AMENDED AND RESTATED
STOCK PLEDGE AGREEMENT
Between
GOLD & ▇▇▇▇▇ TRANSFER, S.A.,
REVISION LLC,
FOUNDATION FOR THE INTERNATIONAL
NON-GOVERNMENTAL DEVELOPMENT OF SPACE, and
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
as Pledgors,
and
▇▇▇▇▇▇ ▇. ▇▇▇▇▇,
as Pledgee
Dated as of October 20, 2000
TABLE OF CONTENTS
Page
SECTION 1. CERTAIN DEFINITIONS.................................... 1
SECTION 2. SECURITY FOR OBLIGATIONS............................... 4
SECTION 3. PLEDGE OF SHARES, ETC.................................. 4
SECTION 4. REPRESENTATIONS AND WARRANTIES......................... 5
SECTION 5. VOTING RIGHTS, DIVIDENDS AND OTHER DISTRIBUTIONS, ETC.. 6
5.1 Prior to Default or Event of Default.......................... 6
5.2 After Default or Event of Default............................. 6
SECTION 6. COVENANTS OF THE PLEDGORS.............................. 7
6.1 Sale of Collateral, Etc....................................... 7
6.2 Delivery of Stock Certificates, Etc........................... 7
6.3 Other Distributions........................................... 8
6.4 Records; Inspection........................................... 8
6.5 Costs, Expenses and Certain Taxes............................. 8
6.6 Priority of Security Interest; Further Assurances............. 9
6.7 Registration of Covista Pledged Stock......................... 9
6.8 Registration of Capsule Pledged Stock; Delivery of
Certificates Representing Startec Stock Upon Consummation
of Proposed Merger Transaction; Covenant Not to
Sell Startec Stock........................................... 10
6.9 Post-Closing Conditions...................................... 12
SECTION 7. RIGHTS OF THE PLEDGEE................................. 13
7.1 No Obligations or Liability to Pledgors...................... 13
7.2 Right of Pledgee to Perform Pledgor's Covenants, Etc......... 13
7.3 Right of Pledgee to Demand Additional Pledged Shares......... 14
7.4 Release of the Pledge and Security Interest Created Hereby... 14
7.5 Partial Release of Pledged Shares Under Certain Circumstances 14
SECTION 8. REMEDIES AND ENFORCEMENT.............................. 15
8.1 Remedies in Case of an Event of Default...................... 15
8.2 Application of Proceeds Following an Event of Default........ 16
8.3 Purchase of Collateral by Pledgee............................ 17
8.4 Purchaser to Acquire Good Title.............................. 17
8.5 Sale of Pledged Stock Without Registration................... 17
8.6 Appointment as Attorney-in-Fact.............................. 18
8.7 No Waiver; Cumulative Remedies............................... 18
8.8 Restoration of Rights and Remedies........................... 18
SECTION 9. PLEDGOR'S OBLIGATIONS NOT AFFECTED.................... 19
SECTION 10. MISCELLANEOUS........................................ 19
10.1 Amendments, Etc............................................. 19
10.2 Pledgee to be Bound by Stock Restriction Agreements and Voting
Agreements.................................................. 19
10.3 Survival of Agreements, Representations and Warranties...... 19
10.4 Successors and Assigns...................................... 20
10.5 Entire Agreement............................................ 20
10.6 Severability................................................ 20
10.7 WAIVER OF JURY TRIAL........................................ 20
10.8 Agreement May Constitute Financing Statement................ 20
10.9 Miscellaneous............................................... 20
10.10 GOVERNING LAW............................................... 20
10.11 Notices, Etc................................................ 21
10.12 Submission to Jurisdiction; Waiver of Immunity; Agent for
Service of Process.......................................... 21
AMENDED AND RESTATED STOCK PLEDGE AGREEMENT, dated as of October 20,
2000, by and among Gold & ▇▇▇▇▇ Transfer, S.A., a corporation organized and
existing under the laws of the British Virgin Islands ("Gold & ▇▇▇▇▇"),
Revision LLC, a limited liability company organized and existing under the
laws of the State of Delaware ("Revision"), Foundation for the International
Non-governmental Development of Space, a corporation organized and existing
under the laws of the State of Delaware ("FINDS"), and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, an
individual ("▇▇▇▇▇▇▇▇") (each of Gold & ▇▇▇▇▇, Revision, FINDS and ▇▇▇▇▇▇▇▇
individually, a "Pledgor," and collectively, the "Pledgors"), and ▇▇▇▇▇▇ ▇.
▇▇▇▇▇, an individual (the "Pledgee").
R E C I T A L S
A. Pursuant to the Note, the Pledgee loaned to Gold & ▇▇▇▇▇, Revision
and ▇▇▇▇▇▇▇▇ (the "Borrowers") the aggregate principal amount of $13 million.
B. As a condition to the obligation of the Pledgee to make such loan,
the Pledgors pledged certain shares of capital stock of Covista to the Pledgee
as security for the performance of the obligations of the Borrowers under the
Note pursuant to that certain Stock Pledge Agreement (the "Existing Pledge
Agreement"), dated as of August 7, 2000, by and among Gold & ▇▇▇▇▇, Revision,
FINDS and ▇▇▇▇▇▇▇▇, as pledgors, and the Pledgee, as pledgee.
C. As a result of a decrease in the Market Price of Covista shares,
Gold & ▇▇▇▇▇ has agreed to pledge certain shares of capital stock of Capsule
to the Pledgee as additional security for the performance of the obligations
of the Borrowers under the Note.
D. Gold & ▇▇▇▇▇ is the legal and beneficial owner of 5,671,300 shares
of common stock of Capsule, which it is willing to pledge as security for the
performance of the obligations of the Borrowers under the Note, subject to and
in accordance with the terms and conditions set forth herein.
NOW, THEREFORE, to induce the Pledgee to refrain from exercising the
rights it may have resulting from a Default or Event of Default under the
Existing Pledge Agreement, and for other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, Pledgors hereby agree
with the Pledgee, and amend and restate the Existing Pledge Agreement in its
entirety, as follows:
SECTION 1. CERTAIN DEFINITIONS.
The following capitalized terms are used herein with the respective
meanings set forth below.
Borrowers: the meaning given in the recitals to this Agreement.
Capsule: Capsule Communications Inc., a Delaware corporation.
Capsule Pledged Stock: the shares of common stock of Capsule
constituting a portion of the Pledged Stock.
Combined Market Value: at any point in time, the sum of the Pledged
Share Market Values for each type (as identified by the issuer and class
thereof) of stock previously pledged to the Pledgee and held at such time by
the Pledgee pursuant to such pledge.
Collateral: the meaning given in the first paragraph of Section 3.
Covista: Covista Communications, Inc., a New Jersey corporation
(formerly known as Total-Tel USA Communication, Inc.).
Covista Pledged Stock: the shares of common stock of Covista
constituting a portion of the Pledged Stock.
Default: shall have the meaning ascribed to such term in the Note.
Demanded Shares: the meaning given in Section 7.3.
Event of Default: shall have the meaning ascribed to such term in the
Note.
Existing Pledge Agreement: the meaning given in the recitals to this
Agreement.
Existing Pledged Shares: a total of 1,883,261 Shares of Covista, owned of
record and beneficially by one or more of the Pledgors, as more specifically
set forth on Exhibit A attached hereto.
Lien: shall have the meaning ascribed to such term in the Note.
Market Price: at any point in time, the last reported sale price of the
shares of common stock of Covista, Capsule or another entity, as applicable,
on The Nasdaq Stock Market (or other market or exchange on which such
securities are traded) on the preceding business day or, if there were no
reported sales of such shares on The Nasdaq Stock Market (or such other market
or exchange) on the immediately preceding business day, on the most recent
business day on which there were such sales.
Merger Agreement: the meaning given in Section 6.8(a).
Newly Pledged Shares: a total of 5,671,300 Shares of Capsule, owned of
record and beneficially by one or more of the Pledgors, as more specifically
set forth on Exhibit A attached hereto.
