Exhibit 10.12
AMENDED AND RESTATED FIBERNET TELECOM PLEDGE AGREEMENT
(LOCAL FIBER)
This AMENDED AND RESTATED SUBSIDIARY PLEDGE AGREEMENT (as amended,
supplemented, amended and restated or otherwise modified from time to time, this
"Pledge Agreement"), is entered into as of February 9, 2001, by FIBERNET
TELECOM, INC., a Delaware corporation (the "Pledgor"), in favor of DEUTSCHE BANK
AG NEW YORK BRANCH, as administrative agent (together with any successor(s)
thereto in such capacity, the "Administrative Agent") for each of the Secured
Parties, and amends and restates in its entirety that certain Subsidiary Pledge
Agreement (as amended prior to the date hereof, the "Original Subsidiary Pledge
Agreement"), dated as of April 11, 2000 between the Pledgor and the
Administrative Agent.
RECITALS
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A. Pursuant to the Amended and Restated Credit Agreement, dated as of
February 9, 2001 (as amended, supplemented, amended and restated or otherwise
modified from time to time, the "Credit Agreement"), among Devnet L.L.C., a
Delaware limited liability company ("Devnet"), FiberNet Operations, Inc., a
Delaware corporation ("FiberNet"), the financial institutions from time to time
parties thereto as lenders (each individually referred to herein as a "Lender"
and, collectively, as the "Lenders"), the ▇▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
(▇▇▇) Securities Inc., as syndication agent for the Lenders, and First Union
Investors, Inc., as documentation agent for the Lenders, the Lenders have
extended commitments to make Loans and to issue Letters of Credit (each as
defined in the Credit Agreement) to, and for the benefit of, the Borrowers;
B. The Pledgor has duly authorized the execution, delivery and
performance of this Pledge Agreement; and
C. It is in the best interest of the Pledgor to execute this Pledge
Agreement as the Pledgor will derive substantial direct and indirect benefits
from the Loans made to the Borrowers, and the Letters of Credit issued for the
benefit of the Borrowers, from time to time pursuant to the Credit Agreement.
AGREEMENT
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NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, and in order to induce the Lenders
to make the Loans and issue the Letters of Credit to or for the benefit of the
Borrowers pursuant to the Credit Agreement and to induce the Secured Parties to
enter into any Interest Rate Agreements, the Pledgor agrees, for the benefit of
each Secured Party, as follows:
ARTICLE I.
DEFINITIONS
Section 1.1 Defined Terms.
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The following terms when used in this Pledge Agreement shall have the
following meanings:
"Administrative Agent" shall have the meaning assigned to such term in the
Preamble.
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"Capital Stock" means any and all shares, interests, participations or
other equivalents (however designated) of capital stock of a corporation, any
and all equivalent ownership interests in a Person other than a corporation
(including partnership interests in a partnership, member interests in a limited
liability company and beneficial interests in a trust), and any and all
warrants, options and other rights to purchase any of the foregoing.
"Credit Agreement" shall have the meaning assigned to such term in the
Recitals.
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"Devnet" shall have the meaning assigned to such term in the Recitals.
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"Distributions" means all stock dividends, liquidating dividends, shares of
stock resulting from (or in connection with the exercise of) stock splits,
reclassifications, warrants, options, non-cash dividends, mergers,
consolidations, and all other distributions (whether similar or dissimilar to
the foregoing) on or with respect to any Pledged Shares or other shares of
Capital Stock constituting Pledged Collateral, but shall not include Dividends
or repurchases of redeemable shares.
"Dividends" means cash dividends and cash distributions with respect to any
Pledged Shares or other Pledged Property which is not a liquidating dividend.
"FiberNet" shall have the meaning assigned to such term in the Recitals.
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"Lender" shall have the meaning assigned to such term in the Recitals.
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"Pledge Agreement" shall have the meaning assigned to such term in the
Preamble.
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"Pledged Collateral" shall have the meaning assigned to such term in
Section 2.1.
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"Pledged Note Issuer" means each Person identified in Item A of Attachment
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1 hereto as the issuer of the Pledged Note identified opposite the name of such
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Person.
"Pledged Notes" means all notes (including, without limitation, promissory
notes and notes evidencing indebtedness of (i) a Subsidiary of the Pledgor to
the Pledgor or any other Subsidiary of the Pledgor, or (ii) the Pledgor to any
of its Subsidiaries) of any Pledged Note Issuer which are required to be
delivered by the Pledgor to the Administrative Agent as Pledged Property
hereunder.
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"Pledged Property" means all Pledged Shares, all Pledged Notes, and all
other pledged shares of Capital Stock or promissory notes, all other securities,
all assignments of any amounts due or to become due, all other instruments which
are now being delivered by the Pledgor to the Administrative Agent or may from
time to time hereafter be delivered by the Pledgor to the Administrative Agent
for the purpose of pledge under this Pledge Agreement or any other Loan
Document, and all proceeds of any of the foregoing.
"Pledged Share Issuer" means each Person identified in Item B of Attachment
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1 hereto as the issuer of the Pledged Shares identified opposite the name of
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such Person.
"Pledged Shares" means all shares or interest of Capital Stock of any
Pledged Share Issuer which are required to be delivered by the Pledgor to the
Administrative Agent as Pledged Property hereunder.
