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Exhibit 3
AMENDED AND RESTATED STOCK PLEDGE AGREEMENT, dated as of
October 20, 2000, by and among Gold & Xxxxx Transfer, S.A., a corporation
organized and existing under the laws of the British Virgin Islands ("Gold &
Xxxxx"), Revision LLC, a limited liability company organized and existing under
the laws of the State of Delaware ("Revision"), Foundation for the International
Non-governmental Development of Space, a corporation organized and existing
under the laws of the State of Delaware ("FINDS"), and Xxxxxx X. Xxxxxxxx, an
individual ("Xxxxxxxx") (each of Gold & Xxxxx, Revision, FINDS and Xxxxxxxx
individually, a "Pledgor," and collectively, the "Pledgors"), and Xxxxxx X.
Xxxxx, an individual (the "Pledgee").
R E C I T A L S
A. Pursuant to the Note, the Pledgee loaned to Gold & Xxxxx, Revision
and Xxxxxxxx (the "Borrowers") the aggregate principal amount of $13 million.
B. As a condition to the obligation of the Pledgee to make such loan,
the Pledgors pledged certain shares of capital stock of Covista to the Pledgee
as security for the performance of the obligations of the Borrowers under the
Note pursuant to that certain Stock Pledge Agreement (the "Existing Pledge
Agreement"), dated as of August 7, 2000, by and among Gold & Xxxxx, Revision,
FINDS and Xxxxxxxx, as pledgors, and the Pledgee, as pledgee.
C. As a result of a decrease in the Market Price of Covista shares,
Gold & Xxxxx has agreed to pledge certain shares of capital stock of Capsule to
the Pledgee as additional security for the performance of the obligations of the
Borrowers under the Note.
D. Gold & Xxxxx is the legal and beneficial owner of 5,671,300 shares
of common stock of Capsule, which it is willing to pledge as security for the
performance of the obligations of the Borrowers under the Note, subject to and
in accordance with the terms and conditions set forth herein.
NOW, THEREFORE, to induce the Pledgee to refrain from
exercising the rights it may have resulting from a Default or Event of Default
under the Existing Pledge Agreement, and for other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged,
Pledgors hereby agree with the Pledgee, and amend and restate the Existing
Pledge Agreement in its entirety, as follows:
SECTION 1. CERTAIN DEFINITIONS.
The following capitalized terms are used herein with the respective
meanings set forth below.
BORROWERS: the meaning given in the recitals to this Agreement.
CAPSULE: Capsule Communications Inc., a Delaware corporation.
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CAPSULE PLEDGED STOCK: the shares of common stock of Capsule
constituting a portion of the Pledged Stock.
COMBINED MARKET VALUE: at any point in time, the sum of the Pledged
Share Market Values for each type (as identified by the issuer and class
thereof) of stock previously pledged to the Pledgee and held at such time by the
Pledgee pursuant to such pledge.
COLLATERAL: the meaning given in the first paragraph of Section 3.
COVISTA: Covista Communications, Inc., a New Jersey corporation
(formerly known as Total-Tel USA Communication, Inc.).
COVISTA PLEDGED STOCK: the shares of common stock of Covista
constituting a portion of the Pledged Stock.
DEFAULT: shall have the meaning ascribed to such term in the Note.
DEMANDED SHARES: the meaning given in Section 7.3.
EVENT OF DEFAULT: shall have the meaning ascribed to such term in the
Note.
EXISTING PLEDGE AGREEMENT: the meaning given in the recitals to this
Agreement.
EXISTING PLEDGED SHARES: a total of 1,883,261 Shares of Covista, owned
of record and beneficially by one or more of the Pledgors, as more specifically
set forth on Exhibit A attached hereto.
LIEN: shall have the meaning ascribed to such term in the Note.
MARKET PRICE: at any point in time, the last reported sale price of the
shares of common stock of Covista, Capsule or another entity, as applicable, on
The Nasdaq Stock Market (or other market or exchange on which such securities
are traded) on the preceding business day or, if there were no reported sales of
such shares on The Nasdaq Stock Market (or such other market or exchange) on the
immediately preceding business day, on the most recent business day on which
there were such sales.
MERGER AGREEMENT: the meaning given in Section 6.8(a).
NEWLY PLEDGED SHARES: a total of 5,671,300 Shares of Capsule, owned of
record and beneficially by one or more of the Pledgors, as more specifically set
forth on Exhibit A attached hereto.
NOTE: the Note, dated August 7, 2000, entered into by Gold & Xxxxx,
Revision and Xxxxxxxx, jointly and severally, in favor of Pledgee.
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PERSON: natural persons, corporations, limited partnerships, general
partnerships, joint stock companies, joint ventures, associations, companies,
trusts, banks, trust companies, land trusts, business trusts or other
organizations, whether or not legal entities, and governments and agencies and
political subdivisions thereof.
PLEDGED SHARE MARKET VALUE: at any point in time, with respect to a
particular type (as identified by the issuer and class thereof) of stock
previously pledged to the Pledgee, the product of (i) the total number of shares
of such stock previously pledged to the Pledgee pursuant to this Agreement and
held at such time by the Pledgee pursuant to such pledge and (ii) the Market
Price of such stock.
PLEDGED STOCK: the Shares and all other securities constituting part of
the Collateral and any securities issued or issuable with respect to the Pledged
Stock by way of dividend, stock split, conversion, exchange, in a merger,
recapitalization, consolidation, contribution or otherwise.
PROPOSED MERGER TRANSACTION: the proposed transaction between Startec,
a subsidiary of Startec and Capsule, pursuant to which Capsule would become a
wholly owned subsidiary of Startec and all outstanding capital stock of Capsule
would be exchanged for shares Startec Stock.
SECURED OBLIGATIONS: the meaning given in Section 2.
SEC: the meaning given in Section 6.7.
SECURITIES ACT: the meaning given in Section 6.7.
SHARES: 1,883,261 shares of common stock of Covista, par value $0.05
per share, owned of record and beneficially by one or more of the Pledgors, and
5,671,300 shares of common stock of Capsule, par value $0.001 per share, owned
of record and beneficially by one or more of the Pledgors, in each case as more
specifically identified on Exhibit A attached hereto. In addition, the term
"Shares" shall include any Demanded Shares and any securities issued or issuable
with respect to the Shares or Demanded Shares by way of dividend, stock split,
conversion, exchange, in a merger, recapitalization, consolidation, contribution
or otherwise (including, without limitation, all shares of Startec Stock issued
in exchange for shares of Capsule Pledged Stock).
SPECIFIED RELEASE CERTIFICATES: the meaning given in Section 7.5.
STARTEC: Startec Global Communications Corporation, a Delaware
corporation.
STARTEC STOCK: shares of common stock of Startec, par value $0.01 per
share.
STOCK RESTRICTION AGREEMENTS: the meaning given in Section 6.8(c).
UCC: the Uniform Commercial Code of the State of New York.
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SECTION 2. SECURITY FOR OBLIGATIONS.
This Agreement is entered into:
(a) to secure the full and timely payment by Pledgors of (i)
all amounts the payment of which is required by Pledgors under the
Note, including, without limitation, the principal of and interest on
the Note (including, without limitation, interest accruing after the
date of any filing by any Pledgor of any petition in bankruptcy or the
commencement of any bankruptcy, insolvency or similar proceeding with
respect to any Pledgor) as and when the same become due and payable in
accordance with the terms thereof, whether at maturity or by
prepayment, acceleration, declaration of default or otherwise, and (ii)
all other indebtedness and other amounts payable by the Pledgors
hereunder or under the Note, and
(b) to secure the due and punctual performance by Pledgors of
(i) all obligations of the Pledgors under the Note and (ii) all other
obligations of Pledgors hereunder.
