Exhibit 4.7
EXECUTION COPY
EURO COLLATERAL PLEDGE AND SECURITY AGREEMENT
This EURO COLLATERAL PLEDGE AND SECURITY AGREEMENT (this "PLEDGE
AGREEMENT") is made and entered into as of February 19, 1999 by CARRIER1
INTERNATIONAL S.A., a societe anonyme organized under the laws of the Grand
Duchy of Luxembourg (the "PLEDGOR"), having its registered office at ▇-▇▇▇▇
▇▇▇▇▇▇▇▇ ▇, ▇▇▇▇▇ ▇'▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, in favor of THE CHASE MANHATTAN BANK
("CHASE"), a New York banking corporation, having an office at ▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇-▇▇▇▇, as trustee (the "TRUSTEE") for the
holders (the "HOLDERS") of the Notes (as defined herein) issued by the Pledgor
under the Indenture referred to below and CHASE MANHATTAN BANK AG, having an
office at ▇▇▇▇▇▇▇▇▇▇▇▇ ▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, in its individual
capacity, as securities intermediary (the "COLLATERAL SECURITIES INTERMEDIARY").
Capitalized terms used herein and not otherwise defined herein shall have the
meanings given to such terms in the Indenture.
W I T N E S S E T H
WHEREAS, the Pledgor and The Chase Manhattan Bank, as Trustee, have entered
into that certain indenture dated as of the date hereof (as amended, restated,
supplemented or otherwise modified from time to time the "INDENTURE"), pursuant
to which the Pledgor is issuing on the date hereof Euro 85,000,000 in aggregate
principal amount of 13 1/4% Senior Notes due 2009 (the "NOTES"); and
WHEREAS, the Trustee has opened a collateral account (the "COLLATERAL
ACCOUNT") with Chase Manhattan Bank AG at its office at ▇▇▇▇▇▇▇▇▇▇▇▇ ▇, ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, Reference: "The Chase Manhattan Bank, as Trustee,
Carrier1 Euro Securities Collateral A/C", Account No. 616-057-006-01, in the
name, and under the sole control and dominion, of the Trustee and subject to the
terms of this Agreement;
WHEREAS, the Pledgor has agreed, pursuant to the Indenture, to either
(i)(A) purchase or cause the purchase of the Pledged Securities (as defined
herein) in the name of the Trustee for the benefit of Holders of the Notes in an
amount that will be sufficient upon receipt of scheduled interest and principal
payments in respect thereof to provide for the payment of the first five
scheduled interest payments due on the Notes and (B) to deliver or cause the
delivery of the Pledged Securities into the Collateral Account for the benefit
of Holders of the Notes or (ii) deposit (or cause to be deposited) sufficient
cash into the Collateral Account to allow for the purchase of such Pledged
Securities and deposit thereof in the Collateral Account; and
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WHEREAS, to secure the obligations of the Pledgor under the Indenture and
the Notes to pay in full each of the first five scheduled interest payments on
the Notes and to secure repayment of the principal, premium (if any) and
interest on the Notes in the event that the Notes become due and payable prior
to such time as the first five scheduled interest payments thereon shall have
been paid in full (collectively, the "OBLIGATIONS"), the Pledgor has agreed (i)
to pledge to the Trustee for its benefit and the ratable benefit of the Holders
of the Notes, a security interest in all cash, if any, held in the Collateral
Account, the Pledged Securities and related collateral and (ii) to execute and
deliver this Pledge Agreement in order to secure the payment and performance by
the Pledgor of all the Obligations; and
WHEREAS, it is a condition precedent to the initial purchase of the Notes
by the initial Holders thereof that the Pledgor shall have granted the
assignment and security interest and made the pledge and assignment contemplated
by this Pledge Agreement; and
WHEREAS, unless otherwise defined herein or in the Indenture, terms used in
Articles 8 or 9 of the Uniform Commercial Code ("UCC") as in effect in the State
of New York are used herein as therein defined.
NOW, THEREFORE, in consideration of the mutual promises herein contained,
and in order to induce the Holders of the Notes to purchase the Notes, the
Pledgor hereby agrees with the Trustee, for the benefit of the Trustee and for
the ratable benefit of the Holders of the Notes, as follows:
SECTION 1. PLEDGE AND GRANT OF SECURITY INTEREST. The Pledgor hereby
assigns and pledges to the Trustee for its benefit and for the ratable benefit
of the Holders of the Notes, and hereby grants to the Trustee for its benefit
and for the ratable benefit of the Holders of the Notes, a continuing first
priority security interest in and to all of the Pledgor's right, title and
interest in, to and under the following (whether consisting of investment
securities, book-entry securities or other securities, security entitlements,
financial assets or other investment property, accounts, general intangibles,
instruments or documents, securities accounts, deposit accounts or other bank,
trust or cash collateral accounts, or other property, assets or rights), whether
now owned or hereafter acquired, wherever located and whether now or hereafter
existing (hereinafter collectively referred to as the "COLLATERAL"):
(a) the Collateral Account, all financial assets from time to time
credited to the Collateral Account (including, without limitation, any
Pledged Securities from time to time credited to the Collateral Account),
and all dividends, interest, cash, instruments and other property from time
to time received, receivable or otherwise distributed in respect of or in
exchange for any or all of such financial assets;
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(b) any and all applicable security entitlements to any of the
financial assets credited from time to time to the Collateral Account
(including, without limitation, to any Pledged Securities from time to time
credited to the Collateral Account);
(c) any and all related securities accounts in which security
entitlements to any of the financial assets credited from time to time to
the Collateral Account (including, without limitation, to any Pledged
Securities from time to time credited to the Collateral Account);
(d) all notes, certificates of deposit, deposit accounts, checks and
other instruments from time to time hereafter delivered to or otherwise
possessed by the Trustee for or on behalf of the Pledgor in substitution
for or in addition to any or all of the then existing Collateral;
(e) all interest, dividends, cash, instruments and other property from
time to time received, receivable or otherwise distributed in respect of or
in exchange for any or all of the then existing Collateral;
(f) any and all claims against the Collateral Securities Intermediary
(ABTRETUNG DER HERAUSGABEANSPRUCHE) for the delivery of the Pledged
Securities in accordance with Sections 870, 1293 and 1205 Abs.2 of the
German Civil Code (BURGERLICHES GESETZBUCH - "BGB" -) or any and all claims
(based on contract or otherwise) against Cedel S.A. or any other clearing
house in respect of the Pledged Securities (collectively, the "ASSIGNED
EURO RIGHTS"); and
(g) all proceeds (including, without limitation, cash proceeds) of any
and all of the foregoing Collateral (including, without limitation,
proceeds that constitute property of types described in clauses (a) through
(f) of this Section 1).
