EXHIBIT 10.40
AMENDED AND RESTATED PLEDGE AGREEMENT
THIS AMENDED AND RESTATED PLEDGE AGREEMENT (as amended,
restated, supplemented or otherwise modified from time to time, this
"AGREEMENT"), dated as of December 21, 1999, is made by BMC INDUSTRIES, INC., a
Minnesota corporation (the "PLEDGOR"), to BANKERS TRUST COMPANY, as Collateral
Agent (the "PLEDGEE") for the benefit of (i) the Lenders and the Agent under the
Credit Agreement hereinafter referred to (such Lenders and the Agent are
hereinafter called the "BANK CREDITORS") and (ii) if one or more Lenders or any
Affiliate of a Lender enters into one or more (A) interest rate protection
agreements (including, without limitation, interest rate swaps, caps, floors,
collars and similar agreements), (B) foreign exchange contracts, currency swap
agreements or other similar agreements or arrangements designed to protect
against the fluctuations in currency values and/or (C) other types of hedging
agreements from time to time (collectively, the "INTEREST RATE PROTECTION OR
OTHER HEDGING AGREEMENTS"), with, or guaranteed by, the Pledgor, any such Lender
or Lenders or Affiliate or Affiliates (even if the respective Lender
subsequently ceases to be a Lender under the Credit Agreement for any reason) so
long as any such Lender or Affiliate participates in the extension of such
Interest Rate Protection or Other Hedging Agreements and their subsequent
assigns, if any (collectively, the "OTHER CREDITORS" and, together with the Bank
Creditors, are hereinafter called the "SECURED CREDITORS"). Except as otherwise
defined herein, terms used herein and defined in the Credit Agreement shall be
used herein as so defined.
W I T N E S S E T H:
WHEREAS, the Pledgor, the financial institutions from time to
time party thereto, and Bankers Trust Company, as Agent (together with any
successor agent, the "AGENT"), have entered into an Amended and Restated Credit
Agreement, dated as of June 25, 1998, providing for the making of Loans and the
issuance of, and participation in, Letters of Credit as contemplated therein (as
used herein, the term "CREDIT AGREEMENT" means the Credit Agreement described
above in this paragraph, as the same may be amended, modified, extended,
renewed, replaced, restated or supplemented from time to time, and including any
agreement extending the maturity of, or restructuring all or any portion of the
Indebtedness under such agreement or any successor agreements);
WHEREAS, the Pledgor may at any time and from time to time
enter into, or guarantee obligations of its Subsidiaries under, one or more
Interest Rate Protection or Other Hedging Agreements with one or more Other
Creditors;
WHEREAS, it is a condition to each of the above-described
extensions of credit that the Pledgor shall have executed and delivered this
Agreement;
WHEREAS, the Pledgor desires to enter into this Agreement in
order to satisfy the condition described in the preceding paragraph;
WHEREAS, the Majority Lenders have consented to the execution
of this Agreement and to the release of the pledge of the Pledge Agreement;
NOW, THEREFORE, in consideration of the benefits accruing to
the Pledgor, the receipt and sufficiency of which are hereby acknowledged, the
Pledgor hereby makes the following representations and warranties to the Pledgee
for the benefit of the Secured Creditors and hereby covenants and agrees with
the Pledgee for the benefit of the Secured Creditors as follows:
1. SECURITY FOR OBLIGATIONS. This Agreement is made by the
Pledgor for the benefit of the Secured Creditors to secure:
(i) the full and prompt payment when due (whether at
the stated maturity, by acceleration or otherwise) of all obligations
and indebtedness (including, without limitation, indemnities, Fees and
interest thereon) of the Pledgor to the Bank Creditors, whether now
existing or hereafter incurred under, arising out of, or in connection
with the Credit Agreement and the other Loan Documents and the due
performance and compliance by the Pledgor with all of the terms,
conditions and agreements contained in the Credit Agreement and the
other Loan Documents (all such principal, interest, obligations and
liabilities described in this clause (i) being herein collectively
called the "CREDIT AGREEMENT OBLIGATIONS");
(ii) the full and prompt payment when due (whether at
the stated maturity, by acceleration or otherwise) of all obligations
and liabilities owing by the Pledgor to the Other Creditors under, or
with respect to, any Interest Rate Protection or Other Hedging
Agreement, including all obligations of the Pledgor in respect of
Interest Rate Protection or Other Hedging Agreement, whether such
Interest Rate Protections or Other Hedging Agreements are now in
existence or hereafter arising, and the due performance and compliance
by the Pledgor with all of the terms, conditions and agreements
contained therein (all such obligations and liabilities described in
this clause (ii) being herein collectively called the "OTHER
OBLIGATIONS");
(iii) any and all sums advanced by the Pledgee in
accordance with the Loan Documents in order to preserve the Collateral
(as hereinafter defined) or preserve its security interest in the
Collateral;
(iv) in the event of any proceeding for the
collection or enforcement of any indebtedness, obligations, or
liabilities referred to in clauses (i) , (ii) and (iii) above, after an
Event of Default (as such term is defined in the Credit Agreement)
shall have occurred and be continuing, the reasonable expenses of
retaking, holding, preparing for sale or lease, selling or otherwise
disposing of or realizing on the Collateral, or of any exercise by the
Pledgee of its rights hereunder, together with reasonable attorneys'
fees and court costs; and
(v) all amounts paid by any Secured Creditor as to
which such Secured Creditor has the right to reimbursement under
Section 11 of this Agreement;
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all such obligations, liabilities, sums and expenses set forth in clauses (i)
through (v) of this SECTION 1 being herein collectively called the
"OBLIGATIONS," it being acknowledged and agreed that the "Obligations" shall
include extensions of credit of the types described above, whether outstanding
on the date of this Agreement or extended from time to time after the date of
this Agreement.