"Pledged Subsidiary" means Local Fiber, L.L.C.
"Pledgor" shall have the meaning assigned to such term in the Preamble.
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"Securities Act" shall have the meaning assigned to such term in Section
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6.2.
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"UCC" shall have the meaning assigned to such term in Section 1.3.
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Section 1.2 Credit Agreement Definitions.
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Unless otherwise defined herein or unless the context otherwise requires,
terms used in this Pledge Agreement, including, without limitation, its preamble
and recitals, have the meanings provided in the Credit Agreement. Nothing in
this Pledge Agreement shall be construed as limiting any of the rights and
remedies under the Credit Agreement, unless expressly set forth herein.
Section 1.3 UCC Definitions.
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Unless otherwise defined herein or in the Credit Agreement or unless the
context otherwise requires, terms for which meanings are provided in the Uniform
Commercial Code of the applicable jurisdiction ("UCC") are used in this Pledge
Agreement, including, without limitation, its preamble and recitals, with such
meanings.
ARTICLE II.
PLEDGE
Section 2.1 Grant of Security Interest.
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As security for the due and punctual payments in full in cash and
performance in full of all Obligations, the Pledgor hereby pledges,
hypothecates, assigns, charges, mortgages, delivers, and transfers to the
Administrative Agent for its benefit and the ratable benefit of each of the
Secured Parties, and hereby grants to the Administrative Agent for its benefit
and the ratable
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benefit of each of the Secured Parties, a continuing security interest in all of
the following property (the "Pledged Collateral"):
(a) all promissory notes of each Pledged Note Issuer identified
in Item A of Attachment I hereto;
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(b) all issued and outstanding shares of Capital Stock of each
Pledged Share Issuer identified in Item B of Attachment 1 hereto;
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(c) all securities, notes, certificates and instruments
representing or evidencing the Pledged Property or the ownership thereof
and any interest of the Pledgor reflected in the books of any financial
intermediary pertaining to the Pledged Property or of any Pledged Share
Issuer thereof and all non-cash dividends, cash, options, warrants, stock
splits, reclassifications, rights, instruments or other investment property
and other property or proceeds from time to time received, receivable or
otherwise distributed in respect of or in exchange for any or all of the
Pledged Property;
(d) all additional Capital Stock of any Pledged Share Issuer
from time to time held or acquired by the Pledgor in any manner (which
shares shall be deemed to be part of the Pledged Property), and all
securities, certificates and instruments representing or evidencing such
additional Capital Stock or the ownership thereof and any interest of the
Pledgor reflected in the books of any financial intermediary pertaining to
such additional Capital Stock or of the Pledged Share Issuer thereof, and
all non-cash dividends, cash, options, warrants, rights, instruments and
other property or proceeds from time to time received, receivable or
otherwise distributed in respect of or in exchange for any or all of such
Capital Stock;
(e) all other Pledged Property, whether now or hereafter
delivered to the Administrative Agent in connection with this Pledge
Agreement;
(f) all Dividends, Distributions, interest and other payments;
(g) all other options, warrants and rights to subscribe for or
purchase voting or nonvoting Capital Stock of any Pledged Share Issuer and
any present or future notes, bonds, debentures or other evidences of
indebtedness owned by the Pledgor that (i) are at any time convertible into
Capital Stock of any Pledged Share Issuer, or (ii) have or at any time
would have voting rights with respect to any Pledged Share Issuer;
(h) all voting rights in respect of the Pledged Property; and
(i) all proceeds of any of the foregoing.
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Section 2.2 Delivery of Pledged Property.
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All certificates or instruments representing or evidencing any Pledged
Collateral, including, without limitation, all Pledged Shares and all Pledged
Notes, shall be delivered to and held by or on behalf of and, in the case of the
Pledged Notes, endorsed to the order of the Administrative Agent or its designee
pursuant hereto, shall be in suitable form for transfer by delivery, and shall
be accompanied by all necessary instruments of transfer or assignment, duly
executed in blank.
Section 2.3 Continuing Security Interest; Transfer of Note.
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This Pledge Agreement shall create a continuing security interest in
the Pledged Collateral and shall
(a) remain in full force and effect until payment in
full in cash of all Obligations,
(b) be binding upon the Pledgor and its successors,
transferees and assigns, and
(c) inure, together with the rights and remedies of the
Administrative Agent hereunder, to the benefit of the
Administrative Agent.
Without limiting the foregoing clause (c), any Lender may assign or otherwise
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transfer (in whole or in part) any Note, Loan or Commitment held by it to any
other Person or entity as permitted by, and in accordance with the terms of, the
Credit Agreement, and such other Person or entity shall thereupon become vested
with all the rights and benefits in respect thereof granted to such Lender under
any Loan Document (including, without limitation, this Pledge Agreement) or
otherwise.
Section 2.4 Security Interest Absolute.
