Exhibit B
PLEDGE AGREEMENT
THIS PLEDGE AGREEMENT, is made as of the 28th day of July, 2000
("Agreement"), by and between ▇▇▇▇▇ ▇. ▇▇▇▇▇, Trustee of the Casty Grantor
Subtrust ("Pledgor"), and ▇▇▇ ▇. ▇▇▇▇▇ ("Secured Party").
W I T N E S S E T H:
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WHEREAS, the Secured Party agreed to lend Twenty Two Million, Nine Hundred
Sixty Thousand, Five Hundred Seventy-Five Dollars ($22,960,575) to Pledgor as
evidenced by the terms of that certain Secured Promissory Note dated as of the
date hereof (the "Note") by and between Pledgor and Secured Party;
WHEREAS, Pledgor wishes to grant security and assurances to Secured Party
in order to secure the payment and performance of his or its liabilities under
the Note and to that effect to pledge all of the shares of common stock, IFX
Corporation, a Delaware corporation, purchased by Pledgor contemporaneously
herewith and listed and described on Exhibit A, attached hereto and incorporated
herein by this reference, owned by the Pledgor (the "Pledged Shares"); and
WHEREAS, it is a condition to the making of the loan by the Secured Party
that this Pledge Agreement be delivered by Pledgor to Secured Party.
NOW, THEREFORE, in consideration of the premises and in order to induce
Secured Party to make the loan, and for other good and valuable consideration,
the receipt of which is hereby acknowledged, Pledgor hereby agrees with Secured
Party as follows:
1. Pledges. Pledgor hereby pledges, assigns, hypothecates, transfers and
delivers to Secured Party and grants to Secured Party, a lien on and security
interest in all of the Pledged Shares and in all proceeds thereof, as collateral
security for the prompt and complete payment when due (whether at the stated
maturity, by acceleration or otherwise) of all obligations and liabilities
under, arising out of or in connection with the Note, this Pledge Agreement and
any other financing agreements contemplated herein executed by Pledgor (all of
the foregoing being referred to hereinafter as the "Liabilities"). All of the
Pledged Shares owned by the Pledgor is presently represented by the stock
certificates described on Exhibit A, which stock certificates, with undated
stock powers duly executed by Pledgor, is being delivered to Secured Party or
Secured Party's agent simultaneously herewith. For the duration of this
Agreement, the Secured Party or its agent shall maintain possession and custody
of the certificates representing the Pledged Shares.
2. Representations of Pledgor. Pledgor represents and warrants to Secured
Party that:
(a) Pledgor is the record, and the beneficiaries of Pledgor are the
beneficial owners, of, and Pledgor has good and marketable title to the Pledged
Shares, free and clear of all pledges, liens, security interests and other
encumbrances and restrictions whatsoever, except the lien and security interest
created by this Pledge Agreement;
(b) Pledgor has full power, authority and legal right to execute this
Pledge Agreement and to pledge the Pledged Shares;
(c) This Pledge Agreement has been duly executed and delivered by
Pledgor and constitutes a legal, valid and binding obligation of Pledgor
enforceable in accordance with its terms;
(d) There are no outstanding options, warrants or agreements with
respect to the Pledged Shares;
(e) Exhibit A sets forth a true and complete description of the
Pledged Shares;
(f) No consent, approval or authorization of or designation or filing
with any authority on the part of Pledgor is required in connection with the
pledge and security interest granted under this Agreement; and
(g) The pledge, assignment and delivery of the Pledged Shares
pursuant to this Pledge Agreement creates a valid lien on and a perfected
security interest in such Pledged Shares and the proceeds thereof in favor of
Secured Party, subject to no prior pledge, lien, hypothecation, security
interest, charge, option or encumbrance or to any agreement purporting to grant
to any third party a security interest in the property or assets of Pledgor
which would include such Pledged Shares. Pledgor covenants and agrees that he
will defend Secured Party's right, title and security interest in and to such
Pledged Shares and the proceeds thereof against the claims and demands of all
persons whomsoever.