2. DEFINITION OF STOCK, NOTES, SECURITIES, ETC. As used
herein, the term "STOCK" shall mean (x) all of the issued and outstanding shares
of capital stock at any time owned by the Pledgor of any Material Subsidiary
which is a Domestic Subsidiary and (y) 65% of the issued and outstanding shares
of capital stock at any time owned by the Pledgor of any first tier Foreign
Subsidiary which is a Material Subsidiary, (ii) the term "NOTES" shall mean Note
B and all promissory notes issued in lieu thereof, and (iii) the term
"SECURITIES" shall mean all of the Stock and the Notes. The Pledgor represents
and warrants, as to the stock of Material Subsidiaries owned by the Pledgor and
the Notes, that on the date hereof (a) the Stock consists of the number and type
of shares of the stock of the corporations as described in Part I of ANNEX A
hereto; (b) such Stock constitutes that percentage of the issued and outstanding
capital stock of the issuing corporation as is set forth in Part I of ANNEX A
hereto; (c) the Notes consist of the promissory notes described in Part II of
ANNEX A hereto; and (d) the Pledgor is the holder of record and sole beneficial
owner of the Stock, and there exist no options or preemptive rights in respect
of any of such Stock. If and to the extent that the Pledgee receives or holds
stock certificates representing more than 65% of the total combined voting power
of all classes of capital stock of any first tier Foreign Subsidiary that is a
Material Subsidiary entitled to vote, the Pledgee agrees to act as bailee (and
not as a pledgee, the Pledgee hereby disclaiming any security interest in such
portion except as otherwise provided in the last sentence of this SECTION 2) and
custodian for the benefit of the Pledgor with respect to any portion of such
capital stock representing more than 65% of the total combined voting power of
all classes of capital stock of any such Foreign Subsidiary entitled to vote
except as otherwise provided in the last sentence of this SECTION 2. If
following a change in the relevant sections of the Code or the regulations,
rules, rulings, notices or other official pronouncements issued or promulgated
thereunder which would permit a pledge of 66% or more (or would be adjusted to
permit a pledge of less than 66%) of the total combined voting power of all
classes of capital stock of such Foreign Subsidiary entitled to vote without
causing the undistributed earnings of such Foreign Subsidiary as determined for
Federal income taxes to be treated as a deemed dividend to the Pledgor for
Federal income tax purposes, then the 65% limitation set forth in clause (y) of
the first sentence of this SECTION 2 shall no longer be applicable (or shall be
adjusted as appropriate) and the Pledgor shall duly pledge and deliver to the
Pledgee such of the Stock not theretofore required to be pledged hereunder or
the Pledgee shall return such Stock as applicable.
3. PLEDGE OF SECURITIES, STOCK, ETC.
3.1 PLEDGE. To secure the Obligations, and for the purposes
set forth in SECTION 1 hereof, the Pledgor hereby (i) grants to the Pledgee a
security interest in all of the Collateral (as hereinafter defined), (ii)
pledges and deposits with the Pledgee the Securities owned by the Pledgor on the
date hereof, and delivers to the Pledgee certificates or instruments therefor,
duly endorsed in blank in the case of Notes, and accompanied by undated stock
powers duly executed in blank by the Pledgor (and accompanied by any transfer
tax stamps required in connection with the pledge of such Securities), or such
other instruments of transfer as are
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acceptable to the Pledgee and (iii) assigns, transfers, hypothecates, mortgages,
charges and sets over to the Pledgee all of the Pledgor's right, title and
interest in and to such Securities (and in and to all certificates or
instruments evidencing such Securities), to be held by the Pledgee as collateral
security for the Obligations, upon the terms and conditions set forth in this
Agreement.