(all of the payment and performance obligations referred to in this Section 2
being referred to collectively as the "Secured Obligations").
SECTION 3. PLEDGE OF SHARES, ETC.
As security for the prompt payment and performance of the Secured
Obligations when due (whether at stated maturity, by acceleration or otherwise),
Pledgors hereby convey, assign, grant, hypothecate, mortgage, pledge, transfer
and deliver to the Pledgee a lien and charge upon, and a security interest in,
all the following property, whether now owned or hereafter acquired and whether
now or in the future existing and wherever located (collectively, the
"Collateral"):
(a) the Shares;
(b) all dividends, instruments, cash and other property or
rights of any kind at any time received, receivable or otherwise
distributed or distributable with respect to any of the foregoing;
(c) all certificates or other writings representing or
evidencing any of the foregoing;
(d) all proceeds of any of the property described in clauses
(a) through (c) above; and
(e) all books, correspondence, credit files, electronic data,
records, invoices and other papers and documents relating to any of the
foregoing.
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SECTION 4. REPRESENTATIONS AND WARRANTIES.
Each Pledgor represents and warrants to the Pledgee, as of the
date of this Agreement and at the time of each pledge of Shares pursuant to this
Agreement, as follows:
(a) With respect to each of the Shares, including, without
limitation, each of the Existing Pledged Shares, Newly Pledged Shares
and Demanded Shares, Gold & Xxxxx or Revision or FINDS is (or, at the
time of the pledge of such Shares to the Pledgee, will be) the record
and beneficial owner of such Shares, free and clear of any Lien except
for the Lien created by this Agreement (or by the Existing Pledge
Agreement). No effective financing statement or other instrument of
similar effect covering all or any part of the Collateral is on file in
any recording office, except such as may have been filed in favor of
the Pledgee relating to this Agreement.
(b) The Shares have been duly and validly issued and are fully
paid and nonassessable.
(c) Upon delivery to the Pledgee of the certificates
evidencing the Newly Pledged Shares and, if applicable, the Demanded
Shares or any other additional Shares delivered to the Pledgee pursuant
hereto, the security interest granted pursuant to this Agreement will
constitute a valid perfected first priority security interest in such
Shares, enforceable as such against all creditors of each Pledgor and
any Persons purporting to purchase any of such Shares from any Pledgor.
The security interest granted pursuant to this Agreement constitutes a
valid perfected first priority security interest in the Existing
Pledged Shares, enforceable as such against all creditors of each
Pledgor and any Persons purporting to purchase any of such Shares from
any Pledgor.
(d) Gold & Xxxxx is a corporation duly organized, validly
existing and in good standing under the laws of the British Virgin
Islands and has all requisite corporate power and authority to enter
into and carry out the terms of this Agreement and the Note. Revision
is a limited liability company duly organized, validly existing and in
good standing under the laws of the State of Delaware and has all
requisite limited liability company power and authority to enter into
and carry out the terms of this Agreement and the Note. FINDS is a
not-for-profit corporation duly organized, validly existing and in good
standing under the laws of Delaware and has all requisite corporate
power and authority to enter into and carry out the terms of this
Agreement.
(e) The execution, delivery and performance of this Agreement
and the Note will not result in any violation of or be in conflict with
or constitute a default under any term of any Pledgor's certificate of
incorporation or by-laws (or similar constitutive documents) or any
agreement or instrument to which any Pledgor is a party or by which any
Pledgor is bound or any term of any applicable law, ordinance, rule or
regulation of any governmental authority or any term of
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any applicable order, judgment or decree of any court, arbitrator or
governmental authority.
(f) No consent, approval or authorization of, or declaration
or filing with, any governmental authority or regulatory body is
required for the valid execution, delivery and performance of this
Agreement and the Note.
(g) This Agreement and the Note have been duly authorized,
executed and delivered by each Pledgor and constitute each Pledgor's
legal, valid and binding obligation, enforceable against such Pledgor
in accordance with its terms, except to the extent that such
enforcement may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium and similar laws of general application
relating to or affecting the rights and remedies of creditors, and by
general equitable principles.
SECTION 5. VOTING RIGHTS, DIVIDENDS AND OTHER DISTRIBUTIONS, ETC.
5.1 Prior to Default or Event of Default. So long as no Default or
Event of Default has occurred and is continuing, Pledgors will remain entitled
to exercise any and all voting and other consensual rights pertaining to the
Pledged Stock and to receive and use cash dividends, in either case for any
purpose not inconsistent with the terms of this Agreement or the Note.
5.2 After Default or Event of Default. For so long as a Default or an
Event of Default is continuing, (i) no Pledgor may exercise any voting or other
consensual rights pertaining to the Pledged Stock without the prior written
consent of the Pledgee, (ii) the right, if any, of any Pledgor to receive cash
dividends in respect of the Pledged Stock will cease and all such dividends must
be paid directly to the Pledgee (or if received by any Pledgor will be deemed
held in trust by such Pledgor for the benefit of, and must be turned over
immediately by such Pledgor to, the Pledgee) and thereafter will be held and
disposed of by the Pledgee as part of the Collateral, and (iii) if the Pledgee
has notified the Pledgors that it elects to exercise the Pledgee's right to
exercise voting and other consensual rights hereunder, all rights of each
Pledgor to exercise the voting and other consensual rights which such Pledgor
would otherwise be entitled to exercise pursuant to Section 5.1 will cease, all
such rights will thereupon become vested in the Pledgee, who during the
continuance of such Default or Event of Default will have (directly or through
its nominee) the sole right to exercise such voting and other consensual rights,
including, without limitation, (A) all voting, corporate and other rights
pertaining to any of the Pledged Stock, (B) all rights to give consents, waivers
and ratifications in respect thereof and (C) any and all rights of conversion,
exchange, subscription and any other rights, privileges or options pertaining to
any of the Pledged Stock as if it were the absolute owner thereof, and in
connection therewith, the right to deposit and deliver any and all of the
Pledged Stock with any committee, depositary, transfer agent, registrar or other
designated agency upon such terms and conditions as it may determine, all
without liability except to account for property actually received by it (each
Pledgor hereby
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irrevocably constituting and appointing the Pledgee the proxy and
attorney-in-fact of such Pledgor, with full power of substitution, to do or take
any of the above actions). The Pledgee will have no duty to Pledgors to exercise
any such right, privilege or option and will not be responsible for any failure
to do so or delay in so doing. In order to permit the Pledgee to exercise the
voting and other consensual rights which it may be entitled to exercise pursuant
to this Section 5.2, and to receive all dividends and distributions which it may
be entitled to receive under this Section 5.2, each Pledgor will, upon written
notice from the Pledgee, from time to time execute and deliver to the Pledgee
appropriate proxies, dividend payment orders and other instruments as the
Pledgee may reasonably request.
SECTION 6. COVENANTS OF THE PLEDGORS.
6.1 Sale of Collateral, Etc. No Pledgor will (i) sell, assign,
transfer, convey, or otherwise dispose of, or grant any option with respect to,
any of the Collateral, or (ii) create or permit to exist any Lien upon or with
respect to any of the Collateral, except for the lien and security interest
created by this Agreement.
6.2 Delivery of Stock Certificates, Etc. (a) Gold & Xxxxx will
immediately deliver to the Pledgee all certificates or other writings
representing or evidencing any of the Newly Pledged Shares, either in suitable
form for transfer by delivery, or issued in the name of Gold & Xxxxx and
accompanied by stock powers or other appropriate instruments of transfer or
assignment, duly executed by Gold & Xxxxx in blank and undated, and in either
case having attached thereto all requisite federal or state stock transfer tax
stamps, all in form and substance satisfactory to the Pledgee. Each of the
Pledgors will immediately deliver to the Pledgee all certificates or other
writings representing or evidencing any other "securities" or "instruments" (as
such terms are defined in the UCC) included in the Collateral at any time
acquired or received by any Pledgor, directly or indirectly (including, without
limitation, certificates representing the shares of Startec Stock that are
issued in exchange for shares of Capsule Pledged Stock), either in suitable form
for transfer by delivery, or issued in the name of a Pledgor and accompanied by
stock powers or other appropriate instruments of transfer or assignment, duly
executed by the relevant Pledgor in blank and undated, and in either case having
attached thereto all requisite federal or state stock transfer tax stamps, all
in form and substance satisfactory to the Pledgee.
