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EXHIBIT 99.3
AMENDED AND RESTATED SHAREHOLDER PLEDGE AGREEMENT
This amended and restated SHAREHOLDER PLEDGE AGREEMENT (this
"AGREEMENT"), which amends and restates the Shareholder Pledge Agreement of even
date hereof, is dated as of October 8, 1999, and entered into by and among GTS
TRANSATLANTIC HOLDINGS, LTD., a company organized and existing under the laws of
Bermuda ("GTS HOLDINGS"), and FLAG ATLANTIC HOLDINGS LIMITED, a company
organized and existing under the laws of Bermuda ("FLAG ATLANTIC HOLDINGS")
(each of GTS Holdings and FLAG Atlantic Holdings being a "PLEDGOR" and
collectively "PLEDGORS"; provided that after the Closing Date, "PLEDGORS" shall
be deemed to include any Additional Pledgors (as herein defined)) and BARCLAYS
BANK PLC, as agent for and representative of (in such capacity herein called
"SECURED PARTY") the financial institutions ("LENDERS") party to the Credit
Agreement referred to below and any Lender Counterparties (as hereinafter
defined).
PRELIMINARY STATEMENTS
A. Pledgors are the legal and beneficial owners of the shares of stock
(the "PLEDGED SHARES") described in Part A of Schedule I annexed hereto and
issued by FLAG Atlantic Limited, a company organized and existing under the laws
of Bermuda ("COMPANY").
B. Pursuant to that certain Credit Agreement dated as of October 8,
1999 (said Credit Agreement, as it may hereafter be amended, restated,
supplemented or otherwise modified from time to time, being the "CREDIT
AGREEMENT"; the terms defined therein and not otherwise defined herein being
used herein as therein defined), by and among the Company, the financial
institutions listed therein as Lenders, Barclays Bank plc, as Administrative
Agent, Barclays Bank plc, as Security Agent, Barclays Capital, as Lead Arranger,
WESTDEUTSCHE LANDESBANK GIROZENTRALE, NEW YORK BRANCH, as syndication agent (in
such capacity, the "SYNDICATION AGENT"), DRESDNER BANK AG, NEW YORK AND GRAND
CAYMAN BRANCHES, as documentation agent (in such capacity, the "DOCUMENTATION
AGENT"), and Lenders have made certain commitments, subject to the terms and
conditions set forth in the Credit Agreement, to extend certain credit
facilities to Company.
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C. Company may from time to time enter, or may from time to time have
entered, into one or more Interest Hedging Agreements (collectively, the "LENDER
INTEREST HEDGING AGREEMENTS") with one or more Lenders or their Affiliates (in
such capacity, each a "LENDER COUNTERPARTY" and collectively, "LENDER
COUNTERPARTIES") in accordance with the terms of the Credit Agreement, and it is
desired that the obligations of Company under the Lender Interest Hedging
Agreements, including without limitation the obligation of Company to make
payments thereunder in the event of early termination thereof (all such
obligations being the "INTEREST RATE Obligations"), together with all
obligations of Company under the Credit Agreement and the other Financing
Documents, be secured hereunder.
D. It is a condition precedent to the initial extensions of credit by
Lenders under the Credit Agreement that each Pledgor shall have granted the
security interests and undertaken the obligations contemplated by this
Agreement.
NOW, THEREFORE, in consideration of the premises and in order to induce
Lenders to make Loans and other extensions of credit under the Credit Agreement
and to induce Lender Counterparties to enter into Lender Interest Hedging
Agreements, and for other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, each Pledgor hereby agrees with
Secured Party as follows:
SECTION 1. PLEDGE OF SECURITY.
Each Pledgor hereby pledges and assigns to Secured Party, and hereby
grants to Secured Party a security interest in, all of Pledgor's right, title
and interest in and to the following (the "PLEDGED COLLATERAL"):
(a) the Pledged Shares owned by such Pledgor and the
certificates representing such Pledged Shares and any interest of such
Pledgor in the entries on the books of any financial intermediary
pertaining to such Pledged Shares, and all dividends, cash, warrants,
rights, instruments and other property or proceeds from time to time
received, receivable or otherwise distributed in respect of or in
exchange for any or all of such Pledged Shares;
(b) all additional shares of, and all securities convertible
into and warrants, options and other rights to purchase or otherwise
acquire, stock of the Company from time to time acquired by such
Pledgor in any manner (which shares shall be deemed to be part of the
Pledged Shares), the certificates or other
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instruments representing such additional shares, securities, warrants,
options or other rights and any interest of such Pledgor in the entries
on the books of any financial intermediary pertaining to such
additional shares (all such shares, securities, warrants, options,
rights, certificates, instruments and interests collectively being
"ADDITIONAL PLEDGED SHARES"), and all dividends, cash, warrants,
rights, instruments and other property or proceeds from time to time
received, receivable or otherwise distributed in respect of or in
exchange for any or all of such Additional Pledged Shares;
(c) to the extent not covered by clauses (a) through (b)
above, all proceeds of any or all of the foregoing Pledged Collateral.
For purposes of this Agreement, the term "PROCEEDS" includes whatever
is receivable or received when Pledged Collateral or proceeds are sold,
exchanged, collected or otherwise disposed of, whether such disposition
is voluntary or involuntary, and includes, without limitation, proceeds
of any indemnity or guaranty payable to such Pledgor or Secured Party
from time to time with respect to any of the Pledged Collateral.
SECTION 2. SECURITY FOR OBLIGATIONS.
