of the provisions of this Agreement at any time or
for any period of time shall not be construed to be a waiver of
any such provision or the right thereafter to enforce the same.
All remedies hereunder shall be cumulative and shall be in
addition to all rights, powers and remedies given to GBC by law.
7. TERM. This Agreement and GBC's rights hereunder shall
continue in full force and effect until all of the Obligations
have been fully paid, performed and discharged and the Loan
Agreement and all other agreements between Borrower and GBC have
terminated. Upon termination, GBC shall * return the Collateral
to Pledgor, with any necessary instruments of transfer.
*promptly
8. REVIVOR. If any payment made on any of the Obligations
shall for any reason be required to be returned by GBC, whether
on the ground that such payment constituted a preference or for
any other reason, then for purposes of this Agreement, and
notwithstanding any prior termination of this Agreement, such
payment shall be treated as not having been made, and this
Agreement shall in all respects be effective with respect to the
Obligations as though such payment had not been made; and if any
of the Collateral has been released or returned to Pledgor, then
Pledgor shall return such Collateral to GBC, to be held and dealt
with in accordance with the terms of this Agreement.
9. GENERAL PROVISIONS. This Agreement and the documents
referred to herein are the entire and only agreements between
Pledgor and GBC with respect to the subject matter hereof, and
all representations, warranties, agreements, or undertakings
heretofore or
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contemporaneously made, with respect to the subject matter
hereof, which are not set forth herein or therein, are superseded
hereby. The terms and provisions hereof may not be waived,
altered, modified, or amended except in a writing executed by
Pledgor and GBC. All rights, benefits and privileges hereunder
shall inure to the benefit of and be enforceable by GBC and its
successors and assigns and shall be binding upon Pledgor and its
successors and assigns; provided that Pledgor may not transfer
any of its rights hereunder without the prior written consent of
GBC. Paragraph headings are used herein for convenience only.
Pledgor acknowledges that the same may not describe completely
the subject matter of the applicable paragraph, and the same
shall not be used in any manner to construe, limit, define or
interpret any term or provision hereof. Pledgor shall upon
demand reimburse GBC for all reasonable costs, fees and expenses
(including without limitation * attorneys' fees, whether or not
suit be brought), which are incurred by GBC in connection with,
or arising out of, this Agreement. This Agreement and all acts
and transactions pursuant hereto and the rights and obligations
of the parties hereto shall be governed, construed, and
interpreted in accordance with the internal laws (and not
conflict of laws rules) of the State of California. Pledgor
hereby agrees that all actions or proceedings relating directly
or indirectly hereto may, at the option of GBC, be litigated in
courts located within said State, and Pledgor hereby expressly
consents to the jurisdiction of any such court and consents to
the service of process in any such action or proceeding by
personal delivery or by certified or registered mailing directed
to Pledgor at its last address known to GBC.
*reasonable
10. MUTUAL WAIVER OF RIGHT TO JURY TRIAL. GBC AND PLEDGOR
EACH HEREBY WAIVE THE RIGHT TO TRIAL BY JURY IN ANY ACTION OR
PROCEEDING BASED UPON, ARISING OUT OF, OR IN ANY WAY RELATING TO:
(i) THIS AGREEMENT; OR (ii) ANY OTHER PRESENT OR FUTURE
INSTRUMENT OR AGREEMENT BETWEEN GBC AND PLEDGOR; OR (iii) ANY
CONDUCT, ACTS OR OMISSIONS OF GBC OR PLEDGOR OR ANY OF THEIR
DIRECTORS, OFFICERS, EMPLOYEES, AGENTS, ATTORNEYS OR ANY OTHER
PERSONS AFFILIATED WITH GBC OR PLEDGOR; IN EACH OF THE FOREGOING
CASES, WHETHER SOUNDING IN CONTRACT OR TORT OR OTHERWISE.
PLEDGOR:
SA TELECOMMUNICATIONS, INC.
By /s/ J. Xxxxx Xxxxxxx
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Title Vice President - Finance
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GBC:
GREYROCK BUSINESS CREDIT
Division of NationsCredit Commercial Corporation
By /s/ Xxx Xxxxxxxx
---------------------------
Title Managing Director and COO
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Exhibit A
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500,000 shares of the Common Stock of
ADDTEL COMMUNICATIONS, INC.
which Pledgor represents and warrants represent 100% of the
issued and outstanding stock of said corporation. Pledgor shall
at all times during the term of this Agreement cause said stock
to continue to represent 100% of the issued and outstanding stock
of said corporation.
