STOCK PLEDGE AGREEMENT, dated as of August 7, 2000, by and among Gold &
Appel Transfer, S.A., a corporation organized and existing under the laws of
the British Virgin Islands ("Gold & Appel"), Revision LLC, a limited liability
company organized under the laws of the State of Delaware ("Revision"),
Foundation for the International Non-governmental Development of Space
("FINDS") and Walter C. Anderson, an individual ("Anderson") (each of Gold &
Appel, Revision, FINDS and Anderson individually, a "Pledgor," and
collectively, the "Pledgors"), and Donald A. Burns, an individual (the
"Pledgee").
R E C I T A L S
A. Pursuant to the Note, the Pledgee has agreed to loan to Gold & Appel,
Revision and Anderson (the "Borrowers") the aggregate principal amount of $13
million.
B. It is a condition to the obligation of the Pledgee to make such loan that
Pledgors pledge the Shares of the Issuer owned by them to the Pledgee as
security for the performance of the obligations of the Borrowers under the
Note.
C. Gold & Appel, Revision and FINDS are stockholders of the Issuer and are
the legal and beneficial owners of 2,454,661 shares of common stock of the
Issuer which they are willing to pledge as security for the performance of the
obligations of the Borrowers under the Note, subject to and in accordance with
the terms and conditions set forth herein.
NOW, THEREFORE, to induce the Pledgee to make the loan pursuant to the
Note, and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, Pledgors hereby agree with the
Pledgee as follows:
SECTION 1. CERTAIN DEFINITIONS.
The following capitalized terms are used herein with the respective meanings
set forth below.
Additional Initial Shares: 1,179,732 Shares owned of record and beneficially
by one or more of the Pledgors, as more specifically set forth on Exhibit A
attached hereto.
Capital Stock: the Shares and all other capital stock or other equity
securities of any class of the Issuer.
Collateral: the meaning given in the first paragraph of Section3.
Default: shall have the meaning ascribed to such term in the Note.
Demanded Shares: the meaning given in Section 7.3.
Event of Default: shall have the meaning ascribed to such term in the Note.
Initial Pledged Shares: a total of 1,751,172 Shares, owned of record and
beneficially by one or more of the Pledgors, as more specifically set forth on
Exhibit A attached hereto.
Initial Release Shares: a total of 571,400 Shares, owned of record and
beneficially by one or more of the Pledgors, as more specifically set forth on
Exhibit A attached hereto.
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Issuer: Total-Tel USA Communications, Inc., a New Jersey corporation.
Lien: shall have the meaning ascribed to such term in the Note.
Market Price: at any point in time, the last reported sale price of the shares
of common stock of the Issuer on The Nasdaq Stock Market on the preceding
business day or, if there were no reported sales of such shares on The Nasdaq
Stock Market on the immediately preceding business day, on the most recent
business day on which there were such sales.
Note: the Note, dated of even date herewith, entered into by each Pledgor,
jointly and severally, in favor of Pledgee.
Person: natural persons, corporations, limited partnerships, general
partnerships, joint stock companies, joint ventures, associations, companies,
trusts, banks, trust companies, land trusts, business trusts or other
organizations, whether or not legal entities, and governments and agencies and
political subdivisions thereof.
Pledged Stock: the Shares and all other securities constituting part of the
Collateral and any securities issued or issuable with respect to the Pledged
Stock by way of dividend, stock split, conversion, exchange, in a merger,
recapitalization, consolidation, contribution or otherwise.
Secured Obligations: the meaning given in Section2.
Securities Act: the meaning given in Section 6.7.
Shares: 2,454,661 shares of common stock of the Issuer, par value $0.05 per
share, owned of record and beneficially by one or more of the Pledgors, as
more specifically identified on Exhibit A attached hereto.
UCC: the Uniform Commercial Code of the State of New York.
SECTION 2. SECURITY FOR OBLIGATIONS.
This Agreement is entered into:
(a) to secure the full and timely payment by Pledgors of (i) all amounts
the payment of which is required by Pledgors under the Note, including,
without limitation, the principal of and interest on the Note (including,
without limitation, interest accruing after the date of any filing by any
Pledgor of any petition in bankruptcy or the commencement of any bankruptcy,
insolvency or similar proceeding with respect to any Pledgor) as and when the
same become due and payable in accordance with the terms thereof, whether at
maturity or by prepayment, acceleration, declaration of default or otherwise,
and (ii) all other indebtedness and other amounts payable by the Pledgors
hereunder or under the Note, and
(b) to secure the due and punctual performance by Pledgors of (i) all
obligations of the Pledgors under the Note and (ii) all other obligations of
Pledgors hereunder.
(all of the payment and performance obligations referred to in this Section 2
being referred to collectively as the "Secured Obligations").
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SECTION 3. PLEDGE OF SHARES, ETC.
As security for the prompt payment and performance of the Secured
Obligations when due (whether at stated maturity, by acceleration or
otherwise), Pledgors hereby convey, assign, grant, hypothecate, mortgage,
pledge, transfer and deliver to the Pledgee a lien and charge upon, and a
security interest in, all the following property, whether now owned or
hereafter acquired and whether now or in the future existing and wherever
located (collectively, the "Collateral"):
(a) the Shares;
(b) all dividends, instruments, cash and other property or rights of any
kind at any time received, receivable or otherwise distributed or
distributable with respect to any of the foregoing;
(c) all certificates or other writings representing or evidencing any of
the foregoing;
(d) all proceeds of any of the property described in clauses(a) through
above; and
(e) all books, correspondence, credit files, electronic data, records,
invoices and other papers and documents relating to any of the foregoing.
SECTION 4. REPRESENTATIONS AND WARRANTIES.
Each Pledgor represents and warrants to the Pledgee as follows:
(a) With respect to each of the Shares, including, without
limitation, each of the Initial Pledged Shares, Additional Initial Shares and
Demanded Shares, Gold & Appel or Revision is the record and beneficial owner
of such Shares, free and clear of any Lien except for the Lien created by this
Agreement. No effective financing statement or other instrument of similar
effect covering all or any part of the Collateral is on file in any recording
office, except such as may have been filed in favor of the Pledgee relating to
this Agreement.
