Exhibit 10.29
PLEDGE AGREEMENT
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THIS PLEDGE AGREEMENT (the "Pledge Agreement") is made the 31st day of July,
1996 by and between VEECO INSTRUMENTS INC., a Delaware corporation, having an
office at Terminal Drive, Plainview, New York 11803 (the "Pledgor") and FLEET
BANK, N.A., a national banking association organized under the laws of the
United States of America, having an office at 300 Broad Hollow Road, Melville,
New York 11747 (hereinafter referred to as the "Agent"), as collateral agent
for FLEET BANK, N.A., THE CHASE MANHATTAN BANK and each other bank that may
hereafter become a "Bank" under the terms of the Credit Agreement referred to
below (hereinafter referred to as the "Pledgees").
RECITALS
WHEREAS, the Pledgees have extended credit to the Pledgor pursuant to
the terms of a Credit Agreement dated the date hereof and executed by the
Pledgor, as Borrower, and the Pledgees, as Banks (the "Credit Agreement";
capitalized terms used herein and not defined herein shall have the meanings
given to them in the Credit Agreement); and
WHEREAS, the Pledgor owns 100% of the issued and outstanding shares of
each of the corporations listed on Schedule A hereto ("the "Subsidiaries"); and
WHEREAS, in order to induce the Pledgees to extend credit to the
Pledgor, and in consideration of any existing or future obligations of the
Pledgor to the Pledgees, the Pledgor wishes to grant further security and
assurance to the Pledgees in order to secure the performance by the Pledgor of
its obligations to the Pledgees and to that effect to pledge to the Pledgees the
issued and outstanding shares of the Subsidiaries owned by the Pledgor and
represented by the stock certificates listed in Schedule A hereto (the "Pledged
Shares");
NOW THEREFORE, in consideration of the foregoing and for $1.00 and
other good and valuable consideration the receipt and adequacy of which are
hereby acknowledged, the parties hereto mutually agree as follows:
1. Security Interest.
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(a) As security for the Obligations (as hereinafter defined),
Pledgor hereby delivers, pledges and assigns to the Agent, as agent for the
Pledgees, and creates in the Agent, as agent for the Pledgees, a security
interest in all of its right, title and interest in and to all of the Pledged
Shares, together with all rights and privileges of Pledgor with respect thereto,
all proceeds, income and profits thereof and all property received with respect
to the Pledged Shares, in addition thereto, in exchange thereof or in
substitution therefor (the "Collateral").
(b) This Pledge Agreement secures the payment of all
obligations of Pledgor to Pledgees, now or hereafter existing under the Credit
Agreement or this Pledge Agreement, including, in each case, any modifications
or amendments thereto, or under any promissory notes or other documents
evidencing indebtedness under or related to or contemplated by the Credit
Agreement or any other obligations of the Pledgor to the Pledgees, whether for
principal, interest, fees, expenses or otherwise, together with all costs of
collection or enforcement, including, without limitation, reasonable attorneys'
fees incurred in any collection efforts or any judicial proceeding (including,
without limitation, bankruptcy or reorganization) (all such obligations, being
the "Obligations").
2. Stock Dividends, Options, or Other Adjustments. Until the
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date on which this Pledge Agreement terminates as provided in Section 11 hereof,
the Agent, for the benefit of the Pledgees, shall receive as Collateral any and
all additional shares of stock or any other property of any kind distributable
on or by reason of the Collateral pledged hereunder, whether in the form of or
by way of stock dividends, warrants, liquidation, partial liquidation,
conversion, prepayments or redemptions (in whole or in part), or otherwise with
the sole exception of cash dividends or cash interest payments made prior to the
declaration of an Event of Default in accordance with the terms of the Credit
Agreement (such cash dividends and cash interest payments being hereby excluded
from the definition of the term "Collateral" hereunder). If any additional
shares of capital stock, instruments, or other property against which a security
interest can only be perfected by possession by Agent which are distributable on
or by reason of the Collateral pledged hereunder shall come into the possession
or control of the Pledgor, the Pledgor shall hold or control and forthwith
transfer and deliver the same to the Agent, for the benefit of the Pledgees,
subject to the provisions hereof.
