BORROWER AND SUBSIDIARY PLEDGE AGREEMENT
This Pledge Agreement (the "Agreement") is dated as of February 24, 1998
by and among EAGLE-PICHER INDUSTRIES, INC., a corporation organized and existing
under the laws of Ohio, as survivor and successor by merger with E-P
Acquisition, Inc., (as further defined in the Credit Agreement referred to
below, the "Borrower"), and the other parties executing this Agreement under the
heading "Pledgors" (the Borrower and such other parties, along with any parties
who execute and deliver to the Agent an agreement in the form attached hereto as
Schedule C being hereinafter referred to collectively as the "Pledgors" and
individually as a "Pledgor"), each with its mailing address as set forth on its
signature page hereto and ABN AMRO Bank N.V., a bank organized under the laws of
the Netherlands ("ABN AMRO"), with its mailing address at 1325 Avenue of the
Americas, New York, New York 10019, acting as collateral agent hereunder for the
Secured Creditors hereinafter identified and defined (ABN AMRO acting as such
agent and any successor or successors to ABN AMRO acting in such capacity being
hereinafter referred to as the "Agent");
PRELIMINARY STATEMENTS
A. The Borrower and ABN AMRO, individually and as agent, have entered
into a Credit Agreement dated as of February 19, 1998 (such Agreement as the
same may be amended, modified or restated from time to time being hereinafter
referred to as the "Credit Agreement"), pursuant to which ABN AMRO and other
banks and financial institutions and letter of credit issuers from time to time
party to the Credit Agreement (ABN AMRO, in its individual capacity, and such
other banks and financial institutions which from time to time become party to
the Credit Agreement being hereinafter referred to collectively as the "Lenders"
and individually as a "Lender" and such letter of credit issuers being
hereinafter referred to collectively as the "Letter of Credit Issuers" and
individually as a "Letter of Credit Issuer") have agreed, subject to certain
terms and conditions, to extend credit and make certain other financial
accommodations available to the Borrower.
B. The Borrower may from time to time enter into one or more Interest
Rate Protection Agreements with one or more of the Lenders party to the Credit
Agreement or affiliates thereof for the purpose of hedging or otherwise
protecting the Borrower against changes in interest rates (the liability of the
Borrower in respect of such agreements with such Lenders or affiliates being
hereinafter referred to as the "Hedging Liability") (the Agent, the Lenders, the
Letter of Credit Issuers and such affiliates party to Interest Rate Protection
Agreements being hereinafter referred to collectively as the "Secured Creditors"
and individually as a "Secured Creditor").
C. As a condition to extending credit to the Borrower under the Credit
Agreement, the Secured Creditors have required, among other things, that each
Pledgor grant to the Agent for the benefit of the Secured Creditors a security
interest in certain personal property of such Pledgor described herein subject
to the terms and conditions hereof.
D. The Borrower owns, directly or indirectly, equity interests in each
other Pledgor and the Borrower provides each other Pledgor with financial,
management, administrative, and technical support which enables such Pledgor to
conduct its business in an orderly and efficient manner in the ordinary course.
E. Each Pledgor will benefit, directly or indirectly, from credit and
other financial accommodations extended by the Secured Creditors to the
Borrower.
NOW, THEREFORE, for and in consideration of the execution and delivery
by the Secured Creditors of the Credit Agreement, and other good and valuable
consideration, receipt whereof is hereby acknowledged, the parties hereto hereby
agree as follows:
Section 1. Terms Defined in Credit Agreement. All capitalized terms
used herein without definition shall have the same meanings herein as such terms
have in the Credit Agreement. The term "Pledgor" and "Pledgors" as used herein
shall mean and include the Pledgors collectively and also each individually,
with all grants, representations, warranties and covenants of and by the
Pledgors, or any of them, herein contained to constitute joint and several
grants, representations, warranties and covenants of and by the Pledgors;
provided, however, that unless the context in which the same is used shall
otherwise require, any grant, representation, warranty or covenant contained
herein related to the Collateral shall be made by each Pledgor only with respect
to the Collateral owned by it or represented by such Pledgor as owned by it.
Section 2. Grant of Security Interest in the Collateral. Each Pledgor
hereby grants to the Agent for the benefit of the Secured Creditors a lien on
and security interest in, and acknowledges and agrees that the Agent has and
shall continue to have for the benefit of the Secured Creditors a continuing
lien on and security interest in, any and all right, title and interest of such
Pledgor in and to the following, whether now owned or existing or hereafter
created, acquired or arising, and in whatever form:
(a) Pledged Securities. (i) 100% (or, if less, the full amount
owned by such Pledgor) of the issued and outstanding shares of capital
stock owned by such Pledgor of each Domestic Subsidiary (as set forth on
Schedule A attached hereto) and (ii) 65% (or, if less, the full amount
owned by such Pledgor) of the issued and outstanding shares of each
class of capital stock or other ownership interests entitled to vote
(within the meaning of Treas. Reg. Section 1.956-2(c)(2)) ("Voting
Equity") and 100% (or, if less, the full amount owned by such Pledgor)
of the issued and outstanding shares of each class of capital stock or
other ownership interests not entitled to vote (within the meaning of
Treas. Reg. Section 1.956-2(c)(2)) ("Non-Voting Equity") owned by such
Pledgor of each First Tier Foreign Subsidiary (as set forth on Schedule
A attached hereto), in each case together with the certificates (or
other agreements or instruments), if any, representing such shares, and
all options and other rights, contractual or otherwise, with respect
thereto (collectively, together with the shares of capital stock
described in Section 2(b) and 2(c) below and the rights and privileges
described hereunder with respect thereto, the "Pledged Securities"),
including, but not limited to, the following:
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(x) all shares of securities representing a dividend on
any of the Pledged Securities, or representing a distribution or
return of capital upon or in respect of the Pledged Securities,
or resulting from a stock split, revision, reclassification or
other exchange therefor, and any subscriptions, warrants, rights
or options issued to the holder of, or otherwise in respect of,
the Pledged Securities; and
(y) without affecting the obligations of such Pledgor
under any provision prohibiting such action hereunder, in the
event of any consolidation or merger in which a Person set forth
on Schedule A is not the surviving corporation, all shares of
each class of the capital stock of the successor corporation
formed by or resulting from such consolidation or merger (or 65%
of Voting Equity and/or 100% of Non-Voting Equity if the
successor corporation is a First Tier Foreign Subsidiary).