This Agreement secures, and the Pledged Collateral pledged and assigned
by each Pledgor is collateral security for, the prompt payment or performance in
full when due, whether at stated maturity, by required prepayment, declaration,
acceleration, demand or otherwise (including without limitation the payment of
amounts that would become due but for the operation of the automatic stay under
Section 362(a) of the Bankruptcy Code, 11 U.S.C. Section 362(a)), of all Secured
Obligations with respect to such Pledgor. "SECURED OBLIGATIONS" means, with
respect to any Pledgor, all obligations and liabilities of every nature of
Company now or hereafter existing under or arising out of or in connection with
the Credit Agreement and the other Financing Documents and any Lender Interest
Hedging Agreements, in each case together with all extensions or renewals
thereof, whether for principal, interest (including, without limitation,
interest accruing at the then applicable rate provided for in the Financing
Documents after the maturity of the Loans and interest accruing at the then
applicable rate provided in the Financing Documents after the filing or
commencement of any bankruptcy, insolvency, reorganization or like proceeding
relating to the Company or any of its Subsidiaries whether or not a claim for
post-filing or post-petition interest is allowed in such proceeding), payments
for early termination of Lender Interest Hedging Agreements, fees, expenses,
indemnities or otherwise, whether voluntary or involuntary, direct or indirect,
absolute or contingent, due or to become due, liquidated or unliquidated,
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whether or not jointly owed with others, and whether or not from time to time
decreased or extinguished and later increased, created or incurred, and all or
any portion of such obligations or liabilities that are paid, to the extent all
or any part of such payment is avoided or recovered directly or indirectly from
Secured Party or any Lender or Lender Counterparty as a preference, fraudulent
transfer or otherwise, and all obligations of every nature of such Pledgor now
or hereafter existing under this Agreement or any other Financing Document.
SECTION 3. DELIVERY OF PLEDGED COLLATERAL.
All certificates or instruments representing or evidencing the Pledged
Collateral shall be delivered to and held by or on behalf of Secured Party
pursuant hereto and shall be in suitable form for transfer by delivery or, as
applicable, shall be accompanied by the appropriate Pledgor's endorsement, where
necessary, or duly executed instruments of transfer or assignment in blank, all
in form and substance satisfactory to Secured Party. Upon the occurrence and
during the continuation of an Event of Default (as defined in the Credit
Agreement), Secured Party shall have the right, without notice to any Pledgor,
to transfer to or to register in the name of Secured Party or any of its
nominees any or all of the Pledged Collateral, subject only to the revocable
rights specified in Section 7(a). In addition, Secured Party shall have the
right at any time to exchange certificates or instruments representing or
evidencing Pledged Collateral for certificates or instruments of smaller or
larger denominations.
SECTION 4. REPRESENTATIONS AND WARRANTIES.
Each Pledgor represents and warrants as follows:
(a) DUE AUTHORIZATION, ETC. OF PLEDGED COLLATERAL. All of the
Pledged Shares owned by such Pledgor have been duly authorized and
validly issued and are fully paid and non-assessable.
(b) DESCRIPTION OF PLEDGED COLLATERAL. The Pledged Shares owned
by such Pledgor constitute the percentage of the issued and outstanding
shares of stock of the Company set forth on Schedule I annexed hereto,
and, except as disclosed to the Administrative Agent in writing, there
are no outstanding warrants, options or other rights to purchase, or
other agreements outstanding with respect to, or property that is now
or hereafter convertible into, or that requires the issuance or sale
of, any Pledged Shares.
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(c) OWNERSHIP OF PLEDGED COLLATERAL. Such Pledgor is the legal,
record and beneficial owner of the Pledged Collateral owned by such
Pledgor free and clear of any Lien except for the security interest
created by this Agreement and by the second priority security interest,
of even date herewith, given by FLAG Atlantic Holdings with respect to
its Pledged Shares in favor of a party acceptable to the Secured Party
who shall be identified to the Secured Party on the Closing Date (the
"SECOND PRIORITY LIEN HOLDER").
(d) PERFECTION. Each Pledgor's pledge of its Pledged Collateral
pursuant to this Agreement creates a valid and, together with delivery
of physical possession to the Secured Party or its Agent of the share
certificates relating thereto, a notation of this pledge on the
Register of Members of the Company and registration of this Agreement
with the Registrar of Companies in Bermuda pursuant to Section 55 of
the Bermuda Companies Act 1981, perfected first priority security
interest in the Pledged Collateral, securing the payment of the Secured
Obligations.
SECTION 5. TRANSFERS AND OTHER LIENS; ADDITIONAL PLEDGED COLLATERAL; ETC.
Each Pledgor shall:
(a) not, except as permitted by the immediately following
proviso, (i) sell, assign (by operation of law or otherwise) or
otherwise dispose of, or grant any option, other than pursuant to the
Shareholders Agreement, with respect to, any of the Pledged Collateral
owned by such Pledgor, (ii) create or suffer to exist any Lien upon or
with respect to any of the Pledged Collateral owned by such Pledgor,
except for the security interest under this Agreement or the second
priority security interest of even date herewith given to the Second
Priority Lien Holder, or (iii) permit Company to merge or consolidate
unless all of its outstanding capital stock of the surviving or
resulting corporation is, upon such merger or consolidation, pledged
hereunder and no cash, securities or other property is distributed in
respect of the outstanding shares of any other constituent corporation;
provided that (i) Pledgor may sell or transfer the Pledged Collateral
so long as the purchaser or transferee thereof is a Pledgor or becomes
an additional Pledgor (each an "ADDITIONAL PLEDGOR") under this
Agreement and (ii) FLAG Atlantic Holdings may grant a security interest
in its shares in the Company and the other assets of the Company which
constitute "PLEDGED CAPITAL" pursuant to the Second Priority Security
Agreement, which security's interest shall be subordinate to the
security interest in the Pledged
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Collateral created hereby pursuant to the terms of the Subordination
Agreement. Each Additional Pledgor shall execute an acknowledgment to
this Agreement substantially in the form of Schedule III annexed hereto
and shall take such further action in connection therewith as Secured
Party may reasonably request. Upon delivery of such counterpart to
Administrative Agent and Secured Party, notice of which is hereby
waived by Pledgors, each such Additional Pledgor shall be a Pledgor and
shall be as fully a party hereto as if such Additional Pledgor were an
original signatory hereto;
(b) (i) cause Company not to issue any stock or other
securities in addition to or in substitution for the Pledged Shares,
except to a Pledgor or as otherwise permitted by the Credit Agreement
and (ii) pledge hereunder, immediately upon its acquisition (directly
or indirectly) thereof, any and all additional shares of stock or other
securities of the Company;
(c) promptly deliver to Secured Party all material written
notices received by it with respect to the Pledged Collateral owned by
such Pledgor; and
(d) pay promptly when due all taxes, assessments and
governmental charges or levies imposed upon, and all claims against,
the Pledged Collateral owned by such Pledgor, except to the extent the
validity thereof is being contested in good faith; provided that such
Pledgor shall in any event pay such taxes, assessments, charges, levies
or claims not later than five days prior to the date of any proposed
sale under any judgement, writ or warrant of attachment entered or
filed against such Pledgor or any of the Pledged Collateral owned by
such Pledgor as a result of the failure to make such payment.
