EXHIBIT 10.16
1996 FORM 10-K
COLLATERAL PLEDGE AGREEMENT
THIS PLEDGE AGREEMENT, dated as of May 20, 1996, is from BUCYRUS-
ERIE COMPANY, a Delaware corporation ("Pledgor"), to BANK ONE, MILWAUKEE,
NATIONAL ASSOCIATION ("Secured Party"), and is given pursuant to that certain
Credit Agreement dated as of December 14, 1994, as amended, between Pledgor
and Secured Party (the "Credit Agreement"). All terms not otherwise defined
herein have the meanings assigned to them in the Credit Agreement.
In consideration of credit to be extended by Secured Party
pursuant to the Credit Agreement, Pledgor agrees as follows:
1. Grant of Security Interest. Pledgor hereby assigns, pledges
and grants to Secured Party all of its right, title and interest in and to the
property described in paragraph 2 below (the "Collateral") to secure payment
and performance of the obligations of Pledgor to Secured Party described in
paragraph 3 below (the "Obligations").
2. Collateral. The Collateral shall consist of the following:
(a) All certificates of deposit issued by Secured Party
(whether or not evidenced by a written instrument) from time to time now or
hereafter in the possession or control of Secured Party for collateral
purposes; and
(b) All proceeds of the foregoing.
For purposes of this Pledge Agreement, the term "proceeds" includes whatever
is receivable or received when Collateral is sold, collected, exchanged or
otherwise disposed of, whether such disposition is voluntary or involuntary,
and includes, without limitation, all rights to payment, including return
premiums, with respect to any insurance relating thereto.
3. Obligations. The Obligations of Pledgor secured by this
Pledge Agreement shall consist of all debts, obligations and liabilities of
Pledgor to reimburse the Secured Party for drawings honored by the Secured
Party under the Letters of Credit and the Collahuasi Project Letters of Credit
issued by the Bank pursuant to the Credit Agreement.
4. Representations and Warranties. In addition to all
representations and warranties of Pledgor set forth in the Credit Agreement,
Pledgor represents and warrants that Pledgor is the owner of the Collateral
(or, in the case of after-acquired Collateral, at the time Pledgor acquires
rights in the Collateral, will be the owner thereof) and that other than as
permitted in the Credit Agreement no other person has (or, in the case of
after-acquired Collateral, will have) any right, title, claim or interest (by
way of security interest or other lien or charge or otherwise) in, against or
to the Collateral.
5. Covenants of Pledgor. In addition to all covenants and
agreements of Pledgor set forth in the Credit Agreement, Pledgor hereby agrees
(a) to do all acts that may be necessary to maintain, preserve and protect the
Collateral; (b) not to use or permit any Collateral to be used unlawfully or
in violation of any provision of the Credit Agreement, this Pledge Agreement
or any applicable statute, regulation or ordinance, the noncompliance with
which could materially and adversely affect the use or value of the
Collateral; (c) to procure, execute and deliver from time to time any
endorsements, assignments, financing statements and other writings deemed
necessary or appropriate by Secured Party to perfect, maintain or protect its
security interest hereunder and the priority thereof and to deliver promptly
to Secured Party all originals of the Collateral or proceeds consisting of
instruments, duly endorsed or assigned to Secured Party; (d) to appear in and
defend any action or proceeding which may affect his or her title to or
Secured Party's interest in the Collateral; (e) to keep separate, accurate and
complete records of the Collateral and to provide Secured Party with such
records and such other reports and information relating to the Collateral as
Secured Party may reasonably request from time to time; and (f) not to
surrender or lose possession of (other than to Secured Party), sell, encumber,
lease, rent or otherwise dispose of or transfer any Collateral or right or
interest therein except as permitted herein or as hereinafter provided, and to
keep the Collateral free of all levies and security interest and other liens
or charges.
6. Preservation of Collateral. Secured Party shall use
reasonable care in the custody and preservation of the Collateral in its
possession, but this standard does not include (a) insuring or taking any
steps to collect or realize upon the Collateral or any distribution of
interest or principal; (b) informing Pledgor of any decline in the value of
the Collateral; (c) sending notices, performing services or taking any other
action in connection with the management of the Collateral; or (d)
ascertaining or informing Pledgor with respect to any maturities, calls,
conversions, exchanges, offers, tenders, or similar matters relating to the
Collateral, or preserving rights in it against prior parties whether or not
Secured Party has or is deemed to have knowledge of it. Any requests
concerning disposition of the Collateral must be in writing and be received by
Secured Party.
7. Default and Remedies. Pledgor shall be deemed in default
under this Pledge Agreement upon the occurrence and continuance of an Event of
Default. Upon the occurrence of any Event of Default, Secured Party may,
without notice to or demand on Pledgor, and in addition to all rights and
remedies available to Secured Party as provided in this Pledge Agreement, do
any one or more of the following:
(a) Foreclose or otherwise enforce Secured Party's
security interest in any manner permitted by law or provided for in this
Pledge Agreement.
(b) Set off the principal amount of the Collateral issued
by Secured Party, whether or not such Collateral has matured, against any of
the Obligations, whether due or not.
(c) Recover from Pledgor all costs and expenses,
including, without limitation, reasonable attorneys' fees, incurred or paid by
Secured Party in exercising any right, power or remedy provided by this Pledge
Agreement or by law.