3.2 SUBSEQUENTLY ACQUIRED SECURITIES. If the Pledgor shall
acquire (by purchase, stock dividend or otherwise) any additional Securities
at any time or from time to time after the date hereof, the Pledgor will
immediately pledge and deposit such Securities (or certificates or
instruments representing such Securities) as security with the Pledgee and
deliver to the Pledgee certificates or instruments therefor, duly endorsed in
blank in the case of Notes, and accompanied by undated stock powers duly
executed in blank by the Pledgor (and accompanied by any transfer tax stamps
required in connection with the pledge of such Securities) in the case of
Stock, or such other instruments of transfer as are reasonably acceptable to
the Pledgee, and any other foreign security documentation reasonably
requested by Pledgee, and will promptly thereafter deliver to the Pledgee a
certificate executed by a Responsible Officer of the Pledgor describing such
Securities and certifying that the same have been duly pledged with the
Pledgee hereunder. If any Domestic Subsidiary of Pledgor shall hereafter own
capital stock of any Material Subsidiary, then Pledgor shall cause such
Domestic Subsidiary to enter into a pledge agreement in substantially the
form hereof, and shall deliver any other security documentation reasonably
requested by Pledgee, in order to cause the stock of such Material Subsidiary
to be pledged to the Pledgee for the benefit of the Lenders. Subject to the
last sentence of SECTION 2, the Pledgor shall not be required at any time to
pledge hereunder more than 65% of the total combined voting power of all
classes of capital stock of any Foreign Subsidiary entitled to vote.
3.3 UNCERTIFICATED SECURITIES. Notwithstanding anything to the
contrary contained in SECTIONS 3.1 AND 3.2 hereof, if any Securities (whether
now owned or hereafter acquired) are uncertificated securities, the Pledgor
shall promptly notify the Pledgee thereof, and shall promptly take all actions
required to perfect the security interest of the Pledgee under applicable law
(including, in any event, under Sections 8-313 and 8-321 of the New York Uniform
Commercial Code if applicable). The Pledgor further agrees to take such actions
as the Pledgee deems necessary or desirable to effect the foregoing and to
permit the Pledgee to exercise any of its rights and remedies hereunder, and
agrees to provide an opinion of counsel reasonably satisfactory to the Pledgee
with respect to any such pledge of uncertificated Stock promptly upon the
reasonable request of the Pledgee. Subject to the last sentence of SECTION 2,
the Pledgor shall not be required, at any time, to pledge hereunder more than
65% of the total combined voting power of all classes of capital stock of any
Foreign Subsidiary entitled to vote.
3.4 DEFINITIONS OF PLEDGED STOCK; PLEDGED NOTES; PLEDGED
SECURITIES AND COLLATERAL. All Stock at any time pledged or required to be
pledged hereunder is hereinafter called the "PLEDGED STOCK;" and all Notes at
any time pledged or required to be pledged hereunder are hereinafter called the
"PLEDGED NOTES;" all Pledged Stock and Pledged Notes together are called the
"PLEDGED SECURITIES;" and the Pledged Securities, together with all proceeds
thereof, including any securities and moneys received and at the time held by
the Pledgee hereunder, are hereinafter called the "COLLATERAL."
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4. APPOINTMENT OF SUB-AGENTS; ENDORSEMENTS, ETC. The Pledgee
shall have the right to appoint one or more sub-agents for the purpose of
retaining physical possession of the Pledged Securities, which may be held (in
the discretion of the Pledgee) in the name of the Pledgor, endorsed or assigned
in blank or in favor of the Pledgee or any nominee or nominees of the Pledgee or
a sub-agent appointed by the Pledgee.
5. VOTING, ETC., WHILE NO EVENT OF DEFAULT. Unless and until
an Event of Default shall have occurred and be continuing, the Pledgor shall be
entitled to exercise any and all voting and other consensual rights pertaining
to the Pledged Securities owned by it, and to give consents, waivers or
ratifications in respect thereof, PROVIDED that no vote shall be cast or any
consent, waiver or ratification given or any action taken which would violate or
result in breach of any covenant contained in this Agreement, the Credit
Agreement, any other Loan Document or any Interest Rate Protection or Other
Hedging Agreement (collectively, the "SECURED DEBT AGREEMENTS"), or which could
reasonably be expected to have the effect of impairing the value of the
Collateral or any part thereof or the position or interests of the Pledgee or
any Secured Creditor. All such rights of the Pledgor to vote and to give
consents, waivers and ratifications shall cease in case an Event of Default
shall occur and be continuing, and SECTION 7 hereof shall become applicable.
6. DIVIDENDS AND OTHER DISTRIBUTIONS. Unless an Event of
Default shall have occurred and be continuing, all cash dividends and
distributions payable in respect of the Pledged Stock and all payments in
respect of the Pledged Notes shall be paid to the Pledgor which owns such
Pledged Stock or Pledged Notes; PROVIDED, that all cash dividends payable in
respect of the Pledged Stock which are reasonably determined by the Pledgee to
represent in whole or in part an extraordinary, liquidating or other
distribution in return of capital shall be paid, to the extent so determined to
represent an extraordinary, liquidating or other distribution in return of
capital, to the Pledgee and retained by it as part of the Collateral. The
Pledgee also shall be entitled to receive directly, and to retain as part of the
Collateral:
(a) all other or additional stock or other securities or
property (other than cash) paid or distributed by way of dividend or otherwise
in respect of the Pledged Stock;
(b) all other or additional stock or other securities or
property (including cash) paid or distributed in respect of the Pledged Stock by
way of stock-split, spin-off, split-up, reclassification, combination of shares
or similar rearrangement; and
(c) all other or additional stock or other securities or
property (including cash) which may be paid in respect of the Collateral by
reason of any consolidation, merger, exchange of stock, conveyance of assets,
liquidation or similar corporate reorganization.