SECTION 2. SECURITY FOR OBLIGATION. This Pledge Agreement and the grant of
a security interest in the Collateral secure the prompt and complete payment and
performance when due (whether at stated maturity, by acceleration or otherwise)
of all the Obligations, whether for principal, interest, fees or otherwise, now
or hereafter existing, under this Pledge Agreement, the Notes or the Indenture
(all such Obligations being the "SECURED OBLIGATIONS"). Without limiting the
generality of the foregoing, this Pledge Agreement and the grant of a security
interest in the Collateral hereunder secure the payment of all amounts that
constitute part of the Secured Obligations and would be owed by the Pledgor to
the Trustee or the Holders under the Notes or the Indenture but for the fact
that they are unenforceable or not allowable due to the existence of a
bankruptcy, reorganization or similar proceeding involving the Pledgor.
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SECTION 3. MAINTAINING THE COLLATERAL ACCOUNT. Prior to or concurrently
with the execution and delivery hereof and for so long as any Secured Obligation
shall remain outstanding,
(a) the Trustee shall establish and maintain (and the Collateral
Securities Intermediary shall maintain and administer in accordance with
this Pledge Agreement) the Collateral Account with the Collateral
Securities Intermediary at its office at ▇▇▇▇▇▇▇▇▇▇▇▇ ▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇
▇▇▇▇, ▇▇▇▇▇▇▇, in accordance with the terms of this Pledge Agreement. The
Collateral Account shall at all times be segregated from any other
custodial or collateral account maintained by the Trustee.
(b) the Collateral Securities Intermediary and the Trustee shall cause
the Collateral Account to be, and the Collateral Account shall be, separate
from all other accounts held by or under the control and dominion of the
Trustee, the Collateral Securities Intermediary or Chase. It shall be a
term and condition of the Collateral Account, notwithstanding any term or
condition to the contrary in any other agreement relating to the Collateral
Account, and except as otherwise provided by the provisions of Section 5
and Section 17.9 of this Pledge Agreement, that no amount shall be paid or
released to or for the account of, or withdrawn by or for the account of,
the Pledgor or any other Person from the Collateral Account.
(c) the Collateral Account shall be subject to such applicable laws,
and such applicable regulations of any appropriate banking or governmental
authority, as may now or hereafter be in effect, including, without
limitation, any applicable regulations of the Board of Governors of the
Federal Reserve System.
(d) subject to the provisions of this Agreement, the Collateral
Account shall be under the sole dominion and control of the Trustee. The
Trustee shall have the sole right to make withdrawals from the Collateral
Account and to exercise all rights (including the delivery of entitlement
orders) with respect to the Collateral from time to time therein. All
Collateral delivered to or held by or on behalf of, and not released by,
the Trustee pursuant hereto shall be held in the Collateral Account in
accordance with the provisions hereof.
(e) if any earnings of the Collateral held in the Collateral Account
are subject to non-U.S. withholding taxes, the Trustee shall cooperate in
good faith with the Pledgor to reduce or eliminate such withholding taxes,
including, without limitation, through changing the location of the
Collateral Account or through establishing an additional Collateral Account
at a different location to hold the affected Collateral, PROVIDED that
after giving effect to any such change of location or establishment of an
additional
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Collateral Account, the Trustee's security interest in the affected
Collateral shall continue to constitute a valid and perfected first
priority security interest in such Collateral.
SECTION 4. DELIVERY AND CONTROL OF COLLATERAL; COLLATERAL ACCOUNTS;
INTEREST. (a) All cash, certificates or instruments representing or evidencing
any of the Collateral shall be delivered to and held by or on behalf of the
Trustee pursuant to this Pledge Agreement and shall be in suitable form for
transfer by delivery, or shall be accompanied by duly executed instruments of
transfer or assignment in blank, all in form and substance reasonably
satisfactory to the Trustee.
(b) With respect to any of the Collateral that constitutes an
uncertificated security, the Pledgor shall cause the issuer thereof either (i)
to register the Trustee as the registered owner of such security or (ii) to
agree in writing with the Pledgor and the Trustee that such issuer will comply
with instructions with respect to such security originated by the Trustee
without further consent of the Pledgor, such agreement to be in form and
substance reasonably satisfactory to the Trustee.
(c) With respect to any of the Collateral that constitutes a security
entitlement, the Pledgor shall cause the securities intermediary with respect to
such security entitlement to identify in its records the Trustee as the
entitlement holder of such security entitlement against such securities
intermediary.
(d) With respect to any Collateral that constitutes a securities account,
the Pledgor will comply with subsection (c) of this Section 4 with respect to
all security entitlements carried in such securities account.
(e) Upon transfer of the Pledged Securities to the Trustee (or the
Trustee's acquisition of a security entitlement thereto), as confirmed to the
Trustee by FRBNY, Chase or another securities intermediary, the Trustee shall
make appropriate book entries indicating that the Pledged Securities and/or such
security entitlements have been credited to and are held in the Collateral
Account. Subject to the other terms and conditions of this Pledge Agreement, all
funds or other property held by the Trustee pursuant to this Pledge Agreement
shall be held in the Collateral Account subject (except as expressly provided in
Sections 5(a), (b), (c), (d), (e) and (f) hereof) to the exclusive dominion and
control of the Trustee and exclusively for the benefit of the Trustee and for
the ratable benefit of the Holders of the Notes and segregated from all other
funds or other property otherwise held by the Trustee.
(f) All Collateral shall be retained in the Collateral Account pending
disbursement pursuant to the terms of this Pledge Agreement.
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SECTION 5. DISBURSEMENTS. (a) Three business days prior to the due date of
any of the first five scheduled interest payments on the Notes, the Pledgor may,
pursuant to written instructions given by the Pledgor to the Trustee (an "ISSUER
ORDER"), direct the Trustee to release from the Collateral Account and pay to
the Holders of the Notes proceeds sufficient to provide for payment in full of
such interest then due on the Notes. Upon receipt of an Issuer Order, the
Trustee will release funds in an amount sufficient to provide for the payment in
full of such interest then due on the Notes in accordance with such Issuer Order
and the payment provisions of the Indenture to the Holders of the Notes from
(and to the extent of) proceeds of the Pledged Securities in the Collateral
Account. Nothing in this Section 5 shall affect the Trustee's rights to apply
the Collateral to the payments of amounts due on the Notes upon acceleration
thereof.
(b) If the Pledgor makes any interest payment or portion of an interest
payment for which the Collateral is security from a source of funds other than
the Collateral Account ("PLEDGOR FUNDS"), the Pledgor may, after payment in full
of such interest payment, direct the Trustee pursuant to an Issuer Order to
release to the Pledgor or to another party at the direction of the Pledgor (the
"PLEDGOR'S DESIGNEE") proceeds from the Collateral Account in an amount less
than or equal to the amount of Pledgor Funds applied to such interest payment.
