Exhibit 10.1
PLEDGE AGREEMENT
from
METALLURG HOLDINGS, INC.,
as Pledgor
to
UNITED STATES TRUST COMPANY OF NEW YORK,
as Trustee
PLEDGE AGREEMENT
PLEDGE AGREEMENT, together with any amendments, replacements and
supplements hereafter entered into (the "Pledge Agreement"), dated July 13,
1998, between Metallurg Holdings, Inc. (together with its successors and
assigns, the "Pledgor") and United States Trust Company of New York, as trustee
(the "Trustee") under the indenture (as the same may be amended from time to
time in accordance with the terms thereof, the "Indenture") relating to the
12.75% Senior Discount Notes due 2008 (together with a series of substantially
identical senior discount notes due 2008 to be issued in exchange for the
originally issued series, the "Notes") of the Pledgor, made for the equal and
ratable benefit of the holders of the Notes (the "Holders"). As used herein,
all capitalized terms not otherwise defined herein shall have the meanings set
forth in the Indenture.
W I T N E S S E T H:
WHEREAS, the Pledgor will issue the Notes in an aggregate principal
amount at maturity of $121,000,000 pursuant to the Indenture; and
WHEREAS, in order to secure on an equal and ratable basis the payment
and performance in full of the obligations to the Holders and the Trustee under
the terms of the Indenture (the "Indenture Obligations"), the parties hereto
desire to set forth their mutual understanding and certain agreements regarding
the terms and conditions of the pledge of the Pledged Collateral (as defined
below) made by the Pledgor to the Trustee for the benefit of the Holders.
NOW, THEREFORE, in consideration of the premises and other benefits to
the Pledgor, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto hereby agree as follows:
Section 1. PLEDGE. As collateral security for the due and prompt
payment in full and complete performance of the Indenture Obligations and all
indebtedness and other liabilities and obligations, whether now existing or
hereafter arising, under, or arising out of, the Indenture, the Pledgor hereby
pledges, assigns, transfers, sets over and delivers unto the Trustee and hereby
grants unto the Trustee for the benefit of the Holders and unto their respective
successors and assigns, a first priority security interest in all of the right,
title and interest of the Pledgor in, to and under any and all of
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the following described property, rights and interests (collectively, the
"Pledged Collateral"):
(a) all of the Equity Interests of Metallurg, Inc. (the
"Pledged Subsidiary") identified on Schedule A attached hereto (for purposes of
this Agreement, "Equity Interests" shall mean any and all issued and outstanding
shares, interests, rights to purchase, warrants, options, participations or
other equivalents of or interests in (however designated) any entity, or any
securities convertible into or exercisable or exchangeable for any such
interests);
(b) all other Equity Interests, now or hereafter owned or
acquired by the Pledgor and wherever located, of the Pledged Subsidiary directly
owned by the Pledgor and the certificates representing such securities, and any
present or future options, warrants or other rights to subscribe for or purchase
any of the foregoing described in subsections 1(a) or 1(b) hereof or any notes,
bonds, debentures or other evidences of indebtedness that (i) are at any time
convertible, exchangeable or exercisable into Equity Interests of the Pledged
Subsidiary or (ii) have or at any time could by their terms have voting rights
with respect to any matter affecting the Pledged Subsidiary and all securities,
certificates and instruments representing or evidencing ownership of any of the
foregoing (the property described in subsections 1(a) and 1(b) hereof, being
referred to herein collectively as the "Pledged Securities"); and
(c) to the extent not included in the foregoing, all of
Pledgor's rights, claims or other general intangibles constituting, or arising
out of or relating to, its rights as a general partner, limited partner or
managing general partner of the Pledged Subsidiary, including without limitation
its share in the profits and losses of the Pledged Subsidiary and its right as
such partner to receive distributions of the Pledged Subsidiary's assets or
income, in each case whether arising under a partnership agreement or applicable
law, created by operation of law, or otherwise;
(d) all obligations for money borrowed ("Indebtedness")
from time to time owed to the Pledgor by the Pledged Subsidiary and the
instruments evidencing such Indebtedness, including, without limitation, all
Indebtedness listed on Schedule B hereto, and all interest, cash, instruments
and other property from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of such Indebtedness;
and
(e) all dividends, distributions, cash, instruments and
other property or securities (including without limitation any security as such
term is defined
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in Article 8 of the Uniform Commercial Code as in effect in the applicable
jurisdiction at such time (the "UCC")), now or hereafter at any time or from
time to time received or receivable or otherwise distributed or distributable in
respect of or in exchange for any or all of the Pledged Collateral and all
proceeds of the Pledged Collateral.
TO HAVE AND TO HOLD the Pledged Collateral, together with all rights, titles,
interests, powers, privileges and preferences pertaining or incidental thereto,
unto the Trustee for the benefit of the Holders and unto their respective
successors and assigns.