(b) The Shares have been duly and validly issued and are fully paid
and nonassessable.
(c) Upon delivery to the Pledgee of the certificates evidencing the
Initial Pledged Shares, the Additional Initial Shares and the Demanded Shares,
the security interest granted pursuant to this Agreement will constitute a
valid perfected first priority security interest in such Shares, enforceable
as such against all creditors of each Pledgor and any Persons purporting to
purchase any of such Shares from any Pledgor.
(d) Gold & Appel is a corporation duly organized, validly existing
and in good standing under the laws of the British Virgin Islands and has all
requisite corporate power and authority to enter into and carry out the terms
of this Agreement. Revision is a limited liability company duly organized,
validly existing and in good standing under the laws of the State of Delaware
and has all requisite limited liability company power and authority to enter
into and carry out the terms of this Agreement and the Note. FINDS is a not-
for-profit corporation duly organized, validly existing and in good standing
under the laws of Delaware and has all requisite corporate power and authority
to enter into and carry out the terms of this Agreement.
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(e) The execution, delivery and performance of this Agreement and the
Note will not result in any violation of or be in conflict with or constitute
a default under any term of any Pledgor's certificate of incorporation or by-
laws (or similar constitutive documents) or any agreement or instrument to
which any Pledgor is a party or by which any Pledgor is bound or any term of
any applicable law, ordinance, rule or regulation of any governmental
authority or any term of any applicable order, judgment or decree of any
court, arbitrator or governmental authority.
(f) No consent, approval or authorization of, or declaration or
filing with, any governmental authority or regulatory body is required for the
valid execution, delivery and performance of this Agreement and the Note.
(g) This Agreement and the Note have been duly authorized, executed
and delivered by each Pledgor and constitute each Pledgor's legal, valid and
binding obligation, enforceable against such Pledgor in accordance with its
terms, except to the extent that such enforcement may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium and similar laws of general
application relating to or affecting the rights and remedies of creditors, and
by general equitable principles.
SECTION 5. VOTING RIGHTS, DIVIDENDS AND OTHER DISTRIBUTIONS, ETC.
5.1 Prior to Default or Event of Default. So long as no Default or
Event of Default has occurred and is continuing, Pledgors will remain entitled
to exercise any and all voting and other consensual rights pertaining to the
Pledged Stock and to receive and use cash dividends, in either case for any
purpose not inconsistent with the terms of this Agreement or the Note.
5.2 After Default or Event of Default. For so long as a Default or an
Event of Default is continuing, (i)no Pledgor may exercise any voting or other
consensual rights without the prior written consent of the Pledgee, (ii)the
right, if any, of any Pledgor to receive cash dividends in respect of the
Pledged Stock will cease and all such dividends must be paid directly to the
Pledgee (or if received by any Pledgor will be deemed held in trust by such
Pledgor for the benefit of, and must be turned over immediately by such
Pledgor to, the Pledgee) and thereafter will be held and disposed of by the
Pledgee as part of the Collateral, and (iii)if the Pledgee has notified the
Pledgors that it elects to exercise the Pledgee's right to exercise voting and
other consensual rights hereunder, all rights of each Pledgor to exercise the
voting and other consensual rights which such Pledgor would otherwise be
entitled to exercise pursuant to Section5.1 will cease, all such rights will
thereupon become vested in the Pledgee, who during the continuance of such
Default or Event of Default will have (directly or through its nominee) the
sole right to exercise such voting and other consensual rights, including,
without limitation, (A)all voting, corporate and other rights pertaining to
any of the Pledged Stock, (B) all rights to give consents, waivers and
ratifications in respect thereof and (C)any and all rights of conversion,
exchange, subscription and any other rights, privileges or options pertaining
to any of the Pledged Stock as if it were the absolute owner thereof, and in
connection therewith, the right to deposit and deliver any and all of the
Pledged Stock with any committee, depositary, transfer agent, registrar or
other designated agency upon such terms and conditions as it may determine,
all without liability except to account for property actually received by it
(each Pledgor hereby irrevocably constituting and appointing the Pledgee the
proxy and attorney-in-fact of such Pledgor, with full power of substitution,
to do or take any of the above actions). The Pledgee will have no duty to
Pledgors to exercise any such right, privilege or option and will not be
responsible for any failure to do so or delay in so doing. In order to permit
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the Pledgee to exercise the voting and other consensual rights which it may be
entitled to exercise pursuant to this Section5.2, and to receive all dividends
and distributions which it may be entitled to receive under this Section5.2,
each Pledgor will, upon written notice from the Pledgee, from time to time
execute and deliver to the Pledgee appropriate proxies, dividend payment
orders and other instruments as the Pledgee may reasonably request.
SECTION 6. COVENANTS OF PLEDGORS.
6.1 Sale of Collateral, Etc. No Pledgor will (i)sell, assign, transfer,
convey, or otherwise dispose of, or grant any option with respect to, any of
the Collateral, or (ii)create or permit to exist any Lien upon or with respect
to any of the Collateral, except for the lien and security interest created by
this Agreement.
6.2 Delivery of Stock Certificates, Etc. (a) The Pledgors will
immediately deliver to the Pledgee all certificates or other writings
representing or evidencing any of the Initial Pledged Shares and any other
"securities" or "instruments" (as such terms are defined in the UCC) included
in the Collateral at any time acquired or received by any Pledgor, directly or
indirectly, either in suitable form for transfer by delivery, or issued in the
name of a Pledgor and accompanied by stock powers or other appropriate
instruments of transfer or assignment, duly executed by the relevant Pledgor
in blank and undated, and in either case having attached thereto all requisite
federal or state stock transfer tax stamps, all in form and substance
satisfactory to the Pledgee.