(d) Recover from Pledgor any deficiency remaining
following such disposition.
Pledgor and Secured Party agree that the Collateral is "of a type customarily
sold on a recognized market" and is "of a type which is the subject of widely
distributed standard price quotations," as those phrases are used in section
409.504(3) of the Wisconsin Uniform Commercial Code and that, therefore,
Secured Party need not give Pledgor reasonable notification of the time and
place of any public sale or of the time after which any private sale or other
disposition of the Collateral is to be made and that the Secured Party may
purchase the Collateral at any private sale. In the event that notice is
nonetheless required by applicable law, written notice sent at least ten
calendar days (counting the day of sending) before the date of a proposed
disposition of the Collateral is reasonable notice. The notice (if any) of
such sale required by this section 7 shall (a) in case of a public sale, state
the time and place fixed for such sale, (b) in case of sale at a broker's
board or on a securities exchange, state the board or exchange at which such
sale is to be made and the day on which the Collateral, or the portion thereof
so being sold, will first be offered for sale at such board or exchange, and
(c) in the case of a private sale, state the day after which such sale may be
consummated. Any such public sale shall be held at such time or times within
ordinary business hours and at such place or places as Secured Party may fix
in the notice of such sale. At any such sale the Collateral may be sold in
one lost as an entirety or in separate parcels, as Secured Party may
determine. Secured Party shall not be obligated to make any such sale
pursuant to any such notice. Secured Party may, without notice or
publication, 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
the sale, and such sale may be made at any time or place to which the same may
be so adjourned. In case of any sale of all or any part of the Collateral on
credit or for future delivery, the Collateral so sold may be retained by
Secured Party until the selling price is paid by the purchaser thereof, but
Secured Party shall not incur any liability in case of the failure of such
purchaser to take up and pay for the Collateral so sold and, in case of any
such failure, such Collateral may again be sold upon like notice.
8. Authorized Action by Secured Party. Effective upon the
occurrence and during the continuance of an Event of Default, Pledgor hereby
irrevocably appoints Secured Party as attorney-in-fact to do (but Secured
Party shall not be obligated to and shall incur no liability to Pledgor or any
third party for failure to do) any act which Pledgor is obligated by this
Pledge Agreement to do, and to exercise such rights and powers as Pledgor
might exercise with respect to the Collateral, including, without limitation,
the right to (a) collect by legal proceedings or otherwise and endorse,
receive and receipt for all dividends, interest, payments, proceeds and other
sums and property now or hereafter payable on or on account of the Collateral;
(b) enter into any extension, reorganization, deposit, merger, consolidation
or other agreement pertaining to, or deposit, surrender, accept, hold or apply
other property in exchange for, any Collateral; (c) protect and preserve the
Collateral; (d) transfer the Collateral to its own or its nominee's name; (e)
sign or endorse Pledgor's name on the Collateral; (f) notify obligors on or
issuers of any Collateral to make payment or delivery to Secured Party of any
amounts, securities or rights due or distributable on the Collateral or
notices given in connection therewith; and (g) make any compromise or
settlement, and take any action it deems advisable, with respect to any
Collateral. Pledgor agrees to reimburse Secured Party upon demand for any
costs and expenses, including, without limitation, reasonable attorneys' fees,
which Secured Party may incur while properly acting as said Pledgor's
attorney-in-fact hereunder, all of which costs and expenses are included in
the Obligations secured hereby. Secured Party shall not be required to make
any presentment, demand or protest, or give any notice and need not take any
action to preserve any rights against any prior party or any other person in
connection with the Obligations or with respect to the Collateral.
9. Cumulative Rights. The rights, powers and remedies of
Secured Party under this Pledge Agreement shall be in addition to all rights,
powers and remedies given to Secured Party by virtue of any statute or rule of
law, the Credit Agreement or any other agreement, all of which rights, powers
and remedies shall be cumulative and may be exercised successively or
concurrently without impairing Secure Party's security interest in the
Collateral.
10. Waiver. Any forbearance by Secured Party in exercising any
right, power or remedy shall not preclude the further exercise thereof.
Pledgor waives any right to require Secured Party to proceed against any
person or to exhaust any Collateral or to pursue any remedy in Secured Party's
power.
11. Binding upon Successors. All rights of Secured Party under
this Pledge Agreement shall inure to the benefit of Secured Party, its
successors and assigns and shall be binding upon Pledgor, its successors and
assigns.
12. Severability. If any of the provisions of this Pledge
Agreement shall be held invalid or unenforceable, this Pledge Agreement shall
be construed as if not containing those provisions and the rights and
obligations of the parties hereto shall be construed and enforced accordingly.
13. Choice of Law. This Pledge Agreement shall be construed in
accordance with and governed by the laws of the State of Wisconsin, and, where
applicable and except as otherwise defined herein, terms used herein shall
have the meanings given them in the Wisconsin Uniform Commercial Code.
14. Notices. All demands, notices and other communications
provided for herein shall be transmitted in accordance with provisions of
section 8.4 of the Credit Agreement and shall be effective at the times
provided therein.
BUCYRUS-ERIE COMPANY
BY /s/▇. ▇. ▇▇▇▇▇▇▇▇
Title: Vice President - Marketing