Section 2. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE
PLEDGOR. The Pledgor hereby represents and warrants, covenants and agrees that:
(a) The Pledgor is, and as to Pledged Collateral acquired
by it from time to time after the date hereof, will be, the sole legal and
beneficial owner of the Pledged Collateral, and holds, or will hold, the Pledged
Collateral free and clear of all Liens (except for the security interest granted
hereunder to the Trustees for the benefit of Holders), and has not made and will
not make any other pledge, assignment, mortgage, hypothecation or transfer of
the Pledged Collateral. The Pledged Securities are not subject to any put,
call, option or other right in favor of any other person whatsoever.
(b) The Pledged Securities which are shares of stock have
been duly authorized and validly issued and are fully paid and non-assessable.
(c) Except as set forth below, upon delivery of the
certificates evidencing the Pledged Securities to the Collateral Agent and so
long as the Collateral Agent maintains possession of such certificates pursuant
to this Pledge Agreement, the Trustee will have a valid and perfected first
priority security interest in the Pledged Securities. In the case of a Pledged
Security which represents an interest in a partnership, upon filing of a UCC-1
financing statement in the appropriate jurisdiction in connection with such
interest, and upon delivery of the certificate evidencing such interest and so
long as the Collateral Agent maintains possession of such certificate, the
Collateral Agent will have a valid and perfected first priority security
interest in such Pledged Security, which together with the security interest in
the other Pledged Securities will secure the payment and performance in full of
the Indenture Obligations.
(d) The Pledgor has the valid right and legal authority to
pledge the Pledged Collateral in the manner hereby done or contemplated and will
defend its title thereto against the claims of all persons whomsoever and shall
maintain and
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preserve the security interest granted hereunder with respect to the Pledged
Collateral as long as this Pledge Agreement shall remain in full force and
effect.
(e) Neither the execution and delivery of this Pledge
Agreement by the Pledgor nor the consummation of the transactions herein
contemplated nor the fulfillment of the terms hereof (i) violate the Pledgor's
or the Pledged Subsidiary's, charter or bylaws, (ii) violate the terms of any
agreement, indenture, mortgage, deed of trust, equipment lease, instrument or
other document to which the Pledgor or the Pledged Subsidiary, is a party, or by
which any of them may be bound or to which any of their properties or assets may
be subject, which violation or conflict would have a material adverse effect on
the financial condition, business, assets or liabilities of the Pledgor and the
Pledged Subsidiary taken as a whole, or on the value of the Pledged Collateral
or a material adverse effect on the security interests hereunder, or (iii)
conflict with any law, order, rule or regulation applicable to the Pledgor or
the Pledged Subsidiary, of any court or any government, regulatory body or
administrative agency or other governmental body having jurisdiction over the
Pledgor or the Pledged Subsidiary, or its or their Properties, or (iv) result in
or require the creation or imposition of any Lien (other than the Lien
contemplated hereby), upon or with respect to any of the property now owned or
hereafter acquired by the Pledgor or the Pledged Subsidiary, which violation or
conflict would have a material adverse effect on the financial condition,
business, assets or liabilities of the Pledgor and the Pledged Subsidiary taken
as a whole, or on the value of the Pledged Collateral or a material adverse
effect on the security interests hereunder.
(f) The Pledged Securities, as described in Schedule A
attached hereto, include all of the issued and outstanding Equity Interests of
the Pledged Subsidiary as of the date hereof, and all outstanding options,
warrants, calls, commitments of any character whatsoever or other rights to
subscribe for or purchase any property described in subsection 2(a) or any
notes, bonds, debentures or other evidences of indebtedness that (i) are at any
time convertible into Equity Interests of the Pledged Subsidiary or (ii) have or
at any time could by their terms have voting rights with respect to any matters
affecting the Pledged Subsidiary. There is no Indebtedness owed to the Pledgor
by the Pledged Subsidiary as of the date hereof, and Schedule B is accordingly
blank.
(g) No consent or approval which has not been obtained
prior to the date hereof of any other person or entity and no authorization,
approval or other action by, and no notice to or filing with any governmental
body, regulatory authority or securities exchange, was or is necessary as a
condition to the validity of the pledge
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hereunder of the Pledged Collateral, and such pledge is effective to vest in the
Trustee the rights of the Trustee in the Pledged Collateral as set forth herein.
(h) The Pledgor shall deliver to the Trustee concurrently
with the execution of this Pledge Agreement: (i) all certificates and
instruments representing the Pledged Securities described in Schedule A, and
(ii) each other item of Pledged Collateral (including all certificates,
instruments, notes and writings representing or evidencing any such Pledged
Collateral) immediately upon the Pledgor's acquisition thereof. Any and all
Pledged Securities delivered to the Trustee shall be accompanied by undated duly
executed stock powers in blank and by such other instruments of transfer or
documents as the Trustee may reasonably request. The Trustee shall have the
right (in its discretion) to hold the certificates representing the Pledged
Securities in its own name or in the name of its nominee, all in form and
substance sufficient to make effective the pledge hereunder and otherwise
satisfactory to the Trustee.
