<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D/A
Under the Securities Exchange Act of 1934
(Amendment No. 1)*
WCT Communications, Inc.
-------------------------------------------------------------
(Name of Issuer)
Common Stock, without par value
--------------------------------------------------------------
(Title of Class of Securities)
92923M 10 2
--------------------------------------------------------------
(CUSIP Number)
Helen A. Zamboni, Esq.
Rochester Telephone Corporation
180 South Clinton Avenue, Rochester, New York 14646
(716) 777-7315
--------------------------------------------------------------
(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications)
November 8, 1994
--------------------------------------------------------------
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule
13G to report the acquisition which is the subject of this
Schedule 13D, and is filing this schedule because of Rule 13d-
1(b)(3) or (4), check the following box [ ].
Check the following box if a fee is being paid with the statement
[ ]. (A fee is not required only if the reporting person: (1)
has a previous statement on file reporting beneficial ownership
of more than five percent of the class of securities described in
Item 1; and (2) has filed no amendment subsequent thereto
reporting beneficial ownership of five percent or less of such
class.) (See Rule 13d-7.)
<PAGE>
<PAGE> 2
Note: Six copies of this statement, including all exhibits,
should be filed with the Commission. See Rule 13d-1(a) for other
parties to whom copies are to be sent.
*The remainder of this cover page shall be filled out for a
reporting person's initial filing on this form with respect to
the subject class of securities, and for any subsequent amendment
containing information which would alter disclosures provided in
a prior cover page.
The information required on the remainder of this cover page
shall not be deemed to be "filed" for the purpose of Section 18
of the Securities Exchange Act of 1934 ("Act") or otherwise
subject to the liabilities of that section of the Act but shall
be subject to all other provisions of the Act (however, see the
Notes).
<PAGE>
<PAGE> 3
SCHEDULE 13D/A
CUSIP NO. 92923M 10 2
1) Name of Reporting Persons S.S. or I.R.S. Identification Nos.
of Above Persons: Rochester Telephone Corporation
2) Check the Appropriate Box if a member of a Group (See
Instructions):
(a) [ ]
(b) [ ]
3) SEC Use Only:
4) Source of Funds (See Instructions): 00 (see item 3)
5) Check if Disclosure of Legal Proceedings is Required Pursuant
to Items 2(d) or 2(e): [ ]
6) Citizenship or Place of Organization: New York
Number of Shares Beneficially Owned by Each Reporting Person
with:
7) Sole Voting Power: 4,424,914 (The Reporting Person disclaims
beneficial ownership of these shares)
8) Shared Voting Power: -0-
9) Sole Dispositive Power: -0-
10) Shared Dispositive Power: -0-
11) Aggregate Amount Beneficially Owned by Each Reporting Person:
4,424,914 (The Reporting Person disclaims beneficial ownership of
these shares)
12) Check if the Aggregate Amount in Row (11) Excludes Certain
Shares (See Instructions): [ ]
13) Percent of Class Represented by Amount in Row (11): 30.4%
14) Type of Reporting Person (See Instructions): CO
<PAGE>
<PAGE> 4
Items 6 and 7 of the Statement of Schedule 13D (the "Initial
Schedule 13D") filed pursuant to Rule 13d-1 of the Rules and
Regulations under the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), by Rochester Telephone Corporation, a New
York corporation ("Rochester"), relating to the Common Stock,
without par value (the "WCT Shares"), of WCT Communications,
Inc., a Washington corporation ("WCT"), are hereby amending by
adding to such items the information set forth below:
Item 6. Contracts, Arrangements or Understandings with Respect
to Securities of the Issuer
On November 3, 1994, RCI Long Distance, Inc., a Delaware
corporation and a wholly-owned subsidiary of Rochester ("RCI"),
loaned Richard Frockt, the Chairman of the Board of Directors and
Chief Executive Officer of WCT, $900,000 which was used by Mr.