SECTION 6. FURTHER ASSURANCES; PLEDGE AMENDMENTS.
(a) Each Pledgor agrees that from time to time, at the expense of such
Pledgor, such Pledgor will promptly execute and deliver all further instruments
and documents, and take all further action, that may be necessary or desirable,
or that Secured Party may request, in order to perfect and protect any security
interest granted or purported to be granted hereby in respect of Pledged
Collateral owned by such Pledgor or to enable Secured Party to exercise and
enforce its rights and remedies hereunder with respect to any Pledged Collateral
owned by such Pledgor. Without limiting the generality of the foregoing, such
Pledgor will: (i) execute and file such financing or continuation statements, or
amendments thereto, and such other instruments or notices, as may be necessary
or desirable, or as Secured Party may request, in order
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to perfect and preserve the security interests granted or purported to be
granted hereby in respect of Pledged Collateral owned by such Pledgor and (ii)
at Secured Party's reasonable request, appear in and defend any action or
proceeding that may affect such Pledgor's title to or Secured Party's security
interest in all or any part of the Pledged Collateral.
(b) Each Pledgor further agrees that it will, upon obtaining any
additional shares of stock or other securities required to be pledged hereunder
as provided in Section 5(a) or (b), promptly (and in any event within five
Business Days) deliver to Secured Party a Pledge Amendment, duly executed by
such Pledgor, in substantially the form of Schedule II annexed hereto (a "PLEDGE
AMENDMENT"), in respect of the additional Pledged Shares to be pledged pursuant
to this Agreement. Each Pledgor hereby authorizes Secured Party to attach each
Pledge Amendment to this Agreement and agrees that all Pledged Shares listed on
any such Pledge Amendment delivered to Secured Party shall for all purposes
hereunder be considered Pledged Collateral; provided that the failure of a
Pledgor to execute a Pledge Amendment with respect to any additional Pledged
Shares pledged pursuant to this Agreement shall not impair the security interest
of Secured Party therein or otherwise adversely affect the rights and remedies
of Secured Party hereunder with respect thereto.
SECTION 7. VOTING RIGHTS; DIVIDENDS; ETC.
(a) PLEDGORS' RIGHTS. So long as no Event of Default shall have
occurred and be continuing:
(i) Pledgors shall be entitled to exercise any and all voting
and other consensual rights pertaining to the Pledged Collateral or any
part thereof for any purpose not inconsistent with the terms of this
Agreement or the Credit Agreement;
(ii) Pledgors shall be entitled to receive and retain, and to
utilize free and clear of the lien of this Agreement, any and all
dividends and interest paid in respect of the Pledged Collateral;
provided, however, that any and all
(1) dividends and interest paid or payable other than
in cash in respect of, and instruments and other property
received, receivable or otherwise distributed in respect of,
or in exchange for, any Pledged Collateral,
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(2) dividends and other distributions paid or payable
in cash in respect of any Pledged Collateral in connection
with a partial or total liquidation or dissolution or in
connection with a reduction of capital, capital surplus or
paid-in-surplus, and
(3) cash paid, payable or otherwise distributed in
respect of principal or in redemption of or in exchange for
any Pledged Collateral,
shall be, and shall forthwith be delivered to Secured Party to hold as,
Pledged Collateral and shall, if received by a Pledgor, be received in
trust for the benefit of Secured Party, be segregated from the other
property or funds of such Pledgor and be forthwith delivered to Secured
Party as Pledged Collateral in the same form as so received (with all
necessary endorsements); and
(iii) Secured Party shall promptly execute and deliver (or
cause to be executed and delivered) to Pledgors all such proxies,
dividend payment orders and other instruments as Pledgors may from time
to time reasonably request for the purpose of enabling Pledgors to
exercise the voting and other consensual rights which they are entitled
to exercise pursuant to paragraph (i) above and to receive the
dividends, principal or interest payments which they are authorized to
receive and retain pursuant to paragraph (ii) above.
(b) SECURED PARTY'S RIGHTS. Upon acceleration of the maturity of
the Loans in accordance with Section 7 of the Credit Agreement and upon the
occurrence and during the continuation of an Event of Default:
(i) upon written notice from Secured Party to the Pledgors,
all rights of such Pledgors to exercise the voting and other consensual
rights which they would otherwise be entitled to exercise pursuant to
Section 7(a)(i) shall cease, and all such rights shall thereupon become
vested in Secured Party who shall thereupon have the sole right to
exercise such voting and other consensual rights;
(ii) all rights of Pledgors to receive the dividends and
interest payments which they would otherwise be authorized to receive
and retain pursuant to Section 7(a)(ii) shall cease, and all such
rights shall thereupon become vested in Secured Party who shall
thereupon have the sole right to receive and hold as Pledged Collateral
such dividends and interest payments; and
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(iii) all dividends and other payments which are received by a
Pledgor contrary to the provisions of paragraph (ii) of this Section
7(b) shall be received in trust for the benefit of Secured Party, shall
be segregated from other funds of such Pledgor and shall forthwith be
paid over to Secured Party as Pledged Collateral in the same form as so
received (with any necessary endorsements).
