Exhibit 10.32
EXECUTION COPY
PLEDGE AGREEMENT
PLEDGE AGREEMENT, dated as of June 19, 1998 (as amended,
restated, modified or supplemented from time to time, this "Agreement"), made by
each of the undersigned pledgors (each, a "Pledgor" and, together with any other
entity that becomes a party hereto pursuant to Section 22 hereof, the
"Pledgors"), in favor of BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION,
as Collateral Agent (the "Pledgee"), for the benefit of the Secured Creditors
(as defined below). Except as otherwise defined herein, terms used herein and
defined in the Credit Agreement (as defined below) shall be used herein as
therein defined.
W I T N E S S E T H :
WHEREAS, CII Technologies, Inc. ("Holdings"), Communications
Instruments, Inc. (the "Borrower"), the several financial institutions from time
to time party thereto (the "Lenders"), Bank of America National Trust and
Savings Association, as an Issuing Lender and Swingline Lender, Bank of America
National Trust and Savings Association, as Administrative Agent (together with
any successor agent, the "Administrative Agent", and together with the Pledgee,
the Issuing Lenders, the Swingline Lender and the Lenders, the "Lender
Creditors"), have entered into a Credit Agreement, dated as of June 19, 1998 (as
amended, restated, modified or supplemented from time to time, the "Credit
Agreement"), providing for the making of Loans to the Borrower and the issuance
of, and participation in, Letters of Credit for the account of the Borrower, all
as contemplated therein;
WHEREAS, the Borrower may from time to time be party to one or
more Interest Rate Protection Agreements or Other Hedging Agreements with one or
more Lenders or with an affiliate of a Lender (each such Lender or affiliate,
even if the respective Lender subsequently ceases to be a Lender under the
Credit Agreement for any reason, together with such Lender's or affiliate's
successors and assigns, collectively, the "Other Creditors," and together with
Lender Creditors, the "Secured Creditors");
WHEREAS, pursuant to Article X of the Credit Agreement,
Holdings has guaranteed to the Secured Creditors the payment when due of all
obligations and liabilities of the Borrower under or with respect to the Loan
Documents and the Interest Rate Protection Agreements or Other Hedging
Agreements;
WHEREAS, pursuant to the Subsidiary Guaranty, each Pledgor
(other than Holdings and the Borrower) has jointly and severally guaranteed to
the Secured Creditors the payment when due of all obligations and liabilities of
the Borrower under or with respect to the Loan Documents and the Interest Rate
Protection Agreements or Other Hedging Agreements;
WHEREAS, it is a condition precedent to the making of Loans to
the Borrower and the issuance of Letters of Credit for the account of the
Borrower under the Credit Agreement that each Pledgor shall have executed and
delivered to the Pledgee this Agreement; and
WHEREAS, each Pledgor desires to execute this Agreement to
satisfy the conditions described in the preceding paragraph;
NOW, THEREFORE, in consideration of the benefits accruing to
each Pledgor, the receipt and sufficiency of which are hereby acknowledged, each
Pledgor hereby makes the following representations and warranties to the Pledgee
and hereby covenants and agrees with the Pledgee as follows:
1. SECURITY FOR OBLIGATIONS. This Agreement is made by each
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
liabilities (including obligations which, but for the automatic stay
under Section 362(a) of the Bankruptcy Code, would become due) of such
Pledgor, now existing or hereafter incurred under, arising out of or in
connection with any Loan Document to which such Pledgor is a party and
the due performance and compliance by such Pledgor with the terms of
each such Loan Document, including, without limitation, in the case of
the Borrower, all "Obligations" under and as defined in the Credit
Agreement, and in the case of each other Pledgor, all "Guaranteed
Obligations" under and as defined in the Credit Agreement or the
Subsidiary Guaranty, as applicable (all such obligations and
liabilities under this clause (i), except to the extent consisting of
obligations or indebtedness with respect to Interest Rate Protection
Agreements or Other Hedging Agreements, being herein collectively
called the "Loan Document Obligations");
(ii) the full and prompt payment when due (whether at the
stated maturity, by acceleration or otherwise) of all obligations
(including obligations which, but for the automatic stay under Section
362(a) of the Bankruptcy Code, would become due) and liabilities of
such Pledgor, now existing or hereafter incurred under, arising out of
or in connection with any Interest Rate Protection Agreement or Other
Hedging Agreement including, in the case of the Pledgors other than the
Borrower, all obligations of such Pledgor under Article X of the Credit
Agreement or the Subsidiary Guaranty, as the case may be, in respect of
Interest Rate Protection Agreements or Other Hedging Agreements (all
such obligations and liabilities under this clause (ii) being herein
collectively called the "Other Obligations");
(iii) any and all sums advanced by the Pledgee in order to
preserve the Collateral (as hereinafter defined) or preserve its
security interest in the Collateral;
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(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
(such term, as used in this Agreement, shall mean any Event of Default
under, and as defined in, the Credit Agreement, or any payment default
by the Borrower under any Interest Rate Protection Agreement or Other
Hedging Agreement and shall in any event include, without limitation,
any payment default (after the expiration of any applicable grace
period) on any of the Obligations (as hereinafter defined)) shall have
occurred and be continuing, the reasonable expenses of retaking,
holding, preparing for sale or lease, selling or otherwise disposing 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;
all such obligations, liabilities, sums and expenses set forth in clauses (i)
through (v) of this Section 1 being herein collectively called the
"Obligations".