Frockt to pay a portion of the settlement of certain legal
proceedings against WCT, Mr. Frockt and other officers, directors
and employees of WCT. Mr. Frockt's obligation to repay the loan
is evidenced by a promissory note (the "Note"), with interest
thereon payable monthly and accruing at the rate of 9% per annum.
The Note is due and payable on the earlier of the following to
occur: (i) three business days after the effective time of the
merger of Rochester Subsidiary Twenty-Eight, Inc., a Delaware
corporation and a wholly-owned subsidiary of Rochester ("Sub"),
with and into WCT pursuant to an Agreement and Plan of Merger
dated as of November 8, 1994 among Rochester, Sub and WCT (the
"Merger Agreement"); (ii) the first anniversary of the
termination of that certain letter of intent between WCT and
Rochester dated as of October 14, 1994 (the "Letter of Intent"),
the Merger Agreement or any other definitive agreements
subsequently entered into between WCT and Rochester pursuant to
the Letter of Intent; and (iii) three business days following the
execution of definitive agreements by WCT and a third party for
the acquisition by such third party of the majority of the voting
stock of WCT or all or substantially all of the assets of WCT.
Mr. Frockt's obligation to pay the Note is secured by a
Pledge and Security Agreement dated as of November 3, 1994
between RCI and Mr. Frockt (the "Pledge Agreement") covering
508,500 WCT Shares owned by Mr. Frockt (the "Pledged Shares").
Subject to the Frockt Shareholder's Agreement (as defined and
described in the Initial Schedule 13D), the power to vote the
Pledged Shares shall remain with Mr. Frockt unless an Event of
Default (as defined in the Pledge Agreement), or an event which
with the passage of time or giving of notice, or both, would
constitute an Event of Default, shall have occurred. The Pledged
Shares are among the 3,522,259 WCT Shares subject to the Frockt
Shareholder's Agreement. Accordingly, the Pledged Shares are
included in the 4,424,914 WCT Shares reported by Rochester in the
Initial Schedule 13D as WCT Shares with respect to which it may
be deemed the beneficial owner for certain purposes.
<PAGE>
<PAGE> 5
Except as described in Item 6 hereof and in Item 4 of the
Initial Schedule 13D, neither Rochester nor, to the best
knowledge of Rochester, any director or executive officer of
Rochester has any contract, arrangement, understanding or
relationship (legal or otherwise) with any person with respect to
any securities of WCT, including, but not limited to, transfer or
voting of any securities of WCT, finder's fees, joint ventures,
loan or option arrangements, puts or calls, guarantees of
profits, division of profits or loss or the giving of withholding
of proxies.
Item 7. Material to be Filed as Exhibits.
1. Promissory Note dated November 3, 1994.
2. Pledge and Security Agreement dated as of November 3,
1994 between RCI and Richard Frockt.
<PAGE>
<PAGE> 6
SIGNATURE
After reasonable inquiry and to the best of my knowledge and
belief, I certify that the information set forth in this
Statement is true, complete and correct.
DATED: December 22, 1994
ROCHESTER TELEPHONE CORPORATION
By: /s/ Barbara J. LaVerdi
----------------------------
Barbara J. LaVerdi
Assistant Secretary
<PAGE>
<PAGE>
EXHIBIT INDEX
EXHIBIT
NUMBER DESCRIPTION
99 Promissory Note dated Filed herewith
November 3, 1994
99 Pledge and Security Filed herewith
Agreement dated November 3,
1994 between RCI
and Richard Frockt
<PAGE> 1
PROMISSORY NOTE
$900,000.00 November 3, 1994
RICHARD FROCKT, an individual having his residence at 220
Hot Springs Road, Montecito, California 93108 ("Maker") for value
received, hereby promises to pay to RCI LONG DISTANCE, INC., a
Delaware corporation, having its offices at 180 South Clinton
Avenue, Rochester, New York 14646 ("Holder"), the sum of Nine
Hundred Thousand Dollars ($900,000.00), with interest thereon
payable monthly and accruing at the rate of nine percent (9%) per
annum.
