EXHIBIT 10.8 CONFORMED
AS EXECUTED
PLEDGE AGREEMENT
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PLEDGE AGREEMENT, dated as of March 30, 1998 (as amended, amended and
restated, modified or supplemented from time to time, the "Agreement"), made by
each of the undersigned (each, a "Pledgor" and together with any other entity
that becomes a party hereto pursuant to Section 24 hereof, collectively, the
"Pledgors"), in favor of BANKERS TRUST COMPANY, as Collateral Agent (including
any successor collateral agent, the "Pledgee") for the benefit of the Secured
Creditors (as defined below). Except as otherwise defined herein, terms used
herein and defined in the Credit Agreement (as defined below) shall be used
herein as therein defined.
W I T N E S S E T H :
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WHEREAS, MJD Communications, Inc. (the "Borrower"), the lenders from
time to time party thereto (the "Lenders"), NationsBank of Texas, N.A., as
Syndication Agent (the "Syndication Agent"), and Bankers Trust Company, as
Administrative Agent (the "Administrative Agent" and together with the Lenders,
the Syndication Agent, the Collateral Agent and the Pledgee, the "Lender
Creditors"), have entered into a Credit Agreement, dated as of March 30, 1998
(as amended, modified or supplemented from time to time, the "Credit
Agreement"), providing for the making of Loans as contemplated therein;
WHEREAS, the Borrower may from time to time be a party to one or more
Interest Rate Agreements (each such Interest Rate Agreement with an Interest
Rate Creditor (as defined below), a "Secured Interest Rate Agreement") with
Bankers Trust Company, in its individual capacity ("BTCo"), any Lender or a
syndicate of financial institutions organized by BTCo or such Lender or an
affiliate of BTCo or such Lender (even if BTCo or any such Lender ceases to be a
Lender under the Credit Agreement for any reason), and any institution that
participates therein, and in each case their subsequent assigns (collectively,
the "Interest Rate Creditors," and together with the Lender Creditors,
collectively, the "Secured Creditors");
WHEREAS, pursuant to the Subsidiary Guaranty, dated as of March 30,
1998 (as amended, modified or supplemented from time to time, the "Subsidiary
Guaranty"), each Pledgor that is a Subsidiary Guarantor has jointly and
severally
guaranteed to the Secured Creditors the payment when due of the Guaranteed
Obligations (as defined in the Subsidiary Guaranty);
WHEREAS, it is a condition precedent to the making of Loans under the
Credit Agreement that each Pledgor shall have executed and delivered to the
Pledgee this Agreement;
WHEREAS, each Pledgor desires to execute this Agreement to satisfy the
conditions described in the preceding paragraph;
NOW, THEREFORE, in consideration of the benefits accruing to each
Pledgor, the receipt and sufficiency of which are hereby acknowledged, each
Pledgor hereby makes the following representations and warranties to the Pledgee
and hereby covenants and agrees with the Pledgee as follows:
1. SECURITY FOR OBLIGATIONS. This Agreement is made by each Pledgor
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for the benefit of the Secured Creditors to secure:
(i) the full and prompt payment when due (whether at the stated
maturity, by acceleration or otherwise) of all obligations (including
obligations which, but for the automatic stay under Section 362(a) of the
Bankruptcy Code, would become due) and liabilities of such Pledgor, now
existing or hereafter incurred under, arising out of or in connection with
any Credit Document to which such Pledgor is a party and the due
performance of and compliance by such Pledgor with the terms of each such
Credit Document by such Pledgor (all such obligations and liabilities under
this clause (i), except to the extent consisting of obligations or
indebtedness with respect to Secured Interest Rate Agreements, being herein
collectively called the "Credit Document Obligations");
(ii) the full and prompt payment when due (whether at the stated
maturity, by acceleration or otherwise) of all obligations (including
obligations which, but for the automatic stay under Section 362(a) of the
Bankruptcy Code, would become due) and liabilities of such Pledgor, now
existing or hereafter incurred under, arising out of or in connection with
any Secured Interest Rate Agreement, including all obligations, if any, of
such Pledgor under its Guaranty (if any) in respect of Secured Interest
Rate Agreements (all such obligations and liabilities under this clause
(ii) being herein collectively called the "Interest Rate Obligations");
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(iii) any and all sums advanced by the Pledgee in order to preserve
the Collateral (as hereinafter defined) and/or its security interest
therein;
(iv) in the event of any proceeding for the collection of the
Obligations (as defined below) or the enforcement of this Agreement, after
an Event of Default (such term, as used in this Agreement, shall mean any
Event of Default under the Credit Agreement or any payment default by the
Borrower under any Secured Interest Rate Agreement after the expiration of
any applicable grace period) shall have occurred and be continuing, the
reasonable expenses of retaking, holding, preparing for sale or lease,
selling or otherwise disposing of or realizing on the Collateral, or of any
exercise by the Pledgee of its rights hereunder, together with reasonable
attorneys' fees and court costs; and
(v) all amounts paid by any Secured Creditor as to which such
Secured Creditor has the right to reimbursement under Section 11 of this
Agreement;
all such obligations, liabilities, sums and expenses set forth in clauses (i)
through (v) of this Section 1 being herein collectively called the
"Obligations".
2. DEFINITION OF STOCK, NOTES, PARTNERSHIP INTERESTS, MEMBERSHIP
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INTERESTS, SECURITIES, ETC. As used herein, (i) the term "Stock" shall mean (x)
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all of the issued and outstanding shares of stock at any time owned by any
Pledgor of any corporation (other than (I) any Excluded Entity and (II) a
corporation that is not organized under the laws of the United States or any
State or territory thereof (a "Foreign Corporation")) and (y) with respect to a
Foreign Corporation that is a first-tier Subsidiary (other than any Excluded
Entity), all of the issued and outstanding shares of capital stock at any time
owned by any Pledgor of such Foreign Corporation, provided that such Pledgor
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shall not be required to pledge hereunder (and the term "Stock" shall not
include) more than 65% of the total combined voting power of all classes of
capital stock of any Exempted Foreign Corporation entitled to vote; (ii) the
term "Notes" shall mean all promissory notes at any time issued to, or held by,
any Pledgor; (iii) the term "Partnership Interest" shall mean the entire
partnership interest (whether general and/or limited partnership interests) at
any time owned by any Pledgor in any partnership (other than (I) an Excluded
Entity and (II) a partnership that is not organized under the laws of the United
States or any State or territory thereof (a "Foreign Partnership")) and (y) with
respect to a Foreign Partnership (other than an Excluded Entity), the entire
partnership interest at any time owned by any Pledgor in such Foreign
Partnership, provided that such Pledgor shall not be required to pledge
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hereunder (and the term "Partnership Interest" shall not include) more than 65%
of the total voting power of all classes of partnership interests of any such
Foreign Partnership entitled to vote (with any partnership (other than an
Excluded Entity) in which any Pledgor owns a partnership interest being herein
called
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a "Pledged Partnership"); (iv) the term "Membership Interest" shall mean the
entire membership interest at any time owned by any Pledgor in any limited
liability company (other than (other than (I) an Excluded Entity and (II) a
limited liability company that is not organized under the laws of the United
States or any State or territory thereof (a "Foreign LLC")) and (y) with respect
to a Foreign LLC (other than an Excluded Entity), the entire membership interest
at any time owned by any Pledgor in such Foreign LLC, provided that such Pledgor
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shall not be required to pledge hereunder (and the term "Membership Interest"
shall not include) more than 65% of the total voting power of all classes of the
membership interests of any such Foreign LLC entitled to vote (with any limited
liability company (other than an Excluded Entity) in which any Pledgor owns a
membership interest being herein called a "Pledged LLC"); (v) the term
"Securities" shall mean all of the Stock, Notes, Partnership Interests and
Membership Interests; (vi) the term "Exempted Foreign Corporation" shall mean
any Foreign Corporation that is treated as a corporation or an association
taxable as a corporation for U.S. Federal income tax purposes and (vii) the term
"Excluded Entity" shall mean (w) any corporation, partnership, limited liability
company or association which is not a Parent Company, an Intermediary Holding
Company or a TelCo, (x) ST Enterprises, Ltd. to the extent (and only to the
extent) the Existing Warrants remain outstanding, (y) STE/NE Acquisition Corp.