Subject to the last sentence of SECTION 2, the Pledgor shall not be required at
any time to pledge hereunder more than 65% of the total combined voting power of
all classes of capital stock of any Foreign Subsidiary entitled to vote. Nothing
contained in this SECTION 6 shall limit or restrict in any way the Pledgee's
right to receive proceeds of the Collateral in any form in accordance with
SECTION 3 of this Agreement. All dividends, distributions or other payments
which are received by the Pledgor contrary to the provisions of this SECTION 6
and SECTION 7 shall be received in trust for the benefit of the Pledgee, shall
be segregated from other property or funds
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of the Pledgor and shall be forthwith paid over to the Pledgee as Collateral in
the same form as so received (with any necessary endorsement).
7. REMEDIES IN CASE OF EVENTS OF DEFAULT. In case an Event of
Default shall have occurred and be continuing, then and in every such case, the
Pledgee shall be entitled to exercise all of the rights, powers and remedies
(whether vested in it by this Agreement, any other Secured Debt Agreement or by
law) for the protection and enforcement of its rights in respect of the
Collateral, and the Pledgee shall be entitled to exercise all the rights and
remedies of a secured party under the Uniform Commercial Code and also shall be
entitled, without limitation, to exercise the following rights, which the
Pledgor hereby agrees to be commercially reasonable:
(a) to receive all amounts payable in respect of the
Collateral otherwise payable to the Pledgor under SECTION 6 hereof;
(b) to transfer all or any part of the Collateral into
the Pledgee's name or the name of its nominee or nominees;
(c) to accelerate any Pledged Note which may be
accelerated in accordance with its terms, and take any other lawful action to
collect upon any Pledged Note (including, without limitation, to make any
demand for payment thereon);
(d) to vote all or any part of the Pledged Stock
(whether or not transferred into the name of the Pledgee) and give all
consents, waivers and ratifications in respect of the Collateral and
otherwise act with respect thereto as though it were the outright owner
thereof (the Pledgor hereby irrevocably constituting and appointing the
Pledgee the proxy and attorney-in-fact of the Pledgor, with full power of
substitution to do so); and
(e) to sell, assign and deliver, or grant options to
purchase, all or any part of the Collateral, or any interest therein, at any
public or private sale, without demand of performance, advertisement or
notice of intention to sell or of the time or place of sale or adjournment
thereof or to redeem or otherwise (all of which are hereby waived by the
Pledgor), for cash, on credit or for other property, for immediate or future
delivery without any assumption of credit risk, and for such price or prices
and on such terms as the Pledgee in its absolute discretion may determine,
PROVIDED that at least 15 business days' written notice of the time and place
of any such sale shall be given to the Pledgor. Pledgee shall not be
obligated to make any such sale of Collateral regardless of whether any such
notice of sale has theretofore been given. The Pledgor hereby waives and
releases to the fullest extent permitted by law any right or equity of
redemption with respect to the Collateral, whether before or after sale
hereunder, and all rights, if any, of marshalling the Collateral and any
other security for the Obligations or otherwise. At any such sale, unless
prohibited by applicable law, the Pledgee on behalf of the Secured Creditors
may bid for and purchase all or any part of the Collateral so sold free from
any such right or equity of redemption. Neither the Pledgee nor any Secured
Creditor shall be liable for failure to collect or realize upon any or all of
the Collateral or for any delay in so doing nor shall any of them be under
any obligation to take any action whatsoever with regard thereto.
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8. REMEDIES, ETC., CUMULATIVE. Each and every right, power
and remedy of the Pledgee provided for in this Agreement or any Secured Debt
Agreement, or now or hereafter existing at law or in equity or by statute
shall be cumulative and concurrent and shall be in addition to every other
such right, power or remedy. The exercise or beginning of the exercise by the
Pledgee or any other Secured Creditor of any one or more of the rights,
powers or remedies provided for in this Agreement, or any other Secured Debt
Agreement or now or hereafter existing at law or in equity or by statute or
otherwise shall not preclude the simultaneous or later exercise by the
Pledgee or any Secured Creditor of all such other rights, powers or remedies,
and no failure or delay on the part of the Pledgee or any Secured Creditor to
exercise any such right, power or remedy shall operate as a waiver thereof.
Unless otherwise required by the Loan Documents, no notice to or demand on
the Pledgor in any case shall entitle it to any other or further notice or
demand in similar or other circumstances or constitute a waiver of any of the
rights of the Pledgee or any Secured Creditor to any other or further action
in any circumstances without notice or demand.
9. APPLICATION OF PROCEEDS.
(a) The cash proceeds actually received from the sale or
other disposition or collection of Collateral, and any other amounts received in
respect of the Collateral, the application of which is not otherwise provided
for herein, shall be applied (after payment of any amounts payable to the
Pledgee or the Agent pursuant to this Agreement or the Credit Agreement) in
whole or in part by the Pledgee against all or any part of the Obligations in
the following order: (i) first, to any fees, costs or other expenses due under
the Loan Documents; (ii) next, to any interest due under the Loan Documents;
(iii) next, to any principal due under the Loan Documents and amount due under
Interest Rate Protection and Other Hedging Agreements; and (iv) last, to any
other Obligations. Any surplus thereof which exists after payment and
performance in full of the Obligations shall be promptly paid over to the
Pledgor or otherwise disposed of in accordance with the UCC or other applicable
law.