Upon receipt by the Trustee of (i) such Issuer Order and (ii) payment in full of
such interest payment, the Trustee shall pay over to the Pledgor or the
Pledgor's Designee, as the case may be, proceeds from the Collateral Account in
accordance with such Issuer Order as soon as practicable.
(c) If at any time the principal of and interest on the Pledged Securities
exceeds 100% of the amount sufficient, in the written opinion of an
internationally recognized firm of independent accountants selected by the
Pledgor and delivered to the Trustee, to provide for payment in full of the
remaining first five scheduled interest payments due on the Notes, the Pledgor
may direct the Trustee to release any such excess amount to the Pledgor or to
the Pledgor's Designee. Upon receipt of an Issuer Order (which shall include a
certificate from such internationally recognized firm of independent accountants
stating the amount by which the Pledged Securities exceeds the amount required
to be held in the Collateral Account) the Trustee shall pay over to the Pledgor
or the Pledgor's Designee, as the case may be, any such excess amount.
(d) Upon payment in full of the first five scheduled interest payments on
the Notes, the security interest in the Collateral evidenced by this Pledge
Agreement will automatically terminate and be of no further force and effect and
the Collateral shall promptly be paid over and transferred to the Pledgor or the
Pledgor's Designee, as the case may be. Furthermore, upon the release of any
Collateral from the Collateral Account in accordance with the terms of this
Pledge Agreement, whether upon release of Collateral to Holders as payment of
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interest or otherwise, the security interest evidenced by this Pledge Agreement
in such released Collateral will automatically terminate and be of no further
force and effect.
(e) At least three Business Days prior to the due date of each of the first
five scheduled interest payments on the Notes, the Pledgor shall give the
Trustee notice (by Issuer Order) as to whether such interest payment will be
made pursuant to Section 5(a) or 5(b) above and the respective amounts of
interest that will be paid from the Collateral Account and from Pledgor Funds.
Any Pledgor Funds to be used to make any interest payment shall be delivered to
the Trustee, in immediately available funds, prior to 10:00 a.m. (New York City
time) on such interest payment date. If no such notice is given or such Pledgor
Funds have not been so delivered, the Trustee will act pursuant to Section 5(a)
above as if it had received an Issuer Order pursuant thereto for the payment in
full of the interest then due from the Collateral Account.
(f) If on any interest payment date there are insufficient funds in the
Collateral Account to make any scheduled payment of interest (after taking into
account any Pledgor Funds delivered to the Trustee as provided in Section 5(b)
above), the Trustee shall liquidate Collateral in the Collateral Account to the
extent necessary to pay, in full, such scheduled payment of interest. The
Trustee will not charge any fee in connection with any necessary conversion of
the legacy currency of any participating member state in the European Monetary
Union into Euro, whether such legacy currency is on deposit in the Collateral
Account, received by the Trustee as a payment from the Pledgor or under any item
of Collateral, or received by the Trustee upon the liquidation of any item of
Collateral.
(g) Nothing contained in this Pledge Agreement shall (i) afford the Pledgor
any right to issue entitlement orders with respect to any security entitlement
to the Pledged Securities or any securities account in which any such security
entitlement may be carried, or otherwise afford the Pledgor control of any such
security entitlement or (ii) otherwise give rise to any rights of the Pledgor
with respect to the Pledged Securities, any security entitlement thereto or any
securities account in which any such security entitlement may be carried, other
than the Pledgor's rights under this Pledge Agreement as the beneficial owner of
collateral pledged to and subject to the exclusive dominion and control (except
as expressly provided in Sections 5(a), (b), (c), (d), (e) and (f) hereof) of
the Trustee in its capacity as such (and not as a securities intermediary). The
Pledgor acknowledges, confirms and agrees that the Trustee holds a security
interest to the Pledged Securities solely as Trustee for the Holders of the
Notes and not as a securities intermediary.
SECTION 6. CASH DEPOSIT; INVESTMENTS. (a) On the date hereof, the Pledgor
shall either (i) deliver or cause the delivery of the European Government
Securities identified in Exhibit A to this Pledge Agreement (the "PLEDGED
SECURITIES") into the Collateral Account or (ii) deposit (or cause to be
deposited) cash proceeds sufficient to purchase such Pledged Securities on the
third business day occurring immediately hereafter into the Collateral Account.
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(b) In the event that the Pledgor shall have deposited (or cause to be
deposited) cash proceeds pursuant to clause (a)(ii) above, the Trustee shall,
within three business days of the date hereof, use such cash proceeds to invest
in the Pledged Securities, at which time such Pledged Securities shall be
promptly credited to the Collateral Account. Until such time as any cash
proceeds are invested in the Pledged Securities as provided above, such cash
proceeds shall be deposited and held in a deposit account with Chase in the name
of the Trustee and under the sole control and dominion of the Trustee, such
deposit account to be deemed to constitute part of the Collateral Account.
SECTION 7 SECURITIES INTERMEDIARY. (a) Chase Manhattan Bank AG, as
Collateral Securities Intermediary, hereby represents and warrants to, and
agrees with the Pledgor and the Trustee as follows:
(a) It is a securities intermediary as of the date hereof and for so
long as this Pledge Agreement remains in effect shall remain in effect and
it is acting as the Collateral Securities Intermediary hereunder, it shall
remain a securities intermediary and shall act as such with respect to the
Pledgor, the Trustee, the Collateral Account and all other Collateral.
(b) The Collateral Account is and will be maintained as a securities
account.
(c) It is the securities intermediary with respect to any assets,
property or other items credited to the Collateral Account from time to
time.
(d) All financial assets in registered form or payable to or to the
order of and credited to the Pledge Account shall be registered in the name
of, payable to or to the order of, or endorsed to, the Collateral
Securities Intermediary and in no case during the term of this Pledge
Agreement will any financial asset credited to the Collateral Account be
registered in the name of, payable to or to the order of, or endorsed to,
the Pledgor, except to the extent the foregoing have been subsequently
endorsed by the Pledgor to the Collateral Securities Intermediary or in
blank.
(e) It shall, upon written direction from the Trustee and without
further consent from the Pledgor, (i) comply with all instructions,
entitlement orders and directions of any kind originated by the Trustee
concerning the Collateral, to liquidate or otherwise dispose of the
Collateral as and to the extent directed by the Trustee and pay over to the
Trustee all proceeds and other value therefrom or otherwise distributed
with respect thereto without any set-off or deduction, and (ii) except as
otherwise directed by the Trustee, not to comply with the instructions,
entitlement orders or directions of the Pledgor or any other person.
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(f) Each item of property (whether cash, a security, investment
property, instrument or obligation, share, participation, interest or other
property whatsoever) credited to the Collateral Account shall be treated as
a financial asset.
(g) Except for the claims and interests of the Trustee and the Pledgor
in the Collateral, it does not know of any claim to or security interest or
other interest in the Collateral.