The amounts due hereunder shall be due and payable on the
earlier of the following to occur: (i) three business days after
the Effective Time, as that term is defined in an Agreement and
Plan of Merger (the "Merger Agreement") contemplated to be
entered into by and among Rochester Telephone Corporation
("Rochester"), Rochester Subsidiary Twenty-Eight, Inc. and WCT
Communications, Inc. ("WCT"); (ii) the first anniversary of the
termination of that certain letter of intent between WCT and
Rochester, dated as of October 14, 1994 (the "Letter of Intent"),
the Merger Agreement or any definitive agreements subsequently
entered into between WCT and Rochester pursuant to the Letter of
Intent; and (iii) three business days following the execution of
definitive agreements by WCT and a third party for the
acquisition by such third party of the majority of the voting
stock of WCT or all or substantially all the assets of WCT.
Amounts due hereunder will be paid in any coin or currency
of the United States of America which at the time of payment is
legal tender for the payment of public and private debts. Unless
Holder shall provide written instructions to the contrary,
amounts due hereunder will be payable at the principal corporate
office of Holder located at 180 South Clinton Avenue, Rochester,
New York 14646.
Maker hereby represents and warrants that Maker has the
legal capacity, power and authority to execute this Note and that
such Note is a binding obligation and subject to the full faith
and credit of Maker. Maker further agrees that Maker's
obligations under this Note are unconditional and not subject to
deduction, diminution, abatement, counter-claim, defense or
<PAGE>
<PAGE> 2
set-off for any reason whatsoever. Maker's obligations hereunder
shall not be subordinate to any other indebtedness of Maker.
In the event any one or more of the provisions contained in
this Note shall for any reason be held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provision of this
Note, but this Note shall be construed as if such invalid,
illegal or unenforceable provision had never been contained
herein or therein.
This Note may not be changed orally, but only by an
agreement in writing signed by the parties against whom
enforcement of any waiver, change, modification or discharge is
sought.
Any notice, demand, request or other communication which
Maker or Holder may be required or may desire to give hereunder
shall be in writing and shall be deemed to have been properly
given if hand-delivered or if sent via facsimile
telecommunication, receipt telephonically confirmed (effective 24
business hours after receipt is confirmed), or if sent by
internationally recognized express courier (such as Federal
Express or United Parcel Service) (effective 48 hours after
deposit thereof at any office of such courier), postage prepaid,
return receipt requested, addressed as follows, or to such other
addresses as the parties may designate by like notice.
To Maker:
Richard Frockt
220 Hot Springs Road
Montecito, California 93108
To Holder:
RCI Long Distance, Inc.
180 South Clinton Avenue
Rochester, New York 14646
Attention: Dale M. Gregory, CEO
Each right, power and remedy of Holder hereunder, now or
hereafter existing at law or in equity by state or other
applicable laws shall be cumulative and concurrent, and the
exercise of any one or more of them shall not preclude the
<PAGE>
<PAGE> 3
simultaneous or later exercise by Holder of any or all such other
rights, powers or remedies. No failure or delay by Holder to
insist upon the strict performance of any one or more provisions
of this Note or to exercise any right, power or remedy consequent
upon a breach thereof or default hereunder shall constitute a
waiver thereof, or preclude Holder from exercising any such
right, power or remedy. By accepting payment after the due date
under this Note, Holder shall not be deemed to have waived the
right to require payment when due of all other payments due under
this Note. No failure or delay by Holder to insist upon the
strict performance of any term, condition, covenant or agreement
of this Note, or to exercise any right, power or remedy
consequent upon a breach thereof, shall constitute a waiver of
any such term, condition, covenant or agreement or of any such
breach, or preclude Holder from exercising any such right, power
or remedy at any later time or times.
This Note shall be governed by, construed and interpreted in
accordance with the laws of the State of New York (excluding the
choice of laws rules thereof). A final judgment in any such
action or proceeding shall be conclusive and may be enforced in
any other jurisdiction by suit on the judgment or in any other
manner provided by law.