(c) IRREVOCABLE PROXY. In order to permit Secured Party to exercise the
voting and other consensual rights which it may be entitled to exercise pursuant
to Section 7(b)(i) and to receive all dividends and other distributions which it
may be entitled to receive under Section 7(a)(ii) or Section 7(b)(ii), (i) each
Pledgor shall promptly execute and deliver (or cause to be executed and
delivered) to Secured Party all such proxies, dividend payment orders and other
instruments in respect of the Pledged Collateral owned by such Pledgor as
Secured Party may from time to time reasonably request and (ii) without limiting
the effect of the immediately preceding clause (i), each Pledgor hereby grants
to Secured Party an IRREVOCABLE PROXY to vote the Pledged Shares owned by such
Pledgor and to exercise all other rights, powers, privileges and remedies to
which a holder of such Pledged Shares would be entitled (including without
limitation giving or withholding written consents of shareholders, calling
special meetings of shareholders and voting at such meetings), which proxy shall
be effective, automatically and without the necessity of any action (including
any transfer of such Pledged Shares on the record books of the issuer thereof)
by any other Person (including the issuer of such Pledged Shares or any officer
or agent thereof), upon the occurrence of an Event of Default and which proxy
shall only terminate upon the earlier to occur of (i) cessation of such Event of
Default and (ii) payment in full of the Secured Obligations.
SECTION 8. SECURED PARTY APPOINTED ATTORNEY-IN-FACT.
Each Pledgor hereby irrevocably appoints Secured Party as such
Pledgor's attorney-in-fact, with full authority in the place and stead of such
Pledgor and in the name of such Pledgor, Secured Party or otherwise, from time
to time following the occurrence and during the continuance of an Event of
Default, in Secured Party's discretion to take any action and to execute any
instrument that Secured Party may deem necessary or advisable to accomplish the
purposes of this Agreement, including without limitation:
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(a) to file one or more financing or continuation statements,
or amendments thereto, relative to all or any part of the Pledged
Collateral owned by such Pledgor without the signature of such Pledgor;
(b) to ask, demand, collect, sue for, recover, compound,
receive and give acquittance and receipts for moneys due and to become
due under or in respect of any of the Pledged Collateral owned by such
Pledgor;
(c) to receive, endorse and collect any instruments made
payable to such Pledgor representing any dividend, principal or
interest payment or other distribution in respect of the Pledged
Collateral owned by such Pledgor or any part thereof and to give full
discharge for the same; and
(d) to file any claims or take any action or institute any
proceedings that Secured Party may deem necessary or desirable for the
collection of any of the Pledged Collateral or otherwise to enforce the
rights of Secured Party with respect to any of the Pledged Collateral
owned by such Pledgor.
SECTION 9. SECURED PARTY MAY PERFORM.
If any Pledgor fails to perform any agreement contained herein, Secured
Party may itself perform, or cause performance of, such agreement, and the
expenses of Secured Party incurred in connection therewith shall be payable by
the relevant Pledgor under Section 13(b).
SECTION 10. STANDARD OF CARE.
The powers conferred on Secured Party hereunder are solely to protect
its interest in the Pledged Collateral and shall not impose any duty upon it to
exercise any such powers. Except for the exercise of reasonable care in the
custody of any Pledged Collateral in its possession and the accounting for
moneys actually received by it hereunder, Secured Party shall have no duty as to
any Pledged Collateral, it being understood that Secured Party shall have no
responsibility for (a) ascertaining or taking action with respect to calls,
conversions, exchanges, maturities, tenders or other matters relating to any
Pledged Collateral, whether or not Secured Party has or is deemed to have
knowledge of such matters, (b) taking any necessary steps (other than steps
taken in accordance with the standard of care set forth above to maintain
possession of the Pledged Collateral) to preserve rights against any parties
with respect to any Pledged Collateral, (c) taking any necessary steps to
collect or realize upon the Secured
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Obligations or any guarantee therefor, or any part thereof, or any of the
Pledged Collateral, or (d) initiating any action to protect the Pledged
Collateral against the possibility of a decline in market value; provided,
however, that the Secured Party shall at all times be liable for its gross
negligence or malfeasance (and that of its employees and agents). Secured Party
shall be deemed to have exercised reasonable care in the custody and
preservation of Pledged Collateral in its possession if such Pledged Collateral
is accorded treatment substantially equal to that which Secured Party accords
its own property consisting of negotiable securities.
SECTION 11. REMEDIES.
(a) If any Event of Default shall have occurred and be continuing,
Secured Party may exercise in respect of the Pledged Collateral, in addition to
all other rights and remedies provided for herein or otherwise available to it,
all the rights and remedies of a secured party on default under the Uniform
Commercial Code as in effect in any relevant jurisdiction (the "CODE") (whether
or not the Code applies to the affected Pledged Collateral), and Secured Party
may also in its sole discretion, without notice except as specified below, sell
the Pledged Collateral or any part thereof in one or more parcels at public or
private sale, at any exchange or broker's board or at any of Secured Party's
offices or elsewhere, for cash, on credit or for future delivery, at such time
or times and at such price or prices and upon such other terms as Secured Party
may deem commercially reasonable, irrespective of the impact of any such sales
on the market price of the Pledged Collateral. Secured Party or any Lender or
Lender Counterparty may be the purchaser of any or all of the Pledged Collateral
at any such sale and Secured Party, as agent for and representative of Lenders
and Lender Counterparties (but not any Lender or Lenders or Lender Counterparty
or Lender Counterparties in its or their respective individual capacities unless
Majority Obligees (as defined in Section 15(a)) shall otherwise agree in
writing), shall be entitled, for the purpose of bidding and making settlement or
payment of the purchase price for all or any portion of the Pledged Collateral
sold at any such public sale, to use and apply any of the Secured Obligations as
a credit on account of the purchase price for any Pledged Collateral payable by
Secured Party at such sale. Each purchaser at any such sale shall hold the
property sold absolutely free from any claim or right on the part of any
Pledgor, and each Pledgor hereby waives (to the extent permitted by applicable
law) all rights of redemption, stay and/or appraisal which it now has or may at
any time in the future have under any rule of law or statute now existing or
hereafter enacted. Each Pledgor agrees that, to the extent notice of sale shall
be required by law, at least ten days' written notice to such Pledgor of the
time and place of any public sale or the time after which any private sale is to
be made shall constitute reasonable notification.
