STOCK PLEDGE AGREEMENT
(this "AGREEMENT"), dated as of October 3, 2000, among Global Technologies,
Ltd., a Delaware corporation ("Pledgor"), and the pledgees signatory hereto and
their respective endorsees, transferees and assignees (collectively, "PLEDGEE").
WITNESSETH:
WHEREAS, pursuant to the Convertible Secured Note Purchase Agreement (the
"PURCHASE Agreement"), dated the date hereof between Pledgor and Pledgee,
Pledgor is selling an aggregate principal amount of $7,000,000 of its 8%
Convertible Notes (the "NOTES") to Pledgee; and
WHEREAS, as a material inducement to Pledgee to purchase the Notes, Pledgee
has required and Pledgor has agreed to grant to Pledgee a security interest in
shares of U.S. Wireless Corporation's (the "Company") common stock, $.01 par
value per share (the "SHARES") currently owned by Pledgor. Terms used and not
defined herein shall have the meaning ascribed to them in the Purchase
Agreement.
NOW, THEREFORE, in consideration of the foregoing recitals, and the mutual
covenants contained herein, the parties hereby agree as follows:
1. THE PLEDGED SHARES. The pledged Shares, (i) shall be held in escrow by
counsel to the Pledgee; (ii) shall have been held by Pledgor for a period of at
least one year prior to the date hereof; and (iii) shall, except as otherwise
provided herein, while the Notes are outstanding, have an aggregate value equal
to 200% of the outstanding principal balance of the Notes ("PLEDGED SHARES
VALUE"), PROVIDED, that, if at any time while the Notes are outstanding, the
Pledged Shares Value (as defined below) drops below 150% of the outstanding
principal balance of the Notes, then the Pledgor shall, within five days after
receipt of written notice from Pledgee requesting additional Shares, deposit
with counsel to the Pledgee, to be held in escrow, additional Shares so that the
aggregate value of the Shares shall equal the Pledged Shares Value. The Shares
shall be held as collateral security for the timely and full satisfaction of all
obligations of Pledgor (including the obligations to timely deliver Underlying
Shares as and when required by the Transaction Documents), whether matured or
unmatured, now or hereafter existing or created and becoming due and payable,
under the Transaction Documents (such obligations are collectively the
"OBLIGATIONS"). For purposes hereof, the aggregate value of the Shares shall be
equal to the average of the closing bid prices of the Shares for the ten Trading
Days immediately preceding the date of any such determination multiplied by the
aggregate number of Shares then being held as collateral. EXHIBIT A attached
hereto, shows how the actual number of shares of U.S. Wireless stock required to
be pledged hereunder (without regard to any additional shares that may be
required) were determined.
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2. SECURITY. As collateral security for the punctual payment and
performance, when due, by Pledgor of all the Obligations, Pledgor, hereby
pledges with, hypothecates, transfers and assigns to Pledgee, its successors and
assigns, all of the Shares and any additional Shares as may be required herein
and all proceeds, shares and other securities received, receivable or otherwise
distributed in respect of or in exchange for the Shares, including, without
limitation, any shares and other securities into which such Shares are
convertible or exchangeable (collectively referred to as the "COLLATERAL").
Simultaneously herewith and with the delivery of any additional Shares as may be
required herein, Pledgor shall deliver to Pledgee the certificate(s)
representing the Shares, stamped with a bank medallion guarantee, along with a
stock transfer power duly executed in blank by Pledgor, to be held by Pledgee as
security. Any other Collateral received by Pledgor shall also be delivered to
Pledgee together with any executed stock powers or other transfer documents
requested by Pledgee, which request may be made at any time prior to the date
when the Obligations shall have been paid and otherwise satisfied in full.
3. VOTING POWER, DIVIDENDS, ETC. AND OTHER AGREEMENTS.
(a) Unless and until an Event of Default as set forth in Section 3
hereof has occurred, Pledgor shall be entitled to:
(i) exercise all voting and/or consensual powers pertaining to the
Shares or other Collateral, or any part thereof, for all purposes;
(ii) receive and retain dividends paid with respect to the Shares
or other Collateral; and
(iii) receive the benefits of any income tax deductions available
to Pledgor as a shareholder of the Company.
(b) Pledgor agrees that it will not sell, assign, transfer, pledge,
hypothecate, encumber or otherwise dispose of the Shares.
(c) Pledgor agrees to pay all costs including all reasonable attorneys'
fees and disbursements incurred by Pledgee in enforcing this Agreement in
accordance with its terms.
4. DEFAULT AND REMEDIES.
(d) For the purposes of this Agreement "Event of Default" shall mean:
(i) default in or under any of the Obligations after the
expiration, without cure, of any applicable cure period; or
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(ii) a breach in any material respect by Pledgor of any of its
representations or warranties in this Agreement or the Transaction Documents; or
(iii) the occurrence of a Event of Default (as defined in the Note).