(b) It is understood and agreed that the Pledgor shall
remain liable to the extent of any deficiency between the amount of the
proceeds of the Collateral hereunder and the aggregate amount of the
Obligations.
10. PURCHASERS OF COLLATERAL. Upon any sale of the Collateral
by the Pledgee hereunder (whether by virtue of the power of sale herein granted,
pursuant to judicial process or otherwise), the receipt of the Pledgee or the
officer making the sale shall be a sufficient discharge to the purchaser or
purchasers of the Collateral so sold, and such purchaser or purchasers shall not
be obligated to see to the application of any part of the purchase money paid
over to the Pledgee or such officer or be answerable in any way for the
misapplication or nonapplication thereof.
11. INDEMNITY. The Pledgor agrees to indemnify and hold
harmless the Pledgee and each Secured Creditor and their respective successors,
assigns, employees, agents and servants (individually an "INDEMNITEE," and
collectively the "INDEMNITEES") from and against any and all claims, demands,
losses, judgments and liabilities (including liabilities for penalties) of
whatsoever kind or nature, and to reimburse each Indemnitee for all costs and
expenses, including reasonable attorneys' fees, growing out of or resulting from
this Agreement or the
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exercise by any Indemnitee of any right or remedy granted to it hereunder or
under any other Secured Debt Agreement (but excluding any claims, demands,
losses, judgments and liabilities or expenses to the extent incurred by
reason of gross negligence or willful misconduct of such Indemnitee). If and
to the extent that the obligations of the Pledgor under this SECTION 11 are
unenforceable for any reason, the Pledgor hereby agrees to make the maximum
contribution to the payment and satisfaction of such obligations which is
permissible under applicable law.
12. FURTHER ASSURANCES; POWER-OF-ATTORNEY.
(a) The Pledgor agrees that it will join with the
Pledgee in executing and, at the Pledgor's own expense, file and
refile under the Uniform Commercial Code or other applicable law such financing
statements, continuation statements and other documents in such offices as the
Pledgee may reasonably deem necessary and wherever required by law in order to
perfect and preserve the Pledgee's security interest in the Collateral and
hereby authorizes the Pledgee to file financing statements and amendments
thereto relative to all or any part of the Collateral without the signature of
the Pledgor where permitted by law, and agrees to do such further acts and
things and to execute and deliver to the Pledgee such additional conveyances,
assignments, agreements and instruments as the Pledgee may reasonably require or
deem necessary to carry into effect the purposes of this Agreement or to further
assure and confirm unto the Pledgee its rights, powers and remedies hereunder.
(b) The Pledgor hereby appoints the Pledgee as the
Pledgor's attorney-in-fact, with full authority in the place and
stead of the Pledgor and in the name of the Pledgor or otherwise, from time to
time after the occurrence and during the continuance of an Event of Default, in
the Pledgee's reasonable discretion to take any action and to execute any
instrument required by paragraph (a) if Pledgor has failed to do so after demand
by Pledgee.
13. THE PLEDGEE AS AGENT. The Pledgee will hold in accordance
with this Agreement all items of the Collateral at any time received under this
Agreement. It is expressly understood and agreed by the parties hereto and each
Secured Creditor, by accepting the benefits of this Agreement that each
acknowledges and agrees that the obligations of the Pledgee as holder of the
Collateral and interests therein and with respect to the disposition thereof,
and otherwise under this Agreement, are only those expressly set forth in this
Agreement. The Pledgee shall act hereunder on the terms and conditions set forth
herein and in ARTICLE X of the Credit Agreement.
14. TRANSFER BY PLEDGOR. The Pledgor will not sell or
otherwise dispose of, grant any option with respect to, or mortgage, pledge or
otherwise encumber any of the Collateral or any interest therein (except as may
be permitted in accordance with the terms of the Credit Agreement).
15. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE PLEDGOR.