(b) Additional Securities. 100% (or, if less, the full amount
owned by such Pledgor) of the issued and outstanding shares of capital
stock owned by such Pledgor of any Person which hereafter becomes a
Domestic Subsidiary and 65% (or, if less, the full amount owned by such
Pledgor) of the Voting Equity and 100% (or, if less, the full amount
owned by such Pledgor) of the Non-Voting Equity owned by such Pledgor of
any Person which hereafter becomes a First Tier Foreign Subsidiary,
including, without limitation, the certificates (or other agreements or
instruments), if any, representing such shares or Equity.
(c) Other Equity Interests. Any and all other equity interests of
each Pledgor in any Domestic Subsidiary or any First Tier Foreign
Subsidiary; provided that with respect to any Voting Equity in any First
Tier Foreign Subsidiary, not more than 65% of the capital stock or
equity interest in any such Foreign Subsidiary is pledged hereunder.
(d) Proceeds. All proceeds and products of the foregoing, however
and whenever acquired and in whatever form.
all of the foregoing being herein sometimes referred to as the "Collateral." All
terms which are used in this Agreement which are defined in the Uniform
Commercial Code of the State of New York ("UCC") shall have the same meanings
herein as such terms are defined in the UCC, unless this Agreement shall
otherwise specifically provide.
Section 3. Obligations Hereby Secured. This Agreement is made and
given to secure, and shall secure, the prompt payment and performance of (i) any
and all indebtedness, obligations and liabilities of the Borrower to the Secured
Creditors, and to any of them individually, under or in connection with or
evidenced by the Credit Agreement, the Notes of the Borrower heretofore or
hereafter issued under the Credit Agreement and the obligations of the Borrower
to reimburse the Secured Creditors for the amount of all drawings on all Letters
of Credit issued pursuant to the Credit Agreement, and all other obligations of
the Borrower under any and all applications for Letters of Credit, and any
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and all liability of the Borrower arising under or in connection with or
otherwise evidenced by agreements with any one or more of the Secured Creditors
with respect to any Hedging Liability, and any and all liability of the
Pledgors, and of any of them individually, arising under any guaranty issued by
it relating to the foregoing or any part thereof, in each case whether now
existing or hereafter arising (and whether arising before or after the filing of
a petition in bankruptcy and including all interest accrued after the petition
date), due or to become due, direct or indirect, absolute or contingent, and
howsoever evidenced, held or acquired and (ii) any and all expenses and charges,
legal or otherwise, suffered or incurred by the Secured Creditors, and any of
them individually, in collecting or enforcing any of such indebtedness,
obligations and liabilities or in realizing on or protecting or preserving any
security therefor, including, without limitation, the lien and security interest
granted hereby (all of the indebtedness, obligations, liabilities, expenses and
charges described above being hereinafter referred to as the "Obligations").
Notwithstanding anything in this Agreement to the contrary, the right of
recovery against any Pledgor (other than the Borrower to which this limitation
shall not apply) under this Agreement shall not exceed $1.00 less than the
amount which would render such Pledgor's obligations under this Agreement void
or voidable under applicable law, including fraudulent conveyance law.
Section 4. Covenants, Agreements, Representations and Warranties. Each
Pledgor hereby covenants and agrees with, and represents and warrants to, the
Secured Creditors that:
(a) Each Pledgor is and shall be the sole and lawful legal,
record and beneficial owner of its Collateral. Each Pledgor's chief
executive office is at the address listed under such Pledgor's name on
Schedule A. Each Pledgor agrees that it will not change any location set
forth on the applicable Schedule hereto without at least 30 days' prior
written notice to the Agent (provided in the case of any Domestic
Subsidiary such locations shall be within the United States of America).
No Pledgor shall, without the Agent's prior written consent, sell,
assign, or otherwise dispose of the Collateral or any interest therein,
except to the extent permitted by Section 8.02 of the Credit Agreement.
The Collateral, and every part thereof, is and shall be free and clear
of all security interests, liens, rights, claims, attachments, levies
and encumbrances of every kind, nature and description and whether
voluntary or involuntary, except for the security interest of the Agent
hereunder. Each Pledgor shall warrant and defend the Collateral against
any claims and demands of all persons at any time claiming the same or
any interest in the Collateral adverse to the any Secured Creditor.
(b) Each Pledgor agrees to execute and deliver to the Agent such
further agreements, assignments, instruments and documents and to do all
such other things as the Agent may deem reasonably necessary or
appropriate to assure the Agent its lien and security interest
hereunder, including such assignments, acknowledgments, stock powers,
financing statements, instruments and documents as the Agent may from
time to time require in order to comply with the UCC. Each Pledgor
hereby agrees that a carbon, photographic or other reproduction of this
Agreement or any such financing statement is sufficient for filing as a
financing statement by the Agent without prior
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notice thereof to such Pledgor wherever the Agent in its discretion desires to
file the same. In the event for any reason the law of any jurisdiction other
than New York becomes or is applicable to the Collateral or any part thereof, or
to any of the Obligations, each Pledgor agrees to execute and deliver all such
agreements, assignments, instruments and documents and to do all such other
things as the Agent in its discretion deems necessary or appropriate to
preserve, protect and enforce the lien and security interest of the Agent under
the law of such other jurisdiction.
(c) If, as and when any Pledgor delivers any securities for
pledge hereunder in addition to those listed on Schedule A hereto, the
Pledgors shall furnish to the Agent a duly completed and executed
amendment to such Schedule in substantially the form (with appropriate
insertions) of Schedule B hereto reflecting the additional securities
pledged hereunder after giving effect to such addition.
(d) None of the Collateral constitutes margin stock (within the
meaning of Regulation U of the Board of Governors of the Federal Reserve
System).