Note: the Note, dated August 7, 2000, entered into by Gold & ▇▇▇▇▇,
Revision and ▇▇▇▇▇▇▇▇, jointly and severally, in favor of Pledgee.
Person: natural persons, corporations, limited partnerships, general
partnerships, joint stock companies, joint ventures, associations, companies,
trusts, banks, trust companies, land trusts, business trusts or other
organizations, whether or not legal entities, and governments and agencies and
political subdivisions thereof.
Pledged Share Market Value: at any point in time, with respect to a
particular type (as identified by the issuer and class thereof) of stock
previously pledged to the Pledgee, the product of (i) the total number of
shares of such stock previously pledged to the Pledgee pursuant to this
Agreement and held at such time by the Pledgee pursuant to such pledge and
(ii) the Market Price of such stock.
Pledged Stock: the Shares and all other securities constituting part of
the Collateral and any securities issued or issuable with respect to the
Pledged Stock by way of dividend, stock split, conversion, exchange, in a
merger, recapitalization, consolidation, contribution or otherwise.
Proposed Merger Transaction: the proposed transaction between Startec, a
subsidiary of Startec and Capsule, pursuant to which Capsule would become a
wholly owned subsidiary of Startec and all outstanding capital stock of
Capsule would be exchanged for shares Startec Stock.
Secured Obligations: the meaning given in Section 2.
SEC: the meaning given in Section 6.7.
Securities Act: the meaning given in Section 6.7.
Shares: 1,883,261 shares of common stock of Covista, par value $0.05 per
share, owned of record and beneficially by one or more of the Pledgors, and
5,671,300 shares of common stock of Capsule, par value $0.001 per share, owned
of record and beneficially by one or more of the Pledgors, in each case as
more specifically identified on Exhibit A attached hereto. In addition, the
term "Shares" shall include any Demanded Shares and any securities issued or
issuable with respect to the Shares or Demanded Shares by way of dividend,
stock split, conversion, exchange, in a merger, recapitalization,
consolidation, contribution or otherwise (including, without limitation, all
shares of Startec Stock issued in exchange for shares of Capsule Pledged
Stock).
Specified Release Certificates: the meaning given in Section 7.5.
Startec: Startec Global Communications Corporation, a Delaware
corporation.
Startec Stock: shares of common stock of Startec, par value $0.01 per
share.
Stock Restriction Agreements: the meaning given in Section 6.8(c).
UCC: the Uniform Commercial Code of the State of New York.
SECTION 2. SECURITY FOR OBLIGATIONS.
This Agreement is entered into:
(a) to secure the full and timely payment by Pledgors of (i) all
amounts the payment of which is required by Pledgors under the Note,
including, without limitation, the principal of and interest on the Note
(including, without limitation, interest accruing after the date of any
filing by any Pledgor of any petition in bankruptcy or the commencement
of any bankruptcy, insolvency or similar proceeding with respect to any
Pledgor) as and when the same become due and payable in accordance with
the terms thereof, whether at maturity or by prepayment, acceleration,
declaration of default or otherwise, and (ii) all other indebtedness and
other amounts payable by the Pledgors hereunder or under the Note, and
(b) to secure the due and punctual performance by Pledgors of (i)
all obligations of the Pledgors under the Note and (ii) all other
obligations of Pledgors hereunder.
(all of the payment and performance obligations referred to in this Section 2
being referred to collectively as the "Secured Obligations").
SECTION 3. PLEDGE OF SHARES, ETC.
As security for the prompt payment and performance of the Secured
Obligations when due (whether at stated maturity, by acceleration or
otherwise), Pledgors hereby convey, assign, grant, hypothecate, mortgage,
pledge, transfer and deliver to the Pledgee a lien and charge upon, and a
security interest in, all the following property, whether now owned or
hereafter acquired and whether now or in the future existing and wherever
located (collectively, the "Collateral"):
(a) the Shares;
(b) all dividends, instruments, cash and other property or
rights of any kind at any time received, receivable or otherwise
distributed or distributable with respect to any of the foregoing;
(c) all certificates or other writings representing or
evidencing any of the foregoing;
(d) all proceeds of any of the property described in clauses (a)
through (c) above; and
(e) all books, correspondence, credit files, electronic data,
records, invoices and other papers and documents relating to any of the
foregoing.
SECTION 4. REPRESENTATIONS AND WARRANTIES.
Each Pledgor represents and warrants to the Pledgee, as of the date of
this Agreement and at the time of each pledge of Shares pursuant to this
Agreement, as follows:
(a) With respect to each of the Shares, including, without
limitation, each of the Existing Pledged Shares, Newly Pledged Shares
and Demanded Shares, Gold & ▇▇▇▇▇ or Revision or FINDS is (or, at the
time of the pledge of such Shares to the Pledgee, will be) the record
and beneficial owner of such Shares, free and clear of any Lien except
for the Lien created by this Agreement (or by the Existing Pledge
Agreement). No effective financing statement or other instrument of
similar effect covering all or any part of the Collateral is on file in
any recording office, except such as may have been filed in favor of the
Pledgee relating to this Agreement.
(b) The Shares have been duly and validly issued and are fully
paid and nonassessable.
(c) Upon delivery to the Pledgee of the certificates evidencing
the Newly Pledged Shares and, if applicable, the Demanded Shares or any
other additional Shares delivered to the Pledgee pursuant hereto, the
security interest granted pursuant to this Agreement will constitute a
valid perfected first priority security interest in such Shares,
enforceable as such against all creditors of each Pledgor and any
Persons purporting to purchase any of such Shares from any Pledgor. The
security interest granted pursuant to this Agreement constitutes a valid
perfected first priority security interest in the Existing Pledged
Shares, enforceable as such against all creditors of each Pledgor and
any Persons purporting to purchase any of such Shares from any Pledgor.
(d) Gold & ▇▇▇▇▇ is a corporation duly organized, validly
existing and in good standing under the laws of the British Virgin
Islands and has all requisite corporate power and authority to enter
into and carry out the terms of this Agreement and the Note. Revision
is a limited liability company duly organized, validly existing and in
good standing under the laws of the State of Delaware and has all
requisite limited liability company power and authority to enter into
and carry out the terms of this Agreement and the Note. FINDS is a not-
for-profit corporation duly organized, validly existing and in good
standing under the laws of Delaware and has all requisite corporate
power and authority to enter into and carry out the terms of this
Agreement.
(e) The execution, delivery and performance of this Agreement
and the Note will not result in any violation of or be in conflict with
or constitute a default under any term of any Pledgor's certificate of
incorporation or by-laws (or similar constitutive documents) or any
agreement or instrument to which any Pledgor is a party or by which any
Pledgor is bound or any term of any applicable law, ordinance, rule or
regulation of any governmental authority or any term of any applicable
order, judgment or decree of any court, arbitrator or governmental
authority.
(f) No consent, approval or authorization of, or declaration or
filing with, any governmental authority or regulatory body is required
for the valid execution, delivery and performance of this Agreement and
the Note.
(g) This Agreement and the Note have been duly authorized,
executed and delivered by each Pledgor and constitute each Pledgor's
legal, valid and binding obligation, enforceable against such Pledgor in
accordance with its terms, except to the extent that such enforcement
may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium and similar laws of general application relating to or
affecting the rights and remedies of creditors, and by general equitable
principles.
SECTION 5. VOTING RIGHTS, DIVIDENDS AND OTHER DISTRIBUTIONS, ETC.
5.1 Prior to Default or Event of Default. So long as no Default or
Event of Default has occurred and is continuing, Pledgors will remain entitled
to exercise any and all voting and other consensual rights pertaining to the
Pledged Stock and to receive and use cash dividends, in either case for any
purpose not inconsistent with the terms of this Agreement or the Note.