(h) It hereby waives its rights to set off any obligations of the
Pledgor to it against any or all assets held by the Trustee as Collateral,
and hereby agrees that any and all liens, encumbrances, claims or security
interests which it may have against the Collateral, either now or in the
future are and shall be subordinate and junior to the prior payment in full
of all obligations of the Pledgor now or hereafter existing under the
Indenture, Notes and all other documents related thereto whether for
principal, interest (including, without limitation, interest as provided
in the Notes, whether or not such interest accrues after the filing of such
petition for purposes of the Bankruptcy Code or is an allowed claim in such
proceeding), indemnities, fees, premiums, expenses or otherwise.
(i) It shall not agree with any third party to comply with any
instructions, entitlement orders or directions of any kind concerning the
Collateral originated by such third party without the prior written consent
of the Trustee.
SECTION 8. REPRESENTATIONS AND WARRANTIES. The Pledgor hereby represents
and warrants that:
(a) The execution and delivery by the Pledgor of, and the performance
by the Pledgor of its obligations under, this Pledge Agreement will not
contravene any provision of applicable law or the Articles of Incorporation
of the Pledgor or any material agreement or other material instrument
binding upon the Pledgor or any of its subsidiaries or any judgment, order
or decree of any governmental body, agency or court having jurisdiction
over the Pledgor or any of its subsidiaries, or result in the creation or
imposition of any Lien on any assets of the Pledgor, except for the
security interests granted under this Pledge Agreement.
(b) No consent of any other person and no approval, authorization,
order of, action by or qualification with, any governmental authority,
regulatory body, agency or other third party is required (i) for the
execution, delivery or performance by the Pledgor of its obligations under
this Pledge Agreement or (ii) for the grant by the Pledgor of the security
interests created by this Pledge Agreement or for the pledge by the Pledgor
of the
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Collateral pursuant to this Pledge Agreement, except, in each case, for
such consents, approvals, authorizations, orders, actions and
qualifications which the failure to obtain, individually or in the
aggregate, could not reasonably be expected to have a material adverse
effect on the properties, assets, financial condition or results of
operations of the Pledgor. No consent of any other person and no approval,
authorization, order of, action by or qualification with, any governmental
authority, regulatory body, agency or other third party is required for the
exercise by the Trustee of the rights provided for in this Pledge Agreement
or the remedies in respect of the Collateral pursuant to this Pledge
Agreement, except for any such consents, approvals, authorizations or
orders required to be obtained by the Trustee (or the Holders) for reasons
other than the consummation of this transaction.
(c) The Pledgor is the beneficial owner of the Collateral, free and
clear of any Lien or claims of any person or entity (except for the
security interests created by this Pledge Agreement). The Pledgor has not
at time transferred any of the Collateral to third parties nor encumbered
such Collateral with any third party rights. No financing statement or
instrument similar in effect covering all or any part of the Pledgor's
interest in the Pledged Securities is on file in any public or recording
office, other than the financing statements filed pursuant to this Pledge
Agreement. The Pledgor has no trade names.
(d) This Pledge Agreement has been duly authorized, validly executed
and delivered by the Pledgor and constitutes a valid and binding agreement
of the Pledgor, enforceable against the Pledgor in accordance with its
terms, except as (i) the enforceability hereof may be limited by
bankruptcy, insolvency, fraudulent conveyance, preference, reorganization,
moratorium or similar laws now or hereafter in effect relating to or
affecting creditors' rights or remedies generally, (ii) the availability of
equitable remedies may be limited by equitable principles of general
applicability, (iii) the exculpation provisions and rights to
indemnification hereunder may be limited by U.S. federal and state
securities laws and public policy considerations and (iv) the waiver of
rights and defenses contained in Section 14(a) and (b), Section 17.11 and
Section 17.15 of this Pledge Agreement may be limited by applicable law.
(e) Upon the transfer to the Trustee of any cash proceeds or the
Pledged Securities and the acquisition by the Trustee of a security
entitlement thereto, in accordance with Sections 3, 4 and 6 above, the
pledge and grant of a security interest in the Collateral pursuant to this
Pledge Agreement for the benefit of the Trustee and the Holders of the
Notes will constitute a valid and perfected first priority security
interest in such Collateral, securing the payment of the Secured
Obligations enforceable as such against all creditors of the Pledgor (and
any persons purporting to purchase any of the Collateral from the Pledgor).
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(f) There are no legal or governmental proceedings pending or, to the
best of the Pledgor's knowledge, threatened to which the Pledgor or any of
its subsidiaries is a party or to which any of the properties of the
Pledgor or any such subsidiary is subject that would materially adversely
affect the power or ability of the Pledgor to perform its obligations under
this Pledge Agreement or to consummate the transactions contemplated
hereby.
(g) The pledge of the Collateral pursuant to this Pledge Agreement is
not prohibited by law or governmental regulation (including, without
limitation, Regulations G, T, U and X of the Board of Governors of the
Federal Reserve System) applicable to the Pledgor.
(h) No Event of Default exists.
SECTION 9. FURTHER ASSURANCES. (a) The Pledgor agrees that from time to
time, at the expense of the Pledgor, the Pledgor will, promptly including upon
reasonable request by the Trustee, execute and deliver or cause to be executed
and delivered, or use its reasonable commercial efforts to procure, all
assignments, instruments and other documents, all in form and substance
reasonably satisfactory to the Trustee, deliver any instruments to the Trustee
and take any other actions that may be necessary or, in the reasonable opinion
of the Trustee, desirable to perfect, continue the perfection of, or protect the
first priority of the Trustee's security interest in and to the Collateral, to
protect the Collateral against the rights, claims, or interests of third persons
(other than any such rights, claims or interests created by or arising through
the Trustee) or to effect the purposes of this Pledge Agreement.
(b) The Pledgor hereby authorizes the Trustee to file any financing or
continuation statements in the United States with respect to the Collateral
without the signature of the Pledgor (to the extent permitted by applicable
law); PROVIDED, HOWEVER, that the Pledgor shall not be relieved of any of its
obligations under Section 9(a) hereof. A photocopy or other reproduction of this
Pledge Agreement or any financing statement covering the Collateral or any part
thereof shall be sufficient as a financing statement where permitted by law.
(c) The Pledgor will furnish to the Trustee from time to time statements
and schedules further identifying and describing the Collateral and such other
reports in connection with the Collateral as the Trustee may reasonably request,
all in reasonable detail.
(d) The Pledgor will promptly pay all costs reasonably incurred in
connection with any of the foregoing within 30 days of receipt of an invoice
therefor. The Pledgor also agrees, whether or not requested by the Trustee, to
take all actions that are necessary to perfect or continue the perfection of, or
to protect the first priority of, the Trustee's security interest in and to the
Collateral, including the filing of all necessary financing and continuation
statements, and
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to protect the Collateral against the rights, claims or interests of third
persons (other than any such rights, claims or interests created by or arising
through the Trustee).