(b) Within 10 business days after the date of a demand by the Pledgee
for Demanded Shares, the Pledgors will deliver to the Pledgee all certificates
or other writings representing or evidencing such Demanded Shares, either in
suitable form for transfer by delivery, or issued in the name of a Pledgor and
accompanied by stock powers or other appropriate instruments of transfer or
assignment, duly executed by the relevant Pledgor in blank and undated, and in
either case having attached thereto all requisite federal or state stock
transfer tax stamps, all in form and substance satisfactory to the Pledgee.
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6.3 Other Distributions. Except for cash dividends permitted to be paid
to Pledgors pursuant to Section 5.1, Pledgors will cause all dividends and
distributions of any kind on the Pledged Stock (including any sums paid upon or
in respect of the Pledged Stock upon the liquidation or dissolution of Covista
or Capsule or Startec or upon the recapitalization or reclassification of the
capital of Covista or Capsule or Startec or upon the reorganization of Covista
or Capsule or Startec) to be paid directly to the Pledgee (and if any such
dividends or distributions are received by any Pledgor, such Pledgor will hold
them in trust for the benefit of, and will immediately turn them over to, the
Pledgee) and the Pledgee will hold and dispose of all such dividends and
distributions as part of the Collateral.
6.4 Records; Inspection. Each Pledgor will keep full and accurate books
and records relating to the Collateral, and stamp or otherwise xxxx such books
and records in such manner as is required in order to reflect the pledge and
security interest granted pursuant hereto. Each Pledgor will permit
representatives of the Pledgee at any time upon reasonable advance notice to
inspect and make abstracts from its books and records pertaining to the
Collateral and to discuss matters relating to the Collateral with officers of
each Pledgor that is a corporation or other entity and with each Pledgor that is
an individual.
6.5 Costs, Expenses and Certain Taxes. Pledgors (a) will pay to the
Pledgee from time to time on demand any and all costs and expenses, including
reasonable attorneys' fees and expenses, paid or incurred by or on behalf of the
Pledgee in connection with this Agreement, the Existing Pledge Agreement or the
Note or in connection with any modification, amendment, alteration or
enforcement of this Agreement, the Existing Pledge Agreement or the Note or the
collection of any amount payable by any Pledgor hereunder or under the Existing
Pledge Agreement or the Note, whether or not any legal proceeding is commenced
hereunder or thereunder and whether or not any Default or Event of Default has
occurred and is continuing, and (b) will jointly and severally indemnify the
Pledgee on demand against any loss, liability or expense incurred by the Pledgee
(other than any such loss, liability or expense directly attributable to gross
negligence or willful misconduct of the Pledgee) arising out of or in connection
with any action or omission of the Pledgee hereunder or under the Existing
Pledge Agreement or the Note, including the costs and expenses of defending
itself against any claim or liability (including any claim by any Pledgor) in
connection with the exercise or performance of any of its powers or duties
hereunder or thereunder. All amounts payable to the Pledgee under this Section
accrue interest until paid in full at the rate of 18% per annum, from the date
of demand therefor. All such amounts shall constitute additional indebtedness of
the Pledgors secured hereunder and shall be payable on demand. Pledgors will
also pay, and will hold the Pledgee harmless from, any and all liabilities with
respect to, or resulting from any delay in paying, any and all stamps, excise,
sales or other taxes or assessments which may be payable or determined to be
payable with respect to any of the Collateral or in connection with any of the
transactions contemplated by this Agreement or the Existing Pledge Agreement or
the Note. All expenses incident to the Pledgors' and Covista's performance of or
compliance with Section 6.7, and all expenses incident to the Pledgors' and
Capsule's performance of or compliance with Section 6.8, including, without
limitation, all registration and filing fees, all fees and
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expenses of complying with securities or blue sky laws, National Association of
Securities Dealers' fees, all printing expenses, the fees and disbursements of
counsel for the Covista or Capsule and of their respective independent public
accountants, and the expenses of any special audits made by such accountants
required by or incident to such performance and compliance, shall be paid by the
Pledgors; provided, however, that Covista agrees that it will complete the
registrations, qualifications and compliance required pursuant to Section 6.7
even if it does not receive payment or reimbursement of such expenses from the
Pledgors and Capsule agrees that, if registration of Capsule Pledged Stock is
required pursuant to this Agreement, it will complete the registrations,
qualifications and compliance required pursuant to Section 6.8(a) even if it
does not receive payment or reimbursement of such expenses from the Pledgors.
6.6 Priority of Security Interest; Further Assurances. (a) Each Pledgor
will at all times cause the security interest granted pursuant to this Agreement
to constitute a valid perfected first priority security interest in the
Collateral, enforceable as such against all creditors of such Pledgor and any
Persons purporting to purchase any Collateral from such Pledgor.
(b) Each Pledgor will at any time and from time to time, at its own
expense, promptly execute and deliver all further instruments and documents, and
take all further actions, as may be necessary or desirable, or that the Pledgee
may reasonably request, in order to (i) grant more effectively a security
interest in favor of the Pledgee in all or any portion of the Collateral, (ii)
maintain, preserve, or perfect the security interest and lien created or
purported to be created by this Agreement and the first priority status of such
security interest and lien, (iii) preserve and defend against any Person such
Pledgor's title to the Collateral and the rights purported to be granted therein
by this Agreement, (iv) enable the Pledgee to exercise and enforce its rights
and remedies hereunder, or (v) carry out more effectively the purposes of this
Agreement. If the issuer of Pledged Stock is incorporated in a jurisdiction
which does not permit the use of certificates to evidence equity ownership of
such Pledged Stock or permit a lien in favor of the Pledgee to be perfected by
the possession by the Pledgee of the certificates representing such Pledged
Stock, then the Pledgors will to the extent permitted by applicable law, record
such lien on the stock register of such issuer, execute any customary stock
pledge forms or other documents necessary to create, evidence or provide for the
perfection of such lien and give the Pledgee the right to transfer such Pledged
Stock under the terms hereof and provide to the Pledgee an opinion of counsel of
such jurisdiction, in form and substance satisfactory to it, confirming the
effectiveness, perfection and priority of such lien.