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All rights of the Administrative Agent and the security interests
granted to the Administrative Agent hereunder, and all obligations of the
Pledgor hereunder, shall be absolute and unconditional irrespective of :
(a) any lack of validity, legality or enforceability of
the Credit Agreement, any Note, or any other Loan Document or any
Interest Rate Agreement;
(b) the failure of any Secured Party or any holder of
any Note
(i) to assert any claim or demand or to enforce any
right or remedy against any Borrower, any other member of
the Borrower Group or any other Person (including any
other pledgor) under the provisions of
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the Credit Agreement, any Note, any other Loan Document, any
Interest Rate Agreement or otherwise, or
(ii) to exercise any right or remedy against any other
pledgor of, or collateral securing, any of the Obligations;
(c) any change in the time, manner or place of payment of, or in
any other term of, all or any of the Obligations, or any other
extension or renewal of any Obligation any Borrower or any other
member of the Borrower Group;
(d) any reduction, limitation, impairment or termination of any
of the Obligations for any reason other than the written agreement of
the Secured Parties to terminate the Obligations in full, including
any claim of waiver, release, surrender, alteration or compromise, and
shall not be subject to, and the Pledgor hereby waives any right to or
claim of, any defense or setoff, counterclaim, recoupment or
termination whatsoever by reason of the invalidity, illegality,
nongenuineness, irregularity, compromise, unenforceability of, or any
other event or occurrence affecting, any Obligations of any Borrower,
any other member of the Borrower Group or otherwise;
(e) any amendment to, rescission, waiver, or other modification
of, or any consent to departure from, any of the terms of the Credit
Agreement, any Note, any other Loan Document or any Interest Rate
Agreement;
(f) any addition, exchange, release, surrender or non-perfection
of any collateral, or any amendment to or waiver or release or
addition of, or consent to departure from, any other pledgor held by
any Secured Party or any holder of any Note securing any of the
Obligations; or
(g) any other circumstance which might otherwise constitute a
defense available to, or a legal or equitable discharge of, any
Borrower, any other member of the Borrower Group, any surety or any
pledgor.
Section 2.5 Postponement of Subrogation.
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The Pledgor agrees that it will not exercise any rights which it may
acquire by way of rights of subrogation under this Pledge, by any payment made
hereunder or otherwise, until the prior payment in full in cash of all of the
Obligations, the termination of all Interest Rate Agreements to which any
Secured Party is a party, the termination or expiration of all Letters of Credit
and the termination of all Commitments. Any amount paid to the Pledgor on
account of any such subrogation rights prior to the payment in full in cash of
all of the Obligations shall be held in trust for the benefit of the Secured
Parties and each holder of a Note and shall immediately be paid to the
Administrative Agent for the benefit of the Secured Parties and each holder of a
Note and credited and applied against the Obligations of the Borrowers and each
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other member of the Borrower Group, whether matured or unmatured, in such order
as the Administrative Agent shall elect; provided, however, that if
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(a) the Pledgor has made payment to the Secured Parties and
each holder of a Note of all or any part of the Obligations, and
(b) all Obligations have been paid in full in cash, all
Interest Rate Agreements to which any Secured Party is a party have
been terminated, all Letters of Credit have expired or been terminated
and all Commitments have been permanently terminated,
then, at the Pledgor's request, the Administrative Agent, on behalf of the
Secured Parties and the holders of the Notes, will execute and deliver to the
Pledgor appropriate documents (without recourse and without representation or
warranty) necessary to evidence the transfer by subrogation to the Pledgor of an
interest in the Obligations resulting from such payment by the Pledgor. In
furtherance of the foregoing, for so long as any Obligations, Letters of Credit
or Commitments remain outstanding, the Pledgor shall refrain from taking any
action or commencing any proceeding against any Borrower or any other member of
the Borrower Group (or any of its or their successors or assigns, whether in
connection with a bankruptcy proceeding or otherwise) to recover any amounts in
respect of payments made under this Pledge to any Secured Party or any holder of
a Note, except that the Pledgor may file a proof of claim in a bankruptcy
proceeding with respect to any Borrower or any other member of the Borrower
Group in connection with any obligations owed by such member to the Pledgor in
the event that the Administrative Agent has failed to file a proof of claim on
the Pledgor's behalf by the second business day before the due date for such
filing.
ARTICLE III.
REPRESENTATIONS AND WARRANTIES
The Pledgor represents and warrants to the Administrative Agent for the
benefit of the Administrative Agent as set forth in this Article.
Section 3.1 Ownership, No Liens, Etc.
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The Pledgor is the legal and beneficial owner of, and has good and
marketable title to (and has full right and authority to pledge and assign), the
Pledged Collateral, free and clear of all Liens except Permitted Liens.
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Section 3.2 Valid Security Interest.
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The execution and delivery of this Pledge Agreement, together with the
delivery of all Pledged Shares and all Pledged Notes to the Administrative
Agent, is effective to create a valid, perfected, first priority security
interest in such Pledged Collateral, securing payment of the Obligations.
Possession by the Administrative Agent of the Pledged Shares and the proceeds
thereof is the only action necessary to perfect or protect such security
interest in the Pledged Shares and the proceeds thereof under the UCC, subject
to Section 9-306 of the UCC.
Section 3.3 As to Pledged Shares.
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The Pledged Shares are duly authorized and validly issued, fully paid, and
non-assessable, and constitute all of the issued and outstanding shares of
Capital Stock of each Pledged Share Issuer, except as otherwise described on
Schedule 4.1.D to the Credit Agreement.