(e) On failure of any Pledgor to perform any of the agreements
and covenants herein contained, the Agent may, at its option, perform
the same and in so doing may expend such sums as the Agent deems
advisable in the performance thereof, including, without limitation, the
payment of any taxes, liens and encumbrances, expenditures made in
defending against any adverse claim, and all other expenditures which
the Agent may be compelled to make by operation of law or which Agent
may make by agreement or otherwise for the protection of the security
hereof. All such sums and amounts so expended shall be repayable by the
Pledgors immediately without notice or demand, shall constitute
additional Obligations secured hereunder and shall bear interest from
the date said amounts are expended at the rate per annum (computed on
the basis of a year of 360 days, for the actual number of days elapsed)
determined by adding 2% to the Base Rate from time to time in effect
plus the Applicable Base Rate Margin for Revolving Loans, with any
change in such rate per annum as so determined by reason of a change in
such Base Rate to be effective on the date of such change in said Base
Rate (such rate per annum as so determined being hereinafter referred to
as the "Default Rate"). No such performance of any covenant or agreement
by the Agent on behalf of such Pledgor, and no such advancement or
expenditure therefor, shall relieve such Pledgor of any default under
the terms of this Agreement or in any way obligate any Secured Creditor
to take any further or future action with respect thereto. The Agent, in
making any payment hereby authorized, may do so according to any bill,
statement or estimate procured from the appropriate public office or
holder of the claim to be discharged without inquiry into the accuracy
of such bill, statement or estimate, or into the validity of any tax
assessment, sale, forfeiture, tax lien or title or claim. The Agent, in
performing any act hereunder, shall be the sole judge of whether the
relevant Pledgor is required to perform the same under the terms of this
Agreement. The Agent is hereby authorized to charge any depository or
other account of any Pledgor maintained with the Agent for the amount of
such sums and amounts so expended.
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Section 5. Special Provisions Re: Pledged Securities.
(a) Each Pledgor has the right to vote the Pledged Securities (in
the case of Foreign Subsidiaries, which are Voting Equity) and there are
no restrictions upon the voting rights associated therewith, or the
transfer of, any of the Pledged Securities, except as provided by
federal and state laws applicable to the sale of securities generally
and the terms of this Agreement.
(b) The certificates for all shares of the Pledged Securities
shall be delivered by the relevant Pledgor to the Agent duly endorsed in
blank for transfer or accompanied by an appropriate assignment or
assignments or an appropriate undated stock power or powers, in every
case sufficient to transfer title thereto. The Agent may at any time
after the occurrence of an Event of Default cause to be transferred into
its name or into the name of its nominee or nominees any and all of the
Pledged Securities. The Agent shall at all times have the right to
exchange the certificates representing the Pledged Securities for
certificates of smaller or larger denominations.
(c) The pledge of shares of the Foreign Subsidiaries listed on
Schedule D shall be effected as set forth in such Schedule.
(d) The Pledged Securities have been validly issued and, except
as described on Schedule A, are fully paid and non-assessable. Except as
set forth on Schedule A, there are no outstanding commitments or other
obligations of the issuers of any of the Pledged Securities to issue,
and no options, warrants or other rights of any individual or entity to
acquire, any share of any class or series of capital stock of such
issuers. The Pledged Securities listed and described on Schedule A
attached hereto constitute the percentage of the issued and outstanding
capital stock of each series and class of the issuers thereof as set
forth thereon owned by the relevant Pledgor. Each Pledgor further agrees
that in the event any such issuer shall issue any additional capital
stock of any series or class (whether or not entitled to vote) to such
Pledgor or otherwise on account of its ownership interest therein, each
Pledgor will forthwith pledge and deposit hereunder, or cause to be
pledged and deposited hereunder, all such additional shares of such
capital stock provided that with respect to Voting Equity of any First
Tier Foreign Subsidiary, not more than 65% of Voting Equity of such
Foreign Subsidiary is pledged hereunder.
Section 6. Voting Rights and Dividends. Unless and until an Event of
Default hereunder has occurred and is continuing and thereafter until notified
by the Agent pursuant to Section 8(b) hereof:
(a) Each Pledgor shall be entitled to exercise all voting and/or
consensual powers pertaining to the Collateral of such Pledgor, or any
part thereof, for all purposes not inconsistent with the terms of this
Agreement or any other document evidencing or otherwise relating to any
of the Obligations.
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(b) Each Pledgor shall be entitled to receive and retain all
dividends and distributions in respect of the Collateral which are paid
in cash of whatsoever nature; provided, however, that such dividends and
distributions representing stock or liquidating dividends or a
distribution or return of capital upon or in respect of the Pledged
Securities or any part thereof or resulting from a split-up, revision or
reclassification of the Pledged Securities or any part thereof or
received in addition to, in substitution of or in exchange for the
Pledged Securities or any part thereof as a result of a merger,
consolidation or otherwise shall be paid, delivered or transferred, as
appropriate, directly to the Agent immediately upon the receipt thereof
by such Pledgor and may, in the case of cash, be applied by the Agent to
the Obligations, whether or not the same may then be due or otherwise
adequately secured and shall, in the case of all other property,
together with any cash received by the Agent and not applied as
aforesaid, be held by the Agent pursuant hereto as part of the
Collateral pledged under and subject to the terms of this Agreement.
(c) In order to permit each Pledgor to exercise such voting
and/or consensual powers which it is entitled to exercise under
subsection (a) above and to receive such distributions which such
Pledgor is entitled to receive and retain under subsection (b) above,
the Agent will, if necessary, upon the written request of such Pledgor,
from time to time execute and deliver to such Pledgor appropriate
proxies and dividend orders.
Section 7. Power of Attorney. Each Pledgor hereby appoints the Agent,
its nominee, or any other person whom the Agent may designate as such Pledgor's
attorney-in-fact, with full power and authority to ask, demand, collect,
receive, receipt for, sue for, compound and give acquittance for any and all
sums or properties which may be or become due, payable or distributable in
respect of the Collateral or any part thereof, with full power to settle, adjust
or compromise any claim thereunder or therefor as fully as such Pledgor could
itself do, to endorse or sign the Pledgor's name on any assignments, stock
powers, or other instruments of transfer and on any checks, notes, acceptances,
money orders, drafts, and any other forms of payment or security that may come
into the Agent's possession and on all documents of satisfaction, discharge or
receipt required or requested in connection therewith, and, in its discretion,
to file any claim or take any other action or proceeding, either in its own name
or in the name of such Pledgor, or otherwise, which the Agent deems necessary or
appropriate to collect or otherwise realize upon all or any part of the
Collateral, or effect a transfer thereof, or which may be necessary or
appropriate to protect and preserve the right, title and interest of the Agent
in and to such Collateral and the security intended to be afforded hereby. Each
Pledgor hereby ratifies and approves all acts of any such attorney and agrees
that neither the Agent nor any such attorney will be liable for any such acts or
omissions nor for any error of judgment or mistake of fact or law other than
such person's gross negligence or willful misconduct. The Agent may file one or
more financing statements disclosing its security interest in all or any part of
the Collateral without any Pledgor's signature appearing thereon, and each
Pledgor also hereby grants the Agent a power of attorney to execute any such
financing statements, and any amendments or supplements thereto, on behalf of
such Pledgor without notice thereof to such Pledgor. The foregoing powers of
attorney, being coupled with an interest, are irrevocable until the
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Obligations have been fully satisfied and all commitments of the Secured
Creditors to extend credit to or for the account of the Borrower have expired or
otherwise been terminated.