In addition to all other rights available to Holder under
this Note or under any law, or under principles of equity, Holder
shall have the right at any time and from time to time to sell,
assign, pledge or otherwise transfer this Note to any entity or
person then affiliated with Holder. Each such purchaser,
assignee, pledgee and transferee shall have all the rights,
remedies and benefits of Holder hereunder. Further, any such
purchaser, assignee, pledgee or transferee shall have the right
to surrender this Note to Maker for cancellation and have a new
Note with identical terms issued in exchange therefore to such
purchaser, assignee, pledgee or transferee.
This Note shall be binding upon and shall inure to the
benefit of Maker and Holder and their respective successors and
assigns.
In the event Maker should default under any of the
provisions of this Note and Holder should employ attorneys or
incur other expenses for the collection of any amounts due from
Maker hereunder, the enforcement of performance or observance of
<PAGE>
<PAGE> 4
any obligation or agreement of Maker herein contained, Maker
agrees that it will on demand therefor pay to Holder the
reasonable fees of such attorneys and such other reasonable
expenses so incurred by Holder, should Holder prevail in such
collection or enforcement efforts. Any amounts paid hereunder
shall first be applied to collection costs, late charges and
interest.
Maker agrees that he has received adequate consideration for
his obligations hereunder.
IN WITNESS WHEREOF, Maker has executed this Promissory Note
under seal as of the date first above written.
/s/ Richard Frockt
------------------------
Richard Frockt
RCI LONG DISTANCE, INC.
By: /s/ James G. Dole
-----------------------
James G. Dole
Vice President
<PAGE> 1
PLEDGE AND SECURITY AGREEMENT
THIS PLEDGE AND SECURITY AGREEMENT (the "Agreement") is
entered into as of November 3, 1994 by and between RCI Long
Distance Inc., a Delaware corporation with its principal office
at Rochester Tel Center, 180 South Clinton Avenue, Rochester, New
York 14646 ("Pledgee"), and Richard Frockt ("Pledgor"), an
individual residing at 220 Hot Springs Road, Montecito,
California 93108 ("Pledgor").
WHEREAS, Pledgor is indebted to Pledgee in the amount of
Nine Hundred Thousand Dollars ($900,000.00) in United States
funds, yet unpaid and accrued interest thereon, as the same may
be adjusted, all as more specifically set forth in that certain
Promissory Note dated concurrently herewith ("Note");
WHEREAS, Pledgor desires to secure the payments due under
the Note;
NOW, THEREFORE, in consideration of the foregoing and of the
mutual covenants and agreements hereinafter set forth, the
parties hereto agree as follows:
1. Pledge. As security for the due and punctual payment
of all amounts now or hereafter payable by Pledgor under the
Note, Pledgor hereby pledges, assigns and delivers to Pledgee
508,500 shares of common stock of WCT represented by certificate
numbers LU 2113, LU 1784, LU 1785, LU 1786, LU 1787, and LU 1788
(the "Stock", the Stock and/or any proceeds thereof being known
herein as the "Collateral"). Pledgor hereby grants to Pledgee a
security interest in and lien on the Collateral. Pledgee hereby
acknowledges receipt of the certificates representing the Stock,
with attached stock powers duly executed in blank (with all
signatures guaranteed or acknowledged).
2. Representations and Warranties of Pledgor. Pledgor
hereby represents and warrants to Pledgee as follows:
(a) Pledgor has good and marketable title to the
Collateral, free and clear of all claims, liens, pledges or other
encumbrances. Subject to restrictions under federal or state
securities laws and, when executed, a Shareholder's Agreement to
be entered into by Pledgor and Rochester Telephone Corporation
(the "Shareholder's Agreement"), Pledgor has full power,
<PAGE>
<PAGE> 2
authority and legal right to pledge the Collateral to Pledgee and
to grant Pledgee a lien thereon and security interest therein.