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Section 3.4 As to Pledged Notes.
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Each Pledged Note has been duly authorized, executed, endorsed, issued and
delivered, and is the legal, valid and binding obligation of the issuer thereof,
and such issuer is not in default thereunder.
Section 3.5 Authorization, Approval, etc.
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No authorization, approval, or other action by, and no notice to or filing
with, any governmental authority, regulatory body or any other Person is
required either
(a) for the pledge by the Pledgor of any Pledged Collateral
pursuant to this Pledge Agreement or for the execution, delivery, and
performance of this Pledge Agreement by the Pledgor, or
(b) except as set forth in Schedule 3.5 hereto, for the
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exercise by the Administrative Agent of the voting or other rights provided
for in this Pledge Agreement.
Section 3.6 Application of Representations and Warranties.
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It is understood and agreed that the foregoing representations and
warranties shall apply only to the Pledged Collateral delivered on the date
hereof and that, with respect to Pledged Collateral delivered thereafter, the
Pledgor shall be required to make representations and warranties in form and
substance substantially similar to the foregoing in supplements hereto and that
such representations and warranties contained in such supplements hereto shall
be applicable to such Pledged Collateral hereafter delivered.
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ARTICLE IV.
COVENANTS
Section 4.1 Protect Pledged Collateral.
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The Pledgor will not sell, assign, transfer, pledge, or encumber in any
other manner the Pledged Collateral except in accordance with the Credit
Agreement. The Pledgor will warrant and defend the right and title herein
granted unto the Administrative Agent in and to the Pledged Collateral (and all
right, title, and interest represented by the Pledged Collateral) against the
claims and demands of all Persons whomsoever.
Section 4.2 Stock Powers, Etc.
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The Pledgor agrees that all Pledged Shares (and all other shares of Capital
Stock constituting Pledged Collateral) delivered by the Pledgor pursuant to this
Pledge Agreement will be accompanied by duly executed undated blank stock
powers, or other equivalent instruments of transfer acceptable to the
Administrative Agent. The Pledgor shall, from time to time upon the request of
the Administrative Agent, promptly deliver to the Administrative Agent such
stock powers, instruments, and similar documents, in form and substance
reasonably satisfactory to the Administrative Agent, with respect to the Pledged
Collateral as the Administrative Agent may reasonably request and shall, from
time to time upon the request of the Administrative Agent after the occurrence,
and during the continuance, of any Event of Default, promptly transfer any
Pledged Shares or other shares of common stock constituting Pledged Collateral
into the name of any nominee designated by the Administrative Agent.
Section 4.3 Continuous Pledge.
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The Pledgor shall, at all times, keep pledged to the Administrative Agent
pursuant hereto all Pledged Shares and all other shares of Capital Stock
constituting Pledged Collateral, all Dividends and Distributions with respect
thereto, all Pledged Notes, all interest, principal and other proceeds received
by the Administrative Agent with respect to the Pledged Notes, and all other
Pledged Collateral and other securities, instruments, proceeds, and rights from
time to time received by or distributable to the Pledgor in respect of any
Pledged Collateral and will not permit any Pledged Share Issuer to issue any
Capital Stock which shall not have been immediately duly pledged hereunder on a
first priority perfected basis.
Section 4.4 Voting Rights, Dividends, Etc.
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(a) If any Event of Default shall have occurred and be
continuing, promptly upon receipt of notice thereof by the Pledgor,
the Pledgor shall deliver (properly endorsed where required hereby or
requested by the Administrative Agent) to the Administrative Agent,
without any request therefor by the Administrative Agent, all
Dividends, all Distributions, all interest, all principal, all other
cash payments, and all proceeds of the Pledged Collateral, all of
which
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shall be held by the Administrative Agent as additional Pledged Collateral
for use in accordance with Section 6.4.
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(b) If any Event of Default shall have occurred and be
continuing, and the Administrative Agent shall have notified the Pledgor of
the Administrative Agent's intention to exercise its right under this
Section 4.4(b) to exercise (to the exclusion of the Pledgor) the voting
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power and all other incidental rights of ownership with respect to any
Pledged Shares or other shares of Capital Stock constituting Pledged
Collateral, the Pledgor shall grant the Administrative Agent an irrevocable
proxy, exercisable under such circumstances, to vote the Pledged Shares and
such other Pledged Collateral and shall promptly deliver to the
Administrative Agent such additional proxies and other documents as may be
necessary to allow the Administrative Agent to effectively exercise such
voting power.
(c) All Dividends, Distributions, interest, principal, cash
payments, and proceeds which may at any time and from time to time be held
by the Pledgor but which the Pledgor is then obligated to deliver to the
Administrative Agent, shall, until delivery to the Administrative Agent, be
held by the Pledgor separate and apart from its other property in trust for
the Administrative Agent. The Administrative Agent agrees that unless any
Event of Default shall have occurred and be continuing and the
Administrative Agent shall have given the notice referred to in Section
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4.4(b), the Pledgor shall have the exclusive voting power with respect to
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any shares of Capital Stock (including, without limitation, any of the
Pledged Shares) constituting Pledged Collateral and the Administrative
Agent shall, upon the written request of the Pledgor, promptly deliver such
proxies and other documents, if any, as shall be reasonably requested by
the Pledgor which are necessary to allow the Pledgor to exercise voting
power with respect to any such share of Capital Stock (including, without
limitation, any of the Pledged Shares) constituting Pledged Collateral;
provided, however, that no vote shall be cast, or consent, waiver, or
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ratification given, or action taken by the Pledgor that would be
inconsistent with or violate any provision of any Loan Document.