5.2 After Default or Event of Default. For so long as a Default or an
Event of Default is continuing, (i) no Pledgor may exercise any voting or
other consensual rights pertaining to the Pledged Stock without the prior
written consent of the Pledgee, (ii) the right, if any, of any Pledgor to
receive cash dividends in respect of the Pledged Stock will cease and all such
dividends must be paid directly to the Pledgee (or if received by any Pledgor
will be deemed held in trust by such Pledgor for the benefit of, and must be
turned over immediately by such Pledgor to, the Pledgee) and thereafter will
be held and disposed of by the Pledgee as part of the Collateral, and (iii) if
the Pledgee has notified the Pledgors that it elects to exercise the Pledgee's
right to exercise voting and other consensual rights hereunder, all rights of
each Pledgor to exercise the voting and other consensual rights which such
Pledgor would otherwise be entitled to exercise pursuant to Section 5.1 will
cease, all such rights will thereupon become vested in the Pledgee, who during
the continuance of such Default or Event of Default will have (directly or
through its nominee) the sole right to exercise such voting and other
consensual rights, including, without limitation, (A) all voting, corporate
and other rights pertaining to any of the Pledged Stock, (B) all rights to
give consents, waivers and ratifications in respect thereof and (C) any and
all rights of conversion, exchange, subscription and any other rights,
privileges or options pertaining to any of the Pledged Stock as if it were the
absolute owner thereof, and in connection therewith, the right to deposit and
deliver any and all of the Pledged Stock with any committee, depositary,
transfer agent, registrar or other designated agency upon such terms and
conditions as it may determine, all without liability except to account for
property actually received by it (each Pledgor hereby irrevocably constituting
and appointing the Pledgee the proxy and attorney-in-fact of such Pledgor,
with full power of substitution, to do or take any of the above actions). The
Pledgee will have no duty to Pledgors to exercise any such right, privilege or
option and will not be responsible for any failure to do so or delay in so
doing. In order to permit the Pledgee to exercise the voting and other
consensual rights which it may be entitled to exercise pursuant to this
Section 5.2, and to receive all dividends and distributions which it may be
entitled to receive under this Section 5.2, each Pledgor will, upon written
notice from the Pledgee, from time to time execute and deliver to the Pledgee
appropriate proxies, dividend payment orders and other instruments as the
Pledgee may reasonably request.
SECTION 6. COVENANTS OF THE PLEDGORS.
6.1 Sale of Collateral, Etc. No Pledgor will (i) sell, assign,
transfer, convey, or otherwise dispose of, or grant any option with respect
to, any of the Collateral, or (ii) create or permit to exist any Lien upon or
with respect to any of the Collateral, except for the lien and security
interest created by this Agreement.
6.2 Delivery of Stock Certificates, Etc. (a) Gold & ▇▇▇▇▇ will
immediately deliver to the Pledgee all certificates or other writings
representing or evidencing any of the Newly Pledged Shares, either in suitable
form for transfer by delivery, or issued in the name of Gold & ▇▇▇▇▇ and
accompanied by stock powers or other appropriate instruments of transfer or
assignment, duly executed by Gold & ▇▇▇▇▇ in blank and undated, and in either
case having attached thereto all requisite federal or state stock transfer tax
stamps, all in form and substance satisfactory to the Pledgee. Each of the
Pledgors will immediately deliver to the Pledgee all certificates or other
writings representing or evidencing any other "securities" or "instruments"
(as such terms are defined in the UCC) included in the Collateral at any time
acquired or received by any Pledgor, directly or indirectly (including,
without limitation, certificates representing the shares of Startec Stock that
are issued in exchange for shares of Capsule Pledged Stock), either in
suitable form for transfer by delivery, or issued in the name of a Pledgor and
accompanied by stock powers or other appropriate instruments of transfer or
assignment, duly executed by the relevant Pledgor in blank and undated, and in
either case having attached thereto all requisite federal or state stock
transfer tax stamps, all in form and substance satisfactory to the Pledgee.
(b) Within 10 business days after the date of a demand by the Pledgee for
Demanded Shares, the Pledgors will deliver to the Pledgee all certificates or
other writings representing or evidencing such Demanded Shares, either in
suitable form for transfer by delivery, or issued in the name of a Pledgor and
accompanied by stock powers or other appropriate instruments of transfer or
assignment, duly executed by the relevant Pledgor in blank and undated, and in
either case having attached thereto all requisite federal or state stock
transfer tax stamps, all in form and substance satisfactory to the Pledgee.
6.3 Other Distributions. Except for cash dividends permitted to be paid
to Pledgors pursuant to Section 5.1, Pledgors will cause all dividends and
distributions of any kind on the Pledged Stock (including any sums paid upon
or in respect of the Pledged Stock upon the liquidation or dissolution of
Covista or Capsule or Startec or upon the recapitalization or reclassification
of the capital of Covista or Capsule or Startec or upon the reorganization of
Covista or Capsule or Startec) to be paid directly to the Pledgee (and if any
such dividends or distributions are received by any Pledgor, such Pledgor will
hold them in trust for the benefit of, and will immediately turn them over to,
the Pledgee) and the Pledgee will hold and dispose of all such dividends and
distributions as part of the Collateral.
6.4 Records; Inspection. Each Pledgor will keep full and accurate books
and records relating to the Collateral, and stamp or otherwise ▇▇▇▇ such books
and records in such manner as is required in order to reflect the pledge and
security interest granted pursuant hereto. Each Pledgor will permit
representatives of the Pledgee at any time upon reasonable advance notice to
inspect and make abstracts from its books and records pertaining to the
Collateral and to discuss matters relating to the Collateral with officers of
each Pledgor that is a corporation or other entity and with each Pledgor that
is an individual.
6.5 Costs, Expenses and Certain Taxes. Pledgors (a) will pay to the
Pledgee from time to time on demand any and all costs and expenses, including
reasonable attorneys' fees and expenses, paid or incurred by or on behalf of
the Pledgee in connection with this Agreement, the Existing Pledge Agreement
or the Note or in connection with any modification, amendment, alteration or
enforcement of this Agreement, the Existing Pledge Agreement or the Note or
the collection of any amount payable by any Pledgor hereunder or under the
Existing Pledge Agreement or the Note, whether or not any legal proceeding is
commenced hereunder or thereunder and whether or not any Default or Event of
Default has occurred and is continuing, and (b) will jointly and severally
indemnify the Pledgee on demand against any loss, liability or expense
incurred by the Pledgee (other than any such loss, liability or expense
directly attributable to gross negligence or willful misconduct of the
Pledgee) arising out of or in connection with any action or omission of the
Pledgee hereunder or under the Existing Pledge Agreement or the Note,
including the costs and expenses of defending itself against any claim or
liability (including any claim by any Pledgor) in connection with the exercise
or performance of any of its powers or duties hereunder or thereunder. All
amounts payable to the Pledgee under this Section accrue interest until paid
in full at the rate of 18% per annum, from the date of demand therefor. All
such amounts shall constitute additional indebtedness of the Pledgors secured
hereunder and shall be payable on demand. Pledgors will also pay, and will
hold the Pledgee harmless from, any and all liabilities with respect to, or
resulting from any delay in paying, any and all stamps, excise, sales or other
taxes or assessments which may be payable or determined to be payable with
respect to any of the Collateral or in connection with any of the transactions
contemplated by this Agreement or the Existing Pledge Agreement or the Note.
All expenses incident to the Pledgors' and Covista's performance of or
compliance with Section 6.7, and all expenses incident to the Pledgors' and
Capsule's performance of or compliance with Section 6.8, including, without
limitation, all registration and filing fees, all fees and expenses of
complying with securities or blue sky laws, National Association of Securities
Dealers' fees, all printing expenses, the fees and disbursements of counsel
for the Covista or Capsule and of their respective independent public
accountants, and the expenses of any special audits made by such accountants
required by or incident to such performance and compliance, shall be paid by
the Pledgors; provided, however, that Covista agrees that it will complete the
registrations, qualifications and compliance required pursuant to Section 6.7
even if it does not receive payment or reimbursement of such expenses from the
Pledgors and Capsule agrees that, if registration of Capsule Pledged Stock is
required pursuant to this Agreement, it will complete the registrations,
qualifications and compliance required pursuant to Section 6.8(a) even if it
does not receive payment or reimbursement of such expenses from the Pledgors.