(b) Within 10 business days after the date hereof, the Pledgors will
deliver to the Pledgee all certificates or other writings representing or
evidencing the Additional Initial Shares, either in suitable form for transfer
by delivery, or issued in the name of a Pledgor and accompanied by stock
powers or other appropriate instruments of transfer or assignment, duly
executed by the relevant Pledgor in blank and undated, and in either case
having attached thereto all requisite federal or state stock transfer tax
stamps, all in form and substance satisfactory to the Pledgee. Upon delivery
of the Additional Initial Shares in accordance with the requirements of the
immediately preceding sentence, the Pledgee will return to the Pledgors the
Initial Release Shares, so long as, at the time of such delivery of the
Additional Initial Shares, the product of (i) the sum of the number of Initial
Pledged Shares and the number of Additional Initial Shares, less the number of
Initial Release Shares, and (ii) the Market Price as of such date, is equal to
or in excess of $13,000,000.
(c) Within 10 business days after the date of a demand by the Pledgee for
Demanded Shares, the Pledgors will deliver to the Pledgee all certificates or
other writings representing or evidencing such Demanded Shares, either in
suitable form for transfer by delivery, or issued in the name of a Pledgor and
accompanied by stock powers or other appropriate instruments of transfer or
assignment, duly executed by the relevant Pledgor in blank and undated, and in
either case having attached thereto all requisite federal or state stock
transfer tax stamps, all in form and substance satisfactory to the Pledgee.
6.3 Other Distributions. Except for cash dividends permitted to be paid to
Pledgors pursuant to Section5.1, Pledgors will cause all dividends and
distributions of any kind on the Pledged Stock (including any sums paid upon
or in respect of the Pledged Stock upon the liquidation or dissolution of the
Issuer or upon the recapitalization or reclassification of the capital of the
Issuer or upon the reorganization of the Issuer) to be paid directly to the
Pledgee (and if any such dividends or distributions are received by any
Pledgor, such Pledgor will hold them in trust for the benefit of, and will
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immediately turn them over to, the Pledgee) and the Pledgee will hold and
dispose of all such dividends and distributions as part of the Collateral.
6.4 Records; Inspection. Each Pledgor will keep full and accurate books
and records relating to the Collateral, and stamp or otherwise mark such books
and records in such manner as is required in order to reflect the pledge and
security interest granted pursuant hereto. Each Pledgor will permit
representatives of the Pledgee at any time upon reasonable advance notice to
inspect and make abstracts from its books and records pertaining to the
Collateral and to discuss matters relating to the Collateral with officers of
each Pledgor that is a corporation or other entity and with each Pledgor that
is an individual.
6.5 Costs, Expenses and Certain Taxes. Pledgors (a)will pay to the
Pledgee from time to time on demand any and all costs and expenses, including
reasonable attorneys' fees and expenses, paid or incurred by or on behalf of
the Pledgee in connection with this Agreement or the Note or in connection
with any modification, amendment, alteration or enforcement of this Agreement
or the Note or the collection of any amount payable by any Pledgor hereunder
or under the Note, whether or not any legal proceeding is commenced hereunder
or thereunder and whether or not any Default or Event of Default has occurred
and is continuing, and (b)will jointly and severally indemnify the Pledgee on
demand against any loss, liability or expense incurred by the Pledgee (other
than any such loss, liability or expense directly attributable to gross
negligence or willful misconduct of the Pledgee) arising out of or in
connection with any action or omission of the Pledgee hereunder or under the
Note, including the costs and expenses of defending itself against any claim
or liability (including any claim by any Pledgor) in connection with the
exercise or performance of any of its powers or duties hereunder or
thereunder. All amounts payable to the Pledgee under this Section accrue
interest until paid in full at the rate of 18% per annum, from the date of
demand therefor. All such amounts shall constitute additional indebtedness of
the Pledgors secured hereunder and shall be payable on demand. Pledgors will
also pay, and will hold the Pledgee harmless from, any and all liabilities
with respect to, or resulting from any delay in paying, any and all stamps,
excise, sales or other taxes or assessments which may be payable or determined
to be payable with respect to any of the Collateral or in connection with any
of the transactions contemplated by this Agreement or the Note. All expenses
incident to the Pledgors' and Issuer's performance of or compliance with
Section 6.7, including, without limitation, all registration and filing fees,
all fees and expenses of complying with securities or blue sky laws, National
Association of Securities Dealers' fees, all printing expenses, the fees and
disbursements of counsel for the Issuer and of its independent public
accountants, and the expenses of any special audits made by such accountants
required by or incident to such performance and compliance, shall be paid by
the Pledgors; provided, however, that the Issuer agrees that it will complete
the registrations, qualifications and compliance required pursuant to Section
6.7 even if it does not receive payment or reimbursement of such expenses from
the Pledgors.
6.6 Priority of Security Interest; Further Assurances. (a) Each Pledgor
will at all times cause the security interest granted pursuant to this
Agreement to constitute a valid perfected first priority security interest in
the Collateral, enforceable as such against all creditors of such Pledgor and
any Persons purporting to purchase any Collateral from such Pledgor.
(b) Each Pledgor will at any time and from time to time, at its own
expense, promptly execute and deliver all further instruments and documents,
and take all further actions, as may be necessary or desirable, or that the
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Pledgee may reasonably request, in order to (i)grant more effectively a
security interest in favor of the Pledgee in all or any portion of the
Collateral, (ii)maintain, preserve, or perfect the security interest and lien
created or purported to be created by this Agreement and the first priority
status of such security interest and lien, (iii)preserve and defend against
any Person such Pledgor's title to the Collateral and the rights purported to
be granted therein by this Agreement, (iv)enable the Pledgee to exercise and
enforce its rights and remedies hereunder, or (v)carry out more effectively
the purposes of this Agreement. If the Issuer of Pledged Stock is
incorporated in a jurisdiction which does not permit the use of certificates
to evidence equity ownership of such Pledged Stock or permit a lien in favor
of the Pledgee to be perfected by the possession by the Pledgee of the
certificates representing such Pledged Stock then the Pledgors will to the
extent permitted by applicable law, record such lien on the stock register of
the Issuer, execute any customary stock pledge forms or other documents
necessary to create, evidence or provide for the perfection of such lien and
give the Pledgee the right to transfer such Pledged Stock under the terms
hereof and provide to the Pledgee an opinion of counsel of such jurisdiction,
in form and substance satisfactory to it, confirming the effectiveness,
perfection and priority of such lien.