Section 4.5 Additional Undertakings.
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The Pledgor shall not, without the prior written consent of the Administrative
Agent:
(a) enter into any agreement amending, supplementing, or waiving
any provision of any Pledged Note (including, without limitation, any
underlying instrument pursuant to which such Pledged Note is issued) or
compromising or releasing or extending the time for payment of any
obligation of the maker thereof;
(b) take or omit to take any action the taking or the omission
of which would result in any impairment or alteration of any obligation of
the maker of any
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Pledged Note or other instrument constituting Pledged Collateral
(unless permitted by the Credit Agreement);
(c) take or omit to take any action which would result in
the Pledgor ceasing to own directly all of the Capital Stock
of the Pledged Subsidiary(ies); or
(d) take or omit to take any action which would result in
the creation, incorporation or formation of any direct or
indirect Subsidiary of the Parent which is not validly
existing as of the date hereof.
ARTICLE V.
THE ADMINISTRATIVE AGENT
Section 5.1 Administrative Agent Appointed Attorney-in-Fact.
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The Pledgor hereby irrevocably appoints the Administrative Agent the
Pledgor's attorney-in-fact, with full authority in the place and stead of the
Pledgor and in the name of the Pledgor or otherwise, from time to time in the
Administrative Agent's discretion, following the occurrence and during the
continuation of any Event of Default, to take any action and to execute any
instrument which the Administrative Agent may deem necessary or advisable to
accomplish the purposes of this Pledge Agreement, including, without limitation:
(a) to ask, demand, collect, ▇▇▇ for, recover, compromise,
receive and give acquittance and receipts for moneys due and to become
due under or in respect of any of the Pledged Collateral;
(b) to receive, endorse, and collect any drafts or other
instruments, documents and chattel paper, in connection with clause
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(a) above;
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(c) to file any claims or take any action or institute any
proceedings which the Administrative Agent may deem necessary or
desirable for the collection of any of the Pledged Collateral or
otherwise to enforce the rights of the Administrative Agent with
respect to any of the Pledged Collateral; provided that, with respect
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to this clause (c), such rights shall be exercised in accordance with
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Section 6.1; and
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(d) to perform the affirmative Obligations of the Pledgor
hereunder or under any other Loan Document.
The Pledgor hereby acknowledges, consents and agrees that the power of
attorney granted pursuant to this Section is irrevocable and coupled with an
interest.
Section 5.2 Administrative Agent May Perform.
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The Administrative Agent may from time to time, at its option, perform or
cause to be performed any act which the Pledgor agrees hereunder to perform and
which the Pledgor fails to perform. In addition, the Administrative Agent may
from time to time take any other action which the Administrative Agent
reasonably deems necessary for the maintenance, preservation or protection of
any of the Pledged Collateral or of its security interest therein. Expenses
incurred by the Administrative Agent pursuant to this Section 5.2 shall be
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payable by the Pledgor pursuant to Section 6.5.
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Section 5.3 Administrative Agent Has No Duty.
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The powers conferred on the Administrative Agent hereunder are solely to
protect its interest in the Pledged Collateral and shall not impose any duty on
it to exercise any such powers. Except for the reasonable care of any Pledged
Collateral (subject to Section 5.4) in its possession and the accounting for
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moneys actually received by it hereunder, the Administrative Agent shall have no
duty as to any Pledged Collateral or responsibility for (a) ascertaining or
taking action with respect to calls, conversions, exchanges, maturities, tenders
or other matters relative to any Pledged Property, whether or not the
Administrative Agent has or is deemed to have knowledge of such matters, or (b)
taking any necessary steps to preserve rights against prior parties or any other
rights pertaining to any Pledged Collateral.
Section 5.4 Reasonable Care.
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The Administrative Agent is required to exercise reasonable care in the
custody and preservation of any of the Pledged Collateral in its possession;
provided, however, the Administrative Agent shall be deemed to have exercised
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reasonable care in the custody and preservation of any of the Pledged Collateral
if it takes such action for that purpose as the Pledgor reasonably requests in
writing at times other than upon the occurrence and during the continuance of
any Event of Default, but failure of the Administrative Agent to comply with any
such request at any time shall not in itself be deemed a failure to exercise
reasonable care.
ARTICLE VI.
REMEDIES
Section 6.1 Certain Remedies.