3. Delivery of Share Certificates; Stock Powers; Registration
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of Pledge. All instruments and share certificates representing the Collateral
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are being delivered to the Agent, for the benefit of the Pledgees,
simultaneously herewith together with stock powers duly executed in blank by the
Pledgor. The Pledgor shall promptly deliver to the Agent, for the benefit of
the Pledgees, or cause the Subsidiaries or any other entity issuing the
Collateral to deliver directly to the Agent, for the benefit of the Pledgees,
all instruments, share certificates or other documents representing Collateral
acquired or received after the date of this Pledge Agreement with a stock power
duly executed by the Pledgor. If at any time Agent notifies Pledgor that
additional stock powers endorsed in blank are required, the Pledgor shall
promptly execute in blank and deliver such stock powers as the Agent may
reasonably request.
4. Power of Attorney. The Pledgor hereby constitutes and
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irrevocably appoints the Agent, with full power of substitution and revocation
by the Agent, as Pledgor's true and lawful attorney-in-fact, to the full extent
permitted by law, upon the occurrence and during the continuance of an Event of
Default (as defined in the Credit Agreement) to transfer or cause the transfer
of the Collateral, or any part thereof on the books of the corporation or other
entity issuing the same, to the name of the Agent and the Agent may thereafter
exercise as to such Collateral all the rights, power and remedies of an owner
and otherwise to take such actions and execute such instruments as the Agent may
deem necessary or advisable to accomplish the purposes of this Pledge Agreement.
The power of attorney granted pursuant to this Pledge
Agreement and all authority hereby conferred are granted and conferred solely to
protect the interest of the Pledgees in the Collateral and shall not impose any
duty upon the Agent or the Pledgees to exercise any power. This power of
attorney shall be irrevocable as one coupled with an interest prior to the
payment in full or other satisfaction of all of the Obligations to the Pledgees.
5. Inducing Representations of Pledgor. The Pledgor represents
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and warrants to the Pledgees that:
(a) The Pledgor is the sole legal and beneficial owner of,
and has good and marketable title to, the Collateral, free and clear of all
pledges, liens, security interests and other encumbrances other than the
security interest created by this Pledge Agreement subject to the Permitted
Liens (as defined in the Credit Agreement), if any, and the Pledgor has the
unqualified right and authority to execute this Pledge Agreement and to pledge
the Collateral to the Agent for the benefit of the Pledgees, as provided for
herein;
(b) There are no outstanding options, warrants or other
agreements with respect to the Collateral;
(c) The Pledged Shares have been validly issued and are
fully paid and non-assessable; the holder or holders thereof are not and will
not be subject to any personal liability as such holder; and are not subject to
any charter, bylaw, statutory, contractual or other restriction governing their
issuance, transfer, ownership or control except that sale or transfer may be
limited in the absence of an effective registration statement (i) under the
Securities Act of 1933, as amended (the "Act"), (ii) under applicable state
securities laws, and (iii) under applicable non-U.S. laws;
(d) Any consent, approval or authorization of or
designation or filing with any authority on the part of the Pledgor which is
required in connection with the pledge and security interest granted under this
Pledge Agreement has been obtained or effected and is in full force and effect;
(e) The execution and delivery of this Pledge Agreement by
the Pledgor, and the performance by the Pledgor of its obligations hereunder,
will not result in a violation of any mortgage, indenture, contract, instrument,
judgment, decree, order, statute, rule or regulation to which the Pledgor is
subject;
(f) The Pledgor has deposited the Pledged Shares duly
endorsed in blank or accompanied by an assignment or assignments sufficient to
transfer title thereto; and
(g) As of the date hereof, each Subsidiary has that number
shares of authorized common stock indicated on Schedule A hereto of which the
number listed on such Schedule are issued and outstanding. No Subsidiary has
any preferred or other class of stock authorized or outstanding.
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6. Obligations of Pledgor. The Pledgor further represents,
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warrants and covenants to the Pledgees that:
(a) The Pledgor will not sell, transfer or convey any
interest in, or suffer or permit any lien or encumbrance to be created upon or
with respect to, any of the Collateral (other than as created under this Pledge
Agreement and as permitted pursuant to the terms of the Credit Agreement) during
the term of the pledge established hereby.
(b) The Pledgor will not permit any Subsidiary to issue
any additional capital stock during the term of this Pledge Agreement unless
such additional capital stock is delivered to the Agent for the benefit of the
Pledgees and subject to the lien of this Pledge Agreement.
(c) The Pledgor will, at its own expense, at any time and
from time to time at the Agent's request, do, make, procure, execute and deliver
all acts, things, writings, assurances and other documents as may be requested
by the Agent to further enhance, preserve, establish, demonstrate or enforce the
Agent's or the Pledgees' rights, interests and remedies created by, provided in
or emanating from this Pledge Agreement.