6.7 Registration of Pledged Stock. Pledgors, as soon as practicable and
at their sole cost and expense, will procure (and the Issuer agrees) that
registration and other qualification of the Pledged Stock under Federal and
state securities laws shall be effected by the Issuer (and kept continuously
effective in compliance with such laws for up to one year after the Maturity
Date as set forth in the Note) so as to permit or facilitate the sale and
distribution of such securities, including, without limitation, "shelf"
registration under the U.S. Securities Act of 1933, as amended (the
"Securities Act"), appropriate qualifications under applicable "blue sky" or
other state securities laws and appropriate compliance with any other
governmental requirements. The Pledgors (and the Issuer) shall ensure that
such registration is declared effective under the Securities Act and all other
such qualifications and compliance are completed prior to the Maturity Date as
set forth in the Note. Pledgors shall cause the Issuer to agree (and the
Issuer agrees) to list the Pledged Stock on the Nasdaq Stock Market. Pledgors
will cause the Pledgee to be kept advised in writing as to the progress of
each such registration, qualification or compliance and as to the completion
thereof, will give the Pledgee, any underwriter and their counsel reasonable
opportunity to review and comment on the registration statement and other
documents incident thereto, to conduct due diligence on the Issuer and to
participate in the process, will furnish to the Pledgee such number of
prospectuses, preliminary prospectuses, prospectus supplements or amendments
or other documents incident thereto as the Pledgee from time to time may
reasonably request, and will indemnify the Pledgee and all others
participating in the distribution of such securities against all claims,
losses, damages and liabilities (or actions in respect thereof) arising out of
or based on any untrue statement (or alleged untrue statement) of a material
fact contained in any prospectus, offering circular or other document
(including any related registration statement, notification or the like)
incident to such registration or by any omission (or alleged omission) to
state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, except (as to the Pledgee) insofar
as the same may have been caused by an untrue statement or omission based upon
information furnished in writing to Pledgor by the Pledgee expressly for use
therein. The registration statement filed with respect to the Pledged Stock
and the prospectus contained therein shall cover only the Pledged Stock and no
other securities. The Pledgors will cause the Issuer (and the Issuer agrees)
to comply with all applicable rules and regulations of the Securities and
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Exchange Commission (hereinafter called "SEC") or similar federal commission,
and of the Nasdaq Stock Market or any other national securities exchange on
which any of the Pledged Stock is listed, if any, for so long as the
registration is effective, to make available to its security holders, as soon
as practicable, an earnings statement covering a period of at least 12 months,
but not more than 18 months, beginning with the first month after the
effective date of the registration statement, which earnings statement will
satisfy the provisions of Section11(a) of and Rule 158 under the Securities
Act, and to make timely filing of all reports with the SEC to enable the
holders of the Pledged Stock, if they so elect, to utilize Rule 144 of the
Securities Act in disposing of said securities. Pledgors (and the Issuer)
agree that, at Pledgee's request, the Issuer shall enter into an underwriting
agreement, which shall include, without limitation, indemnification and
contribution provisions and a "hold-back" or "lock-up" provision covering at
least 90 days and shall otherwise be in form and substance reasonably
satisfactory to Pledgee, with an underwriter for the Pledged Stock chosen by
Pledgee in its sole discretion, and furnish or cause to be furnished to such
underwriter and Pledgee a customary opinion of counsel and accountant's
comfort letter.
SECTION 7. RIGHTS OF THE PLEDGEE.
7.1 No Obligations or Liability to Pledgors. The rights and powers of
the Pledgee hereunder are not contingent upon the pursuit by the Pledgee of
any right or remedy against any Pledgor or against any other Person which may
be or become liable in respect of any of the Secured Obligations or against
any other collateral security or guarantee therefor or right of offset with
respect thereto, but are solely to protect its interest in the Collateral.
The Pledgee will not be liable for any failure to demand, collect or realize
upon all or any part of the Collateral or for any delay in doing so, nor is
the Pledgee under any obligation to sell or otherwise dispose of any
Collateral upon the request of any Pledgor or any other Person or to take any
other action whatsoever with regard to the Collateral or any part thereof. No
action or inaction on the part of the Pledgee hereunder or under the Note will
release any Pledgor from any of its obligations hereunder or under the Note,
or constitute an assumption of any such obligations on the part of the
Pledgee, or cause the Pledgee to become subject to any obligation or liability
to any Pledgor. The Pledgee has no obligation to perform any of the
obligations or duties of any Pledgor as a shareholder of the Issuer.
7.2 Right of Pledgee to Perform Pledgor's Covenants, Etc. If any
Pledgor fails to make any payment or to perform any agreement required to be
made or performed hereunder, the Pledgee may (but need not) at any time
thereafter make such payment or perform such act, or otherwise cause such
payment or performance. No such action will create any liability to any
Pledgor on the part of the Pledgee. All amounts so paid by the Pledgee and
all costs and expenses (including, without limitation, attorneys' fees and
expenses) incurred by the Pledgee in any such performance shall accrue
interest from the date paid or disbursed until reimbursed to the Pledgee in
full by or on behalf of the Pledgors at the rate established in Section 6.5.
All such amounts shall constitute additional indebtedness of the Pledgors
secured hereunder and shall be payable on demand.
7.3 Right of Pledgee to Demand Additional Pledged Shares. The Pledgee
shall have the right at any time, at its sole discretion, to demand by written
notice to the Pledgors that the Pledgors pledge to the Pledgee additional
shares of common stock of the Issuer owned of record and beneficially by one
or more of the Pledgors if, at such time, the product of (i) the total number
of Shares previously pledged to Pledgee pursuant to this Agreement and (ii)
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the Market Value, is less than $13,000,000. The number of shares that may be
demanded pursuant to the preceding sentence shall, at the time of any such
demand, be the number of shares such that the product of (i) the sum of the
total number of shares previously pledged to Pledgee pursuant to this
Agreement and the total number of such additional shares to be pledged, and
(ii) the Market Value, is equal to $13,000,000. All shares at any time
demanded pursuant to the provisions of this Section 7.3 shall be "Demanded
Shares." The Pledgee and the Pledgors agree that Pledgee shall at no time be
required to release from the pledge or return to the Pledgors any Collateral,
except in accordance with the provisions of Section 6.2(b) and Section 7.4.