(i) Upon reasonable request to the Pledgor, the Trustee
shall have full and free access during normal business hours to all of the
books, correspondence and records of the Pledgor relating to the Pledged
Collateral, and the Trustee and its representatives may examine the same, take
extracts therefrom and make photocopies thereof, and the Pledgor agrees to
render to the Trustee, at the Pledgor's cost and expense, such clerical and
other assistance as may be reasonably requested by the Trustee with regard
thereto.
(j) The Pledgor will comply in all material respects with
all requirements of law applicable to the Pledged Collateral or any part thereof
and use its best efforts to obtain all approvals as may be required to effect
any of the granting clauses of this Pledge Agreement.
(k) The Pledgor shall not permit the Pledged Subsidiary to
issue to the Pledgor or any of its Affiliates (other than a Restricted
Subsidiary) any securities of the type required to be pledged hereunder unless
such securities are promptly pledged and delivered hereunder to the Trustee in
accordance with Section 1. In addition, the Pledgor shall not permit the
Pledged Subsidiary to issue any securities of the type required to be pledged
hereunder unless such issuance is made in compliance with the terms of the
Indenture.
(l) If, while this Pledge Agreement is in effect, any stock
dividend, stock split, reclassification, readjustment, reorganization, merger,
consolidation, exchange offer, tender offer or other change in the capital
structure, including the
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creation of any subscription or other rights or other Pledged Securities, is
declared or made, or proposed to be declared or made, by the Pledged Subsidiary,
all substituted and additional securities or interest issued with respect to the
Pledged Collateral and evidenced by certificates shall be endorsed in blank by
the Pledgor promptly upon receipt thereof or otherwise appropriately transferred
to the Trustee in negotiable form, and all certificates or instruments
evidencing such securities shall be delivered to the Trustee to be held under
the terms of this Pledge Agreement in the same manner as, and as a part of, the
Pledged Collateral. All Pledged Securities shall be evidenced by one or more
certificates. Any securities that may be issued upon exercise of any
subscription or other rights relating to the Pledged Securities shall be
endorsed in blank and delivered to the Trustee with any necessary powers.
(m) The Pledgor shall pay and discharge all taxes,
assessments and governmental charges or levies against any Pledged Collateral
prior to delinquency thereof and shall keep all Pledged Collateral free of all
unpaid charges whatsoever, unless contested in good faith and appropriate
reserves have been set aside in accordance with GAAP.
(n) The Pledgor has, independently and without reliance on
the Trustee and/or any Holder and based on such documents and information as it
deemed appropriate, made its own credit analysis and decision to enter into this
Pledge Agreement.
(o) In the event that the Trustee desires to exercise any
remedies, voting or consensual rights or attorney-in-fact powers set forth in
this Pledge Agreement and determines it necessary to obtain any approvals
therefor, then, upon the request of the Trustee, the Pledgor agrees to use its
best efforts to assist and aid the Trustee to obtain as soon as possible any
necessary approvals for the exercise of any such remedies, rights and powers.
(p) The Pledgor has delivered to the Trustee a duly
executed acknowledgment from the Pledged Subsidiary acknowledging the
registration on its books and records of the pledge of the Pledged Securities
pursuant to this Agreement.
(q) There are no voting trusts or other agreements or
understandings to which Pledgor is a party or by which it may be bound with
respect to voting, managerial consent, election or other rights of Pledgor
relating to the Pledged Securities.
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(r) The principal place of business and chief executive
office of Pledgor and the office where Pledgor keeps its records concerning the
Pledged Collateral shall be [c/o Safeguard International Fund, L.P., 800 The
Safeguard Building, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇].
Section 3. ADMINISTRATION OF THE PLEDGED COLLATERAL. The Trustee
shall administer the Pledged Collateral in accordance with the provisions hereof
and of the Indenture.
Section 4. RELEASE AND SUBSTITUTION OF PLEDGED COLLATERAL. The
Pledged Collateral shall not be released from the security interest created
hereunder and no property shall be substituted for any of the Pledged
Collateral, except in accordance with the provisions of Sections 5 and 18
hereof; PROVIDED that Pledged Collateral may be released from the security
interest created hereunder in connection with any disposition thereof by the
Pledgor made in accordance with the Indenture, so long as no "Default" or "Event
of Default" (as defined in the Indenture) is in existence at the time of or
immediately after giving effect thereto.
Section 5. VOTING RIGHTS, DIVIDENDS, ETC.