Section 8. Defaults and Remedies. (a) The occurrence of any event or
the existence of any condition which is specified as an "Event of Default" under
the Credit Agreement shall constitute an "Event of Default" hereunder.
(b) Upon the occurrence and during the continuation of any Event of
Default, all rights of the Pledgors to receive and retain the distributions
which they are entitled to receive and retain pursuant to Section 6(b) hereof
shall, at the option of the Agent cease and thereupon become vested in the Agent
which, in addition to all other rights provided herein or by law, shall then be
entitled solely and exclusively to receive and retain the distributions which
the Pledgors would otherwise have been authorized to retain pursuant to Section
6(b) hereof and all rights of the Pledgors to exercise the voting and/or
consensual powers which they are entitled to exercise pursuant to Section 6(a)
hereof shall, at the option of the Agent, cease and thereupon become vested in
the Agent which, in addition to all other rights provided herein or by law,
shall then be entitled solely and exclusively to exercise all voting and other
consensual powers pertaining to the Collateral and to exercise any and all
rights of conversion, exchange or subscription and any other rights, privileges
or options pertaining thereto as if the Agent were the absolute owner thereof
including, without limitation, the right to exchange, at its discretion, the
Collateral or any part thereof upon the merger, consolidation, reorganization,
recapitalization or other readjustment of the respective issuer thereof or upon
the exercise by or on behalf of any such issuer or the Agent of any right,
privilege or option pertaining to the Collateral or any part thereof and, in
connection therewith, to deposit and deliver the Collateral or any part thereof
with any committee, depositary, transfer agent, registrar or other designated
agency upon such terms and conditions as the Agent may determine. In the event
the Agent in good faith believes any of the Collateral constitutes restricted
securities within the meaning of any applicable securities law, any disposition
thereof in compliance with such laws shall not render the disposition
commercially unreasonable.
(c) Upon the occurrence and during the continuation of any Event of
Default, the Agent shall have, in addition to all other rights provided herein
or by law, the rights and remedies of a secured party under the UCC (regardless
of whether the UCC is the law of the jurisdiction where the rights or remedies
are asserted and regardless of whether the UCC applies to the affected
Collateral), and further the Agent may, without demand and without
advertisement, notice, hearing or process of law, all of which each Pledgor
hereby waives to the extent permitted by applicable law, at any time or times,
sell and deliver any or all of the Collateral held by or for it at public or
private sale, at any securities exchange or broker's board or at any of the
Agent's offices or elsewhere, for cash, upon credit or otherwise, at such prices
and upon such terms as the Agent deems advisable, in its sole discretion. In the
exercise of any such remedies, the Agent may sell the Collateral as a unit even
though the sales price thereof may be in excess of the amount remaining unpaid
on the Obligations. Also, if less than all the Collateral is sold, the Agent
shall have no duty to marshal or apportion the part of the Collateral so sold as
between the Pledgors, or any of them, but may sell and deliver any or all of the
Collateral without regard to which of the Pledgors are the
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owners thereof. In addition to all other sums due any Secured Creditor
hereunder, each Pledgor shall pay the Secured Creditors all costs and expenses
incurred by the Secured Creditors, including reasonable attorneys' fees and
court costs, in obtaining, liquidating or enforcing payment of Collateral or the
Obligations or in the prosecution or defense of any action or proceeding by or
against any Secured Creditor or any Pledgor concerning any matter arising out of
or connected with this Agreement or the Collateral or the Obligations including,
without limitation, any of the foregoing arising in, arising under or related to
a case under the United States Bankruptcy Code (or any successor statute). Any
requirement of reasonable notice shall be met if such notice is personally
served on or mailed, postage prepaid, to the Pledgors in accordance with Section
13(b) hereof at least 10 days before the time of sale or other event giving rise
to the requirement of such notice; provided, however, no notification need be
given to a Pledgor if such Pledgor has signed, after an Event of Default has
occurred, a statement renouncing any right to notification of sale or other
intended disposition. The Agent shall not be obligated to make any sale or other
disposition of the Collateral regardless of notice having been given. Any
Secured Creditor may be the purchaser at any such sale. Each Pledgor hereby
waives all of its rights of redemption from any such sale. The Agent may
postpone or cause the postponement of the sale of all or any portion of the
Collateral by announcement at the time and place of such sale, and such sale
may, without further notice, be made at the time and place to which the sale was
postponed or the Agent may further postpone such sale by announcement made at
such time and place.
EACH PLEDGOR AGREES THAT IF ANY PART OF THE COLLATERAL IS SOLD AT ANY
PUBLIC OR PRIVATE SALE, THE AGENT MAY ELECT TO SELL ONLY TO A BUYER WHO WILL
GIVE FURTHER ASSURANCES, SATISFACTORY IN FORM AND SUBSTANCE TO THE AGENT,
RESPECTING COMPLIANCE WITH THE REQUIREMENTS OF THE FEDERAL SECURITIES ACT OF
1933, AS AMENDED, AND A SALE SUBJECT TO SUCH CONDITION SHALL BE DEEMED
COMMERCIALLY REASONABLE.