2. DEFINITION OF STOCK, NOTES, SECURITIES, ETC. As used
herein: (i) the term "Stock" shall mean (x) with respect to corporations
incorporated under the laws of the United States or any State or territory
thereof (each, a "Domestic Corporation"), all of the issued and outstanding
shares of capital stock of any Domestic Corporation at any time owned by each
Pledgor, and (y) with respect to corporations not Domestic Corporations (each, a
"Foreign Corporation"), all of the issued and outstanding shares of capital
stock at any time directly owned by any Pledgor of any Foreign Corporation,
provided that, except as provided in the last sentence of this Section 2, such
Pledgor shall not be required to pledge hereunder more than 66% of the total
combined voting power of all classes of capital stock of any Foreign Corporation
entitled to vote; (ii) the term "Notes" shall mean (x) all Intercompany Notes at
any time issued to each Pledgor and (y) all other promissory notes from time to
time issued to, or held by, each Pledgor; provided, that, except as provided in
the last sentence of this Section 2, no Pledgor shall be required to pledge
hereunder any promissory notes (including Intercompany Notes) issued to such
Pledgor by any Subsidiary of such Pledgor which is a Foreign Corporation and
(iii) the term "Securities" shall mean all of the Stock and Notes. Each Pledgor
represents and warrants that on the date hereof (i) the Stock held by such
Pledgor consists of the number and type of shares of the stock of the
corporations as described in Annex A hereto; (ii) such Stock constitutes that
percentage of the issued and outstanding capital stock of the issuing
corporation as is set forth in Annex A hereto; (iii) the Notes held by such
Pledgor consist of the promissory notes described in Annex B hereto where such
Pledgor is listed as the Lender; and (iv) on the date hereof, such Pledgor owns
no other Securities. In the circumstances and to the extent provided in Section
7.12(b) of the Credit Agreement, the 66% limitation set forth in the proviso of
clause (i)(y) of this Section 2, the limitation set forth in the proviso of
clause (ii)(y) of this Section 2, and the limitations set forth in the last
sentence in Section 3.2 hereof, in each case shall no longer be
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applicable and such Pledgor shall duly pledge and deliver to the Pledgee such of
the Securities not theretofore required to be pledged hereunder.
3. PLEDGE OF SECURITIES, ETC.
3.1. Pledge. To secure the Obligations and for the purposes
set forth in Section 1 hereof, each Pledgor hereby: (i) grants to the Pledgee a
security interest in all of the "Collateral" (as defined in Section 3.4 hereof)
now or hereafter owned by such Pledgor; (ii) pledges and deposits as security
with the Pledgee the Securities now or hereafter owned by such Pledgor, and
delivers to the Pledgee certificates or instruments with respect to such
Securities owned by such Pledgor on the date hereof, duly endorsed in blank in
the case of Notes and accompanied by undated stock powers duly executed in blank
by such Pledgor in the case of Stock, or such other instruments of transfer as
are acceptable to the Pledgee; and (iii) assigns, transfers, hypothecates,
mortgages, charges and sets over to the Pledgee all of such Pledgor's right,
title and interest in and to the Securities now or hereafter owned by such
Pledgor (and in and to all certificates or instruments evidencing such
Securities), upon the terms and conditions set forth in this Agreement.