3. Stock Dividends, Distributions, etc. If, while this Pledge Agreement
is in effect, Pledgor shall become entitled to receive or shall receive any
stock certificate (including, without limitation, any certificate representing a
stock dividend or a stock distribution in connection with any reclassification,
increase or reduction of capital, or issued in connection with any
reorganization) option or rights, whether as an addition to, in substitution
for, or in exchange for any of the Pledged Shares, or otherwise relating to the
Pledged Shares, Pledgor agrees to accept the same as Secured Party's agent and
to hold the same in trust for Secured Party and to deliver the same forthwith to
Secured Party or its agent in the exact form received, with the endorsement of
Pledgor and, when necessary or appropriate, undated stock powers duly executed
in blank, to be held by Secured Party or its agent, subject to the terms hereof,
as additional collateral security for the Liabilities. In case any distribution
of capital stock shall be made on or in respect of any of the Pledged Shares or
any property shall be distributed upon or with respect to any of the Pledged
Shares pursuant to the recapitalization or reclassification of the capital of
the issuer thereof or pursuant to the reorganization thereof, the property so
distributed shall be delivered to Secured Party or its agent by Pledgor to be
held by Secured Party or its agent as additional collateral security for the
Liabilities.
4. Administration of Security. The following provisions shall govern the
administration of the Pledged Shares:
(a) So long as no "Event of Default" (which for purposes of this
Agreement shall mean an event of default under the Note or this Pledge
Agreement) has occurred, Pledgor shall be entitled to vote or consent with
respect to the Pledged Shares owned by Pledgor in any
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manner not inconsistent with this Agreement, or the Note, or any other document
or instrument delivered or to be delivered pursuant to or in connection with the
Note or this Pledge Agreement. Pledgor hereby grants to Secured Party an
irrevocable proxy to vote the Pledged Shares owned by Pledgor, which proxy shall
be effective immediately upon the occurrence of an Event of Default. After the
occurrence of an Event of Default and upon request of Secured Party, Pledgor
agrees to deliver to Secured Party such further evidence of such irrevocable
proxy or such further irrevocable proxies to vote the Pledged Shares owned by
Pledgor as Secured Party may request.
(b) Upon the occurrence of an Event of Default and at any time
thereafter, in the event that Pledgor, as record and beneficial owner of the
Pledged Shares owned by Pledgor, shall have received or shall have become
entitled to receive, any cash dividends or other distributions, Pledgor shall
deliver to Secured Party and Secured Party shall be entitled to receive and
retain all such cash or other distributions as additional security for the
Liabilities.
(c) Subject to any sale or other disposition by Secured Party of the
Pledged Shares or other property upon the occurrence of and at time after an
Event of Default hereunder pursuant to this Pledge Agreement, the Pledged Shares
owned by Pledgor and any other property then held as part of such Pledged Shares
in accordance with the provisions of this Pledge Agreement shall be returned to
Pledgor upon full payment, satisfaction and termination of all of the
Liabilities and the termination of the lien and security interest hereby granted
pursuant to paragraph 10 hereof.
5. Rights of Secured Party. Secured Party shall not be liable for failure
to collect or realize upon the Liabilities, or any part thereof, or for any
delay in so doing, nor shall it be under any obligation to take any action
whatsoever with regard thereto. Any or all of the Pledged Shares held by Secured
Party or its agent hereunder may, if an Event of Default has occurred, without
notice, be registered in the name of Secured Party or its nominee, and Secured
Party or its nominee may thereafter without notice exercise all voting and
corporate rights and exercise any and all rights of conversion, exchange,
subscription or any other rights, privileges or options pertaining to any of the
Pledged Shares as if it were the absolute owner thereof, including, without
limitation, the right to exchange at its discretion, any and all of the Pledged
Shares upon the merger, consolidation, reorganization, recapitalization or other
readjustment or upon the exercise by Secured Party of any right, privilege or
option pertaining to any of the Pledged Shares, and in connection therewith, to
deposit and deliver any and all of the Pledged Shares with any committee,
depositary, transfer agent, registrar or to other designated agency upon such
terms and conditions as Secured Party may determine, all without liability
except to account for property actually received by Secured Party, but Secured
Party shall have no duty to exercise any of the aforesaid rights, privileges or
options and shall not be responsible for any failure to do so or delay in so
doing.
6. Remedies. In the event that all or any portion of the Liabilities have
been declared due and payable, Secured Party, without demand of performance or
other demand, advertisement or notice of any kind (except the notice specified
below of time and place of public or private sale) to or upon Pledgor or any
other person (all and each of which demands, advertisements and/or notices are
hereby expressly waived), may forthwith collect, receive, appropriate and
realize upon the Pledged Shares, or any part thereof, and/or may forthwith sell,
assign, give option or options to purchase, contract to sell or otherwise
dispose of and deliver
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said Pledged Shares, or any part thereof, in one or more portions at public or
private sale or sales or dispositions, at any exchange, broker's board or at any
of Secured Party's offices or elsewhere upon such terms and conditions as
Secured Party may deem advisable and at such prices as Secured Party may deem
best, for any combination of cash or on credit or for future delivery without
assumption of any credit risk, with the right to Secured Party upon any such
sale or sales or dispositions, public or private, to purchase the whole or any
part of said Pledged Shares so sold, free of any right or equity of redemption
in any Pledgor, which right or equity is hereby expressly waived or released.