EACH PLEDGOR FURTHER AGREES THAT IN ANY SALE OF ANY PART OF THE
COLLATERAL, THE AGENT IS HEREBY AUTHORIZED TO COMPLY WITH ANY LIMITATION OR
RESTRICTION IN CONNECTION WITH SUCH SALE AS IT MAY BE ADVISED BY COUNSEL IS
NECESSARY IN ORDER TO AVOID ANY VIOLATION OF APPLICABLE LAW (INCLUDING, WITHOUT
LIMITATION, COMPLIANCE WITH SUCH PROCEDURES AS MAY RESTRICT THE NUMBER OF
PROSPECTIVE BIDDERS AND PURCHASERS AND/OR FURTHER RESTRICT SUCH PROSPECTIVE
BIDDERS OR PURCHASERS TO PERSONS WHO WILL REPRESENT AND AGREE THAT THEY ARE
PURCHASING FOR THEIR OWN ACCOUNT FOR INVESTMENT AND NOT WITH A VIEW TO THE
DISTRIBUTION OR RESALE OF SUCH COLLATERAL ), OR IN ORDER TO OBTAIN ANY REQUIRED
APPROVAL OF THE SALE OR OF THE PURCHASER BY ANY GOVERNMENTAL REGULATORY
AUTHORITY OR OFFICIAL, AND EACH PLEDGOR FURTHER AGREES THAT SUCH COMPLIANCE
SHALL NOT RESULT IN SUCH SALE BEING CONSIDERED OR DEEMED NOT TO HAVE BEEN MADE
IN A COMMERCIALLY REASONABLE MANNER, NOR SHALL THE AGENT BE LIABLE OR
ACCOUNTABLE TO ANY PLEDGOR FOR ANY DISCOUNT ALLOWED BY REASON OF THE FACT THAT
SUCH COLLATERAL IS SOLD IN COMPLIANCE WITH ANY SUCH LIMITATION OR RESTRICTION.
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(d) The powers conferred upon the Agent hereunder are solely to protect
its interest in the Collateral and shall not impose on it any duties to exercise
such powers. The Agent shall be deemed to have exercised reasonable care in the
custody and preservation of the Collateral in its possession if the Collateral
is accorded treatment substantially equivalent to that which the Agent accords
its own property, consisting of similar types securities, it being
understood, however, that the Agent shall have no responsibility for
(i) ascertaining or taking any action with respect to calls, conversions,
exchanges, maturities, tenders or other matters relating to any Collateral,
whether or not the Agent has or is deemed to have knowledge of such matters,
(ii) taking any necessary steps to preserve rights against any parties with
respect to any Collateral, or (iii) initiating any action to protect the
Collateral or any part thereof against the possibility of a decline in market
value. This Agreement constitutes an assignment of rights only and not an
assignment of any duties or obligations of the Pledgors in any way related to
the Collateral, and the Agent shall have no duty or obligation to discharge any
such duty or obligation. By its acceptance hereof, the Agent does not undertake
to perform or discharge and shall not be responsible or liable for the
performance or discharge of any such duties or responsibilities. Neither any
Secured Creditor, nor any party acting as attorney for any Secured Creditor,
shall be liable hereunder for any acts or omissions or for any error of judgment
or mistake of fact or law other than such person's gross negligence or willful
misconduct.
(e) Failure by the Agent to exercise any right, remedy or option under
this Agreement or any other agreement between any Pledgor and the Agent or
provided by law, or delay by the Agent in exercising the same, shall not operate
as a waiver; and no waiver shall be effective unless it is in writing, signed by
the party against whom such waiver is sought to be enforced and then only to the
extent specifically stated. The rights and remedies of the Secured Creditors
under this Agreement shall be cumulative and not exclusive of any other right or
remedy which any Secured Creditor may have. For purposes of this Agreement, an
Event of Default shall be construed as continuing after its occurrence until the
same is waived in writing by the Lenders or the Required Lenders, as the case
may be, in accordance with the Credit Agreement.
Section 9. Application of Proceeds. The proceeds and avails of the
Collateral at any time received by the Agent upon the occurrence and during the
continuation of any Event of Default shall, when received by the Agent in cash
or its equivalent, be applied by the Agent in reduction of, or held as
collateral security for, the Obligations in accordance with the terms of Section
4.05 of the Credit Agreement. The Pledgors shall remain liable to the Secured
Creditors for any deficiency. Any surplus remaining after the full payment and
satisfaction of the Obligations shall be returned to the Borrower, as agent for
Pledgors, or to whomsoever the Agent reasonably determines is lawfully entitled
thereto.
Section 10. Continuing Agreement. This Agreement shall be a continuing
agreement in every respect and shall remain in full force and effect until all
of the Obligations, both for principal and interest, have been fully paid and
satisfied and the commitments of the Secured Creditors to extend credit to or
for the account of the Borrower shall have expired or otherwise terminated. Upon
such termination of this
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Agreement, the Agent shall, upon the request and at the expense of the Pledgors,
forthwith release all its liens and security interests hereunder.
Section 11. Primary Security; Obligations Absolute. The lien and
security herein created and provided for stand as direct and primary security
for the Obligations. No application of any sums received by the Agent in respect
of the Collateral or any disposition thereof to the reduction of the Obligations
or any portion thereof shall in any manner entitle any Pledgor to any right,
title or interest in or to the Obligations or any collateral security therefor,
whether by subrogation or otherwise, unless and until all Obligations have been
fully paid and satisfied and all commitments to extend credit constituting
Obligations to the Borrower shall have expired or otherwise terminated. Each
Pledgor acknowledges and agrees that the lien and security hereby created and
provided for are absolute and unconditional and shall not in any manner be
affected or impaired by any acts or omissions whatsoever of any Secured Creditor
or any other holder of any of the Obligations, and without limiting the
generality of the foregoing, the lien and security hereof shall not be impaired
by any acceptance by any Secured Creditor or any other holder of any of the
Obligations of any other security for or guarantors upon any Obligations or by
any failure, neglect or omission on the part of any Secured Creditor or any
other holder of any of the Obligations to realize upon or protect any of the
Obligations or any collateral security therefor (including, without limitation,
impairment of collateral or failure to perfect security interest in collateral).