The pledge of the Collateral pursuant to this Agreement does not
violate any agency or court order or agreement to which Pledgor
is a party or, to Pledgor's actual knowledge, any law, rule,
regulation by which Pledgor or the Collateral is bound.
(b) Pledgor has no defenses to the payment of or
setoffs against the amount outstanding on the Note as of the date
hereof to Pledgee.
(c) Consents. To the actual knowledge of Pledgor, no
consent of any government or governmental authority, or of any
other person, is required for the execution and delivery by
Pledgor of this Agreement, the pledge of the Collateral hereunder
or the performance of the other obligations of Pledgor hereunder.
3. Covenants of Pledgor.
(a) Preservation of Pledge. Pledgor shall execute and
deliver any and all documents, or cause the execution and
delivery of any and all documents (including financing
statements), necessary to create, perfect, preserve, validate or
otherwise protect the pledge of the Collateral to Pledgee and
Pledgee's lien on and security interest in the Collateral and the
first priority thereof; maintain, or cause to be maintained at
all times the pledge of the Collateral to Pledgee and Pledgee's
priority thereof; and defend the Collateral and Pledgee's
interests therein against all claims and demands of all persons
at any time claiming the same or any interest therein adverse to
Pledgee and pay all costs and expenses (including, without
limitation, reasonable attorneys' fees and expenses) in
connection with such defense.
(b) Transfer of Collateral. Pledgor shall not sell,
transfer, assign or otherwise dispose of any of the Collateral or
any interest therein, and Pledgor shall not create, incur, assume
or suffer to exist any encumbrances with respect to any of the
Collateral or any interest therein.
(c) Notice to WCT. Upon the request of Pledgee,
Pledgor shall give written notice of this Agreement and of the
pledges, security interests, proxies and powers of attorney
created hereby to WCT and shall cause WCT to note such interest
in its stock transfer records.
<PAGE>
<PAGE> 3
(d) Other Actions. Pledgor shall not take or permit
to be taken any action in connection with the Collateral which
would impair the value of the interests or rights of Pledgee
therein or which would impair the interests or rights of Pledgee
therein or with respect thereto.
4. Irrevocable Proxy. Subject to the provisions of the
Shareholder's Agreement, Pledgor hereby grants to Pledgee an
irrevocable proxy to (a) vote or cause to be voted any and all of
the Stock, (b) give or cause to be given consents, waivers and
ratification in respect thereof and (c) exercise all other rights
of ownership with respect thereto. This proxy shall be valid as
long as the Stock or any part thereof shall be pledged to Pledgee
pursuant to this Agreement. Pledgee hereby agrees that until an
Event of Default (as defined in Section 6 hereof), or an event
which with the passage of time or giving of notice, or both,
would constitute an Event of Default, shall have occurred,
Pledgee shall not exercise this proxy and Pledgor shall be
entitled to (i) vote or cause to be voted any and all of the
Stock, (ii) give or cause to be given consents, waivers and
ratification in respect thereof and (iii) exercise all other
rights of ownership with respect thereto; provided, however, that
no vote shall be cast or consent, waiver, ratification or other
action given or taken which would be inconsistent with any of the
provisions of this Agreement or the Shareholder's Agreement. All
such rights of Pledgor to vote (or cause to be voted), to give
(or cause to be given) consents, waivers and ratification and to
exercise other rights shall cease upon the occurrences of an
Event of Default.
5. Additional Property. All dividends (including
without limitation, stock and liquidating dividends) payable in
stock or other securities, distributions of property, returns of
capital or other noncash distributions made on or in respect of
the Collateral, whether resulting from a subdivision, combination
or reclassification of the outstanding capital stock of WCT or
received in exchange for the Stock or any part thereof or as a
result of any merger, consolidation, acquisition or other sale or
exchange of assets to which WCT or Pledgor may be a party or
otherwise, and any and all money and other property received upon
sale or transfer of or in exchange for or redemption of the Stock
or any part thereof, shall be and become part of the Collateral
and, if received by Pledgor, shall be held in trust for the
benefit of Pledgee and shall forthwith be delivered to Pledgee to
be held subject to the terms of this agreement.