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Secured Party shall not be obligated to make any sale of Pledged Collateral
regardless of notice of sale having been given. Secured Party may adjourn any
public or private sale from time to time by announcement at the time and place
fixed therefor, and such sale may, without further notice, be made at the time
and place to which it was so adjourned. Each Pledgor hereby waives any claims
against Secured Party arising by reason of the fact that the price at which any
Pledged Collateral may have been sold at such a private sale was less than the
price which might have been obtained at a public sale, even if Secured Party
accepts the first offer received and does not offer such Pledged Collateral to
more than one offeree.
(b) In the event that Secured Party determines in its sole discretion
to sell the Pledged Collateral in one or more private sales, subject to Section
11(a):
(i) Secured Party may sell the Pledged Collateral or any part
thereof in one or more parcels;
(ii) Secured Party may sell for cash, on credit or for future
delivery, at such time or times and at such price or prices and upon
such other terms as Secured Party may deem commercially reasonable;
(iii) Secured Party may in its discretion establish a reserve
price for the Pledged Collateral or any part thereof;
(iv) Secured Party shall not be obligated to make any sale
regardless of any offer to sell which Secured Party may have made;
(v) Secured Party may postpone or cancel the sale, modify the
terms and conditions of the sale, withdraw any Pledged Collateral from
the sale at any time, including by announcement at the time and place
fixed for the sale, and such sale may, without further notice, be made
at the time and place to which it was so adjourned;
(vi) Each Pledgor unconditionally waives any claims against
Secured Party arising by reason of the fact that the price of which any
Pledged Collateral may have been sold at such a private sale was less
than the price which might have been attained at a public sale, even if
Secured Party accepts the first offer received and does not offer such
security assets to more than one offeree;
(vii) Each Pledgor unconditionally agrees that Secured Party
may acquire the Secured Assets or sell them to an affiliate.
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(c) Each Pledgor recognizes that, by reason of certain prohibitions
contained in the Securities Act and applicable state securities laws, Secured
Party may be compelled, with respect to any sale of all or any part of the
Pledged Collateral conducted without prior registration or qualification of such
Pledged Collateral under the Securities Act and/or such state securities laws,
to limit purchasers to those who will agree, among other things, to acquire the
Pledged Collateral for their own account, for investment and not with a view to
the distribution or resale thereof. Each Pledgor acknowledges that any such
private sales may be at prices and on terms less favorable than those obtainable
through a public sale without such restrictions and, notwithstanding such
circumstances, such Pledgor agrees that any such private sale shall be deemed to
have been made in a commercially reasonable manner and that Secured Party shall
have no obligation to engage in public sales and no obligation to delay the sale
of any Pledged Collateral for the period of time necessary to permit the issuer
thereof to register it for a form of public sale requiring registration under
the Securities Act or under applicable state securities laws, even if such
issuer would, or should, agree to so register it.
(d) If Secured Party determines to exercise its right to sell any or
all of the Pledged Collateral, upon written request, each Pledgor shall and
shall cause Company to furnish to Secured Party all such information as Secured
Party may request in order to determine the number of shares and other
instruments included in the Pledged Collateral which may be sold by Secured
Party in exempt transactions under the Securities Act and the rules and
regulations of the Securities and Exchange Commission thereunder, as the same
are from time to time in effect.
(e) The Secured Party agrees that it will act in parallel to initiate
remedies available under this Agreement against the respective Pledgors whether
such initiative is by demand or the initiation of the remedies available under
this Section, and if the Secured Party shall realize upon less than all of the
Pledged Collateral, by sale of shares or otherwise, the Secured Party agrees to
initiate a sale of equal portions of the Pledged Collateral from each Pledgor.
This undertaking shall in no respect diminish or delay the exercise by the
Secured Party of all rights available hereunder. In the event that the exercise
of rights by the Secured Party against one of the Pledgors should be delayed,
deferred, enjoined or for any other reason whatsoever the Secured Party is
unable to exercise in full or realize in full its rights and benefits under this
Agreement, the Secured Party may proceed in the exercise of its remedies against
the other Pledgor and, if its initiative was in respect of less than all Pledged
Collateral of such Pledgor, such initiative may be supplemented in order to
exercise remedies against additional Pledged Collateral or all Pledged
Collateral of such Pledgor to the fullest extent permitted by
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law. The Secured Party hereby acknowledges that each Pledgor is subrogated to
the rights of the Secured Party and the Lenders under the Financing Documents;
provided that no such right may be exercisable until the satisfaction in full by
the Company of all its obligations under the Credit Agreement.
SECTION 12. APPLICATION OF PROCEEDS.
All proceeds received by Secured Party in respect of any sale of,
collection from, or other realization upon all or any part of the Pledged
Collateral shall be applied as provided in Section 2.16 of the Credit Agreement.
SECTION 13. INDEMNITY AND EXPENSES.
(a) Subject to Section 25, each Pledgor severally agrees to indemnify
Secured Party from and against any and all claims, losses and liabilities in any
way relating to, growing out of or resulting from enforcement of this Agreement,
except to the extent such claims, losses or liabilities result solely from
Secured Party's or a Lender's or Lender Counterparty's gross negligence or
willful misconduct as finally determined by a court of competent jurisdiction.
(b) Subject to Section 25, each Pledgor severally agrees to pay to
Secured Party upon demand the amount of any and all costs and expenses,
including the reasonable fees and expenses of its counsel and of any experts and
agents, that Secured Party may incur in connection with (i) the sale of,
collection from, or other realization upon, any of the Pledged Collateral of
such Pledgor, (ii) the exercise or enforcement of any of the rights of Secured
Party hereunder, or (iii) the failure by such Pledgor to perform or observe any
of the provisions hereof.
(c) The obligations of Pledgors in this Section 13 shall survive the
termination of this Agreement and the discharge of Pledgors' other obligations
under this Agreement, the Lender Interest Hedging Agreements, the Credit
Agreement and the other Financing Documents.
SECTION 14. CONTINUING SECURITY INTEREST; TRANSFER OF LOANS.