3.2. Subsequently Acquired Securities. If any Pledgor shall
acquire (by purchase, stock dividend or otherwise) any additional Securities at
any time or from time to time after the date hereof, such Pledgor will forthwith
pledge such Securities (or certificates or instruments representing such
Securities) as security for the Obligations, deposit such Securities with the
Pledgee and deliver to the Pledgee certificates therefor or instruments thereof,
duly endorsed in blank in the case of Notes and accompanied by undated stock
powers duly executed in blank in the case of Stock, or such other instruments of
transfer as are acceptable to the Pledgee, and will promptly thereafter deliver
to the Pledgee a certificate executed by any Responsible Officer of such Pledgor
describing such Securities and certifying that the same have been duly pledged
with the Pledgee hereunder. Subject to the last sentence of Section 2 hereof, no
Pledgor shall be required at any time to pledge hereunder (x) any Stock which is
more than 66% of the total combined voting power of all classes of capital stock
of any Foreign Corporation entitled to vote or (y) any promissory notes
(including Intercompany Notes) issued to such Pledgor by any Subsidiary of such
Pledgor which is a Foreign Corporation.
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
respective Pledgor shall promptly notify the Pledgee in writing thereof, and, if
after such notification, the Pledgee so requests, such Pledgor shall promptly
take all actions required to perfect the security interest of the Pledgee under
applicable law. Each Pledgor further agrees to take such actions as the Pledgee
deems reasonably 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 Securities promptly upon request of
the Pledgee.
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3.4 Definition 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," all Notes at any
time pledged or required to be pledged hereunder are hereinafter called the
"Pledged Notes," all of the Pledged Stock and Pledged Notes together are
hereinafter called the "Pledged Securities," which together with all dividends
and interest thereon, as the case may be, and all proceeds thereof, including
any securities and moneys received and at the time held by the Pledgee
hereunder, is hereinafter called the "Collateral."
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 such 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. The Pledgee agrees to promptly notify the
relevant Pledgor after the appointment of any sub-agent; provided, however, that
the failure to give such notice shall not affect the validity of such
appointment.
5. VOTING, ETC., WHILE NO EVENT OF DEFAULT. Unless and until
(i) an Event of Default shall have occurred and be continuing and (ii) written
notice thereof shall have been given by the Pledgee to the relevant Pledgor
(provided, that if an Event of Default specified in Sections 9.01(f) and (g) of
the Credit Agreement shall occur, no such notice shall be required), each
Pledgor shall be entitled to exercise any and all voting and other consensual
rights pertaining to the Pledged Securities and to give all 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
be inconsistent with any of the terms of this Agreement, any other Loan Document
or any Interest Rate Protection Agreement or Other Hedging Agreement
(collectively, the "Secured Debt Agreements"), or which would have the effect of
impairing the position or interests of the Pledgee or any other Secured
Creditor, except to the extent such violation, inconsistency or impairment is
waived in accordance with the terms of Section 20 hereof. All such rights of
such Pledgor to vote and to give consents, waivers and ratifications shall cease
if an Event of Default shall have occurred 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 payable in
respect of the Pledged Stock and all payments in respect of the Pledged Notes
shall be paid to the respective Pledgor; provided, that all cash dividends
payable in respect of the Pledged Stock which are 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. Subject to
the last sentence of Section 3.2 hereof, the Pledgee shall also be entitled to
receive directly, and to retain as part of the Collateral:
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(i) 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;
(ii) 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
(iii) 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.
7. REMEDIES IN CASE OF EVENT OF DEFAULT. If an Event of
Default shall have occurred and be continuing, the Pledgee shall be entitled to
exercise all of the rights, powers and remedies (whether vested in it by this
Agreement or by 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, without limitation, to exercise the following rights, which
each Pledgor hereby agrees to be commercially reasonable:
(i) to receive all amounts payable in respect of the
Collateral payable to such Pledgor under Section 6 hereof;
(ii) to transfer all or any part of the Pledged Securities
into the Pledgee's name or the name of its nominee or nominees (the
Pledgee agrees to promptly notify the relevant Pledgor after such
transfer; provided, however, that the failure to give such notice shall
not affect the validity of such transfer);
(iii) to accelerate any Pledged Note which may be accelerated
in accordance with its terms, and take any other action to collect upon
any Pledged Note (including, without limitation, to make any demand for
payment thereon);
(iv) subject to the giving of written notice to the relevant
Pledgor in accordance with clause (ii) of Section 5 hereof (to the
extent such notice is required by such Section 5), 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 (each Pledgor hereby
irrevocably constituting and appointing the Pledgee the proxy and
attorney-in-fact of such Pledgor, with full power of substitution to do
so); and
(v) at any time or from time to time 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 each Pledgor),
for cash, on credit or for other property, for immediate
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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 10 days' written
notice of the time and place of any such sale shall be given to such
Pledgor. Each 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
other 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.