SECTION 10. COVENANTS. The Pledgor covenants and agrees with the Trustee
and the Holders of the Notes that from and after the date of this Pledge
Agreement until the earlier of payment in full in cash of (x) each of the first
five scheduled interest payments due on the Notes under the terms of the
Indenture and (y) all obligations due and owing under the Indenture and the
Notes in the event such obligations become due and payable prior to the payment
in full of the first five scheduled interest payments on the Notes:
(a) that (i) it will not (and will not purport to) sell or otherwise
dispose of, or grant any option or warrant with respect to, any of the
Collateral or its beneficial interest therein, and (ii) it will not create
or permit to exist any Lien or other adverse interest in or with respect to
its beneficial interest in any of the Collateral (except for the security
interests granted under this Pledge Agreement); and
(b) that it will not (i) enter into any agreement or understanding
that restricts or inhibits or purports to restrict or inhibit the Trustee's
rights or remedies hereunder, including, without limitation, the Trustee's
right to sell or otherwise dispose of the Collateral or (ii) fail to pay or
discharge any tax, assessment or levy of any nature with respect to its
beneficial interest in the Collateral not later than five days prior to the
date of any proposed sale under any judgment, writ or warrant of attachment
with respect to such beneficial interest.
SECTION 11. POWER OF ATTORNEY. In addition to all of the powers granted to
the Trustee pursuant to the Indenture, the Pledgor hereby appoints and
constitutes the Trustee as the Pledgor's attorney-in-fact (with full power of
substitution), with full authority in the place and stead of the Pledgor and in
the name of the Pledgor or otherwise, from time to time in the Trustee's
reasonable discretion to take any action and to execute any instrument that the
Trustee may deem necessary or advisable to accomplish the purposes of this
Pledge Agreement, including, without limitation:
(a) to ask for, demand, collect, ▇▇▇ for, recover, compromise, receive
and give acquittance and receipts for moneys due and to become due under or
in respect of any of the Collateral,
(b) to receive, indorse and collect any drafts or other instruments,
documents and chattel paper, in connection with clause (a) above,
(c) to file any claims or take any action or institute any proceedings
that the Trustee may reasonably deem necessary or desirable for the
collection of any of the
13
Collateral or otherwise to enforce the rights of the Trustee with respect
to any of the Collateral, and
(d) to pay or discharge taxes or Liens levied or placed upon the
Collateral, the legality or validity thereof and the amounts necessary to
discharge the same to be determined by the Trustee in its sole reasonable
discretion, and such payments made by the Trustee to become part of the
Obligations of the Pledgor to the Trustee, due and payable immediately upon
demand;
PROVIDED, HOWEVER, that the Trustee shall have no obligation to perform any of
the foregoing actions. The Trustee's authority under this Section 11 shall
include, without limitation, the authority to endorse and negotiate any checks
or instruments representing proceeds of Collateral in the name of the Pledgor,
execute and give receipt for any certificate of ownership or any document
constituting Collateral, transfer title to any item of Collateral, sign the
Pledgor's name on all financing statements (to the extent permitted by
applicable law) or any other documents reasonably deemed necessary or
appropriate by the Trustee to preserve, protect or perfect the security interest
in the Collateral and to file the same, prepare, file and sign the Pledgor's
name on any notice of Lien, and to take any other actions arising from or
incident to the powers granted to the Trustee in this Pledge Agreement. This
power of attorney is coupled with an interest and is irrevocable by the Pledgor.
SECTION 12. NO ASSUMPTION OF DUTIES; REASONABLE CARE. The rights and powers
conferred on the Trustee hereunder are solely to preserve and protect the
security interest of the Trustee and the Holders of the Notes in and to the
Collateral granted hereby and shall not be interpreted to, and shall not impose
any duties on the Trustee in connection therewith other than those expressly
provided herein or imposed under applicable law. Except as provided by
applicable law or by the Indenture, the Trustee shall be deemed to have
exercised reasonable care in the custody and preservation of the Collateral in
its possession if the Collateral is accorded treatment substantially equal to
that which the Trustee accords similar property held by the Trustee for its own
account, it being understood that the Trustee in its capacity as such shall not
have any responsibility for (a) ascertaining or taking action with respect to
calls, conversions, exchanges, maturities or other matters relative to any
Collateral, whether or not the Trustee has or is deemed to have knowledge of
such matters, (b) taking any necessary steps to preserve rights against any
parties with respect to any Collateral or (c) investing or reinvesting any of
the Collateral or any loss on any investment.
SECTION 13. INDEMNITY. The Pledgor shall indemnify, hold harmless and
defend the Trustee, the Collateral Securities Intermediary and each of their
respective directors, officers, agents and employees, from and against any and
all claims, actions, obligations, liabilities and expenses, including reasonable
defense costs, reasonable investigative fees and costs, and reasonable legal
fees and damages arising from their execution of or performance under this
Pledge Agreement, except to the extent that such claim, action, obligation,
liability or
14
expense is directly attributable to the bad faith, gross negligence or wilful
misconduct of such indemnified person. This indemnification shall survive the
termination of this Pledge Agreement.
SECTION 14. REMEDIES UPON EVENT OF DEFAULT. If any Event of Default shall
have occurred and be continuing:
(a) The Trustee and the Holders of the Notes may exercise, in addition
to all other rights given by law or by this Pledge Agreement or the
Indenture, all of the rights and remedies with respect to the Collateral of
a secured party under the UCC in effect in the State of New York at that
time and also may (i) require the Pledgor to, and the Pledgor hereby agrees
that it will at its expense and upon request of the Trustee forthwith,
assemble all or part of the Collateral as directed by the Trustee and make
it available to the Trustee at a place to be designated by the Trustee that
is reasonably convenient to both parties and (ii) without notice except as
specified below, sell the Collateral or any part thereof in one or more
parcels at any broker's board or at public or private sale, in one or more
sales or lots, at any of the Trustee's offices or elsewhere, for cash, on
credit or for future delivery, and upon such other terms as the Trustee may
deem commercially reasonable. The Pledgor agrees that, to the extent notice
of sale shall be required by law, at least ten days' notice to the Pledgor
of the time and place of any public sale or the time after which any
private sale is to be made shall constitute reasonable notification. The
Trustee shall not be obligated to make any sale of Collateral regardless of
notice of sale having been given. The Trustee may adjourn any public or
private sale from time to time by announcement at the time and place fixed
therefor, and such sale may, without further notice, be made at the time
and place to which it was so adjourned. The purchaser of any or all
Collateral so sold shall thereafter hold the same absolutely, free from any
claim, encumbrance or right of any kind whatsoever created by or through
the Pledgor. Any sale of the Collateral conducted in conformity with
reasonable commercial practices of banks, insurance companies, commercial
finance companies, or other financial institutions disposing of property
similar to the Collateral shall be deemed to be commercially reasonable.