7.4 Release of the Pledge and Security Interest Created Hereby. Upon
payment in full of the outstanding principal amount of and accrued interest on
the Note in accordance with its terms and payment or satisfaction of all other
Secured Obligations, the Pledgee will, upon the written request of all
Pledgors, return to the Pledgors all Collateral held by the Pledgee.
SECTION 8. REMEDIES AND ENFORCEMENT.
8.1 Remedies in Case of an Event of Default. If an Event of Default has
occurred and is continuing, then in addition to the actions referred to in
Section5.2 the Pledgee may take any or all of the following actions, without
demand of performance or other demand, advertisement or notice of any kind to
or upon Pledgors or any other Person (except as specified in Section8.1(b))
all and each of which are hereby expressly waived by Pledgors:
(a) The Pledgee may, in its own name or at its sole option in the
name of any Pledgor, exercise any or all of the rights, powers and privileges
of, and pursue any or all of the remedies accorded to, any Pledgor under the
Collateral and may exclude such Pledgor and all Persons claiming by, through
or under such Pledgor wholly or partly therefrom, including in such rights,
privileges and remedies, but without limitation, all rights of such Pledgor to
demand, receive, sue for, compromise and settle all payments in respect of the
Collateral, and in connection therewith to exercise all rights and remedies
thereunder which such Pledgor could enforce if this Agreement had not been
made.
(b) The Pledgee may forthwith collect, recover, receive, appropriate
and realize upon the Collateral, or any part thereof, and/or may forthwith
sell, assign, give an option or options to purchase, contract to sell or
otherwise dispose of and deliver the Collateral, or any part thereof, in one
or more parcels at public or private sale or sales, at any exchange, broker's
board or at any of the Pledgee's offices or elsewhere upon such terms and
conditions as it may deem advisable and at such prices as it may deem best,
for cash or on credit or for future delivery without assumption of any credit
risk. The Pledgee need not make any sale of Collateral even if notice thereof
has been given, may reject any and all bids that in its commercially
reasonable discretion it shall deem inadequate, and may adjourn any public or
private sale. Pledgors hereby acknowledge that the Collateral is of a type
that could decline speedily in value and is also of a type customarily sold on
a recognized market, in each case within the meaning of Section 9-504 of the
UCC as in effect in any applicable jurisdiction, and that the Pledgee need not
give any notice to Pledgors prior to any sale of the Collateral at any
exchange, broker's board or in any other recognized market. Without limiting
the foregoing, each Pledgor agrees that the Pledgee need not give more than
five days notice of the time and place of any public sale or of the time after
which a private sale or other intended disposition is to take place and that
such notice is reasonable notification of such matters, and waives all other
demands or notices of any kind.
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(c) The Pledgee may, as a matter of right and without notice to any
Pledgor or any Person claiming by, through or under any Pledgor, cause the
appointment of a receiver for all or any part of the Collateral.
(d) In addition to all other rights and remedies granted to it in
this Agreement and in any other instrument or agreement securing, evidencing
or relating to any of the Secured Obligations, the Pledgee will have and may
exercise with respect to any or all of the Collateral all of the rights and
remedies of a secured party under the UCC and all other legal and equitable
remedies allowed under applicable law.
Each Pledgor consents to and ratifies any action which the Pledgee may
take to enforce its rights under this Section 8.1. Each Pledgor waives to the
full extent permitted by law the benefit of all appraisement, valuation, stay,
extension, moratorium and redemption laws now or hereafter in force and all
rights of marshaling in the event of the sale of the Collateral or any part
thereof or any interest therein. Each Pledgor will execute and deliver such
documents as the Pledgee deems advisable or necessary in order that any such
sale or disposition be made in compliance with applicable law.
Any sale or other disposition of the Collateral or any part thereof or
interest therein in the exercise of any remedy hereunder will constitute a
perpetual bar against each Pledgor and any Persons claiming by, through or
under any Pledgor. Upon any such sale or other disposition, the receipt of
the officer or agent making the sale or other disposition or of the Pledgee is
a sufficient discharge to the purchaser for the purchase money, and such
purchaser will have no duty to see to the application thereof.
8.2 Application of Proceeds Following an Event of Default. All amounts held
or collected by the Pledgee as part of the Collateral (including, without
limitation, all amounts realized as a result of the exercise of any rights and
remedies hereunder) following the occurrence of any Event of Default will be
applied forthwith by the Pledgee as follows:
FIRST: to the payment of all costs and expenses of such exercise (including,
without limitation, the cost of evidence of title and the costs and expenses,
if any, of taking possession of, retaining custody over and preserving the
Collateral or any part thereof, or any interest therein prior to such
exercise), all costs and expenses of any receiver of the Collateral or any
part thereof, or any interest therein, any taxes, assessments or charges with
respect to any of the Collateral, whether or not prior to the lien of this
Agreement, which the Pledgee may consider it necessary or desirable to pay and
all amounts due and payable to the Pledgee under Section6.5 and unpaid;
SECOND: to the payment of the accrued and unpaid interest (including interest
on unpaid principal and, to the extent permitted by applicable law, unpaid
interest) of the Note in accordance with the provisions of the Note;
THIRD: if the Note has not become due and payable in full, to the payment of
all outstanding principal then due and payable on the Note;
FOURTH: if the Note has become due and payable in full whether at maturity,
by prepayment, acceleration, declaration of default or otherwise, to the
payment of the outstanding principal of the Note in accordance with the
provisions of the Note;
FIFTH: to the ratable payment to the Persons entitled thereto of all other
obligations secured hereunder for which moneys have not theretofore been
applied; and
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SIXTH: at such time as all of the obligations of the Pledgors under the Note
have been paid in full in cash or in stock in accordance with the terms of the
Note and all other Secured Obligations have been paid or performed to the
satisfaction of the Pledgee, the remainder, if any, will be paid over to
Pledgors, their successors or assigns, or to whomsoever may be lawfully
entitled to receive the same, as determined by a court of competent
jurisdiction.