Secured Party shall apply the net proceeds of any such collection, recovery,
receipt, appropriation, realization or sale, after deducting all costs and
expenses of every kind incurred therein or incidental to the safekeeping or
otherwise of any and all of the Pledged Shares or in any way relating to the
rights of Secured Party hereunder, including attorney's fees and legal expenses,
to the payment, in whole or in part, of the Liabilities pursuant to this Pledge
Agreement in such order as Secured Party may elect, and only after so paying
over such net proceeds and after the payment by Secured Party of any other
amount required by any provision of law, including, without limitation, Section
9-504(1)(c) of the Uniform Commercial Code, need Secured Party account for the
surplus, if any, to Pledgor. Pledgor agrees that Secured Party need not give
more than ten days' notice of the time and place of any public sale or of the
time after which a private sale or other intended disposition is to take place
and that such notice is reasonable notification of such matters. No notification
need be given to Pledgor if Pledgor, after default, has signed a statement
renouncing or modifying any right to notification of sale or other intended
disposition. In addition to the rights and remedies granted to Secured Party in
this Agreement and in any other instrument or agreement securing, evidencing or
relating to any of the Liabilities, Secured Party shall have all the rights and
remedies of a secured party under the Uniform Commercial Code of the State of
Illinois. Pledgor further agrees to waive and agrees not to assert any rights or
privileges which Pledgor may acquire under Section 9-112 of the Uniform
Commercial Code. Pledgor shall remain liable for the deficiency if the proceeds
of any sale or other disposition of the Pledged Shares are insufficient to pay
all amounts to which Secured Party is entitled.
7. No Disposition, etc. Without the prior written consent of Secured
Party, Pledgor agrees that Pledgor will not sell, assign, transfer, exchange, or
otherwise dispose of, or grant any option with respect to, the Pledged Shares,
nor will Pledgor create, incur or permit to exist any pledge, lien, mortgage,
hypothecation, security interest, charge, option or any other encumbrance with
respect to any of the Pledged Shares, or any interest therein, or any proceeds
thereof, except for the lien and security interest provided for by this Pledge
Agreement. Without the prior written consent of Secured Party, Pledgor agrees
that Pledgor will not vote to enable the Secured Party to, and will not
otherwise permit the Secured Party to, issue any stock or other securities of
any nature in addition to or in exchange or substitution for any of the Pledged
Shares.
8. Sale of Pledged Shares.
(a) Pledgor recognizes that Secured Party may be unable to effect a
public sale or disposition of any or all the Pledged Shares by reason of certain
prohibitions contained in the Securities Act of 1933, as amended (the "Act"),
and applicable state securities laws, (Secured Party agreeing that to the extent
a public market exists it will use reasonable efforts to cause a public sale of
the Pledged Shares) but may be compelled to resort to one or more private sales
or dispositions thereof to a restricted group of purchasers who will be obliged
to agree, among other
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things, to acquire such securities for their own account for investment and not
with a view to the distribution or resale thereof. Pledgor acknowledges and
agrees that any such private sale or disposition may result in prices and other
terms (including the terms of any securities or other property received in
connection therewith) less favorable to the seller than if such sale or
disposition were a public sale or disposition and, notwithstanding such
circumstances, agrees that any such private sale or disposition shall be deemed
to have been made in a commercially reasonable manner. Secured Party shall be
under no obligation to delay a sale or disposition of any of the Pledged Shares
to permit the registration of such securities (or trust certificates
representing such securities) for public sale under the Act, or under applicable
state securities laws, even it the Company would agree to do so.
(b) Pledgor further agrees to do or cause to be done all such other
acts and things as may be necessary to make such sale or sales or dispositions
of any portion or all of the Pledged Shares valid and binding and in compliance
with any and all applicable laws, regulations, orders, writs, injunctions,
decrees or awards of any and all courts, arbitrators or governmental
instrumentalities, domestic or foreign, having jurisdiction over any such sale
or sales or dispositions, all at Pledgor's expense. Pledgor further agrees that
a breach of any of the covenants contained in this paragraph 8 will cause
irreparable injury to Secured Party, that Secured Party has no adequate remedy
at law in respect of such breach and, as a consequence, agrees that each and
every covenant contained in this paragraph shall be specifically enforceable
against Pledgor, and Pledgor hereby waives and agrees not to assert any defenses
against an action for specific performance of such covenants except for a
defense that no Event of Default has occurred hereunder.