This Agreement shall create a continuing security interest in the
Pledged Collateral and shall (a) remain in full force and effect until the
payment in full of all
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Secured Obligations and the cancellation or termination of the Commitments, (b)
be binding upon Pledgors and their respective successors and assigns, and (c)
inure, together with the rights and remedies of Secured Party hereunder, to the
benefit of Secured Party and its successors, transferees and assigns. Without
limiting the generality of the foregoing clause (c), but subject to the
provisions of subsection 10.4 of the Credit Agreement, any Lender may assign or
otherwise transfer any Loans held by it to any other Person, and such other
Person shall thereupon become vested with all the benefits in respect thereof
granted to Lenders herein or otherwise. Upon the payment in full of all Secured
Obligations and the cancellation or termination of the Commitments, the security
interest granted hereby shall terminate and all rights to the Pledged Collateral
shall revert to the applicable Pledgors. Upon any such termination Secured Party
will, at Pledgors' expense, execute and deliver to Pledgors such documents as
Pledgors shall reasonably request to evidence such termination and Pledgors
shall be entitled to the return, upon their request and at their expense,
against receipt and without recourse to Secured Party, of such of the Pledged
Collateral as shall not have been sold or otherwise applied pursuant to the
terms hereof.
SECTION 15. SECURED PARTY AS AGENT.
(a) Secured Party has been appointed to act as Secured Party hereunder
by Lenders and, by their acceptance of the benefits hereof, Lender
Counterparties. Secured Party shall be obligated, and shall have the right
hereunder, to make demands, to give notices, to exercise or refrain from
exercising any rights, and to take or refrain from taking any action (including
without limitation the release or substitution of Pledged Collateral), solely in
accordance with this Agreement and the Credit Agreement; provided that Secured
Party shall exercise, or refrain from exercising, any remedies provided for in
Section 11 in accordance with the instructions of (i) Majority Lenders or (ii)
after payment in full of all Obligations under the Credit Agreement and the
other Financing Documents, and the termination of the Commitments, the holders
of a majority of the aggregate notional amount (or, with respect to any Lender
Interest Rate Agreement that has been terminated in accordance with its terms,
the amount then due and payable (exclusive of expenses and similar payments but
including any early termination payments then due) under such Lender Interest
Rate Agreement) under all Lender Interest Hedging Agreements (Majority Lenders
or, if applicable, such holders being referred to herein as "MAJORITY
OBLIGEES"). In furtherance of the foregoing provisions of this Section 15(a),
each Lender Counterparty, by its acceptance of the benefits hereof, agrees that
it shall have no right individually to realize upon any of the Pledged
Collateral hereunder, it being understood and agreed by such Lender Counterparty
that all rights and remedies hereunder may be exercised solely by Secured Party
for the benefit of Lenders and Lender Counterparties in accordance with the
terms of this Section 15(a).
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(b) Secured Party shall at all times be the same Person that is
Administrative Agent under the Credit Agreement. Written notice of resignation
by Administrative Agent pursuant to Article IX of the Credit Agreement shall
also constitute notice of resignation as Secured Party under this Agreement;
removal of Administrative Agent pursuant to Article IX of the Credit Agreement
shall also constitute removal as Secured Party under this Agreement; and
appointment of a successor Administrative Agent pursuant to Article IX of the
Credit Agreement shall also constitute appointment of a successor Secured Party
under this Agreement. Upon the acceptance of any appointment as Administrative
Agent under Article IX of the Credit Agreement by a successor Administrative
Agent, that successor Administrative Agent shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the retiring or
removed Secured Party under this Agreement, and the retiring or removed Secured
Party under this Agreement shall promptly (i) transfer to such successor Secured
Party all sums, securities and other items of Collateral held hereunder,
together with all records and other documents necessary or appropriate in
connection with the performance of the duties of the successor Secured Party
under this Agreement, and (ii) execute and deliver to such successor Secured
Party such amendments to financing statements, and take such other actions, as
may be necessary or appropriate in connection with the assignment to such
successor Secured Party of the security interests created hereunder, whereupon
such retiring or removed Secured Party shall be discharged from its duties and
obligations under this Agreement. After any retiring or removed Administrative
Agent's resignation or removal hereunder as Secured Party, the provisions of
this Agreement shall inure to its benefit as to any actions taken or omitted to
be taken by it under this Agreement while it was Secured Party hereunder.
SECTION 16. AMENDMENTS; ETC.
No amendment, modification, termination or waiver of any provision of
this Agreement, and no consent to any departure by any Pledgor therefrom, shall
in any event be effective unless the same shall be in writing and signed by
Secured Party and, in the case of any such amendment or modification, by
Pledgors; provided that any Pledge Amendment in the form of Schedule II annexed
hereto shall be effective upon execution by any Pledgor and Pledgors hereby
waive any requirement of notice of or consent to any such Pledge Amendment or
amendment. Any such waiver or consent shall be effective only in the specific
instance and for the specific purpose for which it was given.
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SECTION 17. NOTICES.
Any notice or other communication herein required or permitted to be
given shall be in writing and may be personally served, telexed or sent by
telefacsimile or United States mail or courier service and shall be deemed to
have been given when delivered in person or by courier service, upon receipt of
telefacsimile or telex (with received answerback), or three Business Days after
depositing it in the United States mail with postage prepaid and properly
addressed; provided that notices to Secured Party shall not be effective until
received. For the purposes hereof, the address of each party hereto shall be as
provided in subsection 10.1 of the Credit Agreement or as set forth under such
party's name on the signature pages hereof or such other address as shall be
designated by such party in a written notice delivered to the other parties
hereto.
SECTION 18. FAILURE OR INDULGENCE NOT WAIVER; REMEDIES CUMULATIVE.
No failure or delay on the part of Secured Party in the exercise of any
power, right or privilege hereunder shall impair such power, right or privilege
or be construed to be a waiver of any default or acquiescence therein, nor shall
any single or partial exercise of any such power, right or privilege preclude
any other or further exercise thereof or of any other power, right or privilege.
All rights and remedies existing under this Agreement are cumulative to, and not
exclusive of, any rights or remedies otherwise available.
SECTION 19. SEVERABILITY.
In case any provision in or obligation under this Agreement shall be
invalid, illegal or unenforceable in any jurisdiction, the validity, legality
and enforceability of the remaining provisions or obligations, or of such
provision or obligation in any other jurisdiction, shall not in any way be
affected or impaired thereby.