The lien and security hereof shall not in any manner be impaired or affected by
(and the Secured Creditors, without notice to anyone, are hereby authorized to
make from time to time) any sale, pledge, surrender, compromise, settlement,
release, renewal, extension, indulgence, alteration, substitution, exchange,
change in, modification or disposition of any of the Obligations, or of any
collateral security therefor, or of any guaranty thereof, or of any instrument
or agreement setting forth the terms and conditions pertaining to any of the
foregoing. The Secured Creditors may at their discretion at any time grant
credit to the Borrower without notice to the other Pledgors in such amounts and
on such terms as the Secured Creditors may elect without in any manner impairing
the lien and security hereby created and provided for. In order to realize
hereon and to exercise the rights granted the Secured Creditors hereunder and
under applicable law, there shall be no obligation on the part of any Secured
Creditor or any other holder of any of the Obligations at any time to first
resort for payment to the Borrower or any other Pledgor or to any guaranty of
the Obligations or any portion thereof or to resort to any other collateral
security, property, liens or any other rights or remedies whatsoever, and the
Secured Creditors shall have the right to enforce this Agreement as against any
Pledgor or any of its Collateral irrespective of whether or not other
proceedings or steps seeking resort to or realization upon or from any of the
foregoing are pending.
Section 12. The Agent. In acting under or by virtue of this Agreement,
the Agent shall be entitled to all the rights, authority, privileges and
immunities provided in Section 11 of the Credit Agreement, all of which
provisions of said Section 11 are incorporated by reference herein with the same
force and effect as if set forth herein in their entirety. The Agent hereby
disclaims any representation or warranty to the other Secured Creditors or any
other holders of the Obligations concerning the perfection of the liens and
security interests granted hereunder or in the value of the Collateral.
-11-
Section 13. Miscellaneous. (a) This Agreement cannot be changed or
terminated orally. This Agreement shall create a continuing lien on and security
interest in the Collateral and shall be binding upon each Pledgor, its
successors and permitted assigns, and shall inure, together with the rights and
remedies of the Secured Creditors hereunder, to the benefit of the Secured
Creditors, and their successors and assigns; provided, however, that no Pledgor
may assign its rights or delegate its duties hereunder without the Agent's prior
written consent. Without limiting the generality of the foregoing, and subject
to the provisions of the Credit Agreement, any Lender may assign or otherwise
transfer any indebtedness held by it secured by this Agreement to any other
person, and such other person shall thereupon become vested with all the
benefits in respect thereof granted to such Lender herein or otherwise.
(b) All communications provided for herein shall be in writing, except
as otherwise specifically provided for hereinabove, and shall be deemed to have
been given or made, if to any Pledgor when given to the Borrower in accordance
with Section 12.03 of the Credit Agreement, or if to any Secured Creditor, when
given to such party in accordance with Section 12.03 of the Credit Agreement.
(c) No Secured Creditor (other than the Agent) shall have the right to
institute any suit, action or proceeding in equity or at law for the foreclosure
or other realization upon any Collateral subject to this Agreement or for the
execution of any trust or power hereof or for the appointment of a receiver, or
for the enforcement of any other remedy under or upon this Agreement; it being
understood and intended that no one or more of the Secured Creditors (other than
the Agent) shall have any right in any manner whatsoever to affect, disturb or
prejudice the lien and security interest of this Agreement by its or their
action or to enforce any right hereunder, and that all proceedings at law or in
equity shall be instituted, had and maintained by the Agent in the manner herein
provided for the benefit of the Secured Creditors.
(d) In the event that any provision hereof shall be deemed to be invalid
or unenforceable by reason of the operation of any law or by reason of the
interpretation placed thereon by any court, this Agreement shall be construed as
not containing such provision, but only as to such jurisdictions where such law
or interpretation is operative, and the invalidity or unenforceability of such
provision shall not affect the validity of any remaining provision hereof, and
any and all other provisions hereof which are otherwise lawful and valid shall
remain in full force and effect. Without limiting the generality of the
foregoing, in the event that this Agreement shall be deemed to be invalid or
otherwise unenforceable with respect to any Pledgor, such invalidity or
unenforceability shall not affect the validity of this Agreement with respect to
the other Pledgors.
(e) In the event the Secured Creditors shall at any time in their
discretion permit a substitution of Pledgors hereunder or a party shall wish to
become a Pledgor hereunder, such substituted or additional Pledgor shall, upon
executing an agreement in the form attached hereto as Schedule C become a party
hereto and be bound by all the terms and conditions hereof to the same extent as
though such Pledgor had originally executed this Agreement and, in the case of a
substitution, in lieu of the Pledgor being replaced. Any such
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agreement shall contain information as to such Pledgor necessary to update
Schedule A with respect to it. No such substitution shall be effective absent
the written consent of Agent nor shall it in any manner affect the obligations
of the other Pledgors hereunder.
(f) Each Pledgor hereby submits to the non-exclusive jurisdiction of the
United States District Court for the Southern District of New York and of any
New York state court sitting in New York City for purposes of all legal
proceedings arising out of or relating to this Agreement, the other Credit
Documents or the transactions contemplated hereby or thereby. Each Pledgor
irrevocably waives, to the fullest extent permitted by law, any objection which
it may now or hereafter have to the laying of the venue of any such proceeding
brought in such a court and any claim that any such proceeding brought in such a
court has been brought in an inconvenient form. EACH PLEDGOR AND EACH SECURED
CREDITOR HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY
LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT, ANY OTHER CREDIT
DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
(g) This Agreement shall be deemed to have been made in the State of New
York and shall be governed by, and construed in accordance with, the laws of the
State of New York. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning of any
provision hereof.
(h) This Agreement may be executed in any number of counterparts and by
different parties hereto on separate counterpart signature pages, each
constituting an original, but all together one and the same instrument.
[SIGNATURE PAGES TO FOLLOW]
-13-
IN WITNESS WHEREOF, each Pledgor has caused this Agreement to be duly
executed and delivered as of the date first above written.
"PLEDGORS"
EAGLE-PICHER INDUSTRIES, INC.
By /s/ ANDRIES RUIJSSENAARS
--------------------------------------
Name Andries Ruijssenaars
---------------------------------
Title President
---------------------------------
EAGLE-PICHER DEVELOPMENT COMPANY, INC.
By /s/ ANDRIES RUIJSSENAARS
--------------------------------------
Name Andries Ruijssenaars
---------------------------------
Title Authorized Person
---------------------------------
EAGLE-PICHER MINERALS, INC.
By /s/ ANDRIES RUIJSSENAARS
-------------------------------------
Name Andries Ruijssenaars
---------------------------------
Title Authorized Person
--------------------------------
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Acknowledged and agreed to in New York, New York as of the date first
above written.