<PAGE>
<PAGE> 4
6. Events of Default. For purposes of this Agreement, the
term "Event of Default" shall mean the occurrence of any one or
more of the following events:
(a) Failure to Pay Promissory Note. The failure of
Pledgor to pay, in full, as provided therein, the Note, or any
other of the obligations with respect thereto; or
(b) Representation and Warranties. Any
representation, warranty or other statement made by or on behalf
of Pledgor in this Agreement shall prove to have been false or
incorrect in any material respect as of the date made or deemed
made to the detriment of Pledgee; or
(c) Observance of Provisions. Pledgor shall fail to
observe or perform any term, covenant or agreement contained in
this Agreement to the detriment of Pledgee; or
(d) Bankruptcy, Insolvency and Related Events.
Pledgor (i) admits in writing his inability to, or be generally
unable to, pay his debts when due, (ii) applies for or consents
to the appointment of a receiver, custodian, trustee or
liquidator of himself or a substantial portion of his property,
(iii) makes a general assignment for the benefit of his
creditors, (iv) commences a voluntary case under any applicable
bankruptcy or insolvency law, (v) have filed against him any case
or proceeding seeking liquidation, reorganization, dissolution or
winding up upon the appointment of a trustee, receiver,
liquidator or the like; provided, however, that in the event
Pledgor shall pay in full all amounts due on the Note within ten
(10) days after the occurrence of any event specified in
subparagraphs (a), (b), (c) or (d) above, such Event of Default
shall be cured, provided further, however, that the right of
Pledgee to exercise its rights with respect to the Collateral
during such ten (10) day period shall not be impaired if Pledgee
determines, in its sole discretion, that exercise of its rights
is necessary to insure payment in full of the Note; or
(e) Breach of Shareholder's Agreement. The breach by
Pledgor of his obligations under the Shareholder's Agreement.
7. Rights of Pledgee Upon Occurrence of Event of Default.
(a) Upon the occurrence of any Event of Default
hereunder and so long as such Event of Default shall be
<PAGE>
<PAGE> 5
continuing, (i) all of the Note shall be immediately due and
payable, without presentment, demand, protest or further notice
of any kind, all of which are hereby expressly waived by Pledgor,
anything contained herein to the contrary notwithstanding; (ii)
Pledgee may exercise any one or more of the rights and remedies
exercisable by Pledgee under other provisions of this Agreement
or exercisable by a secured party under the Uniform Commercial
Code or under any other applicable law; and (iii) without
limiting the generality of the foregoing, to take any other
action which Pledgee deems necessary or desirable to protect or
realize upon its pledge, lien on or security interest in the
Collateral or any part thereof, and Pledgor hereby irrevocably
appoints Pledgee as Pledgor's attorney-in-fact to take any such
action (including, without limitation, the execution and delivery
of any and all documents or instruments related to the Collateral
or any part thereof in Pledgor's name) and said appointment shall
create in Pledgee a power coupled with an interest; including,
without limitation, any one or more of the following actions:
(A) to cause any or all of the Collateral to be transferred into
the name of Pledgee or into the name of its nominee or nominees;
(B) to apply any cash held by Pledgee hereunder to the payment of
the Note; and (C) if there shall be no such cash or if the cash
so applied shall be insufficient to pay in full the Note, to
sell, resell, assign and deliver all or any part of the
Collateral, at public or private sale, for cash, upon credit or
for future delivery, and at such price or prices and upon such
other terms and conditions as are commercially reasonable.