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If any Event of Default shall have occurred and be continuing:
(a) The Administrative Agent may exercise in respect of the
Pledged Collateral, in addition to other rights and remedies provided
for herein or otherwise available to it, all the rights and remedies
of a secured party on default under the UCC (whether or not the UCC
applies to the affected Pledged Collateral) and also may, without
notice except as specified below, sell the Pledged Collateral or any
part thereof in one or more parcels at public or private sale, at any
of the Administrative Agent's offices or elsewhere, for cash, on
credit or for future delivery, and upon such other terms as the
Administrative Agent may
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deem commercially reasonable. The Pledgor agrees that, to the extent
notice of sale shall be required by law, at least ten days prior
notice to the Pledgor of the time and place of any public sale or the
time after which any private sale is to be made shall constitute
reasonable notification. The Administrative Agent shall not be
obligated to make any sale of Pledged Collateral regardless of notice
of sale having been given. The Administrative Agent may adjourn any
public or private sale from time to time by announcement at the time
and place fixed therefor, and such sale may, without further notice,
be made at the time and place to which it was so adjourned.
(b) The Administrative Agent may:
(i) transfer all or any part of the Pledged Collateral
into the name of the Administrative Agent or its nominee for the
benefit of the Secured Parties, with or without disclosing that
such Pledged Collateral is subject to the lien and security
interest granted hereunder,
(ii) notify the parties obligated on any of the Pledged
Collateral to make payment to the Administrative Agent of any
amount due or to become due thereunder,
(iii) enforce collection of any of the Pledged Collateral by
suit or otherwise, and surrender, release or exchange all or any
part thereof, or compromise or extend or renew for any period
(whether or not longer than the original period) any Obligations
of any nature of any party with respect thereto,
(iv) endorse any checks, drafts, or other writings in the
Pledgor's name to allow collection of the Pledged Collateral,
(v) take control of any proceeds of the Pledged
Collateral, and
(vi) execute (in the name, place and stead of the Pledgor)
endorsements, assignments, stock powers and other instruments of
conveyance or transfer with respect to all or any of the Pledged
Collateral.
All rights and remedies provided for in this Pledge Agreement are cumulative,
and not exclusive of any other rights or remedies. No failure or delay by the
Administrative Agent in exercising any right or power hereunder shall operate as
a waiver thereof, nor shall any single or partial exercise of any such right or
power, or any abandonment or discontinuance of steps to enforce such a right or
power, preclude any other or further exercise thereof or the exercise of any
other right or power.
Section 6.2 Securities Laws.
---------------
13
If the Administrative Agent shall determine to exercise its right to sell
all or any of the Pledged Collateral pursuant to Section 6.1, the Pledgor shall,
-----------
upon the request of the Administrative Agent, at the expense of the Pledgor:
(a) execute and deliver, and cause each issuer of the Pledged
Collateral contemplated to be sold and the directors and officers
thereof to execute and deliver, all such instruments and documents,
and do or cause to be done all such other acts and things, as may be
necessary to register such Pledged Collateral under the provisions of
the Securities Act of 1933, as from time to time amended (the
"Securities Act"), and to cause the registration statement relating
thereto to become effective and to remain effective for such period as
prospectuses are required by law to be furnished, and to make all
amendments and supplements thereto and to the related prospectus
which, in the reasonable opinion of the Administrative Agent, are
necessary or advisable, all in conformity with the requirements of the
Securities Act and the rules and regulations of the Securities and
Exchange Commission applicable thereto;
(b) use its best efforts to qualify the Pledged Collateral under
the state securities or "Blue Sky" laws, and to obtain all necessary
governmental approvals for the sale of the Pledged Collateral, as
reasonably requested by the Administrative Agent;
(c) cause each such issuer to make available to its security
holders, as soon as practicable, an earnings statement that will
satisfy the provisions of Section 11(a) of the Securities Act; and
(d) do or cause to be done all such other acts and things as may
be necessary to make such sale of the Pledged Collateral or any part
thereof valid and binding and in compliance with applicable law.
Section 6.3 Compliance with Restrictions.
----------------------------
The Pledgor agrees that in any sale of any of the Pledged Collateral
whenever an Event of Default shall have occurred and be continuing, the
Administrative Agent is hereby authorized to comply with any limitation or
restriction in connection with such sale as it may be advised by counsel is
necessary in order to avoid any violation of applicable law (including, without
limitation, compliance with such procedures as may restrict the number of
prospective bidders and purchasers, require that prospective bidders and
purchasers have certain qualifications, and restrict prospective bidders and
purchasers to persons who will represent and agree that they are purchasing for
their own account for investment and not with a view to the distribution or
resale of such Pledged Collateral), or in order to obtain any required approval
of the sale or of the purchaser by any governmental regulatory authority or
official, and the Pledgor further agrees that such compliance shall not result
in such sale being considered or deemed not to have been made in a commercially
reasonable manner, nor shall the Administrative Agent be liable or
14
accountable to the Pledgor for any discount allowed by reason of the fact that
such Pledged Collateral is sold in compliance with any such limitation or
restriction.
Section 6.4 Application of Proceeds.
-----------------------
All cash proceeds received by the Administrative Agent in respect of any
sale of, collection from, or other realization upon, all or any part of the
Pledged Collateral in accordance with Section 6.1 hereof may, in the discretion
-----------
of the Administrative Agent, be held by the Administrative Agent as additional
Pledged Collateral security for, or then or at any time thereafter be applied
(after payment of any amounts payable to the Secured Parties pursuant to the
Loan Documents) in whole or in part by the Administrative Agent against all or
any of the Obligations in such order as the Administrative Agent shall elect.