(a) So long as no Event of Default shall have occurred and
be continuing and notwithstanding any other section hereof:
(i) the Pledgor shall be entitled to exercise any and all
voting or consensual rights and powers, including subscription rights,
accruing to an owner of the Pledged Collateral or any part thereof for any
purpose not inconsistent with the terms of this Pledge Agreement or any
agreement giving rise to any of the Indenture Obligations;
(ii) the Pledgor shall be entitled to receive, retain and
use any and all dividends, distributions or other payments which are
permitted by the Indenture and paid on the Pledged Collateral in cash or
property (other than securities which are subject to this Agreement);
(iii) the Trustee shall execute and deliver to the
Pledgor or cause to be executed and delivered to the Pledgor, all such
proxies, powers of attorney, dividend orders and other instruments as the
Pledgor may reasonably request in writing for the purpose of enabling it to
exercise the voting or consensual rights and powers which the Pledgor is
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entitled to exercise pursuant to the foregoing subparagraph (i) or to
receive the dividends, distributions or other payments which the Pledgor is
authorized to retain pursuant to the foregoing subparagraph (ii).
(b) Upon the occurrence and during the continuance of an
Event of Default, all rights of the Pledgor to exercise the voting or consensual
rights and powers which the Pledgor would otherwise be entitled to exercise
pursuant to subparagraph (i) of Section 5(a) hereof and to receive the
dividends, distributions and other payments which the Pledgor would otherwise be
authorized to receive and retain pursuant to subsection (ii) of Section 5(a)
shall automatically cease, and all such rights shall thereupon become vested in
the Trustee, which shall then have the sole and exclusive right and authority to
exercise all such voting and consensual rights and powers and to receive and
retain as Pledged Collateral all such dividends, distributions and other
payments. Any and all money and other property paid over to or received by the
Trustee pursuant to the provisions of this Section 5(b) shall be retained by the
Trustee as Pledged Collateral hereunder and shall be administered and applied in
accordance with the provisions of this Pledge Agreement and the Indenture. All
dividends and interest payments which are received by the Pledgor contrary to
the provisions of this subsection (b) shall be received in trust for the benefit
of the Trustee, shall be segregated from other funds of the Pledgor and shall be
forthwith paid over to the Trustee as Pledged Collateral in the same form as so
received (with any necessary endorsement).
Section 6. DEFAULT; REMEDIES.
(a) EXERCISE OF REMEDIES UNDER THE PLEDGE AGREEMENT. If an
Event of Default shall have occurred and be continuing, the Trustee shall
commence the taking of such actions (or refrain from taking actions) toward
collection or enforcement of this Pledge Agreement and the Pledged Collateral
(or any portion thereof), including without limitation action toward foreclosure
upon any Pledged Collateral, as it deems appropriate in its sole discretion.
(b) REMEDIES GENERALLY. If an Event of Default shall have
occurred and be continuing, the Trustee itself or by its agents or attorneys may
(i) exercise any or all of its rights and remedies hereunder, under the
Indenture or any other instrument or agreement securing, evidencing or relating
to the Indenture Obligations or under applicable laws (including all of the
rights and remedies of a secured creditor under the Uniform Commercial Code then
in effect in the State of New York; the "NUCC"), (ii) retain the Pledged
Collateral or (iii) sell, assign, transfer, or dispose of, endorse and deliver
the whole or, from time to time, any part of the Pledged Collateral
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at public or private sale or sales, at any exchanges, brokers board or at any of
the Trustee's offices or elsewhere, for cash, upon credit or for other property,
for immediate or future delivery, and for such price or prices and on such other
terms that the Trustee may deem commercially reasonable (in its liability for
loss or damage). Upon consummation of any such sale, the Trustee shall have the
right to assign, transfer, endorse and deliver to the purchaser or purchasers
thereof the Pledged Collateral so sold. Each such purchaser at any such sale
shall hold the property sold absolutely free from any claim or right on the part
of the Pledgor, and the Pledgor hereby waives (to the full extent permitted by
law) all rights of redemption, stay or appraisal which the Pledgor now has or
may at any time in the future have under any rule of law or statute now existing
or hereafter enacted. The Trustee shall give the Pledgor at least 10 Business
Days' written notice (which the Pledgor agrees shall be deemed to be reasonable
notification within the meaning of Section 9-504(3) of the NUCC) of the
Trustee's intention to make any such public or private sale. Any such sale
shall be held at such time or times and at such place or places as the Trustee
may deem commercially reasonable. At any such sale, the Pledged Collateral, or
portion thereof to be sold, may be sold as an entirety or in separate portions,
as the Trustee may deem commercially reasonable. The Trustee shall not be
obligated to make any sale of the Pledged Collateral if it shall determine not
to do so, regardless of the fact that notice of sale of the Pledged Collateral
may have been given. The Trustee may adjourn any public or private sale or
cause the same to be adjourned from time to time by announcement at the time and
place fixed for sale, and such sale may, without further notice, be made at the
time and place to which the same was so adjourned. In case sale of all or any
part of the Pledged Collateral is made on credit for future delivery, the
Pledged Collateral so sold may be retained by the Trustee until the sale price
is paid by the purchaser or purchasers thereof, but the Trustee shall not incur
any liability in case any such purchaser or purchasers shall fail to take up and
pay for the Pledged Collateral so sold and, in case of any such failure, such
Pledged Collateral may be sold again upon like notice. As an alternative to
exercising the power of sale herein conferred upon it, the Trustee may proceed
by suit or suits at law or in equity to exercise its remedies regarding the
Pledged Collateral and sell the Pledged Collateral or any portion thereof
pursuant to judgment or decree of a court or courts having competent
jurisdiction. If under mandatory requirements of applicable law, the Trustee
shall be required to make disposition of the Pledged Collateral within a period
of time that does not permit the giving of notice to the Pledgor as herein
before provided, the Trustee need give the Pledgor only such notice of
disposition as shall be reasonably practicable in view of such mandatory
requirements of law.