ABN AMRO BANK N.V., as Agent as
aforesaid for the Secured Creditors
By /s/ GREGORY D. AMOROSO
-----------------------------------
Its Group Vice President
-------------------------------
By /s/ PAUL WIDUCH
-----------------------------------
Its Group Vice President
-------------------------------
-15-
SCHEDULE A TO BORROWER AND SUBSIDIARY PLEDGE AGREEMENT
THE PLEDGED SECURITIES
PERCENTAGE
NAME AND LOCATION NAME OF JURISDICTION NO. OF CERTIFICATE OF
OF PLEDGOR ISSUER OF SHARES CLASS NO. ISSUER'S
INCORPORATION STOCK
Eagle-Picher Common
Industries, Inc. Daisy Parts, Inc. Michigan 1,890 Stock 32 100%
250 East Fifth Street, Eagle-Picher
Cincinnati, Ohio Development Common
45202 Company, Inc. Delaware 100 Stock 1 100%
Eagle-Picher Common
Far East, Inc. Delaware 100 Stock 100 100%
Eagle-Picher
Fluid Common
Systems, Inc. Michigan 100 Stock 1 100%
Eagle-Picher Common
Minerals, Inc. Nevada 1 Stock 1 100%
Hillsdale Tool &
Manufacturing Common
Co. Michigan 98,845 Stock 289 100%
EPTEC, S.A. de Common
C.V. Mexico 18,578,390 Share 3 65%
Series A
Equipo de Acuna Common
S.A. de C.V. Mexico 650 Share 11-A 65%
Series B
Common
12,866,621 Share 4-B 65%
Series C
980,362 Common 2-C 65%
Share
Eagle-Picher
Industries
Europe B.V. Netherlands 13,000 Shares N/A 65%
PERCENTAGE
NAME AND LOCATION NAME OF ISSUER JURISDICTION NO. OF CERTIFICATE OF ISSUER'S
OF PLEDGOR OF SHARES CLASS NO. STOCK
INCORPORATION
Eagle-Picher
Development
Company, Inc. Michigan
250 East Fifth Street Automotive
Cincinnati, Ohio Research Common
45202 Corporation Michigan 24,500 Stock 22 100%
Eagle-Picher Eagle-Picher
Minerals, Inc. Minerals
6110 Plumas Street, International
Reno, Nevada 89509, S.A.R.L. France 51,887 Shares N/A 65%
-2-
SCHEDULE B TO BORROWER AND SUBSIDIARY PLEDGE AGREEMENT
AMENDMENT TO PLEDGE AGREEMENT
Reference is hereby made to that certain Borrower and Subsidiary Pledge
Agreement dated as of February 24, 1998 (as the same may be amended, the "Pledge
Agreement"), from the Pledgors which are signatories thereto to ABN AMRO Bank
N.V., as Agent. Capitalized terms not otherwise defined herein shall have the
meaning set forth in the Pledge Agreement.
Subsequent to the Pledgors' delivery of the Pledge Agreement, certain
shares of stock or equity interests have been added as Collateral under the
Pledge Agreement. As a result of such addition, Schedule A of the Pledge
Agreement does not accurately describe the shares of capital stock or other
equity interest currently held by the Agent as collateral under the Pledge
Agreement.
The Pledgors now desire to amend Schedule A to the Pledge Agreement to
reflect such addition, and this instrument shall constitute an agreement between
the Pledgors and the Agent amending the Pledge Agreement in the respects, but
only in the respects, hereinafter set forth:
1. Schedule A of the Pledge Agreement shall be and hereby is
amended and as so amended shall be restated in its entirety to read as
Annex A attached hereto.
2. As collateral security for the Obligations, each Pledgor
hereby grants to the Agent a continuing lien on and security interest
in, and acknowledges and agrees that the Agent has and shall continue to
have a continuing lien on and security interest in, all the shares of
capital stock or other equity interest of each issuer listed and
described on Annex A attached hereto and all the other properties,
rights, interests and privileges comprising the Collateral (as such term
is defined in the Pledge Agreement after giving effect to this
Amendment), to the same extent and with the same force and effect as if
the shares of stock or other equity interest described on Annex A had
originally been included on Schedule A to the Pledge Agreement. The
foregoing granting clause is in addition to and supplemental of and not
in substitution for the granting clause contained in the Pledge
Agreement. Neither the Pledgors nor the Agent intends by this Amendment
to in any way impair or otherwise affect the lien of the Pledge
Agreement on such of the Collateral which was subject to the Pledge
Agreement prior to giving effect to this Amendment.
3. Each Pledgor hereby repeats and reaffirms all of its
covenants, agreements, representations and warranties contained in the
Pledge Agreement, each and all of which shall be applicable to all of
the properties, rights, interests and privileges subject to the lien of
the Pledge Agreement after giving effect to this Amendment. Each Pledgor
hereby certifies that no Event of Default or event which,
with notice or lapse of time or both, would constitute an Event of
Default exists under the Pledge Agreement after giving effect to this
Amendment.
4. No reference to this Amendment need be made in any note,
instrument or other document at any time referring to the Pledge
Agreement, any reference in any of such to the Pledge Agreement to be
deemed to reference to the Pledge Agreement as modified hereby.
5. Except as specifically modified hereby, all the terms and
conditions of the Pledge Agreement shall stand and remain unchanged and
in full force and effect.
PLEDGOR(S):
[NAME OF PLEDGORS]
By
----------------------------------------
Its
------------------------------------
Acknowledged and agreed to as of the date first above written.