8. REMEDIES, ETC., CUMULATIVE. Each right, power and remedy of
the Pledgee provided for in this Agreement or any other 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 in any other Secured Debt Agreement or now or
here after existing at law or in equity or by statute or otherwise shall not
preclude the simultaneous or later exercise by the Pledgee or any other Secured
Creditor of all such other rights, powers or remedies, and no failure or delay
on the part of the Pledgee or any other Secured Creditor to exercise any such
right, power or remedy shall operate as a waiver thereof. The Secured Creditors
agree that this Agreement may be enforced only by the action of the
Administrative Agent or the Pledgee, in each case acting upon the instructions
of, or with the consent of, the Majority Lenders (or, after the date on which
all Loan Document Obligations have been paid in full and the Aggregate
Commitment has been terminated, the holders of at least the majority of the
outstanding Other Obligations) and that no other Secured Creditor shall have any
right individually to seek to enforce or to enforce this Agreement or to realize
upon the security to be granted hereby, it being understood and agreed that such
rights and remedies may be exercised by the Administrative Agent or the Pledgee
or the holders of at least a majority of the outstanding Other Obligations, as
the case may be, for the benefit of the Secured Creditors upon the terms of this
Agreement.
9. APPLICATION OF PROCEEDS. (a) All moneys collected by the
Pledgee upon any sale or other disposition of the Collateral pursuant to the
terms of this Agreement, together with all other moneys received by the Pledgee
hereunder, shall be applied in the manner provided in the Security Agreement.
(b) It is understood and agreed that the Pledgors shall remain
jointly and severally liable to the extent of any deficiency between the amount
of the proceeds of the Collateral hereunder and the aggregate amount of the
Obligations.
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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. Each Pledgor jointly and severally agrees (i)
to indemnify and hold harmless the Pledgee in such capacity and each other
Secured Creditor from and against any and all claims, demands, losses, judgments
and liabilities of whatsoever kind or nature, and (ii) to reimburse the Pledgee
and each other Secured Creditor for all costs and expenses, including reasonable
attorneys' fees, arising or resulting from this Agreement or the exercise by the
Pledgee of any right or remedy granted to it hereunder or under any other
Secured Debt Agreement except, with respect to clauses (i) and (ii) above, for
those arising from the Pledgee's or such other Secured Creditor's gross
negligence or willful misconduct. In no event shall the Pledgee be liable, in
the absence of gross negligence or willful misconduct on its part, for any
matter or thing in connection with this Agreement other than to account for
moneys actually received by it in accordance with the terms hereof. If and to
the extent that the obligations of the Pledgors under this Section 11 are
unenforceable for any reason, each 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. Each Pledgor agrees that it will join
with the Pledgee in executing and, at such Pledgor's own expense, file and
refile under the applicable UCC or appropriate local equivalent, such financing
statements, continuation statements and other documents in such offices as the
Pledgee may deem reasonably necessary or appropriate and wherever required or
permitted 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 such 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 advisable to carry into effect the purposes of
this Agreement or to further assure and confirm unto the Pledgee its rights,
powers and remedies hereunder.
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 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 XI of the Credit Agreement.
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14. TRANSFER BY PLEDGORS. Except for sales or dispositions of
Collateral permitted pursuant to the Credit Agreement, no Pledgor will 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 in
accordance with the terms of this Agreement).