The Trustee or any Holder of Notes may, in its own name or in the name of a
designee or nominee, buy any of the Collateral at any public sale and, if
permitted by applicable law, at any private sale. All expenses (including
court costs and reasonable attorneys' fees, expenses and disbursements) of,
or incident to, the enforcement of any of the provisions hereof shall be
recoverable from the proceeds of the sale or other disposition of the
Collateral.
(b) All cash proceeds received by the Trustee in respect of any sale
of, collection from, or other realization upon all or any part of the
Collateral may, following the payment of the fees and expenses of the
Trustee, be held by the Trustee
15
as collateral for, and/or then or at any time thereafter applied (after
payment of any amounts payable to the Trustee pursuant to Section 15) in
whole or in part by the Trustee for the ratable benefit of the Holders of
the Notes against, all or any part of the Secured Obligations in such order
as a majority of the Holders shall elect. Any surplus of such cash or cash
proceeds held by the Trustee and remaining after payment in full of all the
Secured Obligations shall be paid over to the Pledgor or to whomsoever may
be lawfully entitled to receive such surplus.
(c) The Trustee may, without notice to the Pledgor except as required
by law and at any time or from time to time, charge, set-off and otherwise
apply all or any part of the Secured Obligations against the Collateral
Account or any part thereof.
(d) The Pledgor further agrees to use its best efforts to do or cause
to be done all such other acts as may be necessary to make such sale or
sales of all or any portion of the Collateral pursuant to this Section 14
valid and binding and in compliance with any and all other applicable
requirements of law. The Pledgor further agrees that a breach of any of the
covenants contained in this Section 14 will cause irreparable injury to the
Trustee and the Holders of the Notes, that the Trustee and the Holders of
the Notes have no adequate remedy at law in respect of such breach and, as
a consequence, that each and every covenant contained in this Section 14
shall be specifically enforceable against the Pledgor, and the 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 and is continuing.
SECTION 15. EXPENSES. The Pledgor will upon demand pay to the Trustee and
the Collateral Securities Intermediary the amount of any and all reasonable
expenses, including, without limitation, the reasonable fees, expenses and
disbursements of its counsel, experts and agents retained by the Trustee or the
Collateral Securities Intermediary, as the case may be, that the Trustee or the
Collateral Securities Intermediary, as the case may be, may incur in connection
with (a) the review, negotiation and administration of this Pledge Agreement,
(b) the custody or preservation of, or the sale of, collection from, or other
realization upon, any of the Collateral, (c) the exercise or enforcement of any
of the rights of the Trustee and the Holders of the Notes hereunder or (d) the
failure by the Pledgor to perform or observe any of the provisions hereof.
SECTION 16. SECURITY INTEREST ABSOLUTE. All rights of the Trustee and the
Holders of the Notes and security interests hereunder, and all obligations of
the Pledgor hereunder, shall be absolute and unconditional irrespective of:
(a) any lack of validity or enforceability of the Indenture or Notes
or any other agreement or instrument relating thereto;
16
(b) any change in the time, manner or place of payment of, or in any
other term of, all or any of the Secured Obligations, or any other
amendment or waiver of or any consent to any departure from the Indenture;
(c) any taking, exchange, surrender, release or non-perfection of any
Liens on any other collateral for all or any of the Secured Obligations;
(d) any manner of application of collateral, or proceeds thereof, to
all or any of the Secured Obligations, or any manner of sale or other
disposition of any collateral for all or any of the Secured Obligations or
any other assets of the Pledgor;
(e) any change, restructuring or termination of the corporate
structure or existence of the Pledgor; or
(f) to the extent permitted by applicable law, any other circumstance
which might otherwise constitute a defense available to, or a discharge of,
the Pledgor in respect of the Secured Obligations or of this Pledge
Agreement.
SECTION 17. MISCELLANEOUS PROVISIONS.
Section 17.1. NOTICES. Any notice or communication given hereunder shall be
sufficiently given if in writing and delivered in person or mailed by first
class mail, commercial courier service or telecopier communication, addressed as
follows:
IF TO THE PLEDGOR:
Carrier1 International S.A.
c/o Carrier1 International GmbH
▇▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇
▇▇-▇▇▇▇ ▇▇▇▇▇▇
Fax: ▇▇▇-▇▇-▇-▇▇▇-▇▇▇▇
IF TO THE TRUSTEE:
The Chase Manhattan Bank
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇ or 8178
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇, Corporate Trust Department
IF TO THE COLLATERAL SECURITIES INTERMEDIARY:
17
Chase Manhattan Bank AG
▇▇▇▇▇▇▇▇▇▇▇▇ ▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇
▇▇▇▇▇▇▇
Fax: ▇▇▇-▇▇▇▇-▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
All such notices and other communications shall, when mailed, delivered or
telecopied, respectively, be effective when deposited in the mails, delivered or
telecopied, respectively, addressed as aforesaid.
Section 17.2. NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS. This Pledge
Agreement may not be used to interpret another pledge, security or debt
agreement of the Pledgor or any subsidiary thereof. No such pledge, security or
debt agreement (other than the Indenture) may be used to interpret this Pledge
Agreement.
Section 17.3. SEVERABILITY. The provisions of this Pledge Agreement are
severable, and if any clause or provision shall be held invalid, illegal or
unenforceable in whole or in part in any jurisdiction, then such invalidity or
unenforceability shall affect in that jurisdiction only such clause or
provision, or part thereof, and shall not in any manner affect such clause or
provision in any other jurisdiction or any other clause or provision of this
Pledge Agreement in any jurisdiction.
Section 17.4. HEADINGS. The headings in this Pledge Agreement have been
inserted for convenience of reference only, are not to be considered a part
hereof and shall in no way modify or restrict any of the terms or provisions
hereof.
Section 17.5. COUNTERPART ORIGINALS. This Pledge Agreement may be signed in
two or more counterparts, each of which shall be deemed an original, but all of
which shall together constitute one and the same agreement.
Section 17.6. BENEFITS OF PLEDGE AGREEMENT. Nothing in this Pledge
Agreement, express or implied, shall give to any person, other than the parties
hereto and their successors hereunder, and the Holders of the Notes, any benefit
or any legal or equitable right, remedy or claim under this Pledge Agreement.
The rights of the Pledgor in the Collateral and the rights and obligations of
the Pledgor hereunder may be assigned (an "ASSIGNMENT") to any direct or
indirect Wholly Owned Subsidiary of the Pledgor (an "ASSIGNEE"), provided that
such Assignee furnishes the Trustee with an Opinion of Counsel to the effect
that such Assignment is valid, binding and enforceable against such Assignee and
that after such Assignment the Trustee shall have a perfected security interest
in the Collateral, securing the payment of the Secured Obligations, and
18
addressing such other related matters as the Trustee may reasonably request. The
Trustee shall cooperate in good faith with the Pledgor to effect any proposed
Assignment. Upon the effectiveness of any such Assignment, the Assignee shall
become the Pledgor hereunder for all purposes of this Agreement, and the prior
Pledgor shall be released from its obligations hereunder (other than its
obligations under Sections 13 and 15).