(D/B/A Northland of Vermont), Big ▇▇▇▇▇ Telecom, Columbine Acquisition Corp. and
Sunflower Telephone Company, in each case to the extent (and only to the extent)
the relevant Pledgor has not obtained the appropriate regulatory approval to
pledge the capital stock of any such Person on the Closing Date and, thereafter,
in compliance with Section 6.11 of the Credit Agreement and (z) any TelCo
acquired or created pursuant to a Permitted Acquisition after the Closing Date
if (I) the relevant Pledgor has not obtained the appropriate regulatory approval
to pledge the capital stock or other equity interests of such Telco in
compliance with Section 6.11 of the Credit Agreement and (II) after giving
effect to the acquisition or creation of such TelCo, the Pro Forma EBITDA Test
is satisfied. Each Pledgor represents and warrants that on the date hereof: (a)
each Subsidiary of such Pledgor whose equity interest is required to be pledged
hereunder, and the direct ownership thereof, is listed on Annex A hereto; (b)
the Stock held by such Pledgor consists of the number and type of shares of the
stock of the corporations as described in Annex B hereto; (c) such Stock
constitutes that percentage of the issued and outstanding capital stock of the
issuing corporation as set forth in Annex B hereto; (d) the Notes held by such
Pledgor consist of the promissory notes described in Annex C hereto; (e) such
Pledgor is the holder of record and sole beneficial owner of the Stock and Notes
held by such Pledgor and there exists no options or preemption rights in respect
of any of the Stock; (f) the Partnership Interests and Membership Interests, as
the case may be, held by such Pledgor constitute that percentage of the entire
interest of the respective Pledged Partnership or Pledged LLC, as the case may
be, as is set forth under its name in Annex D hereto; and (g) on the date
hereof, such Pledgor owns or possesses no other Securities except as described
on Annexes B, C and D hereto.
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3. PLEDGE OF SECURITIES, ETC.
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3.1 Pledge. To secure the Obligations and for the purposes set forth
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in Section 1, each Pledgor hereby:
(i) grants and pledges to the Pledgee a security interest in
all of the Collateral owned by such Pledgor;
(ii) pledges and deposits as security with the Pledgee the
Securities owned by such Pledgor on the date hereof, if any, and delivers
to the Pledgee certificates or instruments therefor, duly endorsed in blank
in the case of Notes and accompanied by undated stock or other powers duly
executed in blank by such Pledgor in the case of Stock, Partnership
Interests or Membership Interests, as the case may be, or such other
instruments of transfer as are acceptable to the Pledgee;
(iii) assigns, transfers, hypothecates, mortgages, charges and
sets over to the Pledgee all of such Pledgor's right, title and interest in
and to such Securities (and in and to all certificates or instruments
evidencing such Securities), to be held by the Pledgee, upon the terms and
conditions set forth in this Agreement;
(iv) grants, pledges, assigns and transfers to the Pledgee all
of such Pledgor's (x) Partnership Interest and all of such Pledgor's right,
title and interest in each Pledged Partnership and (y) Membership Interest
and all of such Pledgor's right, title and interest in each Pledged LLC, in
each case including, without limitation:
(a) all the capital thereof and its interest in all profits,
losses and other distributions to which such Pledgor shall at any
time be entitled in respect of such Partnership Interest and/or
Membership Interest;
(b) all other payments due or to become due to such Pledgor in
respect of such Partnership Interest and/or Membership Interest,
whether under any partnership agreement, limited liability
company agreement or otherwise, whether as contractual
obligations, damages, insurance proceeds or otherwise;
(c) all of its claims, rights, powers, privileges, authority,
options, security interest, liens and remedies, if any, under any
partnership
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agreement, limited liability company agreement or at law or
otherwise in respect of such Partnership Interest and/or
Membership Interest;
(d) all present and future claims, if any, of the Pledgor
against any Pledged Partnership and any Pledged LLC for moneys
loaned or advanced, for services rendered or otherwise;
(e) all of such Pledgor's rights under any partnership
agreement or limited liability company agreement or at law to
exercise and enforce every right, power, remedy, authority,
option and privilege of such Pledgor relating to the Partnership
Interest and/or Membership Interest, including any power to
terminate, cancel or modify any partnership agreement or any
limited liability company agreement, to execute any instruments
and to take any and all other action on behalf of and in the name
of such Pledgor in respect of any Partnership Interest or
Membership Interest and any Pledged Partnership and any Pledged
LLC to make determinations, to exercise any election (including,
but not limited to, election of remedies) or option or to give or
receive any notice, consent, amendment, waiver or approval,
together with full power and authority to demand, receive,
enforce, collect or receipt for any of the foregoing, to enforce
or execute any checks, or other instruments or orders, to file
any claims and to take any action in connection with any of the
foregoing;
(f) all other property hereafter delivered in substitution for
or in addition to any of the foregoing, all certificates and
instruments representing or evidencing such other property and
all cash, securities, interest, dividends, rights and other
property at any time and from time to time received, receivable
or otherwise distributed in respect of or in exchange for any or
all thereof; and
(g) to the extent not otherwise included, all proceeds of any
or all of the foregoing.
3.2 Subsequently Acquired Securities. If any Pledgor shall acquire
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(by purchase, stock dividend or otherwise) any additional Securities at any time
or from time to time after the date hereof, such Pledgor will forthwith pledge
and deposit such Securities (or certificates or instruments representing such
Securities) as security with the Pledgee and deliver to the Pledgee certificates
or instruments thereof, duly endorsed in blank in the case of Notes and
accompanied by undated stock or other powers duly executed in blank by such
Pledgor (and accompanied by any transfer tax stamps required
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in connection with the pledge of such Securities) in the case of Stock,
Partnership Interests or Membership Interests, as the case may be, or such other
instruments of transfer as are acceptable to the Pledgee, and will promptly
thereafter deliver to the Pledgee a certificate executed by a principal
executive officer of such Pledgor describing such Securities and certifying that
the same have been duly pledged with the Pledgee hereunder. No Pledgor shall be
required at any time to pledge hereunder any Securities which constitute more
than 65% of the total combined voting power of all classes of ownership
interests of any Exempted Foreign Corporation, Foreign Partnership or Foreign
LLC, as the case may be, entitled to vote.
3.3 Uncertificated Securities. Notwithstanding anything to the
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contrary contained in Sections 3.1 and 3.2, if any Securities (whether or not
now owned or hereafter acquired) are uncertificated securities, the respective
Pledgor shall promptly notify the Pledgee thereof, and shall promptly take all
actions required to perfect the security interest of the Pledgee under
applicable law (including, in any event, under Articles 8 and 9 of the New York
Uniform Commercial Code if applicable). Each Pledgor further agrees to take
such actions as the Pledgee deems necessary or desirable to effect the foregoing
and to permit the Pledgee to exercise any of its rights and remedies hereunder,
and agrees to provide an opinion of counsel reasonably satisfactory to the
Pledgee with respect to any such pledge of uncertificated Securities promptly
upon request of the Pledgee.