The Pledgor represents and warrants and covenants that (a) it is, or at the time
when pledged hereunder will be, the legal, record and beneficial owner of, and
has (or will have) good title to, all Securities pledged by it hereunder,
subject to no Lien (except the Lien created by this Agreement); (b) it has full
corporate power, authority and legal right to pledge all the Securities pledged
by it pursuant to this Agreement; (c) this Agreement has been duly authorized,
executed
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and delivered by the Pledgor and constitutes a legal, valid and binding
obligation of the Pledgor enforceable in accordance with its terms, except to
the extent that the enforceability hereof may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws
generally affecting creditors' rights and by equitable principles (regardless
of whether enforcement is sought in equity or at law); (d) except to the
extent already obtained or made, no consent of any other party (including,
without limitation, any stockholder or creditor of the Pledgor or any of its
Subsidiaries) and no consent, license, permit, approval or authorization of,
exemption by, notice or report to, or registration, filing or declaration
with, any governmental authority is required to be obtained by the Pledgor in
connection with (i) the execution, delivery or performance of this Agreement,
(ii) the validity or enforceability of this Agreement, (iii) the perfection
or enforceability of the Pledgee's security interest in the Collateral or
(iv) except for compliance with or as may be required by applicable
securities laws and the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of 1976,
the exercise by the Pledgee of any of its rights or remedies provided herein;
(e) the execution, delivery and performance of this Agreement by the Pledgor
does not violate any provision of any applicable law or regulation or of any
order, judgment, writ, award or decree of any court, arbitrator or
governmental authority, domestic or foreign or of the certificate of
incorporation or by-laws of the Pledgor, or of any securities issued by the
Pledgor or any of its Subsidiaries, or of any material mortgage, indenture,
lease, deed of trust, loan agreement, credit agreement or other contract,
agreement or instrument or undertaking to which the Pledgor or any of its
Subsidiaries is a party or which purports to be binding upon the Pledgor or
any of its Subsidiaries or upon any of their respective assets and will not
result in the creation or imposition of (or the obligation to create or
impose) any lien or encumbrance on any of the assets of the Pledgor or any of
its Subsidiaries except as contemplated by this Agreement; (f) all the shares
of the Stock have been duly and validly issued, are fully paid and
nonassessable and are subject to no options to purchase or similar rights;
(g) each of the Pledged Notes to the extent issued by the Pledgor or any of
its Subsidiaries constitutes, or when executed by the obligor thereof will
constitute, the legal, valid and binding obligation of such obligor,
enforceable in accordance with its terms, except to the extent that the
enforceability thereof may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws generally affecting
creditors' rights and by equitable principles (regardless of whether
enforcement is sought in equity or at law); and (h) the pledge, collateral
assignment and delivery to the Pledgee of the Securities (other than
uncertificated securities) pursuant to this Agreement creates a valid and
perfected first priority Lien in the Securities, and the proceeds thereof,
subject to no other Lien or to any agreement purporting to grant to any third
party a Lien on the property or assets of the Pledgor which would include the
Stock. The Pledgor covenants and agrees that it will defend the Pledgee's
right, title and security interest in and to the Securities and the proceeds
thereof against the claims and demands of all persons whomsoever; and the
Pledgor covenants and agrees that it will have like title to and right to
pledge any other property at any time hereafter pledged to the Pledgee as
Collateral hereunder and will likewise defend the right thereto and security
interest therein of the Pledgee and the Secured Creditors.
16. PLEDGOR'S OBLIGATIONS ABSOLUTE, ETC. The obligations of
the Pledgor under this Agreement shall be absolute and unconditional and (except
as provided in Section 18 hereof) shall remain in full force and effect without
regard to, and shall not be released, suspended, discharged, terminated or
otherwise affected by, any circumstance or occurrence whatsoever, including,
without limitation: (a) any renewal, extension, amendment or modification of or
addition or supplement to or deletion from any Secured Debt Agreement or
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any other instrument or agreement referred to therein, or any assignment or
transfer of any thereof; (b) any waiver, consent, extension, indulgence or other
action or inaction under or in respect of any such agreement or instrument
including, without limitation, this Agreement; (c) any furnishing of any
additional security to the Pledgee or its assignee or any acceptance thereof or
any release of any security by the Pledgee or its assignee; (d) any limitation
on any party's liability or obligations under any such instrument or agreement
or any invalidity or unenforceability, in whole or in part, of any such
instrument or agreement or any term thereof; or (e) any bankruptcy, insolvency,
reorganization, composition, adjustment, dissolution, liquidation or other like
proceeding relating to the Pledgor or any Subsidiary of the Pledgor, or any
action taken with respect to this Agreement by any trustee or receiver, or by
any court, in any such proceeding, whether or not the Pledgor shall have notice
or knowledge of any of the foregoing.
17. REGISTRATION, ETC.
(a) If there shall have occurred and be continuing an
Event of Default and acceleration of the Notes then, and in every such case,
upon receipt by the Pledgor from the Pledgee of a written request or requests
that the Pledgor cause any registration, qualification or compliance under
any Federal or state securities law or laws to be effected with respect to
all or any part of the Pledged Stock, the Pledgor as soon as practicable and
at its expense will use its commercially reasonable efforts to cause such
registration to be effected (and be kept effective) and will use its
commercially reasonable efforts to cause such qualification and compliance to
be declared effected (and be kept effective) as may be so requested and as
would permit or facilitate the sale and distribution of such Pledged Stock,
including, without limitation, registration under the Securities Act of 1933,
as then in effect (or any similar statute then in effect), appropriate
qualifications under applicable blue sky or other state securities laws and
appropriate compliance with any other government requirements, PROVIDED that
the Pledgee shall furnish to the Pledgor such information regarding the
Pledgee as the Pledgor may request in writing and as shall be required in
connection with any such registration, qualification or compliance. The
Pledgor 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 furnish to the Pledgee such number of prospectuses,
offering circulars or other documents incident thereto as the Pledgee from
time to time may reasonably request, and will indemnify the Pledgee, each
Secured Creditor and all others participating in the distribution of such
Pledged Stock against all claims, losses, damages and liabilities caused by
any untrue statement (or alleged untrue statement) of a material fact
contained therein (or in any related registration statement, notification or
the like) or by any omission (or alleged omission) to state therein (or in
any related registration statement, notification or the like) a material fact
required to be stated therein or necessary to make the statements therein not
misleading, except insofar as the same may have been caused by an untrue
statement or omission based upon information furnished in writing to the
Pledgor by the Pledgee or such other Secured Creditor expressly for use
therein.