15. REPRESENTATIONS, WARRANTIES AND COVENANTS OF PLEDGOR.
Each Pledgor represents, warrants and covenants that (i) it is the legal, record
and beneficial owner of, and has good and marketable title to, all Securities
pledged by it hereunder, subject to no pledge, lien, mortgage, hypothecation,
security interest, participation, charge, option or other encumbrance
whatsoever, except the liens and security interests created by this Agreement
and liens permitted under clauses (i) and (x) of Section 8.01 of the Credit
Agreement, and subject to no restrictions upon the voting rights associated
with, or upon the transfer or encumbrance of, any of the Securities; (ii) it has
full power, authority and legal right to vote and pledge all the Securities
pledged by it pursuant to this Agreement; (iii) this Agreement has been duly
authorized, executed and delivered by such Pledgor and constitutes a legal,
valid and binding obligation of such 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 affecting creditors' rights generally and by equitable principles
(regardless of whether enforcement is sought in equity or at law); (iv) no
consent of any other party (including, without limitation, any stockholder or
creditor of such 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 such Pledgor in connection with the execution, delivery or
performance of this Agreement, or in connection with the exercise of its rights
and remedies pursuant to this Agreement, except as may be required in connection
with the disposition of the Securities by laws affecting the offering and sale
of securities generally; (v) the execution, delivery and performance of this
Agreement by such 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 such Pledgor or of any securities issued by such
Pledgor or any of its Subsidiaries, or of any mortgage, indenture, deed of
trust, loan agreement, credit agreement or any other material agreement or
material instrument to which such Pledgor or any of its Subsidiaries is a party
or which purports to be binding upon such Pledgor or any of its Subsidiaries or
upon any of their respective assets and will not result in the creation or
imposition of any lien or encumbrance on any of the assets of such Pledgor or
any of its Subsidiaries except as contemplated by this Agreement; (vi) all the
shares of Stock of Subsidiaries of Holding have been duly and validly issued,
are fully paid and non assessable; (vii) each of the Pledged Notes constituting
Intercompany Notes, when executed by the obligor thereof, will be 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 affecting creditors' rights generally and by equitable principles
(regardless of whether enforcement is sought in equity or at law); and (viii)
the pledge and assignment of the Securities pursuant to this Agree ment,
together with the delivery of the Securities pursuant to this Agreement (which
delivery has
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been made), creates a valid and perfected first security interest in such
Securities and the proceeds thereof, subject to no prior lien or encumbrance or
to any agreement purporting to grant to any third party a lien or encumbrance on
the property or assets of such Pledgor which would include the Securities other
than liens permitted under clauses (i) and (x) of Section 8.01 of the Credit
Agreement. Each 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 such
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 other Secured Creditors.
16. PLEDGORS' OBLIGATIONS ABSOLUTE, ETC. The obligations of
each Pledgor under this Agreement shall be absolute and unconditional and 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: (i) any renewal,
extension, amendment or modification of or addition or supplement to or deletion
from any Secured Debt Agreement or any other instrument or agreement referred to
therein, or any assignment or transfer of any thereof; (ii) any waiver, consent,
extension, indulgence or other action or inaction under or in respect of any
such agreement or instrument or this Agreement; (iii) 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; (iv) 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 (v) any bankruptcy, insolvency,
reorganization, composition, adjustment, dissolution, liquidation or other like
proceeding relating to such Pledgor or any Subsidiary of such 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 such Pledgor shall have notice
or knowledge of any of the foregoing.
17. REGISTRATION, ETC. (a) If an Event of Default shall have
occurred and be continuing and any Pledgor shall have received from the Pledgee
a written request or requests that such 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, such Pledgor
as soon as practicable and at its expense will use its reasonable efforts to
cause such registration to be effected (and be kept effective) and will use its
reasonable efforts to cause such qualification and compliance to be 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 such Pledgor such
information regarding the Pledgee as such Pledgor may request in writing and as
shall be required in connection with any such registration, qualification or
compliance. Such Pledgor will cause the Pledgee to be kept reasonably advised in
writing as to the progress of each such registration, qualification or
compliance and as to the completion thereof,
-10-
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 other Secured Creditor and all
others participating in the distribution of the 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 such 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, 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 necessary or
advisable in order that such sale may legally be effected without such
registration; provided, that at least 10 days' notice of the time and place of
any such sale shall be given to such Pledgor. 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, may 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 shall terminate (provided that all indemnities
set forth herein including, without limitation, in Section 11 hereof shall
survive any such termination) and the Pledgee, at the request and expense of the
respective Pledgor, will promptly execute and deliver to such Pledgor a proper
instrument or instruments acknowledging the satisfaction and termination of this
Agreement, and will duly release from the security interest created hereby and
assign, transfer and deliver to such Pledgor (without recourse and without any
representation or warranty) such of the Collateral as may be in the possession
of the Pledgee and as has not theretofore been sold or otherwise applied or
released pursuant to this Agreement. As used in this Agreement, "Termination
Date" shall mean the date upon which the Aggregate Commitment and all Interest
Rate Protection Agreements or Other Hedging Agreements have been terminated, no
promissory note or Letter of Credit under the Credit Agreement is outstanding
(other than Letters of Credit,
-11-
together with all fees that have accrued and will accrue thereon through the
stated termination date of such Letters of Credit, which have been secured in a
manner satisfactory to the applicable Issuing Lenders in their sole and absolute
discretion) and all other Obligations (other than indemnities described in
Section 11 hereof and in Section 12.05 of the Credit Agreement which are not
then due and payable) have been paid in full.