6.6 Priority of Security Interest; Further Assurances. (a) Each Pledgor
will at all times cause the security interest granted pursuant to this
Agreement to constitute a valid perfected first priority security interest in
the Collateral, enforceable as such against all creditors of such Pledgor and
any Persons purporting to purchase any Collateral from such Pledgor.
(b) Each Pledgor will at any time and from time to time, at its own
expense, promptly execute and deliver all further instruments and documents,
and take all further actions, as may be necessary or desirable, or that the
Pledgee may reasonably request, in order to (i) grant more effectively a
security interest in favor of the Pledgee in all or any portion of the
Collateral, (ii) maintain, preserve, or perfect the security interest and lien
created or purported to be created by this Agreement and the first priority
status of such security interest and lien, (iii) preserve and defend against
any Person such Pledgor's title to the Collateral and the rights purported to
be granted therein by this Agreement, (iv) enable the Pledgee to exercise and
enforce its rights and remedies hereunder, or (v) carry out more effectively
the purposes of this Agreement. If the issuer of Pledged Stock is
incorporated in a jurisdiction which does not permit the use of certificates
to evidence equity ownership of such Pledged Stock or permit a lien in favor
of the Pledgee to be perfected by the possession by the Pledgee of the
certificates representing such Pledged Stock, then the Pledgors will to the
extent permitted by applicable law, record such lien on the stock register of
such issuer, execute any customary stock pledge forms or other documents
necessary to create, evidence or provide for the perfection of such lien and
give the Pledgee the right to transfer such Pledged Stock under the terms
hereof and provide to the Pledgee an opinion of counsel of such jurisdiction,
in form and substance satisfactory to it, confirming the effectiveness,
perfection and priority of such lien.
6.7 Registration of Covista Pledged Stock. Pledgors, as soon as
practicable and at their sole cost and expense, will procure (and Covista
agrees) that registration and other qualification of the Covista Pledged Stock
under Federal and state securities laws shall be effected by Covista (and kept
continuously effective in compliance with such laws for up to one year after
the Maturity Date as set forth in the Note) so as to permit or facilitate the
sale and distribution of such securities, including, without limitation,
"shelf" registration under the U.S. Securities Act of 1933, as amended (the
"Securities Act"), appropriate qualifications under applicable "blue sky" or
other state securities laws and appropriate compliance with any other
governmental requirements. The Pledgors (and Covista) shall ensure that such
registration is declared effective under the Securities Act and all other such
qualifications and compliance are completed prior to the Maturity Date as set
forth in the Note. Pledgors shall cause Covista to agree (and Covista agrees)
to list the Covista Pledged Stock on the Nasdaq Stock Market. Pledgors will
cause the Pledgee to be kept advised in writing as to the progress of each
such registration, qualification or compliance and as to the completion
thereof, will give the Pledgee, any underwriter and their counsel reasonable
opportunity to review and comment on the registration statement and other
documents incident thereto, to conduct due diligence on Covista and to
participate in the process, will furnish to the Pledgee such number of
prospectuses, preliminary prospectuses, prospectus supplements or amendments
or other documents incident thereto as the Pledgee from time to time may
reasonably request, and will indemnify the Pledgee and all others
participating in the distribution of such securities against all claims,
losses, damages and liabilities (or actions in respect thereof) arising out of
or based on any untrue statement (or alleged untrue statement) of a material
fact contained in any prospectus, offering circular or other document
(including any related registration statement, notification or the like)
incident to such registration or by any omission (or alleged omission) to
state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, except (as to the Pledgee) insofar
as the same may have been caused by an untrue statement or omission based upon
information furnished in writing to Pledgor by the Pledgee expressly for use
therein. The registration statement filed with respect to the Covista Pledged
Stock and the prospectus contained therein shall cover only the Covista
Pledged Stock and no other securities. The Pledgors will cause Covista (and
Covista agrees) to comply with all applicable rules and regulations of the
Securities and Exchange Commission (hereinafter called "SEC") or similar
federal commission, and of the Nasdaq Stock Market or any other national
securities exchange on which any of the Covista Pledged Stock is listed, if
any, for so long as the registration is effective, to make available to its
security holders, as soon as practicable, an earnings statement covering a
period of at least 12 months, but not more than 18 months, beginning with the
first month after the effective date of the registration statement, which
earnings statement will satisfy the provisions of Section 11(a) of and Rule
158 under the Securities Act, and to make timely filing of all reports with
the SEC to enable the holders of the Covista Pledged Stock, if they so elect,
to utilize Rule 144 of the Securities Act in disposing of said securities.
Pledgors (and Covista) agree that, at Pledgee's request, Covista shall enter
into an underwriting agreement, which shall include, without limitation,
indemnification and contribution provisions and a "hold-back" or "lock-up"
provision covering at least 90 days and shall otherwise be in form and
substance reasonably satisfactory to Pledgee, with an underwriter for the
Covista Pledged Stock chosen by Pledgee in its sole discretion, and furnish or
cause to be furnished to such underwriter and Pledgee a customary opinion of
counsel and accountant's comfort letter.
6.8 Registration of Capsule Pledged Stock; Delivery of Certificates
Representing Startec Stock Upon Consummation of Proposed Merger Transaction;
Covenant Not to Sell Startec Stock. (a) The remaining provisions of this
Section 6.8(a) shall apply in the event that (i) a definitive Agreement and
Plan of Reorganization relating to the Proposed Merger Transaction (the
"Merger Agreement") is not entered into by November 10, 2000 or (ii) the
Merger Agreement terminates without the Proposed Merger Transaction having
been consummated. Pledgors, as soon as practicable and at their sole cost and
expense, will procure (and Capsule agrees) that registration and other
qualification of the Capsule Pledged Stock under Federal and state securities
laws shall be effected by Capsule (and kept continuously effective in
compliance with such laws for up to one year after the Maturity Date as set
forth in the Note) so as to permit or facilitate the sale and distribution of
such securities, including, without limitation, "shelf" registration under the
Securities Act, appropriate qualifications under applicable "blue sky" or
other state securities laws and appropriate compliance with any other
governmental requirements. The Pledgors (and Capsule) shall ensure that such
registration is declared effective under the Securities Act and all other such
qualifications and compliance are completed prior to the Maturity Date as set
forth in the Note. Pledgors shall cause Capsule to agree (and Capsule agrees)
to list the Capsule Pledged Stock on the Nasdaq Stock Market. Pledgors will
cause the Pledgee to be kept advised in writing as to the progress of each
such registration, qualification or compliance and as to the completion
thereof, will give the Pledgee, any underwriter and their counsel reasonable
opportunity to review and comment on the registration statement and other
documents incident thereto, to conduct due diligence on Capsule and to
participate in the process, will furnish to the Pledgee such number of
prospectuses, preliminary prospectuses, prospectus supplements or amendments
or other documents incident thereto as the Pledgee from time to time may
reasonably request, and will indemnify the Pledgee and all others
participating in the distribution of such securities against all claims,
losses, damages and liabilities (or actions in respect thereof) arising out of
or based on any untrue statement (or alleged untrue statement) of a material
fact contained in any prospectus, offering circular or other document
(including any related registration statement, notification or the like)
incident to such registration or by any omission (or alleged omission) to
state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, except (as to the Pledgee) insofar
as the same may have been caused by an untrue statement or omission based upon
information furnished in writing to Pledgor by the Pledgee expressly for use
therein. The registration statement filed with respect to the Capsule Pledged
Stock and the prospectus contained therein shall cover only the Capsule
Pledged Stock and no other securities. The Pledgors will cause Capsule (and
Capsule agrees) to comply with all applicable rules and regulations of the SEC
or similar federal commission, and of the Nasdaq Stock Market or any other
national securities exchange on which any of the Capsule Pledged Stock is
listed, if any, for so long as the registration is effective, to make
available to its security holders, as soon as practicable, an earnings
statement covering a period of at least 12 months, but not more than 18
months, beginning with the first month after the effective date of the
registration statement, which earnings statement will satisfy the provisions
of Section 11(a) of and Rule 158 under the Securities Act, and to make timely
filing of all reports with the SEC to enable the holders of the Capsule
Pledged Stock, if they so elect, to utilize Rule 144 of the Securities Act in
disposing of said securities. Pledgors (and Capsule) agree that, at Pledgee's
request, Capsule shall enter into an underwriting agreement, which shall
include, without limitation, indemnification and contribution provisions and a
"hold-back" or "lock-up" provision covering at least 90 days and shall
otherwise be in form and substance reasonably satisfactory to Pledgee, with an
underwriter for the Capsule Pledged Stock chosen by Pledgee in its sole
discretion, and furnish or cause to be furnished to such underwriter and
Pledgee a customary opinion of counsel and accountant's comfort letter.