Pledgee shall give Pledgor not less than five (5) days' prior
written notice of the time and place of any public sale thereof
or of the time after which any private sale or any other intended
disposition thereof is to be made, and Pledgor agrees that, where
reasonable notification of the time or requirement of such sale
or other disposition thereof is required by law, such requirement
shall be met if Pledgor is given such five-day notice. Pledgee
may purchase any or all of the Collateral to be sold at any such
public sale or sales upon such terms and conditions as are
commercially reasonable. Pledgor recognizes and acknowledges
that, notwithstanding that a higher price might be obtained for
the Collateral at a public sale than at a private sale or sales,
the making of a public sale of the Collateral is subject to
registration requirements and other legal restrictions compliance
with which might require such actions on the part of the Pledgor
and Pledgee, might entail such expenses, and might subject
Pledgee, any underwriter through whom the Collateral might be
<PAGE>
<PAGE> 6
sold and any controlling person of any thereof to such
liabilities, as would make a public sale of the Collateral, in
the judgment of Pledgee, impractical. Accordingly, Pledgor
agrees that private sales made by Pledgee may be at prices and on
other terms and conditions less favorable to the seller than if
the Collateral were sold at public sale, that Pledgee shall have
no obligation to take any steps in order to permit the Collateral
to be sold at a public sale complying with the requirements of
applicable securities and similar laws and that any sale at a
private sale made under the foregoing circumstances shall be
considered and deemed to be a sale in a commercially reasonable
manner. Upon any sale or sales pursuant to this Agreement, the
Collateral so sold shall be held by the purchaser absolutely free
from any claims or rights of whatsoever kind or nature, including
any equity of redemption or any similar rights, all such equity
of redemption and similar rights being hereby expressly waived
and released by Pledgor. Pledgee is hereby authorized to comply
with any limitation or restriction in connection with any such
sale that it may be advised by counsel is necessary in order to
avoid any violation of applicable law or in order to obtain any
required approval of any governmental authority, and any such
sale made in compliance with the foregoing procedure shall be
considered and deemed to be a sale in a commercially reasonable
manner. No notice to or demand on Pledgor in any case shall
entitle Pledgor to any other notice or demand in similar or other
circumstances.
Upon the exercise of any power, right, privilege or remedy
pursuant to this Agreement, which requires any consent, approval,
recording, qualification or authorization of any governmental
authority or instrumentality, Pledgor will execute and deliver,
or will cause the execution and delivery of, and papers that
Pledgee may require to be obtained for such governmental consent,
approval, recording, qualification or authorization.
(b) Anything in Section 7(a) above to the contrary
notwithstanding, Pledgee shall use its best efforts to sell the
Stock in the public market in broker's transactions (in
compliance with Rule 144 promulgated by the Securities and
Exchange Commission, if applicable) and in such manner and
amounts as not to disrupt the public market for the Stock of WCT
and in order to realize the best price per share for the Stock
available in the public market under the circumstances.
<PAGE>
<PAGE> 7
8. Application of Proceeds. All proceeds from the
collection or sale or other disposition of all or any part of the
Collateral pursuant to this Agreement, together with all other
money and property held or received by Pledgee as, on or in
respect of the Collateral, shall be applied in the following
order of priority:
First, to the payment of all costs and expenses of
collecting, holding, managing, selling or otherwise
disposing of the Collateral or any part thereof or any
proceeds thereof, and to the payment of all sums which
Pledgee may be required or may elect to pay, if any, for
charges upon the Collateral or any part thereof, and all
other payments which Pledgee may be required or authorized
to make under any provision of this Agreement (including in
each such case legal costs and attorneys' fees and expenses
and all expenses, liabilities and advances made or incurred
in connection therewith);
Second, to the payment of all amounts due under the
Note; and
Third, to be held by Pledgee until satisfaction or
expiration of Pledgor's obligations under the Note or this
Agreement, and upon such payment or satisfaction, to the
payment of any surplus then remaining to the Pledgor, unless
otherwise provided by law or directed by a court of
competent jurisdiction.