(b) If at any time when the Pledgee shall determine to
exercise its right to sell all or any part of the Pledged Securities pursuant
to SECTION 7 hereof, and such Pledged Securities or the part thereof to be
sold shall not, for any reason whatsoever, be effectively registered under
the Securities Act of 1933, as then in effect, the Pledgee may, in its sole
and absolute discretion, sell such Pledged Securities or part thereof by
private sale in such manner and under such circumstances as the Pledgee may
deem reasonably necessary or advisable in
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order that such sale may legally be effected without such registration. Without
limiting the generality of the foregoing, in any such event the Pledgee, in its
sole and absolute discretion (i) may proceed to make such private sale
notwithstanding that a registration statement for the purpose of registering
such Pledged Securities or part thereof shall have been filed under such
Securities Act, (ii) may approach and negotiate with a single possible purchaser
to effect such sale, and (iii) may restrict such sale to a purchaser who will
represent and agree that such purchaser is purchasing for its own account, for
investment, and not with a view to the distribution or sale of such Pledged
Securities or part thereof. In the event of any such sale, the Pledgee shall
incur no responsibility or liability for selling all or any part of the Pledged
Securities at a price which the Pledgee, in its sole and absolute discretion, in
good ▇▇▇▇▇ ▇▇▇▇▇ reasonable under the circumstances, notwithstanding the
possibility that a substantially higher price might be realized if the sale were
deferred until after registration as aforesaid.
18. TERMINATION; RELEASE.
(a) After the Termination Date (as defined below), this
Agreement and the security interest created hereby shall terminate (provided
that all indemnities set forth in SECTION 11 hereof shall survive any such
termination), and the Pledgee, at the request and expense of the Pledgor, will
execute and deliver to the Pledgor all such proper instruments as Pledgor may
reasonably request acknowledging the satisfaction and termination of this
Agreement, and will duly assign, transfer and deliver to the Pledgor (without
recourse and without any representation or warranty) such of the Collateral as
has not theretofore been sold or otherwise applied or released pursuant to this
Agreement, together with any monies at the time held by the Pledgee or any of
its sub-agents hereunder. As used in this Agreement, "TERMINATION DATE" shall
mean the earlier of (i) the first date occurring after December 31, 1998 on
which Borrower's Most Recent Ratio of Consolidated Debt to Consolidated EBITDA
as of the end of any two consecutive fiscal quarters is less than 2.25 to 1.0 or
(ii) the date upon which the Total Revolving Loan Commitment and all Interest
Rate Agreement or Other Hedging Agreements have been terminated, no Note under
the Credit Agreement is outstanding (and all Loans have been repaid in full),
all Letters of Credit have been terminated and all Obligations then owing have
been paid in full.
(b) Notwithstanding anything to the contrary contained
above, upon the presentment of satisfactory evidence to the Pledgee in its
sole discretion that all obligations evidenced by any Pledged Note have been
repaid in full, and that any payments received by the Pledgor were permitted
to be received by the Pledgor pursuant to SECTION 6 hereof, the Pledgee
shall, upon the request and at the expense of the Pledgor, duly assign,
transfer and deliver to the Pledgor (without recourse and without any
representation or warranty) such Pledged Note if same has not theretofore
been sold or otherwise applied or released pursuant to this Agreement.
(c) In the event that any part of the Collateral is
sold in connection with a sale permitted by SECTION 8.4 of the Credit
Agreement or otherwise released at the direction of the Majority Lenders (or
all Lenders if required by SECTION 11.1 of the Credit Agreement) and the
proceeds of such sale or sales or from such release are applied in accordance
with the provisions of SECTION 4.4 of the Credit Agreement, to the extent
required to be so applied, the Pledgee, at the request and expense of the
Pledgor, will duly assign, transfer and deliver to the Pledgor (without
recourse and without any representation or warranty) such of the
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Collateral as is then being (or has been) so sold or released and has not
theretofore been released pursuant to this Agreement.
(d) At any time that the Pledgor desires that
Collateral be released as provided in the foregoing sub-section (a), (b) or
(c), as the case may be, it shall deliver to the Pledgee a certificate signed
by a Responsible Officer stating that the release of the respective
Collateral is permitted pursuant to such subsection (a), (b) or (c), as the
case may be.
(e) The Pledgee shall have no liability whatsoever to any
Secured Creditor as the result of any release of Collateral by it in accordance
with this SECTION 18.