6.7 Registration of Covista Pledged Stock. Pledgors, as soon as
practicable and at their sole cost and expense, will procure (and Covista
agrees) that registration and other qualification of the Covista Pledged Stock
under Federal and state securities laws shall be effected by Covista (and kept
continuously effective in compliance with such laws for up to one year after the
Maturity Date as set forth in the Note) so as to permit or facilitate the sale
and distribution of such securities, including, without limitation, "shelf"
registration under the U.S. Securities Act of 1933, as amended (the "Securities
Act"), appropriate qualifications under applicable "blue sky" or other state
securities laws and appropriate
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compliance with any other governmental requirements. The Pledgors (and Covista)
shall ensure that such registration is declared effective under the Securities
Act and all other such qualifications and compliance are completed prior to the
Maturity Date as set forth in the Note. Pledgors shall cause Covista to agree
(and Covista agrees) to list the Covista Pledged Stock on the Nasdaq Stock
Market. Pledgors will cause the Pledgee to be kept advised in writing as to the
progress of each such registration, qualification or compliance and as to the
completion thereof, will give the Pledgee, any underwriter and their counsel
reasonable opportunity to review and comment on the registration statement and
other documents incident thereto, to conduct due diligence on Covista and to
participate in the process, will furnish to the Pledgee such number of
prospectuses, preliminary prospectuses, prospectus supplements or amendments or
other documents incident thereto as the Pledgee from time to time may reasonably
request, and will indemnify the Pledgee and all others participating in the
distribution of such securities against all claims, losses, damages and
liabilities (or actions in respect thereof) arising out of or based on any
untrue statement (or alleged untrue statement) of a material fact contained in
any prospectus, offering circular or other document (including any related
registration statement, notification or the like) incident to such registration
or by any omission (or alleged omission) to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, except (as to the Pledgee) insofar as the same may have been caused
by an untrue statement or omission based upon information furnished in writing
to Pledgor by the Pledgee expressly for use therein. The registration statement
filed with respect to the Covista Pledged Stock and the prospectus contained
therein shall cover only the Covista Pledged Stock and no other securities. The
Pledgors will cause Covista (and Covista agrees) to comply with all applicable
rules and regulations of the Securities and Exchange Commission (hereinafter
called "SEC") or similar federal commission, and of the Nasdaq Stock Market or
any other national securities exchange on which any of the Covista Pledged Stock
is listed, if any, for so long as the registration is effective, to make
available to its security holders, as soon as practicable, an earnings statement
covering a period of at least 12 months, but not more than 18 months, beginning
with the first month after the effective date of the registration statement,
which earnings statement will satisfy the provisions of Section 11(a) of and
Rule 158 under the Securities Act, and to make timely filing of all reports with
the SEC to enable the holders of the Covista Pledged Stock, if they so elect, to
utilize Rule 144 of the Securities Act in disposing of said securities. Pledgors
(and Covista) agree that, at Pledgee's request, Covista shall enter into an
underwriting agreement, which shall include, without limitation, indemnification
and contribution provisions and a "hold-back" or "lock-up" provision covering at
least 90 days and shall otherwise be in form and substance reasonably
satisfactory to Pledgee, with an underwriter for the Covista Pledged Stock
chosen by Pledgee in its sole discretion, and furnish or cause to be furnished
to such underwriter and Pledgee a customary opinion of counsel and accountant's
comfort letter.
6.8 Registration of Capsule Pledged Stock; Delivery of Certificates
Representing Startec Stock Upon Consummation of Proposed Merger Transaction;
Covenant Not to Sell Startec Stock. (a) The remaining provisions of this Section
6.8(a) shall apply in the event that (i) a definitive Agreement and Plan of
Reorganization relating to the Proposed Merger Transaction (the "Merger
Agreement") is not entered into by November 10, 2000
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or (ii) the Merger Agreement terminates without the Proposed Merger Transaction
having been consummated. Pledgors, as soon as practicable and at their sole cost
and expense, will procure (and Capsule agrees) that registration and other
qualification of the Capsule Pledged Stock under Federal and state securities
laws shall be effected by Capsule (and kept continuously effective in compliance
with such laws for up to one year after the Maturity Date as set forth in the
Note) so as to permit or facilitate the sale and distribution of such
securities, including, without limitation, "shelf" registration under the
Securities Act, appropriate qualifications under applicable "blue sky" or other
state securities laws and appropriate compliance with any other governmental
requirements. The Pledgors (and Capsule) shall ensure that such registration is
declared effective under the Securities Act and all other such qualifications
and compliance are completed prior to the Maturity Date as set forth in the
Note. Pledgors shall cause Capsule to agree (and Capsule agrees) to list the
Capsule Pledged Stock on the Nasdaq Stock Market. Pledgors will cause the
Pledgee to be kept advised in writing as to the progress of each such
registration, qualification or compliance and as to the completion thereof, will
give the Pledgee, any underwriter and their counsel reasonable opportunity to
review and comment on the registration statement and other documents incident
thereto, to conduct due diligence on Capsule and to participate in the process,
will furnish to the Pledgee such number of prospectuses, preliminary
prospectuses, prospectus supplements or amendments or other documents incident
thereto as the Pledgee from time to time may reasonably request, and will
indemnify the Pledgee and all others participating in the distribution of such
securities against all claims, losses, damages and liabilities (or actions in
respect thereof) arising out of or based on any untrue statement (or alleged
untrue statement) of a material fact contained in any prospectus, offering
circular or other document (including any related registration statement,
notification or the like) incident to such registration or by any omission (or
alleged omission) to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, except (as to the
Pledgee) insofar as the same may have been caused by an untrue statement or
omission based upon information furnished in writing to Pledgor by the Pledgee
expressly for use therein. The registration statement filed with respect to the
Capsule Pledged Stock and the prospectus contained therein shall cover only the
Capsule Pledged Stock and no other securities. The Pledgors will cause Capsule
(and Capsule agrees) to comply with all applicable rules and regulations of the
SEC or similar federal commission, and of the Nasdaq Stock Market or any other
national securities exchange on which any of the Capsule Pledged Stock is
listed, if any, for so long as the registration is effective, to make available
to its security holders, as soon as practicable, an earnings statement covering
a period of at least 12 months, but not more than 18 months, beginning with the
first month after the effective date of the registration statement, which
earnings statement will satisfy the provisions of Section 11(a) of and Rule 158
under the Securities Act, and to make timely filing of all reports with the SEC
to enable the holders of the Capsule Pledged Stock, if they so elect, to utilize
Rule 144 of the Securities Act in disposing of said securities. Pledgors (and
Capsule) agree that, at Pledgee's request, Capsule shall enter into an
underwriting agreement, which shall include, without limitation, indemnification
and contribution provisions and a "hold-back" or "lock-up" provision covering at
least 90 days and shall otherwise be in form and substance reasonably
satisfactory to Pledgee, with an underwriter for the Capsule Pledged Stock
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chosen by Pledgee in its sole discretion, and furnish or cause to be furnished
to such underwriter and Pledgee a customary opinion of counsel and accountant's
comfort letter.
(b) Upon consummation of the Proposed Merger Transaction, the Pledgors
shall immediately deliver to the Pledgee all certificates or other writings
representing or evidencing any shares of common stock of Startec Global
Communications Corporation issued to any Pledgor in exchange for shares of
capital stock of Capsule constituting Capsule Pledged Stock, either in suitable
form for transfer by delivery, or issued in the name of such Pledgor and
accompanied by stock powers or other appropriate instruments of transfer or
assignment, duly executed by such Pledgor in blank and undated, and in either
case having attached thereto all requisite federal or state stock transfer tax
stamps, all in form and substance satisfactory to the Pledgee and, unless waived
in writing by the Pledgee, accompanied by an opinion or opinions of counsel to
the pledgor of such shares of common stock of Startec Global Communications
Corporation in form and substance satisfactory to the Pledgee (which opinion
shall indicate, among other things, that upon expiration of the contractual
restriction imposed by the Stock Restriction Agreement and assuming compliance
by the Pledgors with the covenant set forth in Section 6.8(c) of this Agreement
and the existence of circumstances which permit the Pledgee to sell such shares
pursuant to this Agreement, all such shares of common stock of Startec Global
Communications Corporation shall be freely transferable by the Pledgee without
further need for registration or qualification).
(c) In the event that the Proposed Merger Transaction is consummated,
the Pledgors hereby covenant and agree that Gold & Xxxxx will not sell or
otherwise transfer pursuant to Rule 144 of the Securities Act (or permit the
sale or other transfer pursuant to Rule 144 of the Securities Act of) any shares
of Startec Stock beneficially owned by it until the expiration of the
three-month period following the expiration of the six-month restriction on
sales of Startec capital stock imposed or to be imposed pursuant to the Stock
Restriction Agreements entered into or to be entered into by and among Startec,
Gold & Xxxxx and FINDS (the "Stock Restriction Agreements").