(c) PREVENTING IMPAIRMENT OF THE PLEDGED COLLATERAL.
Regardless of whether or not there shall have occurred any Event of Default, the
Trustee may
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institute and maintain or cause in its name or in the name of the Pledgor or
either of them, to be instituted and maintained, such suits and proceedings as
the Trustee may be advised by counsel shall be necessary or expedient to prevent
any impairment of the security interest in or perfection of the Pledged
Collateral in contravention of the terms of the Indenture. The Pledgor agrees
not to knowingly take or permit to be taken any action which would impair the
Pledged Collateral or the Trustee's rights in the Pledged Collateral.
Section 7. TRUSTEE APPOINTED ATTORNEY-IN-FACT. The Pledgor hereby
constitutes and appoints the Trustee its attorney-in-fact, during the occurrence
and continuance of an Event of Default, for the purpose of carrying out the
provisions, but subject to the terms and conditions, of this Pledge Agreement
and taking any action and executing any instrument, including, without
limitation, any financing statement or continuation statement, and taking any
other action to maintain the validity, perfection, priority and enforcement of
the security interest intended to be created hereunder, that the Trustee may
deem necessary or advisable to accomplish the purposes hereof, which appointment
is irrevocable and coupled with an interest; PROVIDED, HOWEVER, that nothing
herein contained shall be construed as requiring or obligating the Trustee to
make any commitment or to make any inquiry as to the nature or sufficiency of
any payment received by it, or to present or file any claim or notice, or to
take any action with respect to the Pledged Collateral or any part thereof or
the monies due or to become due in respect thereof or any property covered
thereby, and no action taken or omitted or any part thereof shall give rise to
any defense, counterclaim or right of action against the Trustee, unless the
Trustee's actions are taken or omitted to be taken with gross negligence or bad
faith or constitute willful misconduct.
Section 8. PURCHASE OF PLEDGED COLLATERAL BY THE TRUSTEE OR
HOLDERS. At any sale of the Pledged Collateral, whether pursuant to power of
sale or otherwise hereunder, the Trustee or any Holder may, to the extent
permitted by applicable law, bid for and purchase, free from any right of
redemption (all such rights being hereby waived and released by the Pledgor to
the extent permitted by law), the Pledged Collateral or any part thereof or an
interest therein and upon compliance with the terms of such sale may hold,
retain, exploit, resell or otherwise dispose of such property without further
accountability to the Pledgor for the proceeds of such sale. The Pledgor will
execute and deliver or cause to be executed and delivered, such instruments,
endorsements, assignments, waivers, certificates and other documents and take
such further action as the Trustee shall request in connection with any such
sale.
Section 9. PAYMENTS AND PROCEEDS.
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All distributions to the Trustee with respect to the Pledged
Collateral after the occurrence of an Event of Default shall first be applied
to the reasonable costs and expenses, including attorneys' fees, incurred by the
Trustee in taking such foreclosure action and thereafter shall be applied by the
Trustee as provided in the Indenture. After payment in full of all Indenture
Obligations, the remaining proceeds from any foreclosure hereunder shall be paid
to the Pledgor, or its successors or assigns, or to whomsoever may be lawfully
entitled to receive the same or as a court of competent jurisdiction may direct,
any surplus then remaining from such Proceeds.