3.4 Definitions of Pledged Stock, Pledged Notes, Pledged Partnership
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Interests, Pledged Membership Interests, Pledged Securities and Collateral. All
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Stock at any time pledged or required to be pledged hereunder is hereinafter
called the "Pledged Stock, all Notes at any time pledged or required to be
pledged hereunder are hereinafter called the "Pledged Notes", all Partnership
Interests at any time pledged or required to be pledged hereunder are
hereinafter called the "Pledged Partnership Interests," all Membership Interests
at any time pledged or required to be pledged hereunder are hereinafter called
the "Pledged Membership Interests", all Pledged Stock, Pledged Notes, Pledged
Partnership Interests and Pledged Membership Interests, together are called the
"Pledged Securities"; and the Pledged Securities, together with all proceeds
thereof, including any securities and moneys received and at the time held by
the Pledgee hereunder, are hereinafter called the "Collateral."
4. APPOINTMENT OF SUB-AGENTS; ENDORSEMENTS, ETC. The Pledgee shall
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have the right to appoint one or more sub-agents for the purpose of retaining
physical possession of the Pledged Securities, which may be held (in the
discretion of the Pledgee) in the name of the relevant Pledgor, endorsed or
assigned in blank or in favor of the Pledgee or any nominee or nominees of the
Pledgee or a sub-agent appointed by the Pledgee.
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5. VOTING, ETC., WHILE NO EVENT OF DEFAULT. Unless and until there
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shall have occurred and be continuing an Event of Default, each Pledgor shall be
entitled to exercise all voting rights attaching to any and all Pledged
Securities owned by it, and to give consents, waivers or ratifications in
respect thereof, provided that no vote shall be cast or any consent, waiver or
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ratification given or any action taken which would violate, result in breach of
any covenant contained in, or be inconsistent with, any of the terms of this
Agreement, the Credit Agreement, any other Credit Document or any Secured
Interest Rate Agreement (collectively, the "Secured Debt Agreements"), or which
would have the effect of impairing the value of the Collateral or any part
thereof or the position or interests of the Pledgee or any other Secured
Creditor therein. All such rights of a Pledgor to vote and to give consents,
waivers and ratifications shall cease in case an Event of Default shall occur
and be continuing and Section 7 hereof shall become applicable.
6. DIVIDENDS AND OTHER DISTRIBUTIONS. Unless and until an Event of
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Default shall have occurred and be continuing, all cash dividends, distributions
or other amounts payable in respect of the Pledged Securities shall be paid to
the respective Pledgor, provided that all dividends, distributions or other
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amounts payable in respect of the Pledged Securities which are determined by the
Pledgee, in its absolute discretion, to represent in whole or in part an
extraordinary, liquidating or other distribution in return of capital not
permitted by the Credit Agreement shall be paid, to the extent so determined to
represent an extraordinary, liquidating or other distribution in return of
capital not permitted by the Credit Agreement, to the Pledgee and retained by it
as part of the Collateral (unless such cash dividends or distributions are
applied to repay the Obligations pursuant to Section 9 of this Agreement). The
Pledgee shall also be entitled to receive directly, and to retain as part of the
Collateral:
(i) all other or additional stock, or other securities or
property (other than cash) paid or distributed by way of dividend or
otherwise in respect of the Collateral;
(ii) all other or additional stock or other securities or property
(including cash) paid or distributed in respect of the Collateral by way of
stock-split, spin-off, split-up, reclassification, combination of shares or
similar rearrangement; and
(iii) all other or additional stock or other securities or property
(including cash) which may be paid in respect of the Collateral by reason of
any consolidation, merger, exchange of stock, conveyance of assets,
liquidation or similar corporate reorganization (other than the Net Cash
Proceeds from any Asset Sale applied to repay Loans and/or reinvested in
accordance with the relevant provisions of the Credit Agreement).
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Nothing contained in this Section 6 shall limit or restrict in any way the
Pledgee's right to receive the proceeds of the Collateral in any form in
accordance with Section 3 of this Agreement. All dividends, distributions or
other payments which are received by the respective Pledgor contrary to the
provisions of this Section 6 or Section 7 shall be received in trust for the
benefit of the Pledgee, shall be segregated from other property or funds of such
Pledgor and shall be forthwith paid over to the Pledgee as Collateral in the
same form as so received (with any necessary endorsement).
7. REMEDIES IN CASE OF AN EVENT OF DEFAULT. (a) In case an Event of
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Default shall have occurred and be continuing, the Pledgee shall be entitled to
exercise all of the rights, powers and remedies (whether vested in it by this
Agreement or any other Secured Debt Agreement or by law) for the protection and
enforcement of its rights in respect of the Collateral, including, without
limitation, all the rights and remedies of a secured party upon default under
the Uniform Commercial Code of the State of New York, and the Pledgee shall be
entitled, without limitation, to exercise any or all of the following rights,
which each Pledgor hereby agrees to be commercially reasonable:
(i) to receive all amounts payable in respect of the Collateral
otherwise payable under Section 6 to such Pledgor;
(ii) to transfer all or any part of the Collateral into the
Pledgee's name or the name of its nominee or nominees;
(iii) to accelerate any Pledged Note which may be accelerated in
accordance with its terms, and take any other lawful action to collect upon
any Pledged Note (including, without limitation, to make any demand for
payment thereon);
(iv) to vote all or any part of the Pledged Stock, Pledged
Partnership Interests and Pledged Membership Interests (whether or not
transferred into the name of the Pledgee) and give all consents, waivers and
ratifications in respect of the Collateral and otherwise act with respect
thereto as though it were the outright owner thereof (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 so); and
(v) at any time or from time to time to sell, assign and deliver,
or grant options to purchase, all or any part of the Collateral, or any
interest therein, at any public or private sale, without demand of
performance, advertisement or notice of intention to sell or of the time or
place of sale or adjournment thereof or to redeem
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or otherwise (all of which are hereby waived by each Pledgor), for cash, on
credit or for other property, for immediate or future delivery without any
assumption of credit risk, and for such price or prices and on such terms as
the Pledgee in its absolute discretion may determine, provided that at least
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10 days' notice of the time and place of any such sale shall be given to
such Pledgor. The Pledgee shall not be obligated to make such sale of
Collateral regardless of whether any such notice of sale has theretofore
been given. Each purchaser at any such sale shall hold the property so sold
absolutely free from any claim or right on the part of any Pledgor, and each
Pledgor hereby waives and releases to the fullest extent permitted by law
any right or equity of redemption with respect to the Collateral, whether
before or after sale hereunder, all rights, if any, of marshalling the
Collateral and any other security for the Obligations or otherwise, and all
rights, if any, of stay and/or appraisal which it now has or may at any time
in the future have under rule of law or statute now existing or hereafter
enacted. At any such sale, unless prohibited by applicable law, the Pledgee
on behalf of all Secured Creditors (or certain of them) may bid for and
purchase (by bidding in Obligations or otherwise) all or any part of the
Collateral so sold free from any such right or equity of redemption. Neither
the Pledgee nor any Secured Creditor shall be liable for failure to collect
or realize upon any or all of the Collateral or for any delay in so doing
nor shall it be under any obligation to take any action whatsoever with
regard thereto.