(b) Upon consummation of the Proposed Merger Transaction, the Pledgors
shall immediately deliver to the Pledgee all certificates or other writings
representing or evidencing any shares of common stock of Startec Global
Communications Corporation issued to any Pledgor in exchange for shares of
capital stock of Capsule constituting Capsule Pledged Stock, either in
suitable form for transfer by delivery, or issued in the name of such Pledgor
and accompanied by stock powers or other appropriate instruments of transfer
or assignment, duly executed by such Pledgor in blank and undated, and in
either case having attached thereto all requisite federal or state stock
transfer tax stamps, all in form and substance satisfactory to the Pledgee
and, unless waived in writing by the Pledgee, accompanied by an opinion or
opinions of counsel to the pledgor of such shares of common stock of Startec
Global Communications Corporation in form and substance satisfactory to the
Pledgee (which opinion shall indicate, among other things, that upon
expiration of the contractual restriction imposed by the Stock Restriction
Agreement and assuming compliance by the Pledgors with the covenant set forth
in Section 6.8(c) of this Agreement and the existence of circumstances which
permit the Pledgee to sell such shares pursuant to this Agreement, all such
shares of common stock of Startec Global Communications Corporation shall be
freely transferable by the Pledgee without further need for registration or
qualification).
(c) In the event that the Proposed Merger Transaction is consummated,
the Pledgors hereby covenant and agree that Gold & ▇▇▇▇▇ will not sell or
otherwise transfer pursuant to Rule 144 of the Securities Act (or permit the
sale or other transfer pursuant to Rule 144 of the Securities Act of) any
shares of Startec Stock beneficially owned by it until the expiration of the
three-month period following the expiration of the six-month restriction on
sales of Startec capital stock imposed or to be imposed pursuant to the Stock
Restriction Agreements entered into or to be entered into by and among
Startec, Gold & ▇▇▇▇▇ and FINDS (the "Stock Restriction Agreements").
6.9 Post-Closing Conditions. The Pledgors hereby agree to take the
following actions, or to cause Covista, Capsule or other relevant Persons to
take the following actions, by no later than November 17, 2000:
(a) Corporate Proceedings of Pledgors, Covista and Capsule. With
respect to each Pledgor that is a corporation, limited liability company or
similar entity, the Pledgee shall be provided with a copy of the resolutions
(or comparable authorizing document), in form and substance satisfactory to
the Pledgee, of the Board of Directors (or comparable governing body) of each
such Pledgor authorizing and ratifying (i) the execution, delivery and
performance of the Note (if such Pledgor is a Borrower) and this Agreement and
(ii) the granting by it of the Liens created pursuant to this Agreement,
certified by the Secretary or an Assistant Secretary (or comparable officer)
of such Pledgor, which certificate shall be in form and substance reasonably
satisfactory to the Pledgee and shall state that the resolutions thereby
certified have not been amended, modified, revoked or rescinded and were in
effect as of the date of this Agreement. With respect to each of Covista and
Capsule, the Pledgee shall be provided with a copy of the resolutions of the
Board of Directors of such corporation authorizing and ratifying the
execution, delivery and performance of this Agreement to the extent set forth
in this Agreement, certified by the Secretary or Assistant Secretary of such
corporation, which certificate shall be in form and substance reasonably
satisfactory to the Pledgee and shall state that the resolutions thereby
certified have not been amended, modified, revoked or rescinded and were in
effect as of the date of this Agreement.
(b) Incumbency Certificates. The Pledgee shall be provided with a
certificate of Covista, Capsule and each Pledgor that is a corporation,
limited liability company or similar entity as to the incumbency and signature
of the officers of such Pledgor or other entity executing this Agreement
reasonably satisfactory in form and substance to the Pledgee, executed by the
President or any Vice-President (or similar officer) and the Secretary or any
Assistant Secretary (or similar officer) of such Pledgor or other entity.
(c) Signature Guaranties. To the extent that any stock power
provided to the Pledgee on or after the date of this Agreement does not
contain a signature guaranty at the time that it is delivered to the Pledgee,
the Pledgee shall be provided with replacement stock powers containing a
signature guaranteed by a participant of the Securities Transfer Agents
Medallion Program or another approved signature guaranty program acceptable to
the Securities and Exchange Commission, the Securities Transfer Association
and the transfer agent of Covista or Capsule, as applicable.
SECTION 7. RIGHTS OF THE PLEDGEE.
7.1 No Obligations or Liability to Pledgors. The rights and powers of
the Pledgee hereunder are not contingent upon the pursuit by the Pledgee of
any right or remedy against any Pledgor or against any other Person which may
be or become liable in respect of any of the Secured Obligations or against
any other collateral security or guarantee therefor or right of offset with
respect thereto, but are solely to protect its interest in the Collateral.
The Pledgee will not be liable for any failure to demand, collect or realize
upon all or any part of the Collateral or for any delay in doing so, nor is
the Pledgee under any obligation to sell or otherwise dispose of any
Collateral upon the request of any Pledgor or any other Person or to take any
other action whatsoever with regard to the Collateral or any part thereof. No
action or inaction on the part of the Pledgee hereunder or under the Note will
release any Pledgor from any of its obligations hereunder or under the Note,
or constitute an assumption of any such obligations on the part of the
Pledgee, or cause the Pledgee to become subject to any obligation or liability
to any Pledgor. The Pledgee has no obligation to perform any of the
obligations or duties of any Pledgor as a shareholder of Covista or Capsule.
7.2 Right of Pledgee to Perform Pledgor's Covenants, Etc. If any
Pledgor fails to make any payment or to perform any agreement required to be
made or performed hereunder, the Pledgee may (but need not) at any time
thereafter make such payment or perform such act, or otherwise cause such
payment or performance. No such action will create any liability to any
Pledgor on the part of the Pledgee. All amounts so paid by the Pledgee and
all costs and expenses (including, without limitation, attorneys' fees and
expenses) incurred by the Pledgee in any such performance shall accrue
interest from the date paid or disbursed until reimbursed to the Pledgee in
full by or on behalf of the Pledgors at the rate established in Section 6.5.
All such amounts shall constitute additional indebtedness of the Pledgors
secured hereunder and shall be payable on demand.
7.3 Right of Pledgee to Demand Additional Pledged Shares. The Pledgee
shall have the right at any time, at its sole discretion, to demand by written
notice to the Pledgors that the Pledgors pledge to the Pledgee additional
shares of common stock of Capsule, Covista or, if the Proposed Merger
Transaction has been consummated, Startec (or, subject to the approval of the
Pledgee in its sole discretion, shares of common stock of one or more other
entities) owned of record and beneficially by one or more of the Pledgors if,
at such time, the Combined Market Value of all shares of stock previously
pledged to the Pledgee pursuant to this Agreement and held at such time by the
Pledgee is less than $13,000,000. The number of shares that may be demanded
pursuant to the preceding sentence shall, at the time of any such demand, be a
number of shares such that the Combined Market Value, after accounting for
such additional shares, is equal to $13,000,000. All shares at any time
demanded pursuant to the provisions of this Section 7.3 shall be "Demanded
Shares." Unless otherwise agreed in writing by the Pledgee, all Demanded
Shares, to the extent that they would not be freely transferable by the
Pledgee if sold by the Pledgee in a manner consistent with the provisions of
this Agreement, shall be subject to registration requirements equivalent to
those set forth in Section 6.7 of this Agreement with respect to Covista
Pledged Stock. The Pledgee and the Pledgors agree that, except as otherwise
expressly set forth in this Agreement, Pledgee shall at no time be required to
release from the pledge or return to the Pledgors any Collateral.