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SECTION 20. HEADINGS.
Section and subsection headings in this Agreement are included herein
for convenience of reference only and shall not constitute a part of this
Agreement for any other purpose or be given any substantive effect.
SECTION 21. GOVERNING LAW; TERMS; RULES OF CONSTRUCTION.
THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER
SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH,
THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING WITHOUT LIMITATION SECTION
5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT REGARD
TO CONFLICTS OF LAWS PRINCIPLES, EXCEPT TO THE EXTENT THAT THE CODE PROVIDES
THAT THE PERFECTION OF THE SECURITY INTEREST HEREUNDER, OR REMEDIES HEREUNDER,
IN RESPECT OF ANY PARTICULAR PLEDGED COLLATERAL ARE GOVERNED BY THE LAWS OF A
JURISDICTION OTHER THAN THE STATE OF NEW YORK. Unless otherwise defined herein
or in the Credit Agreement, terms used in Articles 8 and 9 of the Uniform
Commercial Code in the State of New York are used herein as therein defined. The
rules of construction set forth in subsection 1.3 of the Credit Agreement shall
be applicable to this Agreement mutatis mutandis.
SECTION 22. CONSENT TO JURISDICTION AND SERVICE OF PROCESS.
ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST ANY PLEDGOR ARISING OUT OF OR
RELATING TO THIS AGREEMENT, OR ANY OBLIGATIONS HEREUNDER, MAY BE BROUGHT IN ANY
STATE OR FEDERAL COURT OF COMPETENT JURISDICTION IN THE STATE, COUNTY AND CITY
OF NEW YORK. BY EXECUTING AND DELIVERING THIS AGREEMENT, EACH PLEDGOR, FOR
ITSELF AND IN CONNECTION WITH ITS PROPERTIES, IRREVOCABLY (I) ACCEPTS GENERALLY
AND UNCONDITIONALLY THE NONEXCLUSIVE JURISDICTION AND VENUE OF SUCH COURTS; (II)
WAIVES ANY DEFENSE OF FORUM NON CONVENIENS; (III) IN THE CASE THAT SUCH PLEDGOR
IS FLAG ATLANTIC HOLDINGS, DESIGNATES AND APPOINTS FLAG TELECOM USA LIMITED WITH
OFFICES AT 570 LEXINGTON AVENUE, 38TH FLOOR, NEW YORK, NY 10022, AND IN THE CASE
THAT SUCH PLEDGOR IS GTS HOLDINGS, DESIGNATES AND APPOINTS NATIONAL CORPORATE
RESEARCH WITH OFFICES AT 225 W. 34TH ST., SUITE 2110, NEW YORK,
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NY 10122, OR SUCH OTHER PERSONS LOCATED IN NEW YORK STATE AS MAY HEREAFTER BE
SELECTED BY SUCH PLEDGOR AND AGREEING IN WRITING TO SO SERVE, AS ITS AGENT TO
RECEIVE ON ITS BEHALF SERVICE OF ALL PROCESS IN ANY SUCH PROCEEDINGS IN ANY SUCH
COURT, SUCH SERVICE BEING HEREBY ACKNOWLEDGED BY SUCH PLEDGOR TO BE EFFECTIVE
AND BINDING SERVICE IN EVERY RESPECT. A COPY OF ANY SUCH PROCESS SO SERVED SHALL
BE MAILED BY REGISTERED MAIL TO SUCH PLEDGOR AT ITS ADDRESS PROVIDED IN
ACCORDANCE WITH SECTION 17 PROVIDED THAT, UNLESS OTHERWISE PROVIDED BY
APPLICABLE LAW, ANY FAILURE TO MAIL SUCH COPY SHALL NOT AFFECT THE VALIDITY OF
SERVICE OF SUCH PROCESS. IF ANY AGENT APPOINTED BY SUCH PLEDGOR REFUSES TO
ACCEPT SERVICE, SUCH PLEDGOR HEREBY AGREES THAT SERVICE OF PROCESS SUFFICIENT
FOR PERSONAL JURISDICTION IN ANY ACTION AGAINST SUCH PLEDGOR IN THE STATE OF NEW
YORK MAY BE MADE BY REGISTERED OR CERTIFIED MAIL, RETURN RECEIPT REQUESTED, TO
SUCH PLEDGOR AT ITS ADDRESS PROVIDED IN ACCORDANCE WITH SECTION 17, AND SUCH
PLEDGOR HEREBY ACKNOWLEDGES THAT SUCH SERVICE SHALL BE EFFECTIVE AND BINDING IN
EVERY RESPECT; (IV) AGREES THAT SECURED PARTY RETAINS THE RIGHT TO SERVE PROCESS
IN ANY OTHER MANNER PERMITTED BY LAW OR TO BRING PROCEEDINGS AGAINST SUCH
PLEDGOR IN THE COURTS OF ANY OTHER JURISDICTION; AND (V) AGREES THAT THE
PROVISIONS OF THIS SECTION 22 RELATING TO JURISDICTION AND VENUE SHALL BE
BINDING AND ENFORCEABLE TO THE FULLEST EXTENT PERMISSIBLE UNDER NEW YORK GENERAL
OBLIGATIONS LAW SECTION 5-1402 OR OTHERWISE.
SECTION 23. WAIVER OF JURY TRIAL.
PLEDGORS AND SECURED PARTY HEREBY AGREE TO WAIVE THEIR RESPECTIVE
RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT
OF THIS AGREEMENT. The scope of this waiver is intended to be all-encompassing
of any and all disputes that may be filed in any court and that relate to the
subject matter of this transaction, including without limitation contract
claims, tort claims, breach of duty claims, and all other common law and
statutory claims. Each Pledgor and Secured Party acknowledge that this waiver is
a material inducement for Pledgors and Secured Party to enter into a business
relationship, that Pledgors and Secured Party have already
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relied on this waiver in entering into this Agreement and that each will
continue to rely on this waiver in their related future dealings. Each Pledgor
and Secured Party further warrant and represent that each has reviewed this
waiver with its legal counsel, and that each knowingly and voluntarily waives
its jury trial rights following consultation with legal counsel. THIS WAIVER IS
IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING
(OTHER THAN BY A MUTUAL WRITTEN WAIVER SPECIFICALLY REFERRING TO THIS SECTION 23
AND EXECUTED BY EACH OF THE PARTIES HERETO), AND THIS WAIVER SHALL APPLY TO ANY
SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT.