8. REMEDIES, ETC., CUMULATIVE. Each right, power and remedy of the
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Pledgee provided for in this Agreement or any other Secured Debt Agreement, or
other Secured Debt Agreement or now or hereafter existing at law or in equity or
by statute or otherwise shall not preclude the simultaneous or later exercise by
the Pledgee or any other Secured Creditor of all such other rights, powers or
remedies, and no failure or delay on the part of the Pledgee or any other
Secured Creditor to exercise any such right, power or remedy shall operate as a
waiver thereof. Unless otherwise required by the Credit Documents, no notice to
or demand on any Pledgor in any case shall entitle it to any other or further
notice or demand in similar other circumstances or constitute a waiver of any of
the rights of the Pledgee or any other Secured Creditor to any other further
action in any circumstances without demand or notice. The Secured Creditors
agree that this Agreement may be enforced only by the action of the
Administrative Agent or the Pledgee, in each case acting upon the instructions
of the Required Lenders (or, after the date on which all Credit Document
Obligations have been paid in full, the holders of at least the majority of the
outstanding Interest Rate Obligations) and that no other Secured
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Creditor shall have any right individually to seek to enforce or to enforce this
Agreement or to realize upon the security to be granted hereby, it being
understood and agreed that such rights and remedies may be exercised by the
Administrative Agent or the Pledgee or the holders of at least a majority of the
outstanding Interest Rate Obligations, as the case may be, for the benefit of
the Secured Creditors upon the terms of this Agreement.
9. APPLICATION OF PROCEEDS. (a) All moneys collected by the Pledgee
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or the Collateral Agent upon any sale or other disposition of the Collateral,
together with all other moneys received by the Pledgee or the Collateral Agent
hereunder, shall be applied as follows:
(i) first, to the payment of all Obligations owing to the Pledgee
or the Collateral Agent of the type described in clauses (iii) and (iv) of
the definition of "Obligations" contained in Section 1 hereof;
(ii) second, to the extent proceeds remain after the application
pursuant to preceding clause (i), an amount equal to the outstanding
Obligations to the Secured Creditors shall be paid to the Secured Creditors
as provided in Section 9(c) with each Secured Creditor receiving an amount
equal to its out standing Obligations or, if the proceeds are insufficient
to pay in full all such Obligations, its Pro Rata Share of the amount
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remaining to be distributed to be applied, with respect to the Credit
Document Obligations, firstly to the payment of interest in respect of the
unpaid principal amount of Loans outstanding, secondly to the payment of
principal of Loans outstanding, then to the other Credit Document
Obligations; and
(iii) third, to the extent proceeds remain after the application
pursuant to the preceding clauses (i) and (ii) and following the
termination of this Agreement pursuant to Section 18 hereof, to the
relevant Pledgor or, to the extent directed by such Pledgor or a court of
competent jurisdiction, to whomever may be lawfully entitled to receive
such surplus.
(b) For purposes of this Agreement, "Pro Rata Share" shall mean, when
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calculating a Secured Creditor's portion of any distribution or amount, the
amount (expressed as a percentage) equal to a fraction the numerator of which is
the then outstanding amount of the relevant Obligations owed such Secured
Creditor and the denominator of which is the then outstanding amount of all
Obligations.
(c) All payments required to be made to the (i) Lender Creditors
hereunder shall be made to the Administrative Agent for the account of the
respective Lender Creditors and (ii) Interest Rate Creditors hereunder shall be
made to the paying
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agent under the applicable Secured Interest Rate Agreement or, in the case of
Secured Interest Rate Agreements without a paying agent, directly to the
applicable Interest Rate Creditor.
(d) For purposes of applying payments received in accordance with
this Section 9, the Pledgee and the Collateral Agent shall be entitled to rely
upon (i) the Administrative Agent for a determination (which the Administrative
Agent agrees to provide upon request to the Pledgee and the Collateral Agent) of
the outstanding Credit Document Obligations and (ii) any Interest Rate Creditor
for a determination (which each Interest Rate Creditor agrees to provide upon
request to the Pledgee and the Collateral Agent) of the outstanding Interest
Rate Obligations owed to such Interest Rate Creditor. Unless it has actual
knowledge (including by way of written notice from a Secured Creditor) to the
contrary, the Administrative Agent under the Credit Agreement, in furnishing
information pursuant to the preceding sentence, and the Pledgee and the
Collateral Agent, in acting hereunder, shall be entitled to assume that (x) no
Credit Document Obligations other than principal, interest and regularly
accruing fees are owing to any Lender Creditor and (y) no Secured Interest Rate
Agreements or Interest Rate Obligations with respect thereto are in existence.
(e) It is understood that the Pledgors shall remain jointly and
severally liable to the extent of any deficiency between (x) the amount of the
Obligations for which it is liable directly or as a Guarantor that are satisfied
with proceeds of the Collateral and (y) the aggregate outstanding amount of the
Obligations.
10. PURCHASERS OF COLLATERAL. Upon any sale of the Collateral by the
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Pledgee hereunder (whether by virtue of the power of sale herein granted,
pursuant to judicial process or otherwise), the receipt of the Pledgee or the
officer making the sale shall be a sufficient discharge to the purchaser or
purchasers of the Collateral so sold, and such purchaser or purchasers shall not
be obligated to see to the application of any part of the purchase money paid
over to the Pledgee or such officer or be answerable in any way for the
misapplication or nonapplication thereof.
11. INDEMNITY. Each Pledgor jointly and severally agrees (i) to
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indemnify and hold harmless the Pledgee and the other Secured Creditors from and
against any and all claims, demands, losses, judgments and liabilities
(including liabilities for penalties) of whatsoever kind or nature, and (ii) to
reimburse the Pledgee for all reasonable costs and expenses, including
reasonable attorneys' fees, arising in connection with any amendment, waiver or
modification to this Agreement and the Pledgee and the other Secured Creditors
for all reasonable costs and expenses (including reasonable attorney's fees)
growing out of or resulting from the exercise by the Pledgee of any right or
remedy granted to it hereunder or under any other Secured Debt Agreement except,
-12-
with respect to clauses (i) and (ii) above, for those arising from the Pledgee's
gross negligence or willful misconduct. In no event shall the Pledgee be
liable, in the absence of gross negligence or willful misconduct on its part,
for any matter or thing in connection with this Agreement other than to account
for moneys or other property actually received by it in accordance with the
terms hereof. If and to the extent that the obligations of any Pledgor under
this Section 11 are unenforceable for any reason, such Pledgor hereby agrees to
make the maximum contribution to the payment and satisfaction of such
obligations which is permissible under applicable law.
12. FURTHER ASSURANCES; POWER OF ATTORNEY. (a) Each Pledgor agrees
-------------------------------------
that it will join with the Pledgee in executing and, at such Pledgor's own
expense, file and refile under the Uniform Commercial Code such financing
statements, continuation statements and other documents in such offices as the
Pledgee may deem necessary or appropriate and wherever required or permitted by
law in order to perfect and preserve the Pledgee's security interest in the
Collateral hereunder and hereby authorizes the Pledgee to file financing
statements and amendments thereto relative to all or any part of the Collateral
without the signature of such Pledgor where permitted by law, and agrees to do
such further acts and things and to execute and deliver to the Pledgee such
additional conveyances, assignments, agreements and instruments as the Pledgee
may reasonably require or deem advisable to carry into effect the purposes of
this Agreement or to further assure and confirm unto the Pledgee its rights,
powers and remedies hereunder or thereunder.
(b) Each Pledgor hereby appoints the Pledgee, such Pledgor's
attorney-in-fact, with full authority in the place and stead of such Pledgor and
in the name of such Pledgor or otherwise, from time to time after the occurrence
and during the continuance of an Event of Default, in the Pledgee's reasonable
discretion to take any action and to execute any instrument which the Pledgee
may reasonably deem necessary or advisable to accomplish the purposes of this
Agreement.
13. THE PLEDGEE AS COLLATERAL AGENT. The Pledgee will hold in
-------------------------------
accordance with this Agreement all items of the Collateral at any time received
under this Agreement. It is expressly understood and agreed that the
obligations of the Pledgee as holder of the Collateral and interests therein and
with respect to the disposition thereof, and otherwise under this Agreement, are
only those expressly set forth in this Agreement. The Pledgee shall act
hereunder on the terms and conditions set forth herein and in Section 11 of the
Credit Agreement.