7.4 Release of the Pledge and Security Interest Created Hereby. Upon
payment in full of the outstanding principal amount of and accrued interest on
the Note in accordance with its terms and payment or satisfaction of all other
Secured Obligations, the Pledgee will, upon the written request of all
Pledgors, return to the Pledgors all Collateral held by the Pledgee.
7.5 Partial Release of Pledged Shares Under Certain Circumstances. In
the event that the Combined Market Value at a particular point in time of all
shares of stock previously pledged to the Pledgee pursuant to this Agreement
(or, if applicable, the Existing Pledge Agreement) and held at such time by
the Pledgee exceeds $15,000,000, and so long as no Default or Event of Default
is continuing at such time, the Pledgors, by a written request executed by
each Pledgor and delivered to the Pledgee, shall have the right to request
that the Pledgee release from the pledge and return to the Pledgors at the
address identified in such notice, certificates representing specified shares
of Pledged Stock previously pledged to the Pledgee and held at such time by
the Pledgee. Such notice shall specify certificates (the "Specified Release
Certificates") representing a number of shares of Pledged Stock such that the
Combined Market Value, after accounting for the release of the Specified
Release Certificates and calculated as of the date of such release, will equal
or exceed $15,000,000; provided that no shares of Covista shall be so released
unless and until all shares of Capsule and all shares of any other entity
previously pledged to the Pledgee and held at such time by the Pledgee have
been released. Within ten business days after its receipt of a valid notice,
in accordance with this paragraph, the Pledgee shall return to the Pledgors at
the address identified in such notice the Specified Release Certificates.
Nothing in this paragraph shall require the Pledgee to release and return the
Specified Release Certificates, or any other shares or certificates in lieu
thereof, if the Combined Market Value, after accounting for the release of the
Specified Release Certificates and calculated as of the date of such release,
would be below $15,000,000.
SECTION 8. REMEDIES AND ENFORCEMENT.
8.1 Remedies in Case of an Event of Default. If an Event of Default has
occurred and is continuing, then in addition to the actions referred to in
Section 5.2 the Pledgee may take any or all of the following actions, without
demand of performance or other demand, advertisement or notice of any kind to
or upon Pledgors or any other Person (except as specified in Section 8.1(b))
all and each of which are hereby expressly waived by Pledgors:
(a) The Pledgee may, in its own name or at its sole option in the
name of any Pledgor, exercise any or all of the rights, powers and privileges
of, and pursue any or all of the remedies accorded to, any Pledgor under the
Collateral and may exclude such Pledgor and all Persons claiming by, through
or under such Pledgor wholly or partly therefrom, including in such rights,
privileges and remedies, but without limitation, all rights of such Pledgor to
demand, receive, ▇▇▇ for, compromise and settle all payments in respect of the
Collateral, and in connection therewith to exercise all rights and remedies
thereunder which such Pledgor could enforce if this Agreement had not been
made.
(b) The Pledgee may forthwith collect, recover, receive, appropriate
and realize upon the Collateral, or any part thereof, and/or may forthwith
sell, assign, give an option or options to purchase, contract to sell or
otherwise dispose of and deliver the Collateral, or any part thereof, in one
or more parcels at public or private sale or sales, at any exchange, broker's
board or at any of the Pledgee's offices or elsewhere upon such terms and
conditions as it may deem advisable and at such prices as it may deem best,
for cash or on credit or for future delivery without assumption of any credit
risk. The Pledgee need not make any sale of Collateral even if notice thereof
has been given, may reject any and all bids that in its commercially
reasonable discretion it shall deem inadequate, and may adjourn any public or
private sale. Pledgors hereby acknowledge that the Collateral is of a type
that could decline speedily in value and is also of a type customarily sold on
a recognized market, in each case within the meaning of Section 9-504 of the
UCC as in effect in any applicable jurisdiction, and that the Pledgee need not
give any notice to Pledgors prior to any sale of the Collateral at any
exchange, broker's board or in any other recognized market. Without limiting
the foregoing, each Pledgor agrees that the Pledgee need not give more than
five days notice of the time and place of any public sale or of the time after
which a private sale or other intended disposition is to take place and that
such notice is reasonable notification of such matters, and waives all other
demands or notices of any kind.
(c) The Pledgee may, as a matter of right and without notice to any
Pledgor or any Person claiming by, through or under any Pledgor, cause the
appointment of a receiver for all or any part of the Collateral.
(d) In addition to all other rights and remedies granted to it in
this Agreement and in any other instrument or agreement securing, evidencing
or relating to any of the Secured Obligations, the Pledgee will have and may
exercise with respect to any or all of the Collateral all of the rights and
remedies of a secured party under the UCC and all other legal and equitable
remedies allowed under applicable law.
Each Pledgor consents to and ratifies any action which the Pledgee may
take to enforce its rights under this Section 8.1. Each Pledgor waives to the
full extent permitted by law the benefit of all appraisement, valuation, stay,
extension, moratorium and redemption laws now or hereafter in force and all
rights of marshaling in the event of the sale of the Collateral or any part
thereof or any interest therein. Each Pledgor will execute and deliver such
documents as the Pledgee deems advisable or necessary in order that any such
sale or disposition be made in compliance with applicable law.
Any sale or other disposition of the Collateral or any part thereof or
interest therein in the exercise of any remedy hereunder will constitute a
perpetual bar against each Pledgor and any Persons claiming by, through or
under any Pledgor. Upon any such sale or other disposition, the receipt of
the officer or agent making the sale or other disposition or of the Pledgee is
a sufficient discharge to the purchaser for the purchase money, and such
purchaser will have no duty to see to the application thereof.
8.2 Application of Proceeds Following an Event of Default. All amounts
held or collected by the Pledgee as part of the Collateral (including, without
limitation, all amounts realized as a result of the exercise of any rights and
remedies hereunder) following the occurrence of any Event of Default will be
applied forthwith by the Pledgee as follows:
FIRST: to the payment of all costs and expenses of such exercise
(including, without limitation, the cost of evidence of title and the costs
and expenses, if any, of taking possession of, retaining custody over and
preserving the Collateral or any part thereof, or any interest therein prior
to such exercise), all costs and expenses of any receiver of the Collateral or
any part thereof, or any interest therein, any taxes, assessments or charges
with respect to any of the Collateral, whether or not prior to the lien of
this Agreement, which the Pledgee may consider it necessary or desirable to
pay and all amounts due and payable to the Pledgee under Section 6.5 and
unpaid;
SECOND: to the payment of the accrued and unpaid interest (including
interest on unpaid principal and, to the extent permitted by applicable law,
unpaid interest) of the Note in accordance with the provisions of the Note;
THIRD: if the Note has not become due and payable in full, to the
payment of all outstanding principal then due and payable on the Note;
FOURTH: if the Note has become due and payable in full whether at
maturity, by prepayment, acceleration, declaration of default or otherwise, to
the payment of the outstanding principal of the Note in accordance with the
provisions of the Note;
FIFTH: to the ratable payment to the Persons entitled thereto of all
other obligations secured hereunder for which moneys have not theretofore been
applied; and
SIXTH: at such time as all of the obligations of the Pledgors under the
Note have been paid in full in cash or in stock in accordance with the terms
of the Note and all other Secured Obligations have been paid or performed to
the satisfaction of the Pledgee, the remainder, if any, will be paid over to
Pledgors, their successors or assigns, or to whomsoever may be lawfully
entitled to receive the same, as determined by a court of competent
jurisdiction.
8.3 Purchase of Collateral by Pledgee. The Pledgee may be a purchaser
of the Collateral or any part thereof or any interest therein at any sale or
other disposition hereunder and may apply against the purchase price the
indebtedness secured hereby.