8.3 Purchase of Collateral by Pledgee. The Pledgee may be a purchaser
of the Collateral or any part thereof or any interest therein at any sale or
other disposition hereunder and may apply against the purchase price the
indebtedness secured hereby.
8.4 Purchaser to Acquire Good Title. Any purchaser of the Collateral
at any sale or other disposition thereof pursuant to this Section 8 will, upon
any such purchase, acquire good title to the Collateral so purchased free of
the lien and security interest created by this Agreement and free of all
rights of equity or redemption in any Pledgor, which rights each Pledgor
hereby expressly waives and releases to the full extent permitted by law, and
each Pledgor will warrant and defend the title of such purchaser against all
claims arising by, through or under the Pledgors. Nevertheless, if so
requested by the Pledgee or any such purchaser, each Pledgor will ratify and
confirm any exercise of remedies by the Pledgee hereunder by executing and
delivering to the Pledgee or such purchaser all bills of sale, assignments,
releases and other proper instruments to effect such ratification and
confirmation as may be designated in any such request. In addition, each
Pledgor will do or cause to be done all such other acts and things as may be
reasonably necessary to make such exercise of remedies valid and binding and
in compliance with any and all applicable laws, regulations, orders, writs,
injunctions, decrees or awards of any and all courts, arbitrators or
governmental instrumentalities, domestic or foreign, having jurisdiction over
any such exercise, all at such Pledgor's expense.
8.5 Sale of Pledged Stock Without Registration. Pledgor recognizes
that, under certain circumstances, (i)the Pledgee may be unable to effect a
public sale of any or all of the Pledged Stock by reason of the Securities Act
and applicable state or foreign securities laws or otherwise, but may be
compelled to resort to one or more private sales thereof to a restricted group
of purchasers who will be obliged to agree, among other things, to acquire
such securities for their own account for investment and not with a view to
the distribution or resale thereof and who otherwise satisfy the requirements
of any such applicable law, and (ii)any such private sale may result in prices
and other terms less favorable to the seller than if such sale were a public
sale. No such sale will be deemed to have been made in a commercially
unreasonable manner for the reason that it was made as a private sale rather
than a public sale, and the Pledgee will be under no obligation to delay a
sale of any of the Pledged Stock for the period of time necessary to permit
the issuer of such securities to register such securities for public sale
under the Securities Act, or under applicable state securities laws, or
otherwise comply with applicable law, even if the issuer would agree or has
agreed to do so and would be able to do so.
8.6 Appointment as Attorney-in-Fact. Each Pledgor hereby irrevocably
constitutes and appoints the Pledgee, with full power of substitution, as such
Pledgor's attorney-in-fact, with full irrevocable power and authority in the
place and stead of such Pledgor and in the name of such Pledgor or otherwise,
from time to time in the Pledgee's discretion, to execute and deliver any and
all bills of sale, assignments or other instruments which the Pledgee may deem
necessary or advisable in its exercise of any of the remedies hereunder, and
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<PAGE>
to take any other action to accomplish the purposes of this Agreement,
including, without limitation, to ask, demand, collect, sue for, recover,
compound, receive and give acquittance and receipt for moneys due and to
become due under or in connection with the Collateral, to receive, endorse,
and collect any drafts or other instruments, documents and chattel paper in
connection therewith, and to file any claims or take any action or institute
any proceedings which the Pledgee may deem to be necessary or desirable for
the collection thereof, such Pledgor hereby ratifying and confirming all that
such attorney or any substitute may lawfully do by virtue hereof. This power
of attorney is a power coupled with an interest and is irrevocable.
8.7 No Waiver; Cumulative Remedies. No action or inaction of the
Pledgee will be deemed to waive any of the rights, powers or remedies of the
Pledgee hereunder except pursuant to a writing, signed by the Pledgee, and
then only to the extent expressly set forth therein. A waiver by the Pledgee
of any right, power or remedy on any one occasion will not bar the exercise of
any right, power or remedy hereunder on any future occasion. No failure of
the Pledgee to exercise nor delay of the Pledgee in exercising any right,
power or remedy will preclude the exercise of any other right, power or
remedy. If the Pledgee accepts payment of any amount secured hereby after its
due date, it will not thereby be deemed to have waived its right to require
prompt payment when due of all other amounts payable hereunder. Each right,
power and remedy of the Pledgee provided for in this Agreement or now or
hereafter existing at law or equity or by statute or otherwise is cumulative
and concurrent and is in addition to every other such right, power or remedy
of the Pledgee, and the exercise of any one or more of any such rights, powers
or remedies with respect to any of the Collateral will not preclude the
simultaneous or later exercise by the Pledgee of any other right, power or
remedy with respect to any other Collateral.
8.8 Restoration of Rights and Remedies. If the Pledgee has instituted
any proceeding to enforce any right, power or remedy under this Agreement and
such proceeding has been discontinued or abandoned for any reason, with or
without notice to Pledgors, or has been determined adversely to the Pledgee,
then and in every such case Pledgors and the Pledgee will be restored to their
former positions hereunder, and thereafter all rights, powers and remedies of
the Pledgee will continue as though no such proceeding had been instituted.
SECTION 9. PLEDGOR'S OBLIGATIONS NOT AFFECTED.
The covenants and agreements of each Pledgor set forth herein are primary
obligations of such Pledgor. All such obligations are absolute and
unconditional, are not subject to any counterclaim, set-off, deduction,
diminution, abatement, recoupment, suspension, deferment, reduction or defense
(other than full and strict compliance by such Pledgor with its obligations
hereunder) based upon any claim any Pledgor, the Issuer or any other Person
may have against the Pledgee or any other Person. All such obligations will
remain in full force and effect without regard to, and will not be released,
discharged or in any way affected by, any unenforceability, invalidity or
other infirmity with respect to the Note, or any other circumstance, condition
or occurrence whatsoever, whether foreseeable or unforeseeable and without
regard to whether any Pledgor, the Issuer or the Pledgee shall have any
knowledge or notice thereof.
SECTION 10. MISCELLANEOUS.