Section 10. WAIVER OF CLAIMS. Except as otherwise provided in this
Pledge Agreement, THE PLEDGOR HEREBY WAIVES, TO THE EXTENT PERMITTED BY
APPLICABLE LAW, NOTICE OF JUDICIAL HEARING IN CONNECTION WITH THE TRUSTEE'S
TAKING POSSESSION OR THE TRUSTEE'S DISPOSITION OF ANY OF THE PLEDGED COLLATERAL,
INCLUDING, WITHOUT LIMITATION, ANY AND ALL PRIOR NOTICES AND HEARINGS FOR ANY
PREJUDGMENT REMEDY OR REMEDIES AND ANY SUCH RIGHT THAT THE PLEDGOR WOULD
OTHERWISE HAVE UNDER THE CONSTITUTION OR ANY STATUTE OF THE UNITED STATES OR OF
ANY STATE, and, to the full extent permitted by applicable law, the Pledgor
hereby further waives:
(a) all damages occasioned by such taking of possession
except any damages which are the direct result of the Trustee's gross
negligence, bad faith or willful misconduct;
(b) all other requirements as to the time, place and terms
of sale or other requirements, with respect to the enforcement of the Trustee's
rights and powers hereunder; and
(c) except as provided in Section 6(c) hereof, all rights
of redemption, appraisement, valuation, stay, marshalling of assets, extension
or moratorium, existing at law or in equity, by statute or otherwise, now or
hereafter in force, in order to prevent or delay the enforcement of this Pledge
Agreement or the sale or other disposition of the Pledged Collateral or any
portion thereof, and the Pledgor, for itself and all who may claim under it,
insofar as it now or hereafter lawfully may, hereby waives all such rights.
Any sale of, or the exercise of any options to purchase, or any other
realization upon, any Pledged Collateral shall operate to divest all right,
title, interest,
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claim and demand, at law or in equity, of the Pledgor therein and thereto, and
shall be a perpetual bar both at law and in equity against the Pledgor and
against any and all persons claiming or attempting to claim the Pledged
Collateral so sold, optioned or realized upon, or any part thereof, through and
under the Pledgor.
Section 11. REMEDIES CUMULATIVE; NO WAIVER. Each right, power and
remedy of the Trustee provided for herein or in another agreement pursuant to
which a Lien is created in favor of the Trustee for the benefit of any Holder,
or now or hereafter existing at law or in equity, by statute or otherwise, shall
be cumulative and concurrent and shall be in addition to every other right,
power or remedy of the Trustee or any Holder provided for herein or in another
agreement pursuant to which a Lien is created in favor of the Trustee for the
benefit of any Holder or now or hereafter existing at law or in equity, by
statute or otherwise. No failure on the part of the Trustee or any Holder to
exercise, and no delay in exercising, any right, power or remedy hereunder, or
in another agreement pursuant to which a Lien is created in favor of the Trustee
for the benefit or any Holder or now or hereafter existing at law or in equity,
by statute or otherwise, shall operate as a waiver thereof, nor shall any single
or partial exercise of any such right, power or remedy preclude any other or
further exercise thereof or the exercise of any other right, power or remedy.
No notice to or demand on the Pledgor hereunder shall, of itself, entitle the
Pledgor to any other or further notice or demand in the same, similar or other
circumstances.
Section 12. ADDITIONAL COLLATERAL. Without notice or consent of
any Pledgor and without impairment of the security interests and rights created
by this Pledge Agreement, the Trustee may accept from any person or persons
additional collateral or other security for the Indenture Obligations. Neither
the creation of the security interests created hereunder nor the acceptance of
any such additional collateral or security shall prevent the Trustee from
resorting to such additional collateral or security or to the Pledged
Collateral, in any order without affecting the Trustee's rights hereunder.
Section 13. FURTHER ASSURANCES. The Pledgor agrees (i) that it
shall, at its own expense, promptly file or record such notices, financing
statements, continuation statements or other documents and take all further
action as may be necessary to perfect, maintain and protect the validity,
perfection and priority of the security interests of the Trustee hereunder or to
enable the Trustee to exercise and enforce its rights and remedies hereunder
with respect to the Pledged Collateral, and as the Trustee may reasonably
request, such instruments to be in form and substance satisfactory to the
Trustee, and (ii) that it shall, at its own expense, do such further acts and
things and execute and deliver
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to the Trustee such additional conveyances, assignments, agreements and
instruments as the Trustee may at any time reasonably request in connection with
the administration and enforcement of this Pledge Agreement or relative to the
Pledged Collateral or any part thereof or in order to assure and confirm unto
the Trustee its rights, powers and remedies hereunder.
The Pledgor agrees that it will notify the Trustee in writing not less
than 30 days prior to any change in location and the creation of a new location
of (a) the principal place of business or chief executive office and (b) the
offices where the Pledgor's books and records and related information concerning
the Pledged Collateral are kept; PROVIDED, HOWEVER, that no such change may be
effected before all filings required to be made and all other necessary action
to preserve the perfection of the first priority security interest of the
Trustee in the Collateral shall have been made or taken.
The Pledgor will not change its name, identity or structure in any
manner which might make any financing statement filed hereunder incorrect or
misleading unless Pledgor shall have given the Trustee at least 30 days' prior
written notice thereof and shall have properly amended all financing statements
and properly filed all additional financing statements necessary to maintain the
perfection of the security interest granted hereunder at all times and shall
have provided the Trustee with an Officers' Certificate certifying that the
above steps have been taken.
Section 14. INDEMNIFICATION. The Trustee shall have such indemnity
as is provided under Section 7.07 of the Indenture.