14. TRANSFER BY THE PLEDGORS. No Pledgor will sell or otherwise
------------------------
dispose of, grant any option with respect to, or mortgage, pledge or otherwise
-13-
encumber any of the Collateral or any interest therein (except in accordance
with the terms of this Agreement and the other Secured Debt Agreements).
15. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE PLEDGORS. (a)
---------------------------------------------------------
Each Pledgor represents, warrants and covenants that:
(i) it is, or at the time when pledged hereunder will be, the
legal, beneficial and record owner of, and has (or will have) good and
marketable title to, all Securities pledged by it hereunder, subject to no
pledge, lien, mortgage, hypothecation, security interest, charge, option or
other encumbrance whatsoever, except (x) the liens and security interests
created by this Agreement and (y) liens permitted by Section 7.03(a) of the
Credit Agreement;
(ii) it has full power, authority and legal right to pledge all the
Securities pledged by it pursuant to this Agreement;
(iii) this Agreement has been duly authorized, executed and delivered
by such Pledgor and constitutes a legal, valid and binding obligation of
such Pledgor enforceable in accordance with its terms, except to the extent
that the enforceability thereof may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws generally
affecting creditors' rights and by equitable principles (regardless of
whether enforcement is sought in equity or at law);
(iv) except to the extent already obtained or made, no consent of
any other party (including, without limitation, any stockholder, limited or
general partner, member or creditor of such Pledgor or any of its
Subsidiaries) and no consent, license, permit, approval or authorization
of, exemption by, notice or report to, or registration, filing or
declaration with, any governmental authority is required to be obtained by
such Pledgor in connection with (a) the execution, delivery or performance
of this Agreement, (b) the validity or enforceability of this Agreement,
(c) the perfection or enforceability of the Pledgee's security interest in
the Collateral or (d) except for compliance with or as may be required by
applicable securities laws, the exercise by the Pledgee of any of its
rights or remedies provided herein;
(v) the execution, delivery and performance of this Agreement by
such Pledgor will not violate any provision of any applicable law or
regulation or of any order, judgment, writ, award or decree of any court,
arbitrator or governmental authority, domestic or foreign, applicable to
such Pledgor, or of the certificate of incorporation, certificate of
formation, by-laws, certificate of limited
-14-
partnership, partnership agreement or limited liability company agreement,
as the case may be, of such Pledgor or of any securities issued by such
Pledgor or any of its Subsidiaries, or of any mortgage, indenture, lease,
loan agreement, credit agreement or other material contract, agreement or
instrument or undertaking to which such Pledgor or any of its Subsidiaries
is a party or which purports to be binding upon such Pledgor or any of its
Subsidiaries or upon any of their respective assets and will not result in
the creation or imposition of (or the obligation to create or impose) any
lien or encumbrance on any of the assets of such Pledgor or any of its
Subsidiaries except as contemplated by this Agreement;
(vi) all the shares of the Stock have been duly and validly issued,
are fully paid and non-assessable and are subject to no options to purchase
or similar rights;
(vii) each of the Pledged Notes constitutes, or when executed by the
obligor thereof will constitute, the legal, valid and binding obligation of
such obligor, enforceable in accordance with its terms, except to the
extent that the enforceability thereof may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws
generally affecting creditors' rights and by equitable principles
(regardless of whether enforcement is sought in equity or at law);
(viii) the pledge, assignment and delivery to the Pledgee of the
Securities (other than uncertificated securities) pursuant to this
Agreement creates a valid and, assuming such Securities are held in the
continued possession of the Collateral Agent in the State of New York,
perfected first priority Lien in the Securities and the proceeds thereof,
subject to no other Lien or to any agreement purporting to grant to any
third party a Lien on the property or assets of such Pledgor which would
include the Securities (other than Liens permitted by Section 7.03(a) of
the Credit Agreement);
(ix) it has the unqualified right to pledge and grant a security
interest in the Partnership Interests and Membership Interests as herein
provided without the consent of any other Person, firm, association or
entity which has not been obtained;
(x) the Partnership Interests and the Membership Interests pledged
by it pursuant to this Agreement have been validly acquired and are fully
paid for and are duly and validly pledged hereunder;
(xi) it is not in default in the payment of any portion of any
mandatory capital contribution, if any, required to be made under any
partnership agreement
-15-
or limited liability company agreement to which such Pledgor is a party,
and such Pledgor is not in violation of any other material provisions of
any partnership agreement or limited liability company agreement to which
such Pledgor is a party, or otherwise in default or violation thereunder,
no Partnership Interest or Membership Interest is subject to any defense,
offset or counterclaim, nor have any of the foregoing been asserted or
alleged against such Pledgor by any Person with respect thereto and as of
the Closing Date, there are no certificates, instruments, documents or
other writings (other than the partnership agreements and certificates, if
any, delivered to the Collateral Agent) which evidence any Partnership
Interest or Membership Interest of such Pledgor;
(xii) the pledge and assignment of the Partnership Interests and the
Membership Interests pursuant to this Agreement, together with the relevant
filings, consents or recordings (which filings, consents and recordings
have been made or obtained), creates a valid, perfected and continuing
first security interest in such Partnership Interests and Membership
Interest and the proceeds thereof, subject to no prior lien or encumbrance
or to any agreement purporting to grant to any third party a lien or
encumbrance on the property or assets of such Pledgor which would include
the Collateral;
(xiii) there are no currently effective financing statements under the
UCC covering any property which is now or hereafter may be included in the
Collateral and such Pledgor will not, without the prior written consent of
the Pledgee, execute and, until the Termination Date (as hereinafter
defined), there will not ever be on file in any public office, any
enforceable financing statement or statements covering any or all of the
Collateral, except financing statements filed or to be filed in favor of
the Pledgee as secured party;
(xiv) it shall give the Pledgee prompt notice of any written claim
relating to the Collateral and shall deliver to the Pledgee a copy of each
other demand, notice or document received by it which may adversely affect
the Pledgee's interest in the Collateral promptly upon, but in any event
within 10 days after, such Pledgor's receipt thereof;
(xv) it shall not withdraw as a partner of any Pledged Partnership
or member of any Pledged LLC, or file or pursue or take any action which
may, directly or indirectly, cause a dissolution or liquidation of or with
respect to any Pledged Partnership or Pledged LLC or seek a partition of
any property of any Pledged Partnership or Pledged LLC, except as permitted
by the Credit Agreement;
-16-
(xvi) a notice in the form set forth in Annex E attached hereto and
by this reference made a part hereof (such notice, the "Pledge Notice"),
appropriately completed, notifying each Pledged Partnership and Pledged LLC
of the existence of this Agreement and attached thereto a copy of this
Agreement have been delivered by such Pledgor to the relevant Pledged
Partnership or Pledged LLC, and such Pledgor has received and delivered to
the Pledgee an acknowledgment in the form set forth in Annex F attached
hereto (such acknowledgement, the "Pledge Acknowledgement"), duly executed
by the relevant Pledged Partnership or Pledged LLC;
(xvi) as of the date hereof, all of its Partnership Interests and
Membership Interests are uncertificated and each Pledgor covenants and
agrees that it will not approve of any action by any Pledged Partnership or
Pledged LLC to convert such uncertificated interests into certificated
interests; and
(xviii) it will take no action which would violate or be inconsistent
with any of the terms of any Secured Debt Agreement, or which would have
the effect of impairing the position or interests of the Pledgee or any
other Secured Creditor under any Secured Debt Agreement except as permitted
by the Credit Agreement.