ABN AMRO BANK N.V., as Agent
By
-----------------------------------------
Its
-------------------------------------
By
-----------------------------------------
Its
-------------------------------------
-2-
ANNEX A
TO AMENDMENT TO PLEDGE AGREEMENT
THE PLEDGED SECURITIES
NAME AND PERCENTAGE
LOCATION OF NAME OF JURISDICTION OF NO. OF CERTIFICATE OF ISSUER'S
PLEDGOR ISSUER INCORPORATION SHARES CLASS NO. STOCK
SCHEDULE C TO BORROWER AND SUBSIDIARY PLEDGE AGREEMENT
ASSUMPTION AND SUPPLEMENTAL PLEDGE AGREEMENT
THIS AGREEMENT dated as of this _____ day of ______________, ___ from
[NEW PLEDGOR], a __________ corporation/partnership/limited liability company
(the "New Pledgor"), to ABN AMRO Bank N.V. ("ABN AMRO") as collateral agent for
the Secured Creditors (defined in the Pledge Agreement hereinafter identified
and defined) (ABN AMRO acting as such agent and any successor or successors to
ABN AMRO in such capacity being hereinafter referred to as the "Agent");
PRELIMINARY STATEMENTS
A. Eagle-Picher Industries, Inc. (the "Borrower") and certain other
Pledgors have executed and delivered to the Agent that certain Pledge Agreement
dated as of February 24, 1998 (such Pledge Agreement, as the same may from time
to time be modified or amended, including supplements thereto which add
additional parties as Pledgors thereunder, being hereinafter referred to as the
"Pledge Agreement") pursuant to which such parties (the "Existing Pledgors")
have granted to the Agent for the benefit of the Secured Creditors a lien on and
security interest in such Existing Pledgors' Collateral (as such term is defined
in the Pledge Agreement) to secure the Obligations (as such term is defined in
the Pledge Agreement);
B. The Borrower provides the New Pledgor with substantial financial,
managerial, administrative, and technical support and the New Pledgor will
benefit from credit and other financial accommodations extended and to be
extended by the Secured Creditors to the Borrower.
NOW, THEREFORE, FOR VALUE RECEIVED, and in consideration of advances
made or to be made, or credit accommodations given or to be given, to the
Borrower by the Secured Creditors from time to time, the New Pledgor hereby
agrees as follows:
1. The New Pledgor acknowledges and agrees that it shall become a
"Pledgor" party to the Pledge Agreement effective upon the date the New
Pledgor's execution of this Agreement and the delivery of this Agreement to the
Agent, and that upon such execution and delivery, all references in the Pledge
Agreement to the terms "Pledgor" or "Pledgors" shall be deemed to include the
New Pledgor. Without limiting the generality of the foregoing, the New Pledgor
hereby repeats and reaffirms all grants (including the grant of a lien and
security interest), covenants, agreements, representations and warranties
contained in the Pledge Agreement as amended hereby, each and all of which are
and shall remain applicable to the Collateral from time to time owned by the New
Pledgor or in which the New Pledgor from time to time has any rights. Without
limiting the foregoing, in order to secure payment of the Obligations, whether
now existing or hereafter arising, the New Pledgor does hereby grant to the
Agent for the benefit of the Secured Creditors, and hereby agrees that the Agent
has and shall continue to have for the benefit of the Secured Creditors
a continuing security interest in, among other things, all of the New Pledgor's
Collateral (as such term is defined in the Pledge Agreement) described in
Section 2 of the Pledge Agreement, each and all of such granting clauses being
incorporated herein by reference with the same force and effect as if set forth
in their entirety except that all references in such clauses to the Existing
Pledgor or any of them shall be deemed to include references to the New Pledgor.
Nothing contained herein shall in any manner impair the priority of the liens
and security interests heretofore granted in favor of the Agent under the Pledge
Agreement.
2. The following information shall be added to Schedules A to the
Pledge Agreement:
SCHEDULE A
THE PLEDGED SECURITIES
PERCENTAGE
NAME AND NAME OF JURISDICTION OF NO. OF CERTIFICATE OF ISSUER'S
LOCATION OF ISSUER INCORPORATION SHARES CLASS NO. STOCK
PLEDGOR
3. The New Pledgor hereby acknowledges and agrees that the Obligations
are secured by all of the Collateral according to, and otherwise on and subject
to, the terms and conditions of the Pledge Agreement to the same extent and with
the same force and effect as if the New Pledgor had originally been one of the
Existing Pledgors under the Pledge Agreement and had originally executed the
same as such an Existing Pledgor.
4. All capitalized terms used in this Agreement without definition
shall have the same meaning herein as such terms have in the Pledge Agreement,
except that any reference to the term "Pledgor" or "Pledgors" and any provision
of the Pledge Agreement providing meaning to such term shall be deemed a
reference to the Existing Pledgors and the New Pledgor. Except as specifically
modified hereby, all of the terms and conditions of the Pledge Agreement shall
stand and remain unchanged and in full force and effect.
5. The New Pledgor agrees to execute and deliver such further
instruments and documents and do such further acts and things as the Agent may
reasonably deem necessary or proper to carry out more effectively the purposes
of this Agreement.
6. No reference to this Agreement need be made in the Pledge Agreement
or in any other document or instrument making reference to the Pledge Agreement,
any reference to the Pledge Agreement in any of such to be deemed a reference to
the Pledge Agreement as modified hereby.
-2-
7. This Agreement shall be governed by and construed in accordance with
the State of New York (without regard to principles of conflicts of law).
[NEW PLEDGOR]
By
-------------------------------------
Its
---------------------------------
Acknowledged and agreed to as of the date first above written.
ABN AMRO BANK N.V., as Agent as
aforesaid for the Secured Creditors
By
-------------------------------------
Its
---------------------------------
By
-------------------------------------
Its
----------------------------------
-3-
SCHEDULE D
1. Eagle-Picher Minerals International S.A.R.L.
A pledge of 51,887 shares of Eagle-Picher Minerals International
S.A.R.L., a French corporation ("EPMI SARL"), representing 65% of its corporate
capital, shall be effected by (i) the execution of the pledge agreement (the
"French Pledge") substantially in the form of Exhibit A attached to this
Schedule D, (ii) the filling of the French Pledge with the French Tax
Administration, and (iii) the notification of such filing being sent to EPMI
SARL through a bailiff.
2. Eagle-Picher Industries Europe B.V.
A pledge of 13,000 shares of Eagle-Picher Industries Europe B.V., a
Dutch corporation ("EPIE BV"), representing 65% of the issued and outstanding
capital of EPIE BV shall be effected by (i) the execution of the powers of
attorney (the "Powers of Attorney"), substantially in the form of Exhibit B
attached to this Schedule D, which will allow the notary in The Netherlands to
pass the share pledge agreement (the "Dutch Pledge") substantially in the form
of Exhibit C attached to this Schedule D and (ii) the delivery of the fully
executed Powers of Attorney, the Credit Agreement and this Agreement to Moret
Ernst & Young of Rotterdam, The Netherlands.