6.9 Post-Closing Conditions. The Pledgors hereby agree to take the
following actions, or to cause Covista, Capsule or other relevant Persons to
take the following actions, by no later than November 17, 2000:
(a) Corporate Proceedings of Pledgors, Covista and Capsule. With
respect to each Pledgor that is a corporation, limited liability company or
similar entity, the Pledgee shall be provided with a copy of the resolutions (or
comparable authorizing document), in form and substance satisfactory to the
Pledgee, of the Board of Directors (or comparable governing body) of each such
Pledgor authorizing and ratifying (i) the execution, delivery and performance of
the Note (if such Pledgor is a Borrower) and this Agreement and (ii) the
granting by it of the Liens created pursuant to this Agreement, certified by the
Secretary or an Assistant Secretary (or comparable officer) of such Pledgor,
which certificate shall be in form and substance reasonably satisfactory to the
Pledgee and shall state that the resolutions thereby certified have not been
amended, modified, revoked or rescinded and were in effect as of the date of
this Agreement. With respect to each of Covista and Capsule, the Pledgee shall
be provided with a copy of the resolutions of the
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Board of Directors of such corporation authorizing and ratifying the execution,
delivery and performance of this Agreement to the extent set forth in this
Agreement, certified by the Secretary or Assistant Secretary of such
corporation, which certificate shall be in form and substance reasonably
satisfactory to the Pledgee and shall state that the resolutions thereby
certified have not been amended, modified, revoked or rescinded and were in
effect as of the date of this Agreement.
(b) Incumbency Certificates. The Pledgee shall be provided with a
certificate of Covista, Capsule and each Pledgor that is a corporation, limited
liability company or similar entity as to the incumbency and signature of the
officers of such Pledgor or other entity executing this Agreement reasonably
satisfactory in form and substance to the Pledgee, executed by the President or
any Vice-President (or similar officer) and the Secretary or any Assistant
Secretary (or similar officer) of such Pledgor or other entity.
(c) Signature Guaranties. To the extent that any stock power provided
to the Pledgee on or after the date of this Agreement does not contain a
signature guaranty at the time that it is delivered to the Pledgee, the Pledgee
shall be provided with replacement stock powers containing a signature
guaranteed by a participant of the Securities Transfer Agents Medallion Program
or another approved signature guaranty program acceptable to the Securities and
Exchange Commission, the Securities Transfer Association and the transfer agent
of Covista or Capsule, as applicable.
SECTION 7. RIGHTS OF THE PLEDGEE.
7.1 No Obligations or Liability to Pledgors. The rights and powers of
the Pledgee hereunder are not contingent upon the pursuit by the Pledgee of any
right or remedy against any Pledgor or against any other Person which may be or
become liable in respect of any of the Secured Obligations or against any other
collateral security or guarantee therefor or right of offset with respect
thereto, but are solely to protect its interest in the Collateral. The Pledgee
will not be liable for any failure to demand, collect or realize upon all or any
part of the Collateral or for any delay in doing so, nor is the Pledgee under
any obligation to sell or otherwise dispose of any Collateral upon the request
of any Pledgor or any other Person or to take any other action whatsoever with
regard to the Collateral or any part thereof. No action or inaction on the part
of the Pledgee hereunder or under the Note will release any Pledgor from any of
its obligations hereunder or under the Note, or constitute an assumption of any
such obligations on the part of the Pledgee, or cause the Pledgee to become
subject to any obligation or liability to any Pledgor. The Pledgee has no
obligation to perform any of the obligations or duties of any Pledgor as a
shareholder of Covista or Capsule.
7.2 Right of Pledgee to Perform Pledgor's Covenants, Etc. If any
Pledgor fails to make any payment or to perform any agreement required to be
made or performed hereunder, the Pledgee may (but need not) at any time
thereafter make such payment or perform such act, or otherwise cause such
payment or performance. No such action will create any liability to any Pledgor
on the part of the Pledgee. All amounts so paid by the Pledgee and all costs and
expenses (including, without limitation, attorneys' fees and expenses) incurred
by the Pledgee in any such performance shall accrue interest from the
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date paid or disbursed until reimbursed to the Pledgee in full by or on behalf
of the Pledgors at the rate established in Section 6.5. All such amounts shall
constitute additional indebtedness of the Pledgors secured hereunder and shall
be payable on demand.
7.3 Right of Pledgee to Demand Additional Pledged Shares. The Pledgee
shall have the right at any time, at its sole discretion, to demand by written
notice to the Pledgors that the Pledgors pledge to the Pledgee additional shares
of common stock of Capsule, Covista or, if the Proposed Merger Transaction has
been consummated, Startec (or, subject to the approval of the Pledgee in its
sole discretion, shares of common stock of one or more other entities) owned of
record and beneficially by one or more of the Pledgors if, at such time, the
Combined Market Value of all shares of stock previously pledged to the Pledgee
pursuant to this Agreement and held at such time by the Pledgee is less than
$13,000,000. The number of shares that may be demanded pursuant to the preceding
sentence shall, at the time of any such demand, be a number of shares such that
the Combined Market Value, after accounting for such additional shares, is equal
to $13,000,000. All shares at any time demanded pursuant to the provisions of
this Section 7.3 shall be "Demanded Shares." Unless otherwise agreed in writing
by the Pledgee, all Demanded Shares, to the extent that they would not be freely
transferable by the Pledgee if sold by the Pledgee in a manner consistent with
the provisions of this Agreement, shall be subject to registration requirements
equivalent to those set forth in Section 6.7 of this Agreement with respect to
Covista Pledged Stock. The Pledgee and the Pledgors agree that, except as
otherwise expressly set forth in this Agreement, Pledgee shall at no time be
required to release from the pledge or return to the Pledgors any Collateral.
7.4 Release of the Pledge and Security Interest Created Hereby. Upon
payment in full of the outstanding principal amount of and accrued interest on
the Note in accordance with its terms and payment or satisfaction of all other
Secured Obligations, the Pledgee will, upon the written request of all Pledgors,
return to the Pledgors all Collateral held by the Pledgee.
7.5 Partial Release of Pledged Shares Under Certain Circumstances. In
the event that the Combined Market Value at a particular point in time of all
shares of stock previously pledged to the Pledgee pursuant to this Agreement
(or, if applicable, the Existing Pledge Agreement) and held at such time by the
Pledgee exceeds $15,000,000, and so long as no Default or Event of Default is
continuing at such time, the Pledgors, by a written request executed by each
Pledgor and delivered to the Pledgee, shall have the right to request that the
Pledgee release from the pledge and return to the Pledgors at the address
identified in such notice, certificates representing specified shares of Pledged
Stock previously pledged to the Pledgee and held at such time by the Pledgee.
Such notice shall specify certificates (the "Specified Release Certificates")
representing a number of shares of Pledged Stock such that the Combined Market
Value, after accounting for the release of the Specified Release Certificates
and calculated as of the date of such release, will equal or exceed $15,000,000;
provided that no shares of Covista shall be so released unless and until all
shares of Capsule and all shares of any other entity previously pledged to the
Pledgee and held at such time by the Pledgee have been released. Within ten
business days after its receipt of a valid notice, in accordance with
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this paragraph, the Pledgee shall return to the Pledgors at the address
identified in such notice the Specified Release Certificates. Nothing in this
paragraph shall require the Pledgee to release and return the Specified Release
Certificates, or any other shares or certificates in lieu thereof, if the
Combined Market Value, after accounting for the release of the Specified Release
Certificates and calculated as of the date of such release, would be below
$15,000,000.
SECTION 8. REMEDIES AND ENFORCEMENT.
8.1 Remedies in Case of an Event of Default. If an Event of Default has
occurred and is continuing, then in addition to the actions referred to in
Section 5.2 the Pledgee may take any or all of the following actions, without
demand of performance or other demand, advertisement or notice of any kind to or
upon Pledgors or any other Person (except as specified in Section 8.1(b)) all
and each of which are hereby expressly waived by Pledgors:
(a) The Pledgee may, in its own name or at its sole option in
the name of any Pledgor, exercise any or all of the rights, powers and
privileges of, and pursue any or all of the remedies accorded to, any
Pledgor under the Collateral and may exclude such Pledgor and all
Persons claiming by, through or under such Pledgor wholly or partly
therefrom, including in such rights, privileges and remedies, but
without limitation, all rights of such Pledgor to demand, receive, xxx
for, compromise and settle all payments in respect of the Collateral,
and in connection therewith to exercise all rights and remedies
thereunder which such Pledgor could enforce if this Agreement had not
been made.
(b) The Pledgee may forthwith collect, recover, receive,
appropriate and realize upon the Collateral, or any part thereof,
and/or may forthwith sell, assign, give an option or options to
purchase, contract to sell or otherwise dispose of and deliver the
Collateral, or any part thereof, in one or more parcels at public or
private sale or sales, at any exchange, broker's board or at any of the
Pledgee's offices or elsewhere upon such terms and conditions as it may
deem advisable and at such prices as it may deem best, for cash or on
credit or for future delivery without assumption of any credit risk.
The Pledgee need not make any sale of Collateral even if notice thereof
has been given, may reject any and all bids that in its commercially
reasonable discretion it shall deem inadequate, and may adjourn any
public or private sale. Pledgors hereby acknowledge that the Collateral
is of a type that could decline speedily in value and is also of a type
customarily sold on a recognized market, in each case within the
meaning of Section 9-504 of the UCC as in effect in any applicable
jurisdiction, and that the Pledgee need not give any notice to Pledgors
prior to any sale of the Collateral at any exchange, broker's board or
in any other recognized market. Without limiting the foregoing, each
Pledgor agrees that the Pledgee need not give more than five days
notice of the time and place of any public sale or of the time after
which a private sale or other intended disposition is to take place and
that such notice is reasonable notification of such matters, and waives
all other demands or notices of any kind.
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(c) The Pledgee may, as a matter of right and without notice
to any Pledgor or any Person claiming by, through or under any Pledgor,
cause the appointment of a receiver for all or any part of the
Collateral.
(d) In addition to all other rights and remedies granted to it
in this Agreement and in any other instrument or agreement securing,
evidencing or relating to any of the Secured Obligations, the Pledgee
will have and may exercise with respect to any or all of the Collateral
all of the rights and remedies of a secured party under the UCC and all
other legal and equitable remedies allowed under applicable law.
Each Pledgor consents to and ratifies any action which the Pledgee may
take to enforce its rights under this Section 8.1. Each Pledgor waives to the
full extent permitted by law the benefit of all appraisement, valuation, stay,
extension, moratorium and redemption laws now or hereafter in force and all
rights of marshaling in the event of the sale of the Collateral or any part
thereof or any interest therein. Each Pledgor will execute and deliver such
documents as the Pledgee deems advisable or necessary in order that any such
sale or disposition be made in compliance with applicable law.
Any sale or other disposition of the Collateral or any part thereof or
interest therein in the exercise of any remedy hereunder will constitute a
perpetual bar against each Pledgor and any Persons claiming by, through or under
any Pledgor. Upon any such sale or other disposition, the receipt of the officer
or agent making the sale or other disposition or of the Pledgee is a sufficient
discharge to the purchaser for the purchase money, and such purchaser will have
no duty to see to the application thereof.
8.2 Application of Proceeds Following an Event of Default. All amounts
held or collected by the Pledgee as part of the Collateral (including, without
limitation, all amounts realized as a result of the exercise of any rights and
remedies hereunder) following the occurrence of any Event of Default will be
applied forthwith by the Pledgee as follows:
FIRST: to the payment of all costs and expenses of such
exercise (including, without limitation, the cost of evidence of title
and the costs and expenses, if any, of taking possession of, retaining
custody over and preserving the Collateral or any part thereof, or any
interest therein prior to such exercise), all costs and expenses of any
receiver of the Collateral or any part thereof, or any interest
therein, any taxes, assessments or charges with respect to any of the
Collateral, whether or not prior to the lien of this Agreement, which
the Pledgee may consider it necessary or desirable to pay and all
amounts due and payable to the Pledgee under Section 6.5 and unpaid;
SECOND: to the payment of the accrued and unpaid interest
(including interest on unpaid principal and, to the extent permitted by
applicable law, unpaid interest) of the Note in accordance with the
provisions of the Note;
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THIRD: if the Note has not become due and payable in full, to
the payment of all outstanding principal then due and payable on the
Note;
FOURTH: if the Note has become due and payable in full whether
at maturity, by prepayment, acceleration, declaration of default or
otherwise, to the payment of the outstanding principal of the Note in
accordance with the provisions of the Note;
FIFTH: to the ratable payment to the Persons entitled thereto
of all other obligations secured hereunder for which moneys have not
theretofore been applied; and
SIXTH: at such time as all of the obligations of the Pledgors
under the Note have been paid in full in cash or in stock in accordance
with the terms of the Note and all other Secured Obligations have been
paid or performed to the satisfaction of the Pledgee, the remainder, if
any, will be paid over to Pledgors, their successors or assigns, or to
whomsoever may be lawfully entitled to receive the same, as determined
by a court of competent jurisdiction.
8.3 Purchase of Collateral by Pledgee. The Pledgee may be a purchaser
of the Collateral or any part thereof or any interest therein at any sale or
other disposition hereunder and may apply against the purchase price the
indebtedness secured hereby.
8.4 Purchaser to Acquire Good Title. Any purchaser of the Collateral at
any sale or other disposition thereof pursuant to this Section 8 will, upon any
such purchase, acquire good title to the Collateral so purchased free of the
lien and security interest created by this Agreement and free of all rights of
equity or redemption in any Pledgor, which rights each Pledgor hereby expressly
waives and releases to the full extent permitted by law, and each Pledgor will
warrant and defend the title of such purchaser against all claims arising by,
through or under the Pledgors. Nevertheless, if so requested by the Pledgee or
any such purchaser, each Pledgor will ratify and confirm any exercise of
remedies by the Pledgee hereunder by executing and delivering to the Pledgee or
such purchaser all bills of sale, assignments, releases and other proper
instruments to effect such ratification and confirmation as may be designated in
any such request. In addition, each Pledgor will do or cause to be done all such
other acts and things as may be reasonably necessary to make such exercise of
remedies valid and binding and in compliance with any and all applicable laws,
regulations, orders, writs, injunctions, decrees or awards of any and all
courts, arbitrators or governmental instrumentalities, domestic or foreign,
having jurisdiction over any such exercise, all at such Pledgor's expense.
8.5 Sale of Pledged Stock Without Registration. Pledgor recognizes
that, under certain circumstances, (i) the Pledgee may be unable to effect a
public sale of any or all of the Pledged Stock by reason of the Securities Act
and applicable state or foreign securities laws or otherwise, but may be
compelled to resort to one or more private sales thereof to a restricted group
of purchasers who will be obliged to agree, among other things, to acquire such
securities for their own account for investment and not with a
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view to the distribution or resale thereof and who otherwise satisfy the
requirements of any such applicable law, and (ii) any such private sale may
result in prices and other terms less favorable to the seller than if such sale
were a public sale. No such sale will be deemed to have been made in a
commercially unreasonable manner for the reason that it was made as a private
sale rather than a public sale, and the Pledgee will be under no obligation to
delay a sale of any of the Pledged Stock for the period of time necessary to
permit the issuer of such securities to register such securities for public sale
under the Securities Act, or under applicable state securities laws, or
otherwise comply with applicable law, even if the issuer would agree or has
agreed to do so and would be able to do so.
8.6 Appointment as Attorney-in-Fact. Each Pledgor hereby irrevocably
constitutes and appoints the Pledgee, with full power of substitution, as such
Pledgor's attorney-in-fact, with full irrevocable power and authority in the
place and stead of such Pledgor and in the name of such Pledgor or otherwise,
from time to time in the Pledgee's discretion, to execute and deliver any and
all bills of sale, assignments or other instruments which the Pledgee may deem
necessary or advisable in its exercise of any of the remedies hereunder, and to
take any other action to accomplish the purposes of this Agreement, including,
without limitation, to ask, demand, collect, xxx for, recover, compound, receive
and give acquittance and receipt for moneys due and to become due under or in
connection with the Collateral, to receive, endorse, and collect any drafts or
other instruments, documents and chattel paper in connection therewith, and to
file any claims or take any action or institute any proceedings which the
Pledgee may deem to be necessary or desirable for the collection thereof, such
Pledgor hereby ratifying and confirming all that such attorney or any substitute
may lawfully do by virtue hereof. This power of attorney is a power coupled with
an interest and is irrevocable.
8.7 No Waiver; Cumulative Remedies. No action or inaction of the
Pledgee will be deemed to waive any of the rights, powers or remedies of the
Pledgee hereunder except pursuant to a writing, signed by the Pledgee, and then
only to the extent expressly set forth therein. A waiver by the Pledgee of any
right, power or remedy on any one occasion will not bar the exercise of any
right, power or remedy hereunder on any future occasion. No failure of the
Pledgee to exercise nor delay of the Pledgee in exercising any right, power or
remedy will preclude the exercise of any other right, power or remedy. If the
Pledgee accepts payment of any amount secured hereby after its due date, it will
not thereby be deemed to have waived its right to require prompt payment when
due of all other amounts payable hereunder. Each right, power and remedy of the
Pledgee provided for in this Agreement or now or hereafter existing at law or
equity or by statute or otherwise is cumulative and concurrent and is in
addition to every other such right, power or remedy of the Pledgee, and the
exercise of any one or more of any such rights, powers or remedies with respect
to any of the Collateral will not preclude the simultaneous or later exercise by
the Pledgee of any other right, power or remedy with respect to any other
Collateral.
8.8 Restoration of Rights and Remedies. If the Pledgee has instituted
any proceeding to enforce any right, power or remedy under this Agreement and
such proceeding has been discontinued or abandoned for any reason, with or
without notice to
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Pledgors, or has been determined adversely to the Pledgee, then and in every
such case Pledgors and the Pledgee will be restored to their former positions
hereunder, and thereafter all rights, powers and remedies of the Pledgee will
continue as though no such proceeding had been instituted.
SECTION 9. PLEDGOR'S OBLIGATIONS NOT AFFECTED.
The covenants and agreements of each Pledgor set forth herein are
primary obligations of such Pledgor. All such obligations are absolute and
unconditional, are not subject to any counterclaim, set-off, deduction,
diminution, abatement, recoupment, suspension, deferment, reduction or defense
(other than full and strict compliance by such Pledgor with its obligations
hereunder) based upon any claim any Pledgor, Covista, Capsule, Startec or any
other Person may have against the Pledgee or any other Person. All such
obligations will remain in full force and effect without regard to, and will not
be released, discharged or in any way affected by, any unenforceability,
invalidity or other infirmity with respect to the Note, or any other
circumstance, condition or occurrence whatsoever, whether foreseeable or
unforeseeable and without regard to whether any Pledgor, Covista, Capsule,
Startec or the Pledgee shall have any knowledge or notice thereof.
SECTION 10. MISCELLANEOUS.
10.1 Amendments, Etc. Any amendment, modification or waiver of any term
or provision of this Agreement must be in writing and signed by the Pledgee. Any
such waiver will be effective only in the specific instance and for the specific
purpose for which it is given.
10.2 Pledgee to be Bound by Stock Restriction Agreements and Voting
Agreements. The Pledgee agrees to execute and be bound by the Stock Restriction
Agreements (as previously defined) and the Voting Agreements entered into or to
be entered into by and among Startec, a subsidiary of Startec, Xxxxxxxx and Gold
& Xxxxx, in each case in form and substance substantially in accordance with
drafts of such agreements provided to the Pledgee prior to the date hereof, to
the extent that such agreements (i) place limitations for specified periods on
the transfer of shares of Startec Stock or shares of Capsule stock, in each case
which have been pledged to the Pledgee, or (ii) require during a specified
period that votes cast with respect to shares of Capsule stock which have been
pledged to the Pledgee be cast in favor of approval of the Merger Agreement and
the Proposed Merger Transaction, in favor of any matter or transaction that is
reasonably required to effect the merger and the other transactions contemplated
by the Merger Agreement, or against any other acquisition proposal or matters
which could reasonably be expected to facilitate any other acquisition proposal.
10.3 Survival of Agreements, Representations and Warranties. All
agreements, representations and warranties contained in this Agreement or the
Note or made in writing by or on behalf of any Pledgor in connection with the
transactions contemplated by this Agreement or the Note will survive the
execution and delivery of this Agreement,
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any investigation at any time made by or on behalf of the Pledgee, the purchase
of any Note or any payment of any Note or any disposition of any Note.
10.4 Successors and Assigns. This Agreement is binding upon and will
inure to the benefit of and be enforceable by the respective successors and
assigns of the parties hereto, whether so expressed or not.
10.5 Entire Agreement. This Agreement and the Note embody the entire
agreement and understanding between Pledgors and the Pledgee with respect to the
transaction referred to herein and therein and supersede all prior agreements
and understandings, written or oral, relating to the pledge of collateral to the
Pledgee to secure the obligations of the Pledgors under the Note.
10.6 Severability. Any provision of this Agreement which is prohibited
or unenforceable in any jurisdiction is, as to such jurisdiction, ineffective
only to the extent made necessary by such prohibition or unenforceability. Any
such prohibition or unenforceability in any jurisdiction will not invalidate or
render unenforceable (i) the remaining provisions hereof or (ii) such provision
in any other jurisdiction. There shall be substituted for any such provision so
rendered ineffective a provision which, as far as legally possible, most nearly
reflects the intent of the parties hereto.
10.7 WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO IRREVOCABLY AND
UNCONDITIONALLY WAIVES THE RIGHT TO TRIAL BY JURY IN ANY LEGAL OR EQUITABLE
ACTION, SUIT OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE
NOTE OR ANY TRANSACTION CONTEMPLATED HEREBY OR THEREBY OR THE SUBJECT MATTER OF
ANY OF THE FOREGOING.
10.8 Agreement May Constitute Financing Statement. Each Pledgor
consents to the filing of this Agreement or a photocopy thereof as a financing
statement under the Uniform Commercial Code as in effect in any jurisdiction in
which the Pledgee may determine such filing to be necessary or desirable.
10.9 Miscellaneous. This Agreement may be executed in any number of
counterparts, each of which is an original, but all of which together constitute
but one instrument. Except as otherwise indicated, references herein to any
"Section" means a "Section" of this Agreement. The table of contents and the
section headings in this Agreement are for purposes of reference only and shall
not limit or define the meaning hereof.
10.10 GOVERNING LAW. THIS AGREEMENT AND (UNLESS OTHERWISE EXPRESSLY
PROVIDED) ALL AMENDMENTS AND SUPPLEMENTS TO, AND ALL CONSENTS AND WAIVERS
PURSUANT TO, THIS AGREEMENT WILL IN ALL RESPECTS BE GOVERNED BY, AND CONSTRUED
AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK
WITHOUT REFERENCE TO
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PRINCIPLES OF CONFLICTS OF LAW, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY
AND PERFORMANCE.
10.11 Notices, Etc. All notices and other communications provided for
hereunder must be in writing (including telegraphic, telex, telecopy or cable
communication) and must be sent (a) if to any Pledgor, at its address listed on
Exhibit B attached hereto, (b) if to Pledgee, at 000 Xxxxx Xxxx Xxx, Xxxxx 000,
Xxxx Xxxxx, XX 00000, Telephone: 000-000-0000, Facsimile: 000-000-0000, or (c)
as to each party, at such other address as shall be designated by such party in
a written notice to the other parties. All such notices and communications are
effective when received.
10.12 Submission to Jurisdiction; Waiver of Immunity; Agent for Service
of Process. For the purpose of assuring that the Pledgee may enforce its rights
under this Agreement, each Pledgor, for itself and its successors and assigns,
hereby irrevocably (a) agrees that any legal or equitable action, suit or
proceeding against any Pledgor arising out of or relating to this Agreement or
any transaction contemplated hereby or the subject matter of any of the
foregoing may be instituted, at the election of the Pledgee, in any state or
federal court in the State of Virginia (including, without limitation, the U.S.
Federal District Court for the Eastern District of Virginia) or in any state or
federal court in the State of Florida, (b) waives any objection which it may now
or hereafter have to the venue of any action, suit or proceeding, (c)
irrevocably submits itself to the nonexclusive jurisdiction of any state or
federal court of competent jurisdiction in the State of Virginia or the State of
Florida, and (d) irrevocably waives any immunity from jurisdiction to which it
might otherwise be entitled in any such action, suit or proceeding which may be
instituted in any state or federal court of the State of Virginia or the State
of Florida, and any immunity from the maintaining of an action against it to
enforce any judgment for money obtained in any such action, suit or proceeding
and, to the extent permitted by applicable law, any immunity from execution.
Each Pledgor acknowledges that it has irrevocably designated and appointed CT
Corporation System (or any successor corporation), at its office in Virginia and
its office in Florida, as its authorized agent to accept and acknowledge on its
behalf service of any and all process which may be served in any such action,
suit or proceeding with respect to any matter as to which it has submitted to
jurisdiction as set forth in this Section 10.11 and agrees that service upon
such authorized agent shall be deemed in every respect service of process upon
such Pledgor or its successors or assigns, and, to the extent permitted by
applicable law, shall be taken and held to be valid personal service upon it.
Each Pledgor will take all action necessary to ensure that such Pledgor shall at
all times have an agent for service of process for the above purposes in the
State of Virginia and the State of Florida. This Section 10.11 does not affect
the right of the Pledgee to serve process in any other manner permitted by law
or to commence legal proceedings or otherwise proceed against any Pledgor in any
jurisdiction.
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and delivered personally or by their
representative officers or agents duly authorized as of the date first above
written.
Pledgors:
GOLD & XXXXX TRANSFER, S.A.
By: /s/ Xxxxxx X. Xxxxxxxx
----------------------
Xxxxxx X. Xxxxxxxx,
Attorney-in-Fact
REVISION LLC
By: /s/ Xxxxxx X. Xxxxxxxx
----------------------
Xxxxxx X. Xxxxxxxx,
Manager
FOUNDATION FOR THE INTERNATIONAL
NON-GOVERNMENTAL DEVELOPMENT
OF SPACE
By: /s/ Xxxxxx X. Xxxxxxxx
----------------------
Xxxxxx X. Xxxxxxxx,
President
XXXXXX X. XXXXXXXX
/s/ Xxxxxx X. Xxxxxxxx
----------------------
Xxxxxx X. Xxxxxxxx
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Pledgee:
XXXXXX X. XXXXX
/s/ Xxxxxx X. Xxxxx
-------------------
Xxxxxx X. Xxxxx
AGREED AND ACCEPTED (as to Sections 6.5 and 6.7 of the Agreement):
COVISTA COMMUNICATIONS, INC. (formerly known as TOTAL-TEL USA COMMUNICATIONS,
INC.)
By: /s/ Xxxxxx X. Xxxxxxx
----------------------
Name: Xxxxxx X. Xxxxxxx
Title: Secretary/Treasurer, CFO
AGREED AND ACCEPTED (as to Sections 6.5 and 6.8 of the Agreement):
CAPSULE COMMUNICATIONS INC.
By: /s/ Xxxxx X. Xxxxxxx
---------------------
Name: Xxxxx X. Xxxxxxx
Title: President & CEO
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Exhibit A
SHARES:
The Shares consist of:
1,179,732 shares of common stock of Covista owned of record and beneficially by
Revision, and represented in certificated form by stock certificate number
CU0008823 of Covista (the "Revision Shares");
703,529 shares of common stock of Covista owned of record and beneficially by
FINDS, and represented in certificated form by stock certificate number
CU0008825 of Covista (the "FINDS Shares"); and
4,521,300 shares of common stock of Capsule owned of record and beneficially by
Gold & Xxxxx and represented in certificated form by stock certificate number
3012 of Capsule and 1,150,000 shares of common stock of Capsule owned of record
and beneficially by Gold & Xxxxx and represented in certificated form by stock
certificate number 3010 of Capsule (collectively, the "Gold & Xxxxx Shares").
EXISTING PLEDGED SHARES
The Existing Pledged Shares consist of the Revision Shares and the FINDS Shares.
NEWLY PLEDGED SHARES
The Newly Pledged Shares consist of the Gold & Xxxxx Shares.
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Exhibit B
NOTICE ADDRESSES FOR PLEDGORS
The notice addresses for the respective Pledgors are as
follows:
(a) If to Gold & Xxxxx:
Xxxx Xxxxx Building
Wickams Cay
Road Town, Tortolla
British Virgin Islands
with copies to:
Xxxx X. XxXxxxxxxx
Xxxxxxx Berlin Shereff Xxxxxxxx, LLP
0000 X Xxxxxx XX
Xxxxxxxxxx, X.X. 00000-0000
Facsimile: 000-000-0000
and
Xxxxxx X. Xxxxxxxx
Revision LLC
0000 00xx Xxxxxx, XX
Xxxxx 000
Xxxxxxxxxx, X.X. 00000
Facsimile: 000-000-0000
(b) If to Revision:
Revision LLC
0000 00xx Xxxxxx, XX
Xxxxx 000
Xxxxxxxxxx, X.X. 00000
Attention: Xxxxxx X. Xxxxxxxx
Facsimile: 000-000-0000
with a copy to:
Xxxx X. XxXxxxxxxx
Xxxxxxx Berlin Shereff Xxxxxxxx, LLP
0000 X Xxxxxx XX
Xxxxxxxxxx, X.X. 00000-0000
Facsimile: 000-000-0000
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(c) If to FINDS:
0000 X Xxxxxx XX
Xxxxx 000
Xxxxxxxxxx, X.X. 00000
with copies to:
Xxxx X. XxXxxxxxxx
Xxxxxxx Berlin Shereff Xxxxxxxx, LLP
0000 X Xxxxxx XX
Xxxxxxxxxx, X.X. 00000-0000
Facsimile: 000-000-0000
and
Xxxxxx X. Xxxxxxxx
Revision LLC
0000 00xx Xxxxxx, XX
Xxxxx 000
Xxxxxxxxxx, X.X. 00000
Facsimile: 000-000-0000
(d) If to Xxxxxxxx:
c/o Revision LLC
0000 00xx Xxxxxx, XX
Xxxxx 000
Xxxxxxxxxx, X.X. 00000
Attention: Xxxxxx X. Xxxxxxxx
Facsimile: 000-000-0000
with a copy to:
Xxxx X. XxXxxxxxxx
Xxxxxxx Berlin Shereff Xxxxxxxx, LLP
0000 X Xxxxxx XX
Xxxxxxxxxx, X.X. 00000-0000
Facsimile: 000-000-0000
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