Section 17.7. AMENDMENTS, WAIVERS AND CONSENTS. Any amendment or waiver of
any provision of this Pledge Agreement and any consent to any departure by the
Pledgor from any provision of this Pledge Agreement shall be effective only if
made or duly given in compliance with all of the terms and provisions of the
Indenture, and then such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given. Neither the
Trustee nor any Holder of Notes shall be deemed, by any act, delay, indulgence,
omission or otherwise, to have waived any right or remedy hereunder or to have
acquiesced in any Event of Default or in any breach of any of the terms and
conditions hereof. Failure of the Trustee or any Holder of Notes to exercise, or
delay in exercising, any right, power or privilege hereunder shall not preclude
any other or further exercise thereof or the exercise of any other right, power
or privilege. A waiver by the Trustee or any Holder of Notes of any right or
remedy hereunder on any one occasion shall not be construed as a bar to any
right or remedy that the Trustee or such Holder of Notes would otherwise have on
any future occasion. The rights and remedies herein provided are cumulative, may
be exercised singly or concurrently and are not exclusive of any rights or
remedies provided by law.
Section 17.8. INTERPRETATION OF AGREEMENT. To the extent a term or
provision of this Pledge Agreement conflicts with the Indenture, the Indenture
shall control with respect to the subject matter of such term or provision.
Acceptance of or acquiescence in a course of performance rendered under this
Pledge Agreement shall not be relevant to determine the meaning of this Pledge
Agreement even though the accepting or acquiescing party had knowledge of the
nature of the performance and opportunity for objection.
Section 17.9. CONTINUING SECURITY INTEREST; TERMINATION. (a) This Pledge
Agreement shall create a continuing security interest in and to the Collateral
and shall, unless otherwise provided in this Pledge Agreement, remain in full
force and effect until the payment in full in cash of the Secured Obligations.
This Pledge Agreement shall be binding upon the Pledgor, its transferees,
successors and assigns, and shall inure, together with the rights and remedies
of the Trustee hereunder, to the benefit of the Trustee, the Holders of the
Notes, the Collateral Securities Intermediary and their respective successors,
transferees and assigns.
(b) This Pledge Agreement (other than Pledgor's obligations under Sections
13 and 15) shall terminate upon the earlier of (i) the payment in full in cash
of the Secured Obligations and (ii) the payment in full in cash of the first
five scheduled interest payments on all of the Notes. At such time, the Trustee
shall, pursuant to an Issuer Order, reassign and redeliver
19
to the Pledgor all of the Collateral hereunder that has not been sold, disposed
of, retained or applied by the Trustee in accordance with the terms of this
Pledge Agreement and the Indenture and take all actions that are necessary to
release the security interest created by this Pledge Agreement in and to the
Collateral, including the execution and delivery of all termination statements
necessary to terminate any financing or continuation statements filed with
respect to the Collateral. Such reassignment and redelivery shall be without
warranty by or recourse to the Trustee in its capacity as such, except as to the
absence of any Liens on the Collateral created by or arising through the
Trustee, and shall be at the reasonable expense of the Pledgor.
Section 17.10. SURVIVAL OF REPRESENTATIONS AND COVENANTS. All
representations, warranties and covenants of the Pledgor contained herein shall
survive the execution and delivery of this Pledge Agreement, and shall terminate
only upon the termination of this Pledge Agreement.
Section 17.11. WAIVERS. The Pledgor waives presentment and demand for
payment of any of the Obligations, protest and notice of dishonor or default
with respect to any of the Obligations, and all other notices to which the
Pledgor might otherwise be entitled, except as otherwise expressly provided
herein or in the Indenture.
Section 17.12. AUTHORITY OF THE TRUSTEE. (a) The Trustee shall have and be
entitled to exercise all powers hereunder that are specifically granted to the
Trustee by the terms hereof, together with such powers as are reasonably
incident thereto. The Trustee may perform any of its duties hereunder or in
connection with the Collateral by or through agents or employees and shall be
entitled to retain counsel and to act in reliance upon the advice of counsel
concerning all such matters. Except as otherwise expressly provided in this
Pledge Agreement or the Indenture, neither the Trustee nor any director,
officer, employee, attorney or agent of the Trustee shall be liable to the
Pledgor for any action taken or omitted to be taken by the Trustee, in its
capacity as Trustee, hereunder, except for its own bad faith, gross negligence
or willful misconduct, and the Trustee shall not be responsible for the
validity, effectiveness or sufficiency hereof or of any document or security
furnished pursuant hereto. The Trustee and its directors, officers, employees,
attorneys and agents shall be entitled to rely on any communication, instrument
or document reasonably believed by it or them to be genuine and correct and to
have been signed or sent by the proper person or persons.
(b) The Pledgor acknowledges that the rights and responsibilities of the
Trustee under this Pledge Agreement with respect to any action taken by the
Trustee or the exercise or non-exercise by the Trustee of any option, right,
request, judgment or other right or remedy provided for herein or resulting or
arising out of this Pledge Agreement shall, as between the Trustee and the
Holders of the Notes, be governed by the Indenture and by such other agreements
with respect thereto as may exist from time to time among them, but, as between
the Trustee and the Pledgor, the Trustee shall be conclusively presumed to be
acting as agent for the
20
Holders of the Notes with full and valid authority so to act or refrain from
acting, and the Pledgor shall not be obligated or entitled to make any inquiry
respecting such authority. All rights of the Trustee under the Indenture,
including its right to reimbursement and indemnification are incorporated herein
by reference in their entirety.
Section 17.13 FINAL EXPRESSION. This Pledge Agreement, together with the
Indenture and any other agreement executed in connection herewith, is intended
by the parties as a final expression of this Pledge Agreement and is intended as
a complete and exclusive statement of the terms and conditions thereof.
Section 17.14. RIGHTS OF HOLDERS OF THE NOTES. No Holder of Notes shall
have any independent rights hereunder other than those rights granted to
individual Holders of the Notes pursuant to Section 6.07 of the Indenture;
PROVIDED that nothing in this subsection shall limit any rights granted to the
Trustee under the Notes or the Indenture.
Section 17.15. GOVERNING LAW; SUBMISSION TO JURISDICTION; WAIVER OF JURY
TRIAL; WAIVER OF DAMAGES. (a) THIS PLEDGE AGREEMENT SHALL BE GOVERNED BY AND
INTERPRETED UNDER THE LAWS OF THE STATE OF NEW YORK.