(e) Pledgee shall have the following rights upon any Event of Default
and for so long as the Obligations are not satisfied in full:
(i) the rights and remedies provided by the Uniform Commercial
Code as adopted by the State of New York (the "UCC") (as said law may at any
time be amended);
(ii) the right to receive and retain all dividends, payments and
other distributions of any kind upon any or all of the Shares or other
Collateral;
(iii) the right to cause any or all of the Shares or other
Collateral to be transferred to its own name or to the name of its designee and
have such transfer recorded in any place or places deemed appropriate by
Pledgee; and
(iv) the right (subject to the provisions of this Section
3(b)(iv)) to sell, at a public or private sale, the Collateral or any part
thereof for cash, upon credit or for future delivery, and at such price or
prices in accordance with the UCC (as such law may be amended from time to
time). Upon any such sale Pledgee shall have the right to deliver, assign and
transfer to the purchaser thereof the Collateral so sold. Pledgee shall give the
Pledgor reasonable notification (which shall not be more than three days), as
required under the UCC, of its intention to make any such sale. Any such sale,
shall be held at such time or times during ordinary business hours and at such
place or places as Pledgee may fix in the notice of such sale. Pledgee may
adjourn or cancel any sale or cause the same to be adjourned from time to time
by announcement at the time and place fixed for the sale, and such sale may be
made at any time or place to which the same may be so adjourned. In case of any
sale of all or any part of the Collateral upon terms calling for payments in the
future, any Collateral so sold may be retained by Pledgee until the selling
price is paid by the purchaser thereof, but Pledgee shall incur no liability in
the case of the failure of such purchaser to take up and pay for the Collateral
so sold and, in the case of such failure, such Collateral may again be sold upon
like notice. Pledgee, however, instead of exercising the power of sale herein
conferred upon it, may proceed by a suit or suits at law or in equity to
foreclose the security interest and sell the Collateral, or any portion thereof,
under a judgment or decree of a court or courts of competent jurisdiction, the
Pledgor having been given due notice of all such action. Pledgee shall incur no
liability as a result of a sale of the Collateral or any part thereof. All
proceeds of any such sale, after deducting the reasonable expenses and
reasonable attorneys' fees incurred in connection with such sale, shall be
applied in reduction of the Obligations, and the remainder, if any, shall be
paid to Pledgor. Notwithstanding anything herein to the contrary, following an
Event of Default, the Pledgee agrees that it will limit sales of the Shares to
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15% or less of the average monthly trading volume of the Shares, as reported by
Bloomberg L.P. (or the successor to its function of reporting share volume)
during each 30 day period immediately preceding such sales measured on a rolling
30 day period.
5. APPLICATION OF PROCEEDS; RELEASE. The proceeds of any sale or
enforcement of or against all or any part of the Collateral, and any other cash
or collateral at the time held by Pledgee hereunder, shall be applied by Pledgee
first to the payment of the reasonable costs of any such sale or enforcement,
then to reimburse Pledgee for any damages, costs or expenses incurred by Pledgee
as a result of an Event of Default, then to the payment of the principal amount
of, and interest and any other payments due in respect of, the Obligations. The
remainder, if any, shall be paid to Pledgor. As used in this Agreement,
"proceeds" shall mean cash, securities and other property realized in respect
of, and distributions in kind of, the Collateral, including any thereof received
under any reorganization, liquidation or adjustment of debt of any issuer of
securities included in the Collateral. Upon performance in full of the
Obligations by the Company, Pledgee shall release the Collateral to Pledgor.
6. REPRESENTATIONS AND WARRANTIES. Pledgor hereby represents and warrants
to Pledgee that:
(v) Pledgor has full power and authority and legal right to pledge
the Collateral to Pledgee pursuant to this Agreement and this Agreement
constitutes a legal, valid and binding obligation of Pledgor enforceable in
accordance with its terms;
(vi) the execution, delivery and performance of this Agreement and
other instruments contemplated herein will not violate any provision of any
order or decree of any court or governmental instrumentality or of any mortgage,
indenture, contract or other agreement to which the Pledgor is a party or by
which the Pledgor and the Collateral may be bound, and will not result in the
creation or imposition of any lien, charge or encumbrance on, or security
interest in, any of the Pledgor's properties pursuant to the provisions of such
mortgage, indenture, contract or other agreement;
(vii) Pledgor is the sole owner of the Collateral free and clear
of all liens and the Shares have been duly authorized and validly issued, fully
paid and non-assessable; and
(viii) the Pledgor is duly organized, validly existing and in good
standing under the laws of the jurisdiction of its organization.
7. NO WAIVER; NO ELECTION OF REMEDIES. No failure on the part of Pledgee to
exercise, and no delay in exercising, any right, power or remedy hereunder shall
operate as a waiver thereof; nor shall any single or partial exercise by Pledgee
of any right, power or remedy preclude any other or further exercise thereof or
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the exercise of any other right, power or remedy. The remedies herein provided
are cumulative and are not exclusive of any remedies provided by law. In
addition, the exercise of any right or remedy of Pledgee at law or equity or
under this Agreement or any of the documents shall not be deemed to be an
election of Pledgee's rights or remedies under such documents or at law or
equity.