(b) In the event that any part of the Collateral is sold or
otherwise disposed of in connection with a sale or other disposition permitted
by Section 8.02 of the Credit Agreement or is otherwise released at the
direction of the Majority Lenders (or all the Lenders if required by Section
12.01 of the Credit Agreement), the Pledgee, at the request and expense of such
Pledgor will duly release from the security interest created hereby and assign,
transfer and deliver to such Pledgor (without recourse and without any
representation or warranty) such of the Collateral as is then being (or has
been) so sold or released and as may be in possession of the Pledgee and has not
theretofore been released pursuant to this Agreement.
(c) At any time that a Pledgor desires that Collateral be
released as provided in the foregoing Section 18(a) or (b), it shall deliver to
the Pledgee a certificate signed by an Responsible Officer of such Pledgor
stating that the release of the respective Collateral is permitted pursuant to
Section 18(a) or (b).
19. NOTICES, ETC. All notices and other communications
hereunder shall be in writing and shall be delivered or mailed by first class
mail, postage prepaid, addressed:
(a) if to any Pledgor, at;
c/o CII Technologies, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
(b) if to the Pledgee, at:
Bank of America National Trust
and Savings Association
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Agency Management - 8th Floor
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Vice President
Telephone No.:(▇▇▇) ▇▇▇-▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
-12-
(c) if to any Lender (other than the Pledgee), at such address
as such Lender 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 each 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 each Pledgor directly affected
thereby and the Pledgee (with the written consent of either (x) the Majority
Lenders (or all the Lenders if required by Section 12.01 of the Credit
Agreement) at all times prior to the time on which all Loan Document Obligations
have been paid in full and the Aggregate Commitment has been terminated or (y)
the holders of at least a majority of the outstanding Other Obligations at all
times after the time on which all Loan Document Obligations have been paid in
full and the Aggregate Commitment has been terminated); provided, 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 Class. For the purpose of this
Agreement, the term "Class" shall mean each class of Secured Creditors, i.e.,
whether (i) the Lender Creditors as holders of the Loan Document Obligations or
(ii) the Other Creditors as holders of the Other Obligations. For the purpose of
this Agreement, the term "Requisite Creditors" of any Class shall mean each of
(i) with respect to the Loan Document Obligations, the Majority Lenders and (ii)
with respect to the Other Obligations, the holders of at least a majority 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
successors and assigns of each Pledgor and shall inure to the benefit of and be
enforceable by the Pledgee and its successors and assigns; provided that no
Pledgor may transfer or assign any or all of its rights and obligations
hereunder without the prior written consent of the Pledgee. THIS AGREEMENT SHALL
BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE
STATE OF ILLINOIS (INCLUDING, WITHOUT LIMITATION, S.H.A. 135 ILCS 105/5-1, ET.
SEQ., BUT WITHOUT GIVING EFFECT TO ANY OTHER CONFLICTS OF LAW PROVISIONS). 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.
22. ADDITIONAL PLEDGORS. It is understood and agreed that any
Subsidiary of the Borrower that is required to execute a counterpart of this
Agreement after the date hereof
-13-
pursuant to Sections 7.12 and/or 8.15 of the Credit Agreement shall
automatically become a Pledgor hereunder by executing a counterpart hereof and
delivering the same to the Pledgee.
* * *
-14-
IN WITNESS WHEREOF, each 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.