The Pledgor shall remain liable for any deficiency. Any surplus of such cash or
cash proceeds held by the Administrative Agent and remaining after payment in
full in cash of all the Obligations, the termination of all Interest Rate
Agreements to which a Secured Party is a party, the termination or expiration of
all Letters of Credit and the termination of all Commitments shall be paid over
to the Pledgor or to whomsoever may be lawfully entitled to receive such
surplus.
Section 6.5 Indemnity and Expenses.
----------------------
The Pledgor shall upon demand pay to the Administrative Agent the amount of
any and all reasonable expenses, including, without limitation, the reasonable
fees and disbursements of its outside counsel and of any experts and agents,
which the Administrative Agent may incur in connection with:
(a) the consideration of legal matters relevant to this
Pledge Agreement;
(b) the custody, preservation, use, or operation of, or the
sale of, collection from, or other realization upon, any of the
Pledged Collateral;
(c) the exercise or enforcement of any of the rights of the
Administrative Agent hereunder; or
(d) the failure by the Pledgor to perform or observe any of
the provisions hereof.
The provisions of this Section 6.5 shall survive termination of this Pledge
-----------
Agreement.
ARTICLE VII.
MISCELLANEOUS PROVISIONS
Section 7.1 Additional Actions and Documents.
--------------------------------
The Pledgor agrees that at any time, and from time to time, at the expense
of the Pledgor, the Pledgor will promptly execute and deliver all further
instruments, and take all further action
15
that the Administrative Agent may reasonably request, in order to perfect and
protect any security interest granted or purported to be granted hereby or to
enable the Administrative Agent to exercise and enforce its rights and remedies
hereunder with respect to any Pledged Collateral.
Section 7.2 Expenses.
--------
The Pledgor agrees to reimburse and save the Administrative Agent harmless
against liability for the payment of all out-of-pocket expenses arising in
connection with the administration or enforcement of, or the preservation or
exercise of, any rights (including, without limitation, the right to collect and
dispose of the Pledged Collateral) under this Pledge Agreement, including,
without limitation, the reasonable fees and other charges of outside counsel to
the Administrative Agent arising in such connection, and all such fees and other
charges shall be deemed to be a part of the Obligations secured hereby.
Section 7.3 Notices.
-------
Any communications between the parties hereto or notices provided herein to
be given shall be sent in accordance with the provisions of, and to the
addresses set forth in, Section 9.8 of the Credit Agreement, and if to the
-----------
Pledgor, to the following address:
FiberNet Telecom, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇/▇▇/ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn.: President
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Section 7.4 Release and Satisfaction.
------------------------
Upon the indefeasible payment (whether in cash and/or other consideration
which is satisfactory to the Lenders in their sole discretion) and performance
in full of the Obligations, the termination of all Interest Rate Agreements to
which any Secured Party is a party, the termination or expiration of all Letters
of Credit and the termination of all Commitments (i) this Pledge Agreement and
the security interest created hereby shall terminate, and (ii) upon written
request of the Pledgor, the Administrative Agent shall execute and deliver to
the Pledgor, at the Pledgor's expense and without representation or warranty by
or recourse to the Administrative Agent or the Secured Parties, all
certificates, representations or evidences of the Pledged Shares and all Pledged
Notes, together with all other Pledged Collateral held by the Administrative
Agent hereunder and such documents as the Pledgor shall reasonably request to
evidence such termination, and the Pledgor shall deliver to the Administrative
Agent a general release of all of the Administrative Agent's liabilities and
Obligations under all Loan Documents and an acknowledgment that the same have
been terminated.
Section 7.5 Benefit.
-------
16
This Pledge Agreement shall be binding upon, and shall inure to the benefit
of, the parties hereto, the Secured Parties and their respective successors,
legal representatives and permitted assigns. The Pledgor shall not assign any
of its rights or obligations hereunder without the prior written consent of the
Required Lenders.
Section 7.6 Amendments and Waivers.
----------------------
No amendment, modification, termination or waiver of any provision of this
Pledge Agreement, or consent to any departure by the Administrative Agent
therefrom, shall be effective unless the same shall be in writing and signed by
the Administrative Agent and the Pledgor and shall comply with the provisions
set forth in Section 9.6 of the Credit Agreement. Each amendment, modification,
-----------
termination or waiver shall be effective only in the specific instance and for
the specific purpose for which it was given.
Section 7.7 Headings.
--------
Section and subsection headings contained in this Pledge Agreement are
inserted for convenience of reference only, shall not be deemed to be a part of
this Pledge Agreement for any purpose, and shall not in any way define or affect
the meaning, construction or scope of any of the provisions hereof.
Section 7.8 Applicable Law; Entire Agreement.