8.4 Purchaser to Acquire Good Title. Any purchaser of the Collateral at
any sale or other disposition thereof pursuant to this Section 8 will, upon
any such purchase, acquire good title to the Collateral so purchased free of
the lien and security interest created by this Agreement and free of all
rights of equity or redemption in any Pledgor, which rights each Pledgor
hereby expressly waives and releases to the full extent permitted by law, and
each Pledgor will warrant and defend the title of such purchaser against all
claims arising by, through or under the Pledgors. Nevertheless, if so
requested by the Pledgee or any such purchaser, each Pledgor will ratify and
confirm any exercise of remedies by the Pledgee hereunder by executing and
delivering to the Pledgee or such purchaser all bills of sale, assignments,
releases and other proper instruments to effect such ratification and
confirmation as may be designated in any such request. In addition, each
Pledgor will do or cause to be done all such other acts and things as may be
reasonably necessary to make such exercise of remedies valid and binding and
in compliance with any and all applicable laws, regulations, orders, writs,
injunctions, decrees or awards of any and all courts, arbitrators or
governmental instrumentalities, domestic or foreign, having jurisdiction over
any such exercise, all at such Pledgor's expense.
8.5 Sale of Pledged Stock Without Registration. Pledgor recognizes
that, under certain circumstances, (i) the Pledgee may be unable to effect a
public sale of any or all of the Pledged Stock by reason of the Securities Act
and applicable state or foreign securities laws or otherwise, but may be
compelled to resort to one or more private sales thereof to a restricted group
of purchasers who will be obliged to agree, among other things, to acquire
such securities for their own account for investment and not with a view to
the distribution or resale thereof and who otherwise satisfy the requirements
of any such applicable law, and (ii) any such private sale may result in
prices and other terms less favorable to the seller than if such sale were a
public sale. No such sale will be deemed to have been made in a commercially
unreasonable manner for the reason that it was made as a private sale rather
than a public sale, and the Pledgee will be under no obligation to delay a
sale of any of the Pledged Stock for the period of time necessary to permit
the issuer of such securities to register such securities for public sale
under the Securities Act, or under applicable state securities laws, or
otherwise comply with applicable law, even if the issuer would agree or has
agreed to do so and would be able to do so.
8.6 Appointment as Attorney-in-Fact. Each Pledgor hereby irrevocably
constitutes and appoints the Pledgee, with full power of substitution, as such
Pledgor's attorney-in-fact, with full irrevocable power and authority in the
place and stead of such Pledgor and in the name of such Pledgor or otherwise,
from time to time in the Pledgee's discretion, to execute and deliver any and
all bills of sale, assignments or other instruments which the Pledgee may deem
necessary or advisable in its exercise of any of the remedies hereunder, and
to take any other action to accomplish the purposes of this Agreement,
including, without limitation, to ask, demand, collect, ▇▇▇ for, recover,
compound, receive and give acquittance and receipt for moneys due and to
become due under or in connection with the Collateral, to receive, endorse,
and collect any drafts or other instruments, documents and chattel paper in
connection therewith, and to file any claims or take any action or institute
any proceedings which the Pledgee may deem to be necessary or desirable for
the collection thereof, such Pledgor hereby ratifying and confirming all that
such attorney or any substitute may lawfully do by virtue hereof. This power
of attorney is a power coupled with an interest and is irrevocable.
8.7 No Waiver; Cumulative Remedies. No action or inaction of the
Pledgee will be deemed to waive any of the rights, powers or remedies of the
Pledgee hereunder except pursuant to a writing, signed by the Pledgee, and
then only to the extent expressly set forth therein. A waiver by the Pledgee
of any right, power or remedy on any one occasion will not bar the exercise of
any right, power or remedy hereunder on any future occasion. No failure of
the Pledgee to exercise nor delay of the Pledgee in exercising any right,
power or remedy will preclude the exercise of any other right, power or
remedy. If the Pledgee accepts payment of any amount secured hereby after its
due date, it will not thereby be deemed to have waived its right to require
prompt payment when due of all other amounts payable hereunder. Each right,
power and remedy of the Pledgee provided for in this Agreement or now or
hereafter existing at law or equity or by statute or otherwise is cumulative
and concurrent and is in addition to every other such right, power or remedy
of the Pledgee, and the exercise of any one or more of any such rights, powers
or remedies with respect to any of the Collateral will not preclude the
simultaneous or later exercise by the Pledgee of any other right, power or
remedy with respect to any other Collateral.
8.8 Restoration of Rights and Remedies. If the Pledgee has instituted
any proceeding to enforce any right, power or remedy under this Agreement and
such proceeding has been discontinued or abandoned for any reason, with or
without notice to Pledgors, or has been determined adversely to the Pledgee,
then and in every such case Pledgors and the Pledgee will be restored to their
former positions hereunder, and thereafter all rights, powers and remedies of
the Pledgee will continue as though no such proceeding had been instituted.
SECTION 9. PLEDGOR'S OBLIGATIONS NOT AFFECTED.
The covenants and agreements of each Pledgor set forth herein are primary
obligations of such Pledgor. All such obligations are absolute and
unconditional, are not subject to any counterclaim, set-off, deduction,
diminution, abatement, recoupment, suspension, deferment, reduction or defense
(other than full and strict compliance by such Pledgor with its obligations
hereunder) based upon any claim any Pledgor, Covista, Capsule, Startec or any
other Person may have against the Pledgee or any other Person. All such
obligations will remain in full force and effect without regard to, and will
not be released, discharged or in any way affected by, any unenforceability,
invalidity or other infirmity with respect to the Note, or any other
circumstance, condition or occurrence whatsoever, whether foreseeable or
unforeseeable and without regard to whether any Pledgor, Covista, Capsule,
Startec or the Pledgee shall have any knowledge or notice thereof.
SECTION 10. MISCELLANEOUS.
10.1 Amendments, Etc. Any amendment, modification or waiver of any term
or provision of this Agreement must be in writing and signed by the Pledgee.
Any such waiver will be effective only in the specific instance and for the
specific purpose for which it is given.
10.2 Pledgee to be Bound by Stock Restriction Agreements and Voting
Agreements. The Pledgee agrees to execute and be bound by the Stock
Restriction Agreements (as previously defined) and the Voting Agreements
entered into or to be entered into by and among Startec, a subsidiary of
Startec, ▇▇▇▇▇▇▇▇ and Gold & ▇▇▇▇▇, in each case in form and substance
substantially in accordance with drafts of such agreements provided to the
Pledgee prior to the date hereof, to the extent that such agreements (i) place
limitations for specified periods on the transfer of shares of Startec Stock
or shares of Capsule stock, in each case which have been pledged to the
Pledgee, or (ii) require during a specified period that votes cast with
respect to shares of Capsule stock which have been pledged to the Pledgee be
cast in favor of approval of the Merger Agreement and the Proposed Merger
Transaction, in favor of any matter or transaction that is reasonably required
to effect the merger and the other transactions contemplated by the Merger
Agreement, or against any other acquisition proposal or matters which could
reasonably be expected to facilitate any other acquisition proposal.
10.3 Survival of Agreements, Representations and Warranties. All
agreements, representations and warranties contained in this Agreement or the
Note or made in writing by or on behalf of any Pledgor in connection with the
transactions contemplated by this Agreement or the Note will survive the
execution and delivery of this Agreement, any investigation at any time made
by or on behalf of the Pledgee, the purchase of any Note or any payment of any
Note or any disposition of any Note.
10.4 Successors and Assigns. This Agreement is binding upon and will
inure to the benefit of and be enforceable by the respective successors and
assigns of the parties hereto, whether so expressed or not.
10.5 Entire Agreement. This Agreement and the Note embody the entire
agreement and understanding between Pledgors and the Pledgee with respect to
the transaction referred to herein and therein and supersede all prior
agreements and understandings, written or oral, relating to the pledge of
collateral to the Pledgee to secure the obligations of the Pledgors under the
Note.