Section 15. REGISTRATION RIGHTS, ETC.
(a) If the Trustee determines that the registration of any
of the securities included in the Pledged Collateral under, or other compliance
with, the Securities Act or any similar federal or state law is desirable, upon
or at any time after an Event of Default and acceleration of either issue of the
Notes, the Pledgor will use its best efforts to cause such registration or
compliance to be effectively made, at no expense to the Trustee or to the
Holders, and to continue any such registration effective for such time as may be
reasonably necessary in the opinion of the Trustee. The Pledgor will reimburse
the Trustee upon demand for any expenses incurred by the Trustee (including
reasonable attorneys' fees and expenses) incurred in connection therewith, which
obligation to pay such expenses shall be secured hereunder.
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(b) If the Pledgor is unable to effect a public sale of any
or all of the Pledged Collateral or if the Trustee determines that it is
desirable to sell the Pledged Collateral in one or more private sales, the
Trustee may limit such sales 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 view to distribution or resale. The
Pledgor acknowledges and agrees that any such private sale may result in prices
and other terms less favorable to the seller than if such sale were a public
sale and, notwithstanding such circumstances, agrees that any such private sale
shall be deemed to have been made in a commercially reasonable manner. The
Trustee shall be under no obligation to delay a sale of any of the Pledged
Collateral 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 even if such issuer would agree to do
so.
(c) The Pledgor further agrees to do or cause to be done
all such other acts and things as may be necessary to make such sale or sales of
all or any part of the Pledged Collateral valid and binding and in compliance
with any and all applicable law, rules, regulations, orders or decrees, all at
the Pledgor's expense. The Pledgor further agrees that a breach of any of the
covenants contained in this Pledge Agreement will cause irreparable injury to
the Trustee, as secured party, for which the Trustee would have no adequate
remedy at law in respect of such breach and, as a consequence, agrees that each
and every covenant contained in this Section 15 shall be specifically
enforceable against the Pledgor and the Pledgor waives and agrees not to assert
any defenses against an action for specific performance of such covenants.
Section 16. PLEDGOR'S INDENTURE OBLIGATIONS ABSOLUTE. The
liability of the Pledgor under this Pledge Agreement shall remain in full force
and effect without regard to, and shall not be released, suspended, discharged,
terminated or otherwise affected by (a) any change in the time, place or manner
of payment of all or any of the Indenture Obligations, or in any other term of
the Indenture, the Notes, any waiver, indulgence, renewal, extension, amendment
or modification of or addition, consent or supplement to or deletion from or any
other action or inaction under or in respect of the Indenture, the Notes or any
assignment or transfer thereof; (b) any lack of validity or enforceability, in
whole or in part, of the Indenture or the Notes; (c) any furnishing of any
additional security for the Indenture Obligations or any acceptance thereof or
any release or non-perfection of any security interest in the Pledged
Collateral; (d) any limitation on any party's liability or obligations under the
Indenture or the Notes; (e) any bankruptcy, insolvency, reorganization,
composition, adjustment, dissolution, liquidation or other like proceeding
relating to a Pledgor, or any action taken with respect to
14
this Pledge 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; (f) any exchange, release or amendment or waiver of or consent to
departure from any agreement pursuant to which a Lien is created in favor of the
Trustee for the benefit of the Holder, pursuant to which a person other than the
Pledgor has granted a security interest; or (g) any other circumstance that
might otherwise constitute a defense available to, or a discharge of the
Pledgor.
Section 17. WAIVER. To the extent permitted by applicable law, the
Pledgor hereby waives promptness, diligence, notice of acceptance and any other
notice with respect to any of the Indenture Obligations and this Pledge
Agreement and any requirement that the Trustee protect, secure, perfect or
insure any security interest or any property subject thereto or exhaust any
right or take any action against the Pledgor or any other person or entity;
PROVIDED, HOWEVER, that the Trustee shall in any event take such care in the
handling of any Pledged Securities in its possession as it takes with respect to
Property of a similar nature in its possession.
Section 18. TERMINATION. Upon payment and performance in full and
satisfaction of all of the obligations of the Pledgor or its successors or
assigns under the Indenture and all other amounts payable under this Pledge
Agreement, this Pledge Agreement shall terminate and the Trustee shall assign
and redeliver to the Pledgor all of the Pledged Collateral hereunder that has
not been sold, disposed of, retained or applied by the Trustee in accordance
with the terms hereof. Such reassignment and redelivery shall be without
warranty by or recourse to the Trustee, and shall be at the expense of the
Pledgor. At such time, this Pledge Agreement shall no longer constitute a Lien
upon or grant any security interest in any of the Pledged Collateral, and the
Trustee shall, at the Pledgor's expense deliver to the Pledgor written
acknowledgment thereof and of cancellation of this Pledge Agreement in a form
reasonably requested by the Pledgor; PROVIDED, HOWEVER, that this Pledge
Agreement shall continue to be effective or be reinstated, as the case may be,
if at any time any payment of any of the Indenture Obligations is rescinded or
must otherwise be returned upon the insolvency, bankruptcy or reorganization of
the Pledgor or the Pledged Subsidiary all as though such payment had not been
made.