--------------------------------
This Pledge Agreement shall be governed by, and shall be construed and
enforced in accordance with, the internal laws of the State of New York, without
regard to conflicts of laws principles (other than Sections 5-1401 and 5-1402 of
the General Obligations Law of the State of New York), except to the extent that
the validity or perfection of the security interest hereunder, or exercise of
remedies hereunder, in respect of any particular Pledged Collateral are governed
by the laws of a jurisdiction other than the State of New York. This Pledge
Agreement and the other Loan Documents constitute the entire understanding among
the parties hereto with respect to the subject matter hereof and supersede any
prior agreements, written or oral, with respect thereto (including, subject to
the following sentence, the Original Subsidiary Pledge Agreement). On and after
the date hereof, each reference in any document, instrument, record or account
(other than the Original Subsidiary Pledge Agreement) entered into in connection
with the Original Subsidiary Pledge Agreement to the "Subsidiary Pledge
Agreement" of the ▇▇▇▇▇▇▇ with respect to Local Fiber shall be a reference to
and mean this Amended and Restated Subsidiary Pledge Agreement.
Section 7.9 Severability.
------------
The invalidity, illegality or unenforceability in any jurisdiction of any
provision in or obligation under this Pledge Agreement shall not affect or
impair the validity, legality or enforceability of the remaining provisions or
obligations under this Pledge Agreement or of such provision or obligation in
any other jurisdiction.
17
Section 7.10 Consent to Jurisdiction.
-----------------------
The Pledgor hereby irrevocably and unconditionally submits, for itself and
its property, to the nonexclusive jurisdiction of the Supreme Court of the State
of New York sitting in New York County and of the United States District Court
of the Southern District of New York, and any appellate court in respect
thereof, in any action or proceeding arising out of or relating to this Pledge
Agreement, or for recognition or enforcement of any judgment, and hereby
irrevocably and unconditionally agrees that all claims in respect of any such
action or proceeding may be heard and determined in such New York State court
or, to the extent permitted by law, in such federal court. The Pledgor agrees
that a final judgment in any such action or proceeding shall be conclusive and
may be enforced in other jurisdictions by suit on the judgment or in any other
manner provided by law. Nothing in this Section 7.10 shall affect any right
------------
that the Administrative Agent or any Secured Party may otherwise have to bring
any action or proceeding relating to this Pledge Agreement against the Pledgor
or any of its properties in the courts of any jurisdiction. The Pledgor hereby
irrevocably and unconditionally waives, to the fullest extent it may legally and
effectively do so, any objection which it may now or hereafter have to the
laying of venue of any suit, action or proceeding arising out of or relating to
this Pledge Agreement in any court referred to in this Section 7.10. The
------------
Pledgor irrevocably waives, to the fullest extent permitted by law, the defense
of an inconvenient forum to the maintenance of such action or proceeding in any
such court. The Pledgor irrevocably consents to service of process in the manner
provided for notices in Section 7.3. Nothing in this Pledge Agreement will
-----------
affect the right of any party hereto to serve process in any other manner
permitted by law.
Section 7.11 Construction.
------------
The Pledgor and the Administrative Agent each acknowledges that it has had
the benefit of legal counsel of its own choice and has been afforded an
opportunity to review this Pledge Agreement with its legal counsel and that this
Pledge Agreement shall be construed as if jointly drafted by the Pledgor and the
Administrative Agent.
Section 7.12 Waiver of Jury Trial.
--------------------
THE PLEDGOR HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE
LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY
OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS PLEDGE AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER
THEORY).
Section 7.13 Survival.
--------
All agreements, covenants, representations and warranties made herein shall
survive the execution and delivery of this Pledge Agreement. Notwithstanding
anything in this Pledge Agreement or implied by law to the contrary, the
agreements set forth in Sections 6.5 and 7.2 shall survive the payment of the
------------ ---
Obligations and the termination of this Pledge Agreement.
18
Section 7.14 Counterparts; Effectiveness.
---------------------------
This Pledge Agreement and any amendments, waivers, consents, or supplements
may be executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed and delivered shall be
deemed an original, but all of which counterparts together shall constitute but
one and the same instrument. This Pledge Agreement shall become effective upon
the execution of a counterpart hereof by each of the parties hereto. Delivery
of an executed counterpart of a signature page to this Pledge Agreement or to
any amendments, waivers, consents or supplements hereof by telecopier shall be
as effective as delivery of a manually executed counterpart thereof.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
19
IN WITNESS WHEREOF, the parties hereto have caused this Pledge Agreement to
be duly executed and delivered by their respective officers thereunto duly
authorized as of the day and year first above written.
FIBERNET TELECOM, INC.,
as the Pledgor
By:/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
--------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: President and Chief Executive Officer
DEUTSCHE BANK AG NEW YORK
BRANCH, as Administrative Agent
By:/s/ ▇▇▇▇▇▇▇ ▇▇▇▇
--------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇
Title: Director
By:/s/ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------------------------
Name: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Assistant Vice President
Attachment 1
to the Subsidiary Pledge Agreement
Item A. Pledged Notes
-------------
Pledged Note Issuer Description of Pledged Notes
----------------------- -----------------------------------------------------
None Not applicable
Item B. Pledged Shares
--------------
Pledged Share Issuer Description of Shares
----------------------- -----------------------------------------------------
% of
Outstanding
Shares
Pledged
-----------------------------------------------------
LOCAL FIBER, L.L.C. Certificated Securities representing 100%
100% of the membership interests of
Local Fiber, L.L.C.
SCHEDULE 3.5
GOVERNMENTAL CONSENTS
---------------------
Any consents, authorizations, filings, notices or approvals required under
Article 5, Section 100 of the New York Public Service Law.