10.6 Severability. Any provision of this Agreement which is prohibited
or unenforceable in any jurisdiction is, as to such jurisdiction, ineffective
only to the extent made necessary by such prohibition or unenforceability.
Any such prohibition or unenforceability in any jurisdiction will not
invalidate or render unenforceable (i) the remaining provisions hereof or
(ii) such provision in any other jurisdiction. There shall be substituted for
any such provision so rendered ineffective a provision which, as far as
legally possible, most nearly reflects the intent of the parties hereto.
10.7 WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO IRREVOCABLY AND
UNCONDITIONALLY WAIVES THE RIGHT TO TRIAL BY JURY IN ANY LEGAL OR EQUITABLE
ACTION, SUIT OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE
NOTE OR ANY TRANSACTION CONTEMPLATED HEREBY OR THEREBY OR THE SUBJECT MATTER
OF ANY OF THE FOREGOING.
10.8 Agreement May Constitute Financing Statement. Each Pledgor
consents to the filing of this Agreement or a photocopy thereof as a financing
statement under the Uniform Commercial Code as in effect in any jurisdiction
in which the Pledgee may determine such filing to be necessary or desirable.
10.9 Miscellaneous. This Agreement may be executed in any number of
counterparts, each of which is an original, but all of which together
constitute but one instrument. Except as otherwise indicated, references
herein to any "Section" means a "Section" of this Agreement. The table of
contents and the section headings in this Agreement are for purposes of
reference only and shall not limit or define the meaning hereof.
10.10 GOVERNING LAW. THIS AGREEMENT AND (UNLESS OTHERWISE EXPRESSLY
PROVIDED) ALL AMENDMENTS AND SUPPLEMENTS TO, AND ALL CONSENTS AND WAIVERS
PURSUANT TO, THIS AGREEMENT WILL IN ALL RESPECTS BE GOVERNED BY, AND CONSTRUED
AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK
WITHOUT REFERENCE TO PRINCIPLES OF CONFLICTS OF LAW, INCLUDING ALL MATTERS OF
CONSTRUCTION, VALIDITY AND PERFORMANCE.
10.11 Notices, Etc. All notices and other communications provided for
hereunder must be in writing (including telegraphic, telex, telecopy or cable
communication) and must be sent (a) if to any Pledgor, at its address listed
on Exhibit B attached hereto, (b) if to Pledgee, at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇, ▇▇▇▇▇
▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Telephone: ▇▇▇-▇▇▇-▇▇▇▇, Facsimile: ▇▇▇-▇▇▇-▇▇▇▇,
or (c) as to each party, at such other address as shall be designated by such
party in a written notice to the other parties. All such notices and
communications are effective when received.
10.12 Submission to Jurisdiction; Waiver of Immunity; Agent for Service
of Process. For the purpose of assuring that the Pledgee may enforce its
rights under this Agreement, each Pledgor, for itself and its successors and
assigns, hereby irrevocably (a) agrees that any legal or equitable action,
suit or proceeding against any Pledgor arising out of or relating to this
Agreement or any transaction contemplated hereby or the subject matter of any
of the foregoing may be instituted, at the election of the Pledgee, in any
state or federal court in the State of Virginia (including, without
limitation, the U.S. Federal District Court for the Eastern District of
Virginia) or in any state or federal court in the State of Florida, (b) waives
any objection which it may now or hereafter have to the venue of any action,
suit or proceeding, (c) irrevocably submits itself to the nonexclusive
jurisdiction of any state or federal court of competent jurisdiction in the
State of Virginia or the State of Florida, and (d) irrevocably waives any
immunity from jurisdiction to which it might otherwise be entitled in any such
action, suit or proceeding which may be instituted in any state or federal
court of the State of Virginia or the State of Florida, and any immunity from
the maintaining of an action against it to enforce any judgment for money
obtained in any such action, suit or proceeding and, to the extent permitted
by applicable law, any immunity from execution. Each Pledgor acknowledges
that it has irrevocably designated and appointed CT Corporation System (or any
successor corporation), at its office in Virginia and its office in Florida,
as its authorized agent to accept and acknowledge on its behalf service of any
and all process which may be served in any such action, suit or proceeding
with respect to any matter as to which it has submitted to jurisdiction as set
forth in this Section 10.11 and agrees that service upon such authorized agent
shall be deemed in every respect service of process upon such Pledgor or its
successors or assigns, and, to the extent permitted by applicable law, shall
be taken and held to be valid personal service upon it. Each Pledgor will
take all action necessary to ensure that such Pledgor shall at all times have
an agent for service of process for the above purposes in the State of
Virginia and the State of Florida. This Section 10.11 does not affect the
right of the Pledgee to serve process in any other manner permitted by law or
to commence legal proceedings or otherwise proceed against any Pledgor in any
jurisdiction.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered personally or by their representative officers or
agents duly authorized as of the date first above written.
Pledgors:
GOLD & ▇▇▇▇▇ TRANSFER, S.A.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇,
Attorney-in-Fact
REVISION LLC
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
----------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇,
Manager
FOUNDATION FOR THE INTERNATIONAL
NON-GOVERNMENTAL DEVELOPMENT
OF SPACE
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇,
President
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Pledgee:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
/s/▇▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
AGREED AND ACCEPTED (as to Sections 6.5 and 6.7 of the Agreement):
COVISTA COMMUNICATIONS, INC. (formerly known as TOTAL-TEL USA COMMUNICATIONS,
INC.)
By:
--------------------------------
Name:
------------------------------
Title:
------------------------------
AGREED AND ACCEPTED (as to Sections 6.5 and 6.8 of the Agreement):
CAPSULE COMMUNICATIONS INC.
By: ____________________________________
--------------------------------
Name:
Title:
Exhibit A
SHARES:
The Shares consist of:
1,179,732 shares of common stock of Covista owned of record and beneficially
by Revision, and represented in certificated form by stock certificate number
CU0008823 of Covista (the "Revision Shares");
703,529 shares of common stock of Covista owned of record and beneficially by
FINDS, and represented in certificated form by stock certificate number
CU0008825 of Covista (the "FINDS Shares"); and
4,521,300 shares of common stock of Capsule owned of record and beneficially
by Gold & ▇▇▇▇▇ and represented in certificated form by stock certificate
number 3012 of Capsule and 1,150,000 shares of common stock of Capsule owned
of record and beneficially by Gold & ▇▇▇▇▇ and represented in certificated
form by stock certificate number 3010 of Capsule (collectively, the "Gold &
▇▇▇▇▇ Shares").
EXISTING PLEDGED SHARES
The Existing Pledged Shares consist of the Revision Shares and the FINDS
Shares.
NEWLY PLEDGED SHARES
The Newly Pledged Shares consist of the Gold & ▇▇▇▇▇ Shares.
Exhibit B
NOTICE ADDRESSES FOR PLEDGORS
The notice addresses for the respective Pledgors are as follows:
(a) If to Gold & ▇▇▇▇▇:
▇▇▇▇ ▇▇▇▇▇ Building
Wickams Cay
Road Town, Tortolla
British Virgin Islands
with copies to:
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ Berlin Shereff ▇▇▇▇▇▇▇▇, LLP
▇▇▇▇ ▇ ▇▇▇▇▇▇ ▇▇
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇-▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
and
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Revision LLC
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
(b) If to Revision:
Revision LLC
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ Berlin Shereff ▇▇▇▇▇▇▇▇, LLP
▇▇▇▇ ▇ ▇▇▇▇▇▇ ▇▇
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇-▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
(c) If to FINDS:
▇▇▇▇ ▇ ▇▇▇▇▇▇ ▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
with copies to:
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ Berlin Shereff ▇▇▇▇▇▇▇▇, LLP
▇▇▇▇ ▇ ▇▇▇▇▇▇ ▇▇
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇-▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
and
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Revision LLC
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
(d) If to ▇▇▇▇▇▇▇▇:
c/o Revision LLC
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ Berlin Shereff ▇▇▇▇▇▇▇▇, LLP
▇▇▇▇ ▇ ▇▇▇▇▇▇ ▇▇
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇-▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