(b) THE PLEDGOR HEREBY APPOINTS CT CORPORATION SYSTEM WITH AN OFFICE ON THE
DATE HEREOF AT ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇, AS ITS
AGENT FOR SERVICE OF PROCESS IN ANY SUIT, ACTION OR PROCEEDING WITH RESPECT TO
THIS PLEDGE AGREEMENT AND FOR ACTIONS BROUGHT UNDER U.S. FEDERAL OR STATE
SECURITIES LAWS BROUGHT IN ANY FEDERAL OR STATE COURT LOCATED IN THE CITY OF NEW
YORK AND AGREES TO SUBMIT TO THE JURISDICTION OF ANY SUCH COURT.
(c) THE PLEDGOR AGREES THAT THE TRUSTEE SHALL, IN ITS CAPACITY AS TRUSTEE
OR IN THE NAME AND ON BEHALF OF ANY HOLDER OF NOTES, HAVE THE RIGHT, TO THE
EXTENT PERMITTED BY APPLICABLE LAW (AND TO THE EXTENT THE TRUSTEE HAS RECEIVED
INDEMNITY DEEMED SATISFACTORY TO IT AND HAS AGREED TO DO SO), TO PROCEED AGAINST
THE PLEDGOR OR THE COLLATERAL IN A COURT IN ANY LOCATION REASONABLY SELECTED IN
GOOD FAITH (AND HAVING PERSONAL OR IN REM JURISDICTION OVER THE PLEDGOR OR THE
COLLATERAL, AS THE CASE MAY BE) TO ENABLE THE TRUSTEE TO REALIZE ON SUCH
COLLATERAL, OR TO ENFORCE A JUDGMENT OR OTHER COURT ORDER ENTERED IN FAVOR OF
THE TRUSTEE. THE PLEDGOR AGREES THAT IT WILL NOT ASSERT ANY COUNTERCLAIMS,
SETOFFS OR CROSSCLAIMS IN ANY PROCEEDING BROUGHT BY THE TRUSTEE TO REALIZE ON
SUCH PROPERTY OR TO ENFORCE A JUDGMENT OR OTHER COURT ORDER IN
21
FAVOR OF THE TRUSTEE, EXCEPT FOR SUCH COUNTERCLAIMS, SETOFFS OR CROSSCLAIMS
WHICH, IF NOT ASSERTED IN ANY SUCH PROCEEDING, COULD NOT OTHERWISE BE BROUGHT OR
ASSERTED. THE PLEDGOR WAIVES, TO THE FULLEST EXTENT IT MAY LEGALLY AND
EFFECTIVELY DO SO, ANY OBJECTION THAT IT MAY HAVE TO THE LOCATION OF THE COURT
IN THE CITY OF NEW YORK IN THE BOROUGH OF MANHATTAN ONCE THE TRUSTEE HAS
COMMENCED A PROCEEDING DESCRIBED IN THIS PARAGRAPH INCLUDING, WITHOUT
LIMITATION, ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF
FORUM NON CONVENIENS.
(d) THE PLEDGOR AGREES THAT NONE OF ANY HOLDER OF NOTES, (EXCEPT AS
OTHERWISE PROVIDED IN THIS PLEDGE AGREEMENT OR THE INDENTURE) THE TRUSTEE IN ITS
CAPACITY AS TRUSTEE OR CHASE MANHATTAN BANK AG IN ITS CAPACITY AS COLLATERAL
SECURITIES INTERMEDIARY SHALL HAVE ANY LIABILITY TO THE PLEDGOR (WHETHER ARISING
IN TORT, CONTRACT OR OTHERWISE) FOR LOSSES SUFFERED BY THE PLEDGOR IN CONNECTION
WITH, ARISING OUT OF, OR IN ANY WAY RELATED TO, THE TRANSACTIONS CONTEMPLATED
AND THE RELATIONSHIP ESTABLISHED BY THIS PLEDGE AGREEMENT, OR ANY ACT, OMISSION
OR EVENT OCCURRING IN CONNECTION THEREWITH, UNLESS IT IS DETERMINED BY A FINAL
AND NONAPPEALABLE JUDGMENT OF A COURT THAT IS BINDING ON THE TRUSTEE OR SUCH
HOLDER OF NOTES, AS THE CASE MAY BE, THAT SUCH LOSSES WERE THE RESULT OF ACTS OR
OMISSIONS ON THE PART OF THE TRUSTEE OR SUCH HOLDERS OF NOTES, AS THE CASE MAY
BE, CONSTITUTING BAD FAITH, GROSS NEGLIGENCE OR WILLFUL MISCONDUCT.
(e) TO THE EXTENT PERMITTED BY APPLICABLE LAW, THE PLEDGOR WAIVES THE
POSTING OF ANY BOND OTHERWISE REQUIRED OF THE TRUSTEE OR ANY HOLDER OF NOTES IN
CONNECTION WITH ANY JUDICIAL PROCESS OR PROCEEDING TO ENFORCE ANY JUDGMENT OR
OTHER COURT ORDER PERTAINING TO THIS PLEDGE AGREEMENT OR ANY RELATED AGREEMENT
OR DOCUMENT ENTERED IN FAVOR OF THE TRUSTEE OR ANY HOLDER OF NOTES, OR TO
ENFORCE BY SPECIFIC PERFORMANCE, TEMPORARY RESTRAINING ORDER OR PRELIMINARY OR
PERMANENT INJUNCTION, THIS PLEDGE AGREEMENT OR ANY RELATED AGREEMENT OR DOCUMENT
BETWEEN THE PLEDGOR ON THE ONE HAND AND THE TRUSTEE AND/OR THE HOLDERS OF THE
NOTES ON THE OTHER HAND.
22
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IN WITNESS WHEREOF, the Pledgor and the Trustee have each caused this
Pledge Agreement to be duly executed and delivered as of the date first above
written.
Pledgor:
CARRIER1 INTERNATIONAL S.A.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Authorized Officer
Trustee:
THE CHASE MANHATTAN BANK
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇
Title: Assistant Treasurer
Collateral Securities Intermediary:
CHASE MANHATTAN BANK AG
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇
Title: Vice President
EXHIBIT A
EURO SECURITIES
Security ID No. Coupon (%) Maturity Amount
-------- ------ ---------- -------- ------
▇▇▇▇▇▇▇▇▇▇▇▇▇ (▇▇▇) ▇▇▇▇▇▇▇▇▇ 3.5 06/18/99 4,771,000
BUNDESOBL 113 (OBL) ▇▇▇▇▇▇▇▇▇ 7.0 01/13/00 5,110,000
BUNDESSCHATZ (BKO) ▇▇▇▇▇▇▇▇▇ 4.0 06/16/00 5,157,000
BUNDESSCHATZ (BKO) ▇▇▇▇▇▇▇▇▇ 3.0 12/15/00 5,467,000
BUNDESOBL 119 (OBL) ▇▇▇▇▇▇▇▇▇ 5.0 05/21/01 5,363,000
TOTAL 25,868,000