7. Rights of Pledgor. Prior to the occurrence and continuance
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of an Event of Default (as defined in the Credit Agreement), and so long as the
Agent has not transferred the Collateral to its own name under Section 4 hereof,
the Pledgor shall be entitled to vote or consent with respect to the Collateral
in any manner not inconsistent with this Pledge Agreement, the Credit Agreement,
or any note, document or instrument delivered pursuant to or in connection
herewith or therewith. The Pledgor hereby grants to the Agent an irrevocable
proxy to vote the Collateral, which proxy shall be effective immediately upon
the declaration of an Event of Default or registration of the Collateral in the
name of the Agent. Upon request of the Agent, the Pledgor agrees to deliver to
the Agent such further evidence of such irrevocable proxy or such further
irrevocable proxy to vote the Collateral as the Agent may request.
8. Rights of The Agent and The Pledgees. At any time whether
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or not an Event of Default shall exist, unless otherwise explicitly noted below
in this Section and without notice, the Agent, for the benefit of the Pledgees,
may:
(a) Cause the Collateral to be transferred to its name or
to the name of its nominee or nominees in order to protect its lien on or
security interest in the Pledged Shares, provided that, so long as Pledgees have
not declared an Event of Default, the Pledgor shall retain the right to vote the
Collateral as set forth in Section 7 of this Agreement and the right to receive
all cash dividends and cash interest payments with respect thereto;
(b) Collect by legal proceedings or otherwise all
dividends, interest, principal payments, capital distributions and other sums
now or hereafter payable on account of said Collateral, and hold the same as
part of the Collateral, or apply the same to any of the Obligations to the
Pledgees in such manner and order as the Pledgees may decide in the sole
discretion, provided that, so long as the Pledgees has not declared an Event of
Default, the
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Pledgor shall retain the right to receive all cash dividends and all cash
interest payments with respect thereto;
(c) Upon the occurrence and continuance of an Event of
Default, enter into any extension, subordination, reorganization, deposit,
merger, or consolidation agreement; or enter into any other agreement relating
to or affecting the Collateral; and in connection therewith deposit or surrender
control of such Collateral thereunder, and accept other property in exchange
therefor and hold and apply such property or money so received in accordance
with the provisions hereof; and
(d) Discharge any taxes, liens, security interests or
other encumbrances levied or placed on the Collateral, or pay for the
maintenance and preservation of the Collateral provided however that unless a
"Default" or "Event of Default" has occurred and is continuing under the Credit
Agreement, the Agent shall provide the Pledgor with thirty (30) days prior
notice to making any such payment; and the amount of such payments, plus any and
all fees, costs and expenses of the Agent and the Pledgees (including attorneys'
fees and disbursements), in connection therewith, shall, at Pledgees' option, be
reimbursed by Pledgor on demand, with interest thereon at the highest interest
rate applicable under the Credit Agreement from the date paid, or added to the
Obligations secured hereby.
(e) After all Events of Default have been cured, the
Agent's rights to exercise voting power and to retain dividends, interests and
other payments and distributions under this Section 8 shall cease and the Agent
shall pay over to the Pledgor any such collateral retained by it during the
continuance of such Event of Default and not applied against the Obligations.
9. Remedies on Default. Upon the occurrence and continuance of
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an Event of Default (as defined in the Credit Agreement):
(a) In addition to all the rights and remedies of a
secured party under the Uniform Commercial Code, the Agent, on behalf of the
Pledgees, shall have the right, and without demand of performance or other
demand, advertisement or notice of any kind, except as specified below, to or
upon the Pledgor or any other person (all and each of which demands,
advertisements and/or notices are hereby expressly waived to the extent
permitted by law), to proceed forthwith to collect, receive, appropriate and
realize upon the Collateral, or any part thereof and to proceed forthwith to
sell, assign, give an option or options to purchase, contract to sell, or
otherwise dispose of and deliver the Collateral or any part thereof in one or
more parcels at public or private sale or sales at any stock exchange, broker's
board or at any of the Agent's offices or elsewhere at such prices and on such
terms (including, without limitation, a requirement that any purchaser of all or
any part of the Collateral shall be required to purchase any securities
constituting the Collateral solely for investment and without any intention to
make a distribution thereof) as the Agent in its sole and absolute discretion
deems appropriate without any liability for any loss due to decrease in the
market value of the Collateral during the period held or the manner in which the
Collateral is sold. If any notification of intended disposition of the
Collateral is required by law, such notification shall be deemed reasonable and
properly
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given if mailed, postage prepaid, at least ten (10) days before any such
disposition, to Pledgor's address indicated below. Any disposition of the
Collateral or any part thereof may be for cash or on credit or for future
delivery without assumption of any credit risk, with the right to the Agent or
any Pledgee to purchase all or any part of the Collateral so sold at any such
sale or sales, public or private, free of any equity of redemption or right of
redemption in the Pledgors, which right or equity is, to extent permitted by
applicable law, hereby expressly waived or released by the Pledgor.