Section 19. NOTICES. Any notices or other communications required
or permitted hereunder shall be in writing, and shall be sufficiently given if
made by hand delivery, by telex, by facsimile or registered or certified mail,
postage prepaid, return receipt requested, addressed as provided in Section
11.02 of the Indenture.
15
Any party hereto may by notice to the other party designate such
additional or different addresses as shall be furnished in writing by such
party. Any notice or communication to any party shall be deemed to have been
given or made as of the date so delivered, if personally delivered; when
answered back, if telexed; when receipt is acknowledged, if faxed; and five
calendar days after mailing, if sent by registered or certified mail (except
that a notice of change of address shall not be deemed to have been given until
actually received by the addressee). The Pledgor may give notice to the Holders
at the addresses set forth for them in the register kept by the Registrar under
the Indenture or may request that the Trustee notify the Holders at such
addresses at the expense of the Pledgor.
Section 20. BINDING AGREEMENT; ASSIGNMENT. This Pledge Agreement
shall be binding upon and inure to the benefit of the Trustee, the Pledgor and
their respective successors and permitted assigns. Neither this Pledge
Agreement nor any interest herein or in the Pledged Collateral, or any part
thereof, may be assigned by the Pledgor without the prior written consent of the
Trustee (which consent shall not be unreasonably withheld). This Pledge
Agreement shall be deemed to be automatically assigned by the Trustee to any
person who succeeds to such Trustee in accordance with Article 7 of the
Indenture, and its assignee shall have all rights and powers of, and act as,
such Trustee hereunder.
Section 21. GOVERNING LAW. THIS PLEDGE AGREEMENT SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT
GIVING EFFECT TO CONFLICT OF LAWS PRINCIPLES THEREOF.
Section 22. AMENDMENTS. This Pledge Agreement may not be amended
or modified, except with the consent of the Pledgor and the Trustee in
accordance with Article 9 of the Indenture as it exists on the date hereof.
Section 23. SEVERABILITY. In the event that any provision
contained in this Pledge Agreement shall for any reason beheld to be illegal or
invalid under the laws of any jurisdiction, such illegality or invalidity shall
in no way impair the effectiveness of any other provision hereof, or of such
provision under the laws of any other jurisdiction; PROVIDED, that in the
construction and enforcement of such provision under the laws of the
jurisdiction in which such holding of illegality or invalidity exists, and to
the extent only of such illegality or invalidity, this Pledge Agreement shall be
construed and enforced as though such illegal or invalid provision had not been
contained herein.
16
Section 24. HEADINGS. Section headings used herein are inserted
for convenience only and shall not in any way affect the meaning or construction
of any provision of this Pledge Agreement.
Section 25. COUNTERPARTS. This Pledge Agreement may be executed in
any number of counterparts, each of which when so executed and delivered shall
be an original, and all of which shall together constitute but one and the same
instrument. A complete set of counterparts shall be lodged with the Trustee.
Section 26. EXPENSES. The Pledgor will upon demand pay to the
Trustee the amount of any and all reasonable expenses, including the reasonable
fees and expenses of its counsel and of any experts and agents, which the
Trustee may incur in connection with (i) the administration of this Pledge
Agreement, (ii) the custody or presentation of, or the sale of, collection from,
or other realization upon, any of the Pledged Collateral, (iii) the exercise or
enforcement of any of the rights of the Trustee hereunder or (iv) the failure by
the Pledgor to perform or observe any of the provisions hereof.
Section 27. NO RECOURSE AGAINST OTHERS. A direct or indirect
partner, director, officer, employee or stockholder, as such, past, present or
future of the Pledgor or any successor entity shall not have any personal
liability in respect of the obligations of the Pledgor under this Agreement by
reason of its status as such partner, stockholder, employee, officer or
director, to the extent such liabilities may be waived under applicable law.
17
IN WITNESS WHEREOF, the parties have caused this Pledge Agreement to
be executed and delivered by their respective officers thereunto duly authorized
as of the day and first written above.
METALLURG HOLDINGS, INC.
By:/s/▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------
Title: Vice President
----------------------------
UNITED STATES TRUST COMPANY OF NEW YORK,
as Trustee
By:/s/▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------
Title: Senior Vice President
----------------------------
SCHEDULE A
PLEDGED SECURITIES
Percentage
Class of Stock/ Number of
Stock Equity Certificate of Outstanding
Issuer Interest No.(s) Shares Equity
Metallurg, Inc. Common Stock 2 100 100%
SCHEDULE B
PLEDGED DEBT
None