CII TECHNOLOGIES, INC., as a Pledgor
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------
Title: CFO
-------------------------
COMMUNICATIONS INSTRUMENTS, INC.,
as a Pledgor
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------
Title: CFO
-------------------------
KILOVAC CORPORATION, as a Pledgor
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------
Title: CFO
-------------------------
KILOVAC INTERNATIONAL, INC.,
as a Pledgor
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------
Title: CFO
-------------------------
BANK OF AMERICA NATIONAL
TRUST AND SAVINGS ASSOCIATION,
as Pledgee and Collateral Agent
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------------
Title: Vice President
-------------------------
ANNEX A
to
PLEDGE AGREEMENT
LIST OF STOCK
1. Certificate No. CII-1 dated May 11, 1993 representing 1,000 shares
of common stock of Communications Instruments, Inc. issued to Communications
Instruments, Holdings, Inc. (n/k/a CII Technologies, Inc.).
2. Certificate No. 71 dated September 18, 1997 representing 124,785
shares of Class A Common Stock of Kilovac Corporation issued to Communications
Instruments, Inc.
3. Certificate No. 1 dated December 15, 1977 representing 2,500 shares
of capital stock of Kilovac International, Inc. issued to Kilovac Corporation.
4. Certificate No. C1 dated June 19, 1998 representing 1,000 issued and
outstanding Common Shares of Corcom, Inc., issued to Communications Instruments,
Inc.
E - 17
Corcom, Inc.
ANNEX B
to
PLEDGE AGREEMENT
LIST OF NOTES
1. Executive Promissory Notes
Executive Amount of Executive
Promissory Note
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ $ 152,000.00
▇▇▇▇▇ ▇▇▇▇▇▇▇ 53,500.00
▇▇▇▇▇▇▇ ▇. ▇▇▇▇ 5,000.00
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ 34,000.00
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ 12,000.00
▇▇▇▇ ▇. ▇▇▇▇▇▇ 34,000.00
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ 17,000.00
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇. 5,000.00
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 10,000.00
▇▇▇▇▇▇▇▇ ▇▇▇ 5,000.00
▇▇▇▇ ▇. ▇▇▇▇▇ 15,000.00
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ 5,000.00
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ 5,000.00
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇ 5,000.00
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ 49,000.00
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ 24,500.00
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ 17,000.00
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ 14,000.00
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ 7,000.00
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ 6,000.00
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ 10,000.00
▇▇▇▇ ▇▇▇▇▇▇▇ 7,000.00
▇▇▇▇ ▇▇▇▇▇ 8,000.00
2. Intercompany Notes
Payor: Communications Instruments, Inc.
Payee: Kilovac International, Inc.
Kilovac Corporation
CII Technologies Inc.
E - 1
ANNEX B
Corcom, Inc.
Payor: Kilovac International, Inc.
Payee: Kilovac Corporation
CII Technologies Inc.
Corcom, Inc.
Communications Instruments, Inc.
Payor: Kilovac Corporation
Payee: CII Technologies Inc.
Corcom, Inc.
Communications Instruments, Inc.
Kilovac International, Inc.
Payor: CII Technologies Inc.
Payee: Corcom, Inc.
Communications Instruments, Inc.
Kilovac International, Inc.
Kilovac Corporation
Payor: Corcom, Inc.
Payee: Communications Instruments, Inc.
Kilovac International, Inc.
Kilovac Corporation
CII Technologies Inc.
Master Intercompany Note dated June 19, 1998 executed by each
of CII Technologies, Inc., Communications Instruments, Inc.,
Kilovac Corporation, Kilovac International, Inc. and Corcom,
Inc.
E - 2
ANNEX B
Page 3
Corcom, Inc.
EXHIBIT A
to
PLEDGE AGREEMENT
dated as of June 19, 1998
Form of Stock Power
STOCK POWER
FOR VALUE RECEIVED, the undersigned does hereby sell, assign
and transfer to _____________________________ _____ Shares of Common Stock of
____________, a __________ corporation, represented by Certificate No. __ (the
"Stock"), standing in the name of the undersigned on the books of said
corporation and does hereby irrevocably constitute and appoint
___________________________________ as the undersigned's true and lawful
attorney, for it and in its name and stead, to sell, assign and transfer all or
any of the Stock, and for that purpose to make and execute all necessary acts of
assignment and transfer thereof; and to substitute one or more persons with like
full power, hereby ratifying and confirming all that said attorney or substitute
or substitutes shall lawfully do by virtue hereof.
Dated: _______________
[--------------------]
By:
Name:
Title:
E - 3