16. PLEDGORS' OBLIGATIONS ABSOLUTE, ETC. The obligations of each
------------------------------------
Pledgor under this Agreement shall be absolute and unconditional and shall
remain in full force and effect without regard to, and shall not be released,
suspended, discharged, terminated or otherwise affected by, any circumstance or
occurrence whatsoever, including, without limitation:
(i) any renewal, extension, amendment or modification of, or
addition or supplement to or deletion from any of the Secured Debt
Agreements, or any other instrument or agreement referred to therein, or
any assignment or transfer of any thereof;
(ii) any waiver, consent, extension, indulgence or other action or
inaction under or in respect of any such agreement or instrument or this
Agreement;
(iii) any furnishing of any additional security to the Pledgee or its
assignee or any acceptance thereof or any release of any security by the
Pledgee or its assignee;
(iv) any limitation on any party's liability or obligations under
any such instrument or agreement or any invalidity or unenforceability, in
whole or in part, of any such instrument or agreement or any term thereof;
or
-17-
(v) any bankruptcy, insolvency, reorganization, composition,
adjustment, dissolution, liquidation or other like proceeding relating to
such Pledgor or any Subsidiary of such Pledgor, or any action taken with
respect to this Agreement by any trustee or receiver, or by any court, in
any such proceeding, whether or not such Pledgor shall have notice or
knowledge of any of the foregoing.
17. REGISTRATION, ETC. (a) If an Event of Default shall have
------------------
occurred and be continuing and any Pledgor shall have received from the Pledgee
a written request or requests that such Pledgor cause any registration,
qualification or compliance under any Federal or state securities law or laws to
be effected with respect to all or any part of the Pledged Stock, such Pledgor
as soon as practicable and at its expense will use its best efforts to cause
such registration to be effected (and be kept effective) and will use its best
efforts to cause such qualification and compliance to be effected (and be kept
effective) as may be so requested and as would permit or facilitate the sale and
distribution of such Pledged Stock, including, without limitation, registration
under the Securities Act of 1933, as then in effect (or any similar statute then
in effect), appropriate qualifications under applicable blue sky or other state
securities laws and appropriate compliance with any other governmental
requirements, provided that the Pledgee shall furnish to such Pledgor such
--------
information regarding the Pledgee as such Pledgor may request in writing and as
shall be required in connection with any such registration, qualification or
compliance. Each Pledgor will cause the Pledgee to be kept reasonably advised
in writing as to the progress of each such registration, qualification or
compliance and as to the completion thereof, will furnish to the Pledgee such
number of prospectuses, offering circulars and other documents incident thereto
as the Pledgee from time to time may reasonably request, and will indemnify, to
the extent permitted by law, the Pledgee, each other Secured Creditor and all
others participating in the distribution of such Pledged Stock against all
claims, losses, damages or liabilities caused by any untrue statement (or
alleged untrue statement) of a material fact contained therein (or in any
related registration statement, notification or the like) or by any omission (or
alleged omission) to state therein (or in any related registration statement,
notification or the like) a material fact required to be stated therein or
necessary to make the statements therein not misleading, except insofar as the
same may have been caused by an untrue statement or omission based upon
information furnished in writing to such Pledgor by the Pledgee or such other
Secured Creditor expressly for use therein.
(b) If at any time when the Pledgee shall determine to exercise its
right to sell all or any part of the Pledged Securities pursuant to Section 7,
and such Pledged Securities or the part thereof to be sold shall not, for any
reason whatsoever, be effectively registered under the Securities Act of 1933,
as then in effect, the Pledgee may, in its sole and absolute discretion, sell
such Pledged Securities or part thereof by private sale in such manner and under
such circumstances as the Pledgee may deem necessary or
-18-
advisable in order that such sale may legally be effected without such
registration. Without limiting the generality of the foregoing, in any such
event the Pledgee, in its sole and absolute discretion, (i) may proceed to make
such private sale notwithstanding that a registration statement for the purpose
of registering such Pledged Securities or part thereof shall have been filed
under such Securities Act, (ii) may approach and negotiate with a single
possible purchaser to effect such sale and (iii) may restrict such sale to a
purchaser who will represent and agree that such purchaser is purchasing for its
own account, for investment, and not with a view to the distribution or sale of
such Pledged Securities or part thereof. In the event of any such sale, the
Pledgee shall incur no responsibility or liability for selling all or any part
of the Pledged Securities at a price which the Pledgee, in its sole and absolute
discretion, may in good ▇▇▇▇▇ ▇▇▇▇ reasonable under the circumstances,
notwithstanding the possibility that a substantially higher price might be
realized if the sale were deferred until the registration as aforesaid.
18. TERMINATION; RELEASE. (a) After the Termination Date (as
--------------------
defined below), this Agreement shall terminate (provided that all indemnities
set forth herein including, without limitation, in Section 11 hereof shall
survive any such termination) and the Pledgee, at the request and expense of the
respective Pledgor, will execute and deliver to such Pledgor a proper instrument
or instruments acknowledging the satisfaction and termination of this Agreement
as provided above, and will duly assign, transfer and deliver to such Pledgor
(without recourse and without any representation or warranty) such of the
Collateral as may be in the possession of the Pledgee and as has not theretofore
been sold or otherwise applied or released pursuant to this Agreement, together
with any moneys at the time held by the Pledgee hereunder. As used in this
Agreement, "Termination Date" shall mean the date upon which the Total
Commitment and all Secured Interest Rate Agreements have been terminated, no
Note under the Credit Agreement is outstanding (and all Loans have been paid in
full) and all other Obligations have been paid in full (other than arising from
indemnities for which no request has been made).
(b) In the event that any part of the Collateral is sold or otherwise
disposed of in connection with a sale or other disposition permitted by Section
7.02 of the Credit Agreement or is otherwise released at the direction of the
Required Lenders (or all the Lenders if required by Section 11.12 of the Credit
Agreement), and the proceeds of such sale or other disposition or from such
release are applied in accordance with the terms of the Credit Agreement to the
extent required to be so applied, the Pledgee, at the request and expense of the
respective Pledgor, will release such Collateral from this Agreement, duly
assign, transfer and deliver to such Pledgor (without recourse and without any
representation or warranty) such of the Collateral as is then being (or has
been) so sold, disposed of or released and as may be in possession of the
Pledgee and has not theretofore been released pursuant to this Agreement.
-19-
(c) At any time that any Pledgor desires that Collateral be released
as provided in the foregoing Section 18(a) or (b), it shall deliver to the
Pledgee a certificate signed by a principal executive officer stating that the
release of the respective Collateral is permitted pursuant to Section 18(a) or
(b). The Pledgee shall have no liability whatsoever to any Secured Creditor as
the result of any release of Collateral by it as permitted by this Section 18.
19. NOTICES, ETC. All notices and other communications hereunder
-------------
shall be in writing (including telegraphic, telex, telecopier, facsimile or
cable communication) and shall be delivered, telegraphed, telexed, telecopied,
faxed, cabled, or mailed (by first class mail, postage prepaid):
(i) if to any Pledgor, at its address set forth opposite its
signature below;
(ii) if to the Pledgee, at:
Bankers Trust Company
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
(iii) if to any if to any Bank Creditor (other than the Pledgee),
either (x) to the Administrative Agent, at the address of the Administrative
Agent specified in the Credit Agreement or (y) at such address as such Bank
Creditor shall have specified in the Credit Agreement;
(iv) if to any Interest Rate Creditor, at such address as such
Interest Rate Creditor shall have specified in writing to the Pledgors and
the Pledgee;
or at such other address as shall have been furnished in writing by any Person
described above to the party required to give notice hereunder.