9. Return of Collateral. So long as no Event of Default
shall have occurred and be continuing, Pledgee shall return the
Collateral to Pledgor upon payment or satisfaction in full of the
Note and all other sums payable under this Agreement, together
with all money and property held or received by Pledgee as, on or
in respect of the Collateral. So long as no Event of Default
shall have occurred and be continuing, Pledgee shall return to
Pledgor, on payment in full of all amounts due on the Note,
shares of the Stock representing the Collateral. Pledgee shall
not be deemed to make or to have made any representation or
warranty with respect to any Collateral returned to Pledgor,
pursuant to this Section 9, except that such Collateral is free
and clear, on the date of delivery, of any and all encumbrances
arising from Pledgee's own acts.
<PAGE>
<PAGE> 8
10. Sole Duty of Pledgee. Other than the exercise of
reasonable care to assure the safe custody of the Collateral
while held by the Pledgee hereunder, Pledgee shall have no
responsibility for or obligation or duty with respect to all or
any part of the Collateral or any matter or proceeding arising
out of or relating thereto, including, without limitation, no
obligation or duty to collect any sums due in respect thereof or
to protect or preserve rights pertaining thereto and Pledgor
hereby waives any claims he may have again Pledgee with respect
thereto.
11. Miscellaneous Provisions.
(a) Additional Actions and Documents. Pledgor hereby
agrees to take or cause to be taken such further actions, to
execute, deliver and file or cause to be executed delivered and
filed such further documents and instruments and to obtain such
consents, as may be necessary or as may be reasonably requested
in order to fully effectuate the purposes, terms and conditions
of, and the remedies set forth in, this Agreement, whether
before, at or after the occurrence of an Event of Default
hereunder.
(b) Expenses. Pledgor agrees to reimburse and save
Pledgee harmless against liability for the payment of all out-of-
pocket expenses arising in connection with the administration or
enforcement of, or the preservation or exercise of any rights
(including the right to dispose of the Collateral) under, this
Agreement, including, without limitation, the reasonable fees and
expenses of counsel to Pledgee arising in such connection.
(c) Notices. All notice, demands, request or other
communications which may be or are required to be given, served
or sent by a party to the other party pursuant to this Agreement
shall be in writing and shall be given, served or sent in the
manner and to the addresses specified herein or otherwise
theretofore delivered to the other party hereto in writing, in
the case of Pledgee, to the attention of its Corporate Counsel.
(d) Benefit. This Agreement shall be binding upon
and shall inure to the benefit of the parties hereto and their
respective successors and permitted assigns.
<PAGE>
<PAGE> 9
(e) Modification; Discharge; and Waiver. No
amendment, modification or discharge of this Agreement or waiver
hereunder shall be valid or binding unless set forth in writing
and duly executed by the party against whom enforcement of the
amendment, modification, discharge or waiver is sought.
(f) Governing Law. This Agreement, the rights and
obligations of the parties hereto and any claims or disputes
relating thereto shall be governed by and construed in accordance
with the laws of the State of New York.
(g) Severability of Provisions. Each provision of
this Agreement will be interpreted in such manner as to be
effective and valid under applicable laws and regulations, but if
any provision of this Agreement is held to be prohibited or
unenforceable in any jurisdiction, such provision shall, as to
such jurisdiction, be ineffective only to the extent of such
prohibition or unenforceability without invalidating the
remainder of such provision or the remaining provisions hereof.
(h) Counterparts. This Agreement may be executed in
any number of counterparts, all of which together shall
constitute one and the same instrument and any of the parties
hereto may execute this Agreement by signing any such
counterpart.
<PAGE>
<PAGE> 10
IN WITNESS WHEREOF, each of the parties hereto has caused
this Pledge and Security Agreement to be duly executed and
delivered in its name and on its behalf, all as of the day and
year first above written.
PLEDGOR:
/s/ Richard Frockt
--------------------------
RICHARD FROCKT
PLEDGEE:
RCI LONG DISTANCE, INC.
By: /s/ James G. Dole
-----------------------
James G. Dole
Its: Vice President