(b) All of the rights and remedies of the Agent and the
Pledgees, including but not limited to the foregoing, shall be cumulative and
not exclusive and shall be enforceable alternatively, successively or
concurrently as the Agent or the Pledgees may deem expedient.
(c) The Agent may elect to obtain the advice of any
investment banking firm or other advisor, with respect to the method and manner
of sale or other disposition of any of the Collateral, the best price reasonably
obtainable therefor, the consideration of cash and/or credit terms, or any other
details concerning such sale or disposition. The Agent in its sole discretion,
may elect to sell on such credit terms which it deems reasonable. The sale of
any of the Collateral on credit terms shall not relieve the Pledgor of its
liability under any of the Obligations until the full purchase price for the
Collateral has been paid in full. All payments received by the Agent for the
benefit of the Pledgees in respect of all sale of Collateral shall be applied to
the Obligations in such order as the Agent shall elect, as and when such
payments are received.
(d) The Pledgors recognizes that the Agent may be unable
to effect a public sale of all or a part of the Collateral by reason of certain
prohibitions contained in the Act or in any applicable U.S. state laws or non-
U.S. laws, but may be compelled to resort to one or more private sales to a
restricted group of purchasers who will be obliged to agree, among other things,
to acquire the Collateral for their own account, for investment and not with a
view for the distribution or resale thereof. The Pledgor agrees that private
sales so made may be at prices and on other terms less favorable to the seller
than if the Collateral were sold at public sale, and that the Agent has no
obligation to delay the sale of any Collateral for the period of time necessary
to permit the registration of the Collateral for public sale under the Act. The
Pledgor agrees that a private sale or sales made under the foregoing
circumstances shall be deemed to have been made in a commercially reasonable
manner.
(e) If any consent, approval or authorization of any
state, municipal or other governmental department, agency or authority should be
necessary to effect any sale or other disposition of the Collateral, or any
partial disposition of the Collateral, the Pledgor will execute all such
applications and other instruments as may be required in connection with
securing any such consent, approval or authorization, and will otherwise use its
best efforts to secure the same. The Pledgor further agrees to use its best
efforts to secure such sale or other disposition of the Collateral as the Agent
may reasonably deem necessary pursuant to the terms of this Pledge Agreement.
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(f) Upon any sale or other disposition, the Agent shall
have the right to deliver, assign and transfer to the purchaser thereof the
Collateral so sold or disposed of. Each purchaser at any such sale or other
disposition (including any Pledgee) shall hold the Collateral free from any
claim or right of whatever kind, including any equity of redemption or right of
redemption of the Pledgor. The Pledgors specifically waive, to the extent
permitted by applicable law, all rights of redemption, stay or appraisal which
its has or may have under any rule of law or statute now existing or hereafter
adopted.
(g) The Agent shall not be obligated to make any sale or
other disposition, unless the terms thereof shall be satisfactory to it. The
Agent may, without notice or publication, adjourn any private or public sale,
and, upon five (5) days prior notice to Pledgor, hold such sale 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 future delivery, the Collateral so sold may
be retained by the Agent until the selling price is paid by the purchaser
thereof, but the Agent shall incur no liability in case of the failure of such
purchaser to take up and pay for the property so sold and, in case of any such
failure, such property may again be sold as herein provided.
10. Disposition of Proceeds.
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The proceeds of any sale or disposition of all or any part of the
Collateral shall be applied by the Agent in the following order:
(i) to the payment in full of the costs and expenses
of such sale or sales, collections, and the protection, declaration and
enforcement of any security interest granted hereunder, including the reasonable
compensation of the Agent's agents and attorneys;
(ii) to the payment of the Obligations in such order as
the Agent may elect; and
(iii) to the payment to the Pledgor of any surplus
then remaining from such proceeds.