20. WAIVER; AMENDMENT. None of the terms and conditions of this
-----------------
Agreement may be changed, waived, modified or varied in any manner whatsoever
unless in writing duly signed by the Pledgee (with the consent of the Required
Lenders or, to the extent required by Section 11.12 of the Credit Agreement, all
of the Lenders) and each Pledgor affected thereby, provided that (i) no such
--------
change, waiver, modification or variance shall be made to Section 9 hereof or
this Section 20 without the consent of each Secured Creditor adversely affected
thereby and (ii) any change, waiver, modification or
-20-
variance affecting the rights and benefits of a single Class (as defined below)
of Secured Creditors (and not all Secured Creditors in a like or similar manner)
shall require the written consent of the Requisite Creditors (as defined below)
of such Class of Secured Creditors. For the purpose of this Agreement, the term
"Class" shall mean each class of Secured Creditors, i.e., whether (x) the Lender
----
Creditors as holders of the Credit Document Obligations or (y) the Interest Rate
Creditors as holders of the Interest Rate Obligations. For the purpose of this
Agreement, the term "Requisite Creditors" of any Class shall mean each of (x)
with respect to each of the Credit Document Obligations, the Required Lenders
and (y) with respect to the Interest Rate Obligations, the holders of at least a
majority of all obligations outstanding from time to time under the Secured
Interest Rate Agreements.
21. PLEDGEE NOT BOUND. (a) Nothing herein shall be construed to
-----------------
make the Pledgee or any other Secured Creditor liable as a general partner or
limited partner of any Pledged Partnership or a member of any Pledged LLC or a
shareholder of any corporation, and neither the Pledgee nor any Secured Creditor
by virtue of this Agreement or otherwise (except as referred to in the following
sentence) shall have any of the duties, obligations or liabilities of a general
partner or limited partner of any Pledged Partnership or a member of any Pledged
LLC or a stockholder of any corporation. The parties hereto expressly agree
that, unless the Pledgee shall become the absolute owner of a Partnership
Interest, a Membership Interest or Stock pursuant hereto, this Agreement shall
not be construed as creating a partnership or joint venture or membership
agreement among the Pledgee, any other Secured Creditor and/or a Pledgor.
(b) Except as provided in the last sentence of paragraph (a) of this
Section 21, the Pledgee, by accepting this Agreement, did not intend to become a
general partner or limited partner of any Pledged Partnership or a member of any
Pledged LLC or a shareholder of any corporation or otherwise be deemed to be a
co-venturer with respect to any Pledgor or any Pledged Partnership or a member
of any Pledged LLC or a shareholder of any corporation either before or after an
Event of Default shall have occurred. The Pledgee shall have only those powers
set forth herein and shall assume none of the duties, obligations or liabilities
of a general partner or limited partner of any Pledged Partnership or of a
member of any Pledged LLC or of a Pledgor.
(c) The Pledgee shall not be obligated to perform or discharge any
obligation of a Pledgor as a result of the collateral assignment hereby
effected.
(d) The acceptance by the Pledgee of this Agreement, with all the
rights, powers, privileges and authority so created, shall not at any time or in
any event obligate
-21-
the Pledgee to appear in or defend any action or proceeding relating to the
Collateral to which it is not a party, or to take any action hereunder or
thereunder, or to expend any money or incur any expenses or perform or discharge
any obligation, duty or liability under the Collateral.
22. MISCELLANEOUS. This Agreement shall create a continuing security
-------------
interest in the Collateral and shall (i) remain in full force and effect,
subject to release and/or termination as set forth in Section 18, (ii) be
binding upon each Pledgor, its successors and assigns; provided that no Pledgor
--------
shall assign any of its rights or obligations hereunder without the prior
written consent of the Pledgee (with the prior written consent of the Required
Lenders or to the extent required by Section 11.12 of the Credit Agreement, all
of the Lenders), and (iii) inure, together with the rights and remedies of the
Pledgee hereunder, to the benefit of the Pledgee, the other Secured Creditors
and their respective successors, transferees and assigns. The headings of the
several sections and subsections in this Agreement are for purposes of reference
only and shall not limit or define the meaning hereof. This Agreement may be
executed in any number of counterparts, each of which shall be an original, but
all of which together shall constitute one instrument. In the event that any
provision of this Agreement shall prove to be invalid or unenforceable, such
provision shall be deemed to be severable from the other provisions of this
Agreement which shall remain binding on all parties hereto.
23. GOVERNING LAW, ETC. (a) THIS AGREEMENT AND THE RIGHTS AND
------------------
OBLIGATIONS OF THE SECURED CREDITORS AND OF THE UNDERSIGNED HEREUNDER SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK
WITHOUT REGARD TO PRINCIPLES OF CONFLICT OF LAWS. Any legal action or
proceeding with respect to this Agreement or any other Credit Document may be
brought in the courts of the State of New York or of the United States of
America for the Southern District of New York, and, by execution and delivery of
this Agreement, each Pledgor which is not a Subsidiary Guarantor (each, an "NSG
Pledgor") hereby irrevocably accepts for itself and in respect of its property,
generally and unconditionally, the jurisdiction of the aforesaid courts. Each
NSG Pledgor hereby irrevocably designates, appoints and empowers CT Corporation
System with offices on the date hereof at ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, as
its designee, appointee and agent to receive, accept and acknowledge for and on
its behalf, and in respect of its property, service of any and all legal
process, summons, notices and documents which may be served in any such action
or proceeding. If for any reason such designee, appointee and agent shall cease
to be available to act as such, each NSG Pledgor agrees to designate a new
designee, appointee and agent in New York City on the terms and for the purposes
of this provision satisfactory to the Collateral Agent under this Agreement.
Each NSG Pledgor further irrevocably consents to the service of process out of
any of the aforementioned courts in any such action or proceeding by the mailing
of copies thereof by registered or certified mail, postage prepaid, to each NSG
Pledgor at its address set forth opposite its signature
-22-
below, such service to become effective 30 days after such mailing. Nothing
herein shall affect the right of any of the Secured Creditors to serve process
in any other manner permitted by law or to commence legal proceedings or
otherwise proceed against any Pledgor in any other jurisdiction.
(b) Each NSG Pledgor hereby irrevocably waives any objection which it
may now or hereafter have to the laying of venue of any of the aforesaid actions
or proceedings arising out of or in connection with this Agreement or any other
Credit Document brought in the courts referred to in clause (a) above and hereby
further irrevocably waives and agrees not to plead or claim in any such court
that such action or proceeding brought in any such court has been brought in an
inconvenient forum.
(c) Each Pledgor and the Pledgee hereby irrevocably waive all right
to a trial by jury in any action, proceeding or counterclaim arising out of or
relating to this Agreement, the other Credit Documents or the transactions
contemplated hereby or thereby.
24. ADDITIONAL PLEDGORS. It is understood and agreed that any
-------------------
Subsidiary of the Borrower that is required to execute a counterpart of this
Agreement pursuant to the Credit Agreement shall become a Pledgor hereunder by
executing a counterpart hereof and delivering the same to the Pledgee and
Annexes A, B, C and D will be modified at such time in a manner acceptable to
the Pledgee to give effect to such additional Pledgor.
25. AUTHORIZATION AND DIRECTION. Each Pledged Partnership and each
---------------------------
Pledged LLC is hereby authorized and directed to register the respective
Pledgor's pledge to the Pledgee on behalf of the Secured Creditors of the
interest of such Pledgor on such entity's books. Each Pledgor agrees to give
the respective Pledged Partnership or Pledged LLC, as the case may be, a Pledge
Notice, and to cause each such Pledged Partnership or Pledged LLC, as the case
may be, to acknowledge such notice with a Pledge Acknowledgement.