In the event of litigation, this Agreement may be filed as a written consent to
a trial by the court.
SECTION 24 COUNTERPARTS.
This Agreement may be executed in one or more counterparts and by
different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed an original, but all such counterparts
together shall constitute but one and the same instrument; signature pages may
be detached from multiple separate counterparts and attached to a single
counterpart so that all signature pages are physically attached to the same
document.
SECTION 25 NON-RECOURSE.
Notwithstanding anything to the contrary in this Agreement or
any other Financing Document, the Secured Party's sole recourse against each
Pledgor for the breach of any representation or warranty by any such Pledgor
under this Agreement or the failure by any Pledgor to perform its obligations
under this Agreement shall be solely to the Pledged Collateral and shall not
extend to any other assets of such Pledgor, or to any shareholder, employee,
director, officer, representative or agent of such Pledgor or any Affiliates of
such Pledgor or its shareholders, employees, directors, officers,
representatives or agents.
[Remainder of page intentionally left blank]
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IN WITNESS WHEREOF, Pledgors and Secured Party have caused this
Agreement to be duly executed and delivered by their Responsible Officers
thereunto duly authorized as of the date first written above.
GTS TRANSATLANTIC HOLDINGS, LTD
By: /s/ Steven E. Andrews
---------------------
Name: Steven E. Andrews
Title: Authorized Signatory
FLAG ATLANTIC HOLDINGS LIMITED
By: /s/ Edward McCormack
--------------------
Name: Edward McCormack
Title: Authorized Signatory
S-1
22
BARCLAYS BANK PLC,
as Secured Party
By: /s/ C. Peter Yetman
-------------------
Title: Authorized Signatory
S-2
23
SCHEDULE I
TO PLEDGE AGREEMENT
Attached to and forming a part of the Pledge Agreement dated as of
October 8, 1999, by and among the Pledgors referred to therein and Barclays Bank
Plc, as Secured Party.
PART A
====================== ======================== ================ ============== ========= ============ =============
PERCENTAGE
STOCK OF
PLEDGOR STOCK ISSUER CLASS OF STOCK CERTIFICATE PAR NUMBER OF OUTSTANDING
NOS. VALUE SHARES SHARES
PLEDGED
====================== ======================== ================ ============== ========= ============ =============
FLAG Atlantic FLAG Atlantic Limited Ordinary 1 $1.00 6,000 50%
Holdings Limited
- ---------------------- ------------------------ ---------------- -------------- --------- ------------ -------------
GTS TransAtlantic FLAG Atlantic Holdings Ordinary 2 $1.00 6,000 50%
Holdings, Ltd. Limited
- ---------------------- ------------------------ ---------------- -------------- --------- ------------ -------------
- ---------------------- ------------------------ ---------------- -------------- --------- ------------ -------------
====================== ======================== ================ ============== ========= ============ =============
Sched - I
24
SCHEDULE II
TO PLEDGE AGREEMENT
[FORM OF PLEDGE AMENDMENT]
This Pledge Amendment, dated _______________, [199_] [200_] is
delivered pursuant to Section 6(b) of the Pledge Agreement referred to below.
The undersigned hereby agrees that this Pledge Amendment may be attached to the
Pledge Agreement dated as of October 8, 1999, by and among the Pledgors referred
to therein and Barclays Bank Plc, as Secured Party (the "PLEDGE AGREEMENT",
capitalized terms defined therein being used herein as therein defined), and
that the Pledged Shares listed on this Pledge Amendment shall be deemed to be
part of the Pledged Shares and shall become part of the Pledged Collateral and
shall secure all Secured Obligations.
[NAME OF PLEDGOR]
By:
Name:
Title:
=================================== ========== ==================== ========= ============== ====================
PERCENTAGE OF
STOCK ISSUER CLASS OF STOCK PAR NUMBER OF OUTSTANDING SHARES
STOCK CERTIFICATE NOS. VALUE SHARES PLEDGED
=================================== ========== ==================== ========= ============== ====================
- ----------------------------------- ---------- -------------------- --------- -------------- --------------------
- ----------------------------------- ---------- -------------------- --------- -------------- --------------------
=================================== ========== ==================== ========= ============== ====================
Sched - II
25
SCHEDULE III
TO PLEDGE AGREEMENT
[FORM OF PLEDGE ACKNOWLEDGMENT]
This Pledge Acknowledgment, dated _______________, [199_] [200_], is
delivered pursuant to the Pledge Agreement referred to below. The undersigned
hereby agrees that this Pledge Acknowledgment may be attached to the Pledge
Agreement dated October 8, 1999, by and among the Pledgors referred to therein
and Administrative Agent, as Secured Party (as amended, restated, supplemented
or otherwise modified to the date hereof, the "PLEDGE AGREEMENT", capitalized
terms defined therein being used herein as therein defined), that the
undersigned by executing and delivering this Acknowledgment hereby becomes a
Pledgor under the Pledge Agreement and agrees to be bound by all of the terms
thereof, and that the Pledged Shares listed on this Pledge Acknowledgment shall
be deemed to be part of the Pledged Shares and shall become part of the Pledged
Collateral and shall secure all Secured Obligations.
[NAME OF ADDITIONAL PLEDGOR]
By:
Name:
Title:
Notice Address:
=================================== ========== ==================== ========= ============== ====================
PERCENTAGE OF
STOCK ISSUER CLASS OF STOCK PAR NUMBER OF OUTSTANDING SHARES
STOCK CERTIFICATE NOS. VALUE SHARES PLEDGED
=================================== ========== ==================== ========= ============== ====================
- ----------------------------------- ---------- -------------------- --------- -------------- --------------------
- ----------------------------------- ---------- -------------------- --------- -------------- --------------------
=================================== ========== ==================== ========= ============== ====================
Sched - III