10.1 Amendments, Etc. Any amendment, modification or waiver of any term
or provision of this Agreement must be in writing and signed by the Pledgee.
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<PAGE>
Any such waiver will be effective only in the specific instance and for the
specific purpose for which it is given.
10.2 Survival of Agreements, Representations and Warranties. All
agreements, representations and warranties contained in this Agreement or the
Note or made in writing by or on behalf of any Pledgor in connection with the
transactions contemplated by this Agreement or the Note will survive the
execution and delivery of this Agreement, any investigation at any time made
by or on behalf of the Pledgee, the purchase of any Note or any payment of any
Note or any disposition of any Note.
10.3 Successors and Assigns. This Agreement is binding upon and will
inure to the benefit of and be enforceable by the respective successors and
assigns of the parties hereto, whether so expressed or not.
10.4 Entire Agreement. This Agreement and the Note embody the entire
agreement and understanding between Pledgors and the Pledgee with respect to
the transaction referred to herein and therein and supersede all prior
agreements and understandings, written or oral, relating to the pledge of
collateral to the Pledgee to secure the obligations of the Pledgors under the
Note.
10.5 Severability. Any provision of this Agreement which is prohibited
or unenforceable in any jurisdiction is, as to such jurisdiction, ineffective
only to the extent made necessary by such prohibition or unenforceability.
Any such prohibition or unenforceability in any jurisdiction will not
invalidate or render unenforceable (i)the remaining provisions hereof or
(ii)such provision in any other jurisdiction. There shall be substituted for
any such provision so rendered ineffective a provision which, as far as
legally possible, most nearly reflects the intent of the parties hereto.
10.6 WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO IRREVOCABLY AND
UNCONDITIONALLY WAIVES THE RIGHT TO TRIAL BY JURY IN ANY LEGAL OR EQUITABLE
ACTION, SUIT OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE
NOTE OR ANY TRANSACTION CONTEMPLATED HEREBY OR THEREBY OR THE SUBJECT MATTER
OF ANY OF THE FOREGOING.
10.7 Agreement May Constitute Financing Statement. Each Pledgor
consents to the filing of this Agreement or a photocopy thereof as a financing
statement under the Uniform Commercial Code as in effect in any jurisdiction
in which the Pledgee may determine such filing to be necessary or desirable.
10.8 Miscellaneous. This Agreement may be executed in any number of
counterparts, each of which is an original, but all of which together
constitute but one instrument. Except as otherwise indicated, references
herein to any "Section" means a "Section" of this Agreement. The table of
contents and the section headings in this Agreement are for purposes of
reference only and shall not limit or define the meaning hereof.
10.9 GOVERNING LAW. THIS AGREEMENT AND (UNLESS OTHERWISE EXPRESSLY
PROVIDED) ALL AMENDMENTS AND SUPPLEMENTS TO, AND ALL CONSENTS AND WAIVERS
PURSUANT TO, THIS AGREEMENT WILL IN ALL RESPECTS BE GOVERNED BY, AND CONSTRUED
AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK
WITHOUT REFERENCE TO PRINCIPLES OF CONFLICTS OF LAW, INCLUDING ALL MATTERS OF
CONSTRUCTION, VALIDITY AND PERFORMANCE.
10.10 Notices, Etc. All notices and other communications provided for
hereunder must be in writing (including telegraphic, telex, telecopy or cable
communication) and must be sent (a) if to any Pledgor, at its address listed
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<PAGE<
on Exhibit B attached hereto, (b) if to Pledgee, at 450 Royal Palm Way, Suite
450, Palm Beach, FL 33480, Telephone: 561-655-7550, Facsimile: 561-655-9692,
or as to each party, at such other address as shall be designated by such
party in a written notice to the other parties. All such notices and
communications are effective when received.
10.11 Submission to Jurisdiction; Waiver of Immunity; Agent for Service
of Process. For the purpose of assuring that the Pledgee may enforce its
rights under this Agreement, each Pledgor, for itself and its successors and
assigns, hereby irrevocably (a) agrees that any legal or equitable action,
suit or proceeding against any Pledgor arising out of or relating to this
Agreement or any transaction contemplated hereby or the subject matter of any
of the foregoing may be instituted, at the election of the Pledgee, in any
state or federal court in the State of Virginia (including, without
limitation, the U.S. Federal District Court for the Eastern District of
Virginia) or in any state or federal court in the State of Florida, (b) waives
any objection which it may now or hereafter have to the venue of any action,
suit or proceeding, (c) irrevocably submits itself to the nonexclusive
jurisdiction of any state or federal court of competent jurisdiction in the
State of Virginia or the State of Florida, and (d) irrevocably waives any
immunity from jurisdiction to which it might otherwise be entitled in any such
action, suit or proceeding which may be instituted in any state or federal
court of the State of Virginia or the State of Florida, and any immunity from
the maintaining of an action against it to enforce any judgment for money
obtained in any such action, suit or proceeding and, to the extent permitted
by applicable law, any immunity from execution. Not later than August 15,
2000, each Pledgor shall irrevocably designate and appoint CT Corporation
System (or any successor corporation), at its office in Virginia and its
office in Florida, as its authorized agent to accept and acknowledge on its
behalf service of any and all process which may be served in any such action,
suit or proceeding with respect to any matter as to which it has submitted to
jurisdiction as set forth in this Section 10.11 and agrees that service upon
such authorized agent shall be deemed in every respect service of process upon
such Pledgor or its successors or assigns, and, to the extent permitted by
applicable law, shall be taken and held to be valid personal service upon it.
Each Pledgor will take all action necessary to ensure that such Pledgor shall
at all times have an agent for service of process for the above purposes in
the State of Virginia and the State of Florida. This Section 10.11 does not
affect the right of the Pledgee to serve process in any other manner permitted
by law or to commence legal proceedings or otherwise proceed against any
Pledgor in any jurisdiction.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered personally or by their representative officers or
agents duly authorized as of the date first above written.
Pledgors:
GOLD & APPEL TRANSFER, S.A.