* * *
-23-
IN WITNESS WHEREOF, each Pledgor and the Pledgee have caused this
Agreement to be executed and delivered by their duly authorized officers as of
the date first above written.
MJD COMMUNICATIONS, INC.,
as a Pledgor
By /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
-----------------------------
Title: Vice President, Secretary and
Chief Financial Officer
ST ENTERPRISES, LTD.,
as a Pledgor
By /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
-----------------------------
Title: Vice President, Secretary and
Chief Financial Officer
MJD HOLDINGS CORP.,
as a Pledgor
By /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
-----------------------------
Title: Vice President, Secretary and
Chief Financial Officer
MJD SERVICES CORP.,
as a Pledgor
-24-
By /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
-----------------------------
Title: Vice President, Secretary and
Chief Financial Officer
MJD VENTURES, INC.,
as a Pledgor
By /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
-----------------------------
Title: Vice President, Secretary and
Chief Financial Officer
C-R COMMUNICATIONS, INC.,
as a Pledgor
By /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
-----------------------------
Title: Vice President, Secretary and
Chief Financial Officer
BANKERS TRUST COMPANY,
as Collateral Agent, as Pledgee
By /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
-----------------------------
Title: Vice President
-25-
ANNEX A
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LIST OF PLEDGED SUBSIDIARIES
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A. [PLEDGOR]
Name Jurisdiction of Incorporation
---- -----------------------------
B. [PLEDGOR]
Name Jurisdiction of Incorporation
---- -----------------------------
ANNEX B
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LIST OF STOCK
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A. [PLEDGOR]
Name of
Issuing Type of Number of Certificate Percentage
Corporation Shares Shares No. Owned
----------- ------- --------- ----------- ----------
B. [PLEDGOR]
Name of
Issuing Type of Number of Certificate Percentage
Corporation Shares Shares No. Owned
----------- ------- --------- ----------- ----------
[TO BE PROVIDED BY THE BORROWER]
ANNEX C
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LIST OF NOTES
-------------
A. [PLEDGOR]
Obligor Amount (if any) Maturity Date (if any)
------- --------------- ----------------------
B. [PLEDGOR]
Obligor Amount (if any) Maturity Date (if any)
------- --------------- ----------------------
[TO BE PROVIDED BY THE BORROWER]
ANNEX D
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PART I.
------
LIST OF PARTNERSHIP INTERESTS
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A. [PLEDGOR]
-------
Type of
Pledged Partnership
Percentage
Entities Interest
--------- ------------
Owned
------
B. [PLEDGOR]
-------
Type of
Pledged Partnership
Percentage
Entities Interest
--------- ------------
Owned
------
PART II.
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LIST OF MEMBERSHIP INTERESTS
----------------------------
A. [PLEDGOR]
-------
Type of
Pledged Membership
Percentage
Entities Interest
--------- ------------
Owned
------
B. [PLEDGOR]
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ANNEX D
Page 2
Type of
Pledged Membership
Percentage
Entities Interest
--------- ------------
Owned
------
ANNEX E
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FORM OF PLEDGE NOTICE
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[Letterhead of Pledgor]
[Date]
TO: [Name of Pledged Entity]
Notice is hereby given that, pursuant to the Pledge Agreement (a true
and correct copy of which is attached hereto), dated as of March __, 1998 (as
amended, amended and restated, modified or supplemented from time to time in
accordance with the terms thereof, the "Pledge Agreement"), between [NAME OF
PLEDGOR] (the "Pledgor"), the other pledgors from time to time party thereto and
Bankers Trust Company (the "Pledgee") on behalf of the Secured Creditors
described therein, the Pledgor has pledged and assigned to the Pledgee for the
benefit of the Secured Creditors, and granted to the Pledgee for the benefit of
the Secured Creditors a continuing security interest in, all right, title and
interest of the Pledgor, whether now existing or hereafter arising or acquired,
as a [[limited] [general] partner] [member] in [NAME OF PLEDGED ENTITY] (the
["Partnership"] ["LLC"]), and in, to and under the [TITLE OF APPLICABLE
AGREEMENT] (the "[Partnership] [LLC] Agreement"), including, without limitation:
(i) all the capital of the [Partnership] [LLC] and the Pledgor's
interest in all profits, losses, and other distributions to which the
Pledgor shall at any time be entitled in respect of such interest;
(ii) all other payments due or to become due to the Pledgor in
respect of such partnership interest, whether under the [Partnership] [LLC]
Agreement or otherwise, whether as contractual obligations, damages,
insurance proceeds or otherwise;
(iii) all of its claims, rights, powers, privileges, authority,
options, security interest, liens and remedies, if any, under the
[Partnership] [LLC] Agreement or at law or otherwise in respect of such
interest;
ANNEX X
Page 2
(iv) all present and future claims, if any, of the Pledgor against
the [Partnership] [LLC] for moneys loaned or advanced, for services
rendered or otherwise;
(v) all of the Pledgor's rights under the [Partnership] [LLC]
Agreement or at law to exercise and enforce every right, power, remedy,
authority, option and privilege of the Pledgor relating to the
[Partnership] [Membership] Interest, including any power to terminate,
cancel or modify the [Partnership] [LLC] Agreement, to execute any
instruments and to take any and all other action on behalf of and in the
name of the Pledgor in respect of the [Partnership] [Membership] Interest
and the [Partnership] [LLC] to make determinations, to exercise any
election (including, but not limited, election of remedies) or option or to
give or receive any notice, consent, amendment, waiver or approval,
together with full power and authority to demand, receive, enforce, collect
or receipt for any of the foregoing, to enforce or execute any checks, or
other instruments or orders, to file any claims and to take any action in
connection with any of the foregoing;
(vi) all other property hereafter delivered in substitution for or
in addition to any of the foregoing, all certificates and instruments
representing or evidencing such other property and all cash, securities,
interest, dividends, rights and other property at any time and from time to
time received, receivable or otherwise distributed in respect of or in
exchange for any or all thereof; and
(vii) to the extent not otherwise included, all proceeds of any or
all of the foregoing.
Pursuant to the Pledge Agreement, the [Partnership] [LLC] is hereby
authorized and directed to register the Pledgor's pledge to the Pledgee on
behalf of the Secured Creditors of the interest of the Pledgor on the
[Partnership's] [LLC's] books.
ANNEX E
Page 3
The Pledgor hereby requests the [Partnership] [LLC] to indicate the
[Partnership's] [LLC's] acceptance of this Notice and consent to and
confirmation of its terms and provisions by signing a copy hereof where
indicated on the attached page and returning the same to the Pledgee on behalf
of the Secured Creditors.
[NAME OF PLEDGOR]
By_________________________________
Title:
ANNEX F
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FORM OF PLEDGE ACKNOWLEDGMENT
-----------------------------
[NAME OF PLEDGED ENTITY] (the ["Partnership"] ["LLC"]) hereby
acknowledges receipt of a copy of the assignment by [NAME OF PLEDGOR]
("Pledgor") of its interest under the [TITLE OF APPLICABLE AGREEMENT] (the
"[Partnership] [LLC] Agreement") pursuant to the terms of the Pledge Agreement,
dated as of March __, 1998, (as the same may be amended, amended and restated,
modified or supplemented) from time to time, between Pledgor, the other pledgors
from time to time party thereto, and Bankers Trust Company (the "Pledgee") on
behalf of the Secured Creditors described therein. The undersigned hereby
further confirms the registration of the Pledgor's pledge of its interest to the
Pledgee on behalf of the Secured Creditors on the [Partnership's] [LLC's] books.
Dated: ______________ __, 199_
[NAME OF PLEDGED ENTITY]
By____________________________
Title: