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EXHIBIT 4.6
NOTIFICATION AND CONTROL AGREEMENT
THIS NOTIFICATION AND CONTROL AGREEMENT (the "Agreement")
dated as of April 13, 1998 by and among Long Distance International Inc. (the
"Pledgor") and The Bank of New York, a New York banking corporation, in its
capacity as trustee (the "Trustee") and in its capacity as a bank (the "Bank")
at which the Pledgor maintains the Pledge Account (as defined herein).
A. The Pledgor has granted to the Trustee a security interest in
certain U.S. Treasury securities and security entitlements related thereto (the
"Pledged Securities") maintained by the Pledgor with the Bank and carried in an
account in the name of "BNY, Trustee, LDI Collateral Pledge A/C" (the "Pledge
Account") and all additions thereto and substitutions and proceeds thereof
(collectively, the "Collateral"), pursuant to, and as more particularly
described in, a Collateral Pledge and Security Agreement dated as of April 13,
1998 among the Pledgor and the Trustee (as the same may hereafter be amended,
supplemented or otherwise modified from time to time, the "Pledge Agreement";
terms defined in the Pledge Agreement and not otherwise defined herein are used
herein as therein defined).
B. Terms defined in Articles 8 or 9 of the Uniform Commercial Code
as in effect in the State of New York (the "UCC") are used in this Agreement
(including, without limitation, paragraph A above) as defined in Articles 8 or
9, respectively, of the UCC.
C. Pursuant to the Pledge Agreement, the Trustee has required the
execution and delivery of this Agreement.
NOW, THEREFORE, for valuable consideration and intending to be
legally bound, the parties hereto agree and acknowledge as follows:
1. Notice of Security Interest. The Pledgor and Trustee are entering
into this Agreement to perfect, and confirm the first priority lien of, the
Trustee's security interest in the Collateral. The Bank agrees to promptly make
all necessary entries or notations in its books and records to reflect the
Trustee's security interest in the Collateral and to apply any value distributed
on account of any Pledged Securities as directed by the Trustee without further
consent from the Pledgor. The Bank acknowledges that the Trustee has control
over the Pledge Account and all Pledged Securities contained therein from time
to time.
2. Separate Pledge Account; Trustee Representations and Warranties.
(a) The Trustee hereby instructs the Bank, and the Bank hereby confirms and
agrees that,
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unless the Trustee shall otherwise direct the Bank in writing, (i) the Pledge
Account is to be maintained separately at all times and (ii) the Pledged
Securities shall be carried only in the Pledge Account.
(b) The Trustee hereby represents and warrants that it has acquired
its security interest in, and security entitlement to, the Collateral for value
and without notice of any adverse claim thereto. Without limiting the generality
of the foregoing, the Collateral is not, to the Trustee's knowledge, subject to
any Lien granted by the Trustee in favor of any securities intermediary
(including, without limitation, the Bank or the Federal Reserve Bank of New
York) and the Trustee has not knowingly or purposefully caused or permitted the
Collateral to become subject to any Lien created by or arising through the Bank.
3. Control. The Bank hereby agrees, upon written direction from the
Trustee and without further consent from the Pledgor, (a) to comply with all
instructions, entitlement orders and directions of any kind originated by the
Trustee concerning the Collateral, to liquidate or otherwise dispose of the
Collateral as and to the extent directed by the Trustee and pay over to the
Trustee all proceeds and other value therefrom or otherwise distributed with
respect thereto without any set off or deduction, and (b) except as otherwise
directed by the Trustee, not to comply with the instructions or directions of
the Pledgor or any other person.
4. Other Agreements; Termination; Successor Trustees. The Bank shall
simultaneously send to the Trustee copies of all notices given and statements
rendered pursuant to the Pledge Account. So long as the Pledge Agreement remains
in effect, neither the Pledgor nor the Bank shall terminate the Pledge Account
without thirty (30) days' prior written notice to the other party and the
Trustee. In the event of any conflict between the provisions of this Agreement
and any other agreement governing the Pledge Account, the provisions hereof
shall control. In the event the Trustee no longer serves as Trustee for the
Collateral, the Pledge Account and Pledged Securities carried therein shall be
transferred to a successor trustee satisfactory to the Trustee, provided that
prior to such transfer, such successor trustee executes an agreement that is in
all material respects the same as this Agreement or is otherwise in form and
substance satisfactory to the Trustee.
5. Indemnity. The Pledgor shall indemnify and hold the Trustee and
the Bank harmless from any and all losses, claims, damages, liabilities,
expenses and fees, including reasonable counsel fees, resulting from the
execution of or performance under this Agreement and delivery by the Trustee of
all or any part of the Collateral to the Bank pursuant to this Agreement, except
claims, losses or liabilities resulting from the Trustee's or the Bank's gross
negligence, bad faith or willful misconduct as determined by a final judgment of
a court of competent jurisdiction. This indemnification shall survive the
termination of this Agreement.
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6. Protection of Bank. Except as required by Paragraph 3 hereof, the
Bank shall have no duty to determine that the amount and form of assets
constituting Collateral comply with any applicable requirements. The Bank may
rely and shall be protected in acting upon any notice, instruction, or other
communication which it reasonably believes to be genuine and authorized.
7. Termination/Release of Collateral. This Agreement shall terminate
automatically upon receipt by the Bank of written notice executed by two
officers of the Trustee holding titles of Vice President or higher that (a) all
of the obligations secured by the Collateral have been satisfied, or (b) all of
the Collateral has been released, whichever is sooner, and the Bank shall
thereafter be relieved of all duties and obligations hereunder.
8. Waiver and Subordination of Rights. The Bank hereby waives its
right to set off any obligations of the Pledgor to the Bank against any or all
assets held by the Trustee as Collateral, and hereby agrees that any and all
liens, encumbrances, claims or security interests which the Bank may have
against the Collateral, either now or in the future are and shall be subordinate
and junior to the prior payment in full of all obligations of the Pledgor now or
hereafter existing under the Indenture, Notes and all other documents related
thereto whether for principal, interest (including, without limitation,
interest, as provided in the Notes, whether or not such interest accrues after
the filing of such petition for purposes of the Bankruptcy Code or is an allowed
claim in such proceeding), indemnities, fees, premiums, expenses or otherwise.
The Bank will not agree with any third party that the Bank will comply with any
instructions or directions of any kind concerning the Collateral originated by
such third party without the prior written consent of the Trustee. Except for
the claims and interests of the Trustee and the Pledgor in the Collateral, the
Bank does not know of any claim to or security interest or other interest in the
Collateral.
9. Expenses. The Pledgor shall pay upon demand all fees, costs and
expenses (including reasonable fees and expenses of counsel) of enforcing the
Bank's rights and remedies upon any breach (by the Trustee or the Pledgor) of
any of the provisions of this Agreement.
10. Notices. All notices, demands, requests, consents, approvals and
other communications required or permitted hereunder must be in writing and will
be effective upon receipt if delivered personally, or if sent by facsimile
transmission with confirmation of delivery, or by nationally recognized
overnight courier service, to the Pledgor's and the Trustee's addresses as set
forth in the Pledge Agreement, and to the Bank's address as set forth below, or
to such other address as any party may give to the others in writing for such
purpose.
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11. Changes in Writing. No modification, amendment or waiver of any
provision of this Agreement nor consent to any departure by any party therefrom
will be effective unless made in writing signed by the parties hereto, and then
such waiver or consent shall be effective only in the specific instance and for
the purpose for which given.
12. Entire Agreement. This Agreement (including the documents and
instruments referred to herein) constitutes the entire agreement and supersedes
all other prior agreements and understandings, both written and oral, among the
parties with respect to the subject matter hereof.
13. Counterparts. This Agreement may be signed in any number of
counterpart copies and by the parties hereto on separate counterparts (including
by facsimile transmission), but all such copies shall constitute one and the
same instrument.
14. Successors and Assigns. This Agreement will be binding upon and
inure to the benefit of the parties hereto and their respective heirs,
executors, administrators, successors and assigns.
15. Governing Law and Jurisdiction. This Agreement has been
delivered to and accepted by the Trustee and will be deemed to be made in the
State of New York. THIS AGREEMENT WILL BE INTERPRETED AND THE RIGHTS AND
LIABILITIES OF THE PARTIES HERETO DETERMINED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK. Each of the parties hereby irrevocably submits for itself and
its property in any legal action or proceeding relating to this Agreement, or
for recognition and enforcement of any judgment in respect thereof, to the
non-exclusive general jurisdiction and venue of the courts of the State of New
York, the courts of the United States of America in New York, and appellate
courts from any thereof.
16. WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO IRREVOCABLY
WAIVES ANY AND ALL RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY ACTION,
PROCEEDING OR CLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) OF ANY NATURE
RELATING TO THIS AGREEMENT, ANY DOCUMENTS EXECUTED IN CONNECTION WITH THIS
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AGREEMENT OR ANY TRANSACTION CONTEMPLATED IN ANY OF SUCH DOCUMENTS. EACH PARTY
HERETO ACKNOWLEDGES THAT THE FOREGOING WAIVER IS KNOWING AND VOLUNTARY.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their respective officers thereunto duly authorized, as of the
date first above written.
PLEDGOR:
LONG DISTANCE INTERNATIONAL INC.
By:
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Name:
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Title:
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Trustee:
THE BANK OF NEW YORK, as Trustee
By:
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Name:
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Title:
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Trustee:
Bank's Address for Bank:
Notices:
THE BANK OF NEW YORK
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ By:
▇▇ ▇▇▇▇ --------------------------------
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Name:
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Title:
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Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇,
Corporate Trust Administration
Facsimile Number: (▇▇▇) ▇▇▇-▇▇▇▇
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ANNEX 1
Pledged Securities
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Security CUSIP No. Coupon (%) Maturity Amount
-------- --------- ---------- -------- ------
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▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ 0 10/15/98 10,856,000
Treasury
--------------------------------------------------------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ 7 04/15/99 11,830,000
Treasury
--------------------------------------------------------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ 6 10/15/99 12,245,000
Treasury
--------------------------------------------------------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ 5.5 04/15/00 12,612,000
Treasury
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▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ 6.125 09/30/00 12,958,000
Treasury
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▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ 6.375 03/31/01 13,356,000
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