11. Termination. This Pledge Agreement shall continue in full
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force and effect until the date on which all of the Obligations shall have
either been paid in full or otherwise satisfied. Subject to any sale or other
disposition by the Agent of the Collateral or any part thereof pursuant to this
Pledge Agreement, and provided there then exists no Event of Default under the
Credit Agreement, the Collateral shall be returned to the Pledgor (without
warranty by, or recourse to, the Agent or the Pledgees) upon payment in full and
satisfaction of all of the Obligations.
12. Expenses of The Agent and The Pledgees. All expenses
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(including reasonable fees and disbursements of counsel) incurred by the Agent
and the Pledgees in connection with any actual or attempted sale, exchange of,
or any enforcement, collection, compromise or settlement respecting, the
Collateral, or any other action taken by the Agent or the Pledgees hereunder
whether directly or as attorney-in-fact pursuant to a power of attorney or
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other authorization herein conferred, for the purpose of satisfaction of the
liability of the Pledgor for failure to pay the Obligations or as additional
amounts owing by the Pledgor to cover Agent's costs of acting against the
Collateral as provided herein, shall be deemed an Obligation of the Pledgor for
all purposes of this Pledge Agreement and the Agent may apply the Collateral to
payment of or reimbursement of itself or the Pledgees for such liability.
13. General Provisions.
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(a) The Agent and its assigns shall have no obligation in
respect of the Collateral, except to use reasonable care in holding the
Collateral and to hold and dispose of the same in accordance with the terms of
this Pledge Agreement.
(b) Any notice or other communication given hereunder
shall be in writing and sent by registered or certified mail, postage prepaid,
or by telecopier as follows:
If to Pledgor:
Veeco Instruments Inc.
Terminal Drive
Plainview, New York 11803
Attention: John F. Rein, Jr.
Telephone: (516) 349-8300
Telecopy: (516) 349-9079
If to the Agent:
Fleet Bank, N.A.
300 Broad Hollow Road
Melville, New York 11747
Attention: William Ewing
Telephone: (516) 547-7759
Telecopy: (516) 547-7815
Either party hereto may change its address or telecopier number for notice by
giving notice thereof to the other party in accordance with the provisions of
this paragraph.
(c) No failure on the part of the Agent to exercise, and
no delay in exercising, any right, power or remedy hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise by the Agent of any
right, power or remedy hereunder preclude any other or future exercise thereof,
or the exercise of any other right, power or remedy. The remedies herein
provided are cumulative and are not exclusive of any remedies provided by law or
any other agreement. The representations, covenants and agreements of Pledgor
herein contained shall survive the date hereof. This Pledge Agreement cannot be
changed, waived or terminated other than by prior written consent by the Pledgor
and the Agent and the Pledgees. This Pledge Agreement shall be binding upon and
inure to the benefit of the parties hereto and
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their respective successors, legal representatives and assigns (it being
understood that the Pledgor may not assign any of its obligations hereunder
without the express prior written consent of the Pledgees) and shall be governed
by and construed in accordance with the laws of the State of New York applicable
to agreements made and to be wholly performed in the State of New York.
14. Term of Agreement.
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Notwithstanding anything herein or in the Agreement, the Agent and the
Pledgees agree that upon the payment in full of the Obligations (other than
Obligations, including, without limitation, indemnities, which are intended to
survive the payment of the Loans and/or termination of the Commitments) and
termination of the Commitments, (1) this Pledge Agreement shall automatically
terminate and be of no force or effect, (2) all liens created hereunder shall
terminate, (3) the Agent shall promptly deliver and/or transfer to the Pledgor
any and all Collateral in the Agent's or its representative's possession and (4)
the Agent shall execute and deliver to the Debtor such documents and instruments
as the Debtor shall reasonably request in order to evidence the foregoing.
IN WITNESS WHEREOF, the parties hereto have executed and delivered
this Agreement as of the date first above written.
VEECO INSTRUMENTS INC., Pledgor
By: /s/ John F. Rein, Jr.
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Name: John F. Rein, Jr.
Title: Vice President
FLEET BANK, N.A., as Agent and as Pledgee
By: /s/ William Ewing
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Name: William Ewing
Title: Vice President
THE CHASE MANHATTAN BANK, as Pledgee
By: /s/ Carolyn B. Lattanzi
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Name: Carolyn B. Lattanzi
Title: Vice President
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SCHEDULE "A" TO PLEDGE
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Stock Certificate No. 1 representing 10 shares of Sloan Technology
Corporation, which constitute all the outstanding and issued shares of Veeco
Instruments, Inc.
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