8. TERMINATION. This Agreement shall terminate on the date on which all of
the Obligations shall have been paid and otherwise satisfied in full.
9. FURTHER ASSURANCES. The parties hereto agree that, from time to time
upon the written request of any party hereto, they will execute and deliver such
further documents and do such other acts and things as such party may reasonably
request in order fully to effect the purposes of this Agreement.
10. MISCELLANEOUS.
(f) MODIFICATION. This Agreement contains the entire understanding
between the parties with respect to the subject matter hereof and specifically
incorporates all prior oral and written agreements relating to the subject
matter hereof. No portion or provision of this Agreement may be changed,
modified, amended, waived, supplemented, discharged, canceled or terminated
orally or by any course of dealing, or in any manner other than by an agreement
in writing, signed by the party to be charged.
(g) NOTICE. Any and all notices or other communications or deliveries
required or permitted to be provided hereunder shall be in writing and shall be
deemed given and effective on the earliest of (i) the date of transmission, if
such notice or communication is delivered via facsimile at the facsimile
telephone number specified in this Section prior to 6:30 p.m. (New York City
time) on a Business Day, (ii) the Business Day after the date of transmission,
if such notice or communication is delivered via facsimile at the facsimile
telephone number specified in this Agreement later than 6:30 p.m. (New York City
time) on any date and earlier than 11:59 p.m. (New York City time) on such date,
(iii) the Business Day following the date of mailing, if sent by nationally
recognized overnight courier service, or (iv) upon actual receipt by the party
to whom such notice is required to be given. The address for such notices and
communications shall be as follows:
If to Pledgor: Global Technologies, Ltd.
1811 Chestnut Street, Suite 120
Philadelphia, PA 19103
Facsimile No.: (215) 972-8183
Attn: Chief Financial Officer/General Counsel
With copies to: Schnader Harrison Segal & Lewis LLP
1600 Market Street
Philadelphia, PA 19103
Facsimile No.: (215) 751-2205
Attn: Richard P. Jaffe
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If to the Pledgee: c/o CITCO
Kaya Flamboyan 9
Curacao, Netherlands, Antilles
Facsimile No.: 011-599-9732-2008
Attention: W.R. Weber
Jurisdiction of organization:
British Virgin Islands
With copies to: Genesee International Inc.
10500 NE 8th Street
Suite 1920
Bellevue, WA 98004
Facsimile No.: (425) 462-4645
Attn: Howard Coleman
And:
Koch Investment Group, Ltd.
4111 East 37th Street North
Wichita, Kansas 67270
Facsimile: (316) 828-7947
Attention: Josh Taylor
With copies to: Robinson Silverman Pearce Aronsohn & Berman LLP
1290 Avenue of the Americas
New York, NY 10104
Facsimile No.: (212) 541-1432 and (212) 541-4630
Attn: Eric L. Cohen, Esq.
(h) INVALIDITY. If any part of this Agreement is contrary to,
prohibited by, or deemed invalid under applicable laws or regulations, such
provision shall be inapplicable and deemed omitted to the extent so contrary,
prohibited or invalid, but the remainder hereof shall not be invalidated thereby
and shall be given effect so far as possible.
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(i) BENEFIT OF AGREEMENT. This Agreement shall be binding upon and
inure to the parties hereto and their respective successors and assigns.
(j) MUTUAL AGREEMENT. This Agreement embodies the arm's length
negotiation and mutual agreement between the parties hereto and shall not be
construed against either party as having been drafted by it.
(k) NEW YORK LAW TO GOVERN. The corporate law of Delaware shall govern
all issues concerning the relative rights of the Company and its stockholders.
All other questions concerning the construction, validity, enforcement and
interpretation of this Agreement shall be governed by and construed and enforced
in accordance with the internal laws of the State of New York, without regard to
the principles of conflicts of law thereof. Each party hereby irrevocably
submits to the jurisdiction of the state and Federal courts sitting in the city
of New York, borough of Manhattan, for the adjudication of any dispute hereunder
or in connection herewith or with any transaction contemplated hereby or
discussed herein, and hereby irrevocably waives, and agrees not to assert in any
suit, action or proceeding, any claim that it is not personally subject to the
jurisdiction of any such court or that such suit, action or proceeding is
improper. Each party hereby irrevocably waives personal service of process and
consents to process being served in any such suit, action or proceeding by
mailing a copy thereof to such party at the address in effect for notices to it
under this Agreement and agrees that such service shall constitute good and
sufficient service of process and notice thereof. Nothing contained herein shall
be deemed to limit in any way any right to serve process in any manner permitted
by law.
[THE REMAINDER OF IS INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties hereto have caused this Stock Pledge
Agreement to be duly executed by their respective authorized persons as of the
date first indicated above.
GLOBAL TECHNOLOGIES, LTD.
By:
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Name:
Title:
ADVANTAGE FUND II LTD.
By:
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Name:
Title:
KOCH INVESTMENT GROUP LTD.
By:
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Name:
Title:
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