9. Further Assurances. Pledgor agrees that at any time and from time to
time upon the written request of Secured Party, Pledgor will execute and deliver
such further documents and do such further acts and things as Secured Party may
reasonably request consistent with the provisions hereof in order to effect the
purposes of this Agreement.
10. Termination. This Pledge Agreement and the lien and security interest
granted hereunder shall terminate upon full and complete performance and
satisfaction of the Liabilities.
11. Secured Party's Duty of Care. Secured Party shall have no duty with
respect to the Pledged Shares other than the duty to use reasonable care in the
safe custody of the Pledged Shares in Secured Party's possession. Without
limiting the generality of the foregoing, Secured Party shall be under no
obligation to take any steps necessary to preserve rights in any of the Pledged
Shares against any other parties but may do so at Secured Party's option.
Pledgor will indemnify and hold Secured Party harmless from all costs and
expenses incurred by Secured Party in connection with the Pledged Shares and
this Agreement.
12. Miscellaneous.
(a) Severability. Any provision of this Agreement which is prohibited
or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
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(b) No Waiver. Secured Party shall not by any act, delay, omission or
otherwise be deemed to have waived any of its rights or remedies hereunder and
no waiver by Secured Party shall be valid unless in writing, signed by Secured
Party, and then only to the extent therein set forth. A waiver by Secured Party
of any right or remedy hereunder on any one occasion shall not be construed as a
bar to any right or remedy which Secured Party would otherwise have on any
further occasion No failure to exercise, nor any delay in exercising on the part
of Secured Party any right, power or privilege hereunder, shall operate as a
wavier thereof; nor shall any single or partial exercise of any right, power or
privilege hereunder preclude any other or further exercise of any right, power
or privilege hereunder preclude any other or further exercise thereof or the
exercise of any other right, power or privilege.
(c) Cumulative Remedies. The rights and remedies herein provided are
cumulative and may be exercised singly or concurrently, and are not exclusive of
any rights or remedies provided by law.
(d) Successors. This Agreement and all obligations of Pledgor
hereunder shall be binding upon the successors and assigns of Pledgor, and
shall, together with the rights and remedies of Secured Party hereunder, inure
to the benefit of Secured Party and its successors and assigns.
(e) Governing Law. This Agreement shall be governed by, and be
construed and interpreted in accordance with, the internal laws (as opposed to
conflicts of law provisions) of the State of Illinois.
(f) Notices. Any notices, request or other communication required or
desired to be served, given or delivered under this Agreement shall be in
writing and shall be deemed to have been validly served, given or delivered upon
physical delivery thereof or three (3) days after deposit in the United States
mails, registered or certified mail, with proper postage prepaid and addressed
to the party to be notified as follows:
If to Pledgor:
Casty Grantor Subtrust
c/o ▇▇▇▇▇ ▇. ▇▇▇▇▇, Trustee
▇▇▇▇, Gerber & ▇▇▇▇▇▇▇▇▇
Two North LaSalle Street, Suite 2200
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
If to Secured Party:
▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
or to such other address as either party may hereafter designate for itself by
written notice to the other party in the manner herein prescribed.
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(g) Section Headings. The section headings in this Agreement are for
convenience of reference only, and shall not affect in any way the
interpretation of any of the provisions of this Agreement.
(h) Trustee Liability. This Agreement to the extent executed by any
person or entity in his or her capacity as trustee or co-trustee of a trust, is
executed by such person or entity solely as such trustee and not in an
individual capacity. The execution by such person or entity of this Agreement
in his or her capacity as trustee or co-trustee shall not create any liability
on, or require the performance of any covenant by, any such trustee individually
nor subject the individual property of any trustee to any liability.
(i) Counterparts. This Agreement may be executed in counterparts. all
of which together shall constitute one Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered on the date first above written.
PLEDGOR:
CASTY GRANTOR SUBTRUST
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
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▇▇▇▇▇ ▇. ▇▇▇▇▇, Trustee
SECURED PARTY:
/s/ ▇▇▇ ▇. ▇▇▇▇▇
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▇▇▇ ▇. ▇▇▇▇▇
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EXHIBIT A TO PLEDGE AGREEMENT
DESCRIPTION OF PLEDGED SHARES*
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Number of
Class of Pledged Pledged Certificate Date of
Pledgor Shares* Shares* Number(s) Issuance
----------- ---------------- --------- ------------ --------
Casty Grantor 3,061,410
Subtrust
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Total
*Shares of common stock of IFX Corporation, a Delaware corporation.
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