By:
-------------------------
Walter C. Anderson,
Attorney-in-Fact
REVISION LLC
By:
---------------------------
Walter C. Anderson,
Manager
FOUNDATION FOR THE INTERNATIONAL
NON-GOVERNMENTAL DEVELOPMENT
OF SPACE
By:
-----------------------
Walter C. Anderson,
President
WALTER C. ANDERSON
__________--------------------------______
Walter C. Anderson
Pledgee:
DONALD A. BURNS
----------------------
Donald A. Burns
AGREED AND ACCEPTED (as to Sections 6.5 and 6.7 of the Agreement):
TOTAL-TEL USA COMMUNICATIONS, INC.
By:
-----------------------------
Name:
Title:
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Exhibit A
Shares:
The Shares consist of:
571,400 shares owned of record and beneficially by Gold & Appel, and
represented in certificated form by stock certificate number CU0008824 of the
Issuer (the "Gold & Appel Shares");
1,179,732 shares owned of record and beneficially by Revision, and represented
in certificated form by stock certificate number CU0008823 of the Issuer (the
"Revision Shares"); and
703,529 shares owned of record and beneficially by FINDS, and represented in
certificated form by stock certificate number CU0008825 of the Issuer (the
"FINDS Shares").
Initial Pledged Shares:
The Initial Pledged Shares consist of the Gold & Appel Shares and the Revision
Shares.
Additional Initial Shares:
The Additional Initial Shares consist of the FINDS Shares.
Initial Release Shares:
The Initial Release Shares consist of the Gold & Appel Shares.
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Exhibit B
NOTICE ADDRESSES FOR PLEDGORS
The notice addresses for the respective Pledgors are as follows:
(a) If to Gold & Appel:
Omar Hodge Building
Wickams Cay
Road Town, Tortolla
British Virgin Islands
with copies to:
Sean P. McGuinness
Swidler Berlin Shereff Friedman, LLP
3000 K Street NW
Washington, D.C. 20007-5116
Facsimile: 202-424-7643
and
Walter C. Anderson
Revision LLC
1023 31st Street, NW
Suite 300
Washington, D.C. 20007
Facsimile: 202-736-5065
(b) If to Revision:
Revision LLC
1023 31st Street, NW
Suite 300
Washington, D.C. 20007
Attention: Walter C. Anderson
Facsimile: 202-736-5065
with a copy to:
Sean P. McGuinness
Swidler Berlin Shereff Friedman, LLP
3000 K Street NW
Washington, D.C. 20007-5116
Facsimile: 202-424-7643
(c) If to FINDS:
2000 L Street NW
Suite 200
Washington, D.C. 20036
with copies to:
Sean P. McGuinness
Swidler Berlin Shereff Friedman, LLP
3000 K Street NW
Washington, D.C. 20007-5116
Facsimile: 202-424-7643
and
Walter C. Anderson
Revision LLC
1023 31st Street, NW
Suite 300
Washington, D.C. 20007
Facsimile: 202-736-5065
(d) If to Anderson:
c/o Revision LLC
1023 31st Street, NW
Suite 300
Washington, D.C. 20007
Attention: Walter C. Anderson
Facsimile: 202-736-5065
with a copy to:
Sean P. McGuinness
Swidler Berlin Shereff Friedman, LLP
3000 K Street NW
Washington, D.C. 20007-5116
Facsimile: 202-424-7643
<PAGE>
<PAGE>
STOCK PLEDGE AGREEMENT
Between
GOLD & APPEL TRANSFER, S.A.,
REVISION LLC,
FOUNDATION FOR THE INTERNATIONAL
NON-GOVERNMENTAL DEVELOPMENT OF SPACE, and
WALTER C. ANDERSON
as Pledgors,
and
DONALD A. BURNS,
as Pledgee
Dated as of August 7, 2000
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TABLE OF CONTENTS
Page
SECTION 1. CERTAIN DEFINITIONS 1
SECTION 2. SECURITY FOR OBLIGATIONS 3
SECTION 3. PLEDGE OF SHARES, ETC. 4
SECTION 4. REPRESENTATIONS AND WARRANTIES 4
SECTION 5. VOTING RIGHTS, DIVIDENDS AND OTHER
DISTRIBUTIONS, ETC. 6
5.1 Prior to Default or Event of Default 6
5.2 After Default or Event of Default 6
SECTION 6. COVENANTS OF PLEDGORS 7
6.1 Sale of Collateral, Etc 7
6.2 Delivery of Stock Certificates, Etc 7
6.3 Other Distributions 8
6.4 Records; Inspection 8
6.5 Costs, Expenses and Certain Taxes 8
6.6 Priority of Security Interest;
Further Assurances 9
6.7 Registration of Pledged Stock 9
SECTION 7. RIGHTS OF THE PLEDGEE 11
7.1 No Obligations or Liability to Pledgors 11
7.2 Right of Pledgee to Perform Pledgor's
Covenants, Etc 11
7.3 Right of Pledgee to Demand Additional
Pledged Shares 11
7.4 Release of the Pledge and Security
Interest Created Hereby 12
SECTION 8. REMEDIES AND ENFORCEMENT 12
8.1 Remedies in Case of an Event of Default 12
8.2 Application of Proceeds Following an
Event of Default 14
8.3 Purchase of Collateral by Pledgee 15
8.4 Purchaser to Acquire Good Title 15
8.5 Sale of Pledged Stock Without Registration 15
8.6 Appointment as Attorney-in-Fact 16
8.7 No Waiver; Cumulative Remedies 16
8.8 Restoration of Rights and Remedies 16
SECTION 9. PLEDGOR'S OBLIGATIONS NOT AFFECTED 17
SECTION 10. MISCELLANEOUS 17
10.1 Amendments, Etc 17
10.2 Survival of Agreements, Representations
and Warranties 17
10.3 Successors and Assigns 17
10.4 Entire Agreement 18
10.5 Severability 18
10.6 WAIVER OF JURY TRIAL 18
10.7 Agreement May Constitute Financing
Statement 18
10.8 Miscellaneous 18
10.9 GOVERNING LAW 18
10.10 Notices, Etc 19
10.11 Submission to Jurisdiction; Waiver of
Immunity; Agent for Service of Process 19