19. NOTICES ETC. All such notices and communications
hereunder shall be personally delivered, sent by registered or certified
mail, postage prepaid, return receipt requested, or by a reputable courier
delivery service, or by prepaid telex, TWX or telegram (with messenger
delivery specified in the case of a telegram), or by telecopier, and shall be
deemed to be given for purposes of this Agreement on the date received if
deposited in registered or certified mail, postage prepaid, and otherwise on
the day that such writing is delivered or sent to the intended recipient
thereof, or in the case of notice delivered by telecopy, upon completion of
transmission with a copy of such notice also being delivered under any of the
methods provided above. All notices and other communications shall be in
writing and addressed as follows:
(a) if to the Pledgor:
BMC Industries, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
(b) if to the Pledgee, at:
Bankers Trust Company
One Bankers Trust Plaza
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
with copies to:
Bankers Trust Company
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
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Attn: ▇▇▇▇ Anos
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Winston & ▇▇▇▇▇▇
▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
(c) if to any Bank Creditor, either (x) to the Agent,
at the address of the Agent specified in the Credit Agreement or (y) at such
address as such Bank Creditor shall have specified in the Credit Agreement;
(d) if to any Other Creditor at such address as such
Other Creditor shall have specified in writing to the Pledgor and the Pledgee;
or at such other address as shall have been furnished in writing by any Person
described above to the party required to give notice hereunder.
20. WAIVER; AMENDMENT. None of the terms and conditions of
this Agreement may be changed, waived, modified or varied in any manner
whatsoever unless in writing duly signed by the Pledgor and the Pledgee (with
the written consent of the Majority Lenders or, to the extent required by
SECTION 11.1 of the Credit Agreement with the consent of each of the Lenders);
PROVIDED, HOWEVER, that any change, waiver, modification or variance affecting
the rights and benefits of a single Class (as defined below) of Secured
Creditors (and not all Secured Creditors in a like or similar manner) shall
require the written consent of the Requisite Creditors (as defined below) of
such affected Class. For the purpose of this Agreement, the term "CLASS" shall
mean each class of Secured Creditors, I.E., whether (i) the Bank Creditors as
holders of the Credit Agreement Obligations or (ii) the Other Creditors as the
holders of the Other Obligations. For the purpose of this Agreement, the term
"REQUISITE CREDITORS" of any Class shall mean each of (A) with respect to the
Credit Agreement Obligations, the Majority Lenders and (B) with respect to the
Other Obligations, the holders of 51% of all obligations outstanding from time
to time under the Interest Rate Protection Agreements or Other Hedging
Agreements.
21. MISCELLANEOUS. This Agreement shall be binding upon the
parties hereto and their respective successors and assigns and shall inure to
the benefit of and be enforceable by each of the parties hereto and its
successors and assigns. THIS AGREEMENT SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE STATE OF NEW YORK. The headings
in this Agreement are for purposes of reference only and shall not limit or
define the meaning hereof. This Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which shall
constitute one instrument. In the event that any provision of this Agreement
shall prove to be invalid or unenforceable, such provision shall be deemed to be
severable from the other provisions of this Agreement which shall remain binding
on all parties hereto.
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22. RECOURSE. This Agreement is made with full recourse to the
Pledgor and pursuant to and upon all the representations, warranties, covenants
and agreements on the part of the Pledgor contained herein, in the other Loan
Documents, in the Interest Rate Protection or Other Hedging Agreements and
otherwise in writing in connection herewith or therewith.
[signature page follows]
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IN WITNESS WHEREOF, the Pledgor and the Pledgee have caused
this Agreement to be executed by their duly elected officers duly authorized as
of the date first above written.
BMC INDUSTRIES, INC., as Pledgor
By: /s/▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------
Title: Treasurer
---------
BANKERS TRUST COMPANY, as Pledgee
By: /s/▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------
Title: Assistant Vice President
--------------------------
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ANNEX A
TO
PLEDGE AGREEMENT
Part I. PLEDGED STOCK
------------------- ---------------- -------------- -------------- ------------------ ------------------- --------------------
PERCENTAGE OF
OUTSTANDING SHARES
NAME OF TYPE OF NUMBER OF NUMBER OF SHARES SHARE CERTIFICATE OF CAPITAL STOCK
NAME OF PLEDGOR ISSUING SHARES SHARES OUTSTANDING NUMBER
CORPORATION AUTHORIZED
------------------- ---------------- -------------- -------------- ------------------ ------------------- --------------------
BMC Industries, Vision-Ease common 1,000 100 1 100%
Inc. Lens, Inc. (US)
------------------- ---------------- -------------- -------------- ------------------ ------------------- --------------------
BMC Industries, ▇▇▇▇▇▇▇-▇▇▇▇▇ common 100,000 20,000 1 65%
Inc. Holding
Company B.V.
------------------- ---------------- -------------- -------------- ------------------ ------------------- --------------------
Part II. PLEDGED NOTE
1. Note in a stated face amount of EURO 77,000,000 made by ▇▇▇▇▇▇▇-▇▇▇▇▇
Holding Company B.V. in favor of BMC Industries, Inc.
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