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PLEDGE AGREEMENT
This PLEDGE AGREEMENT is made this 25th day of April, 1996 and
is among SPECTRAN CORPORATION, having a place of business at 50 Hall Road,
Sturbridge, Massachusetts ("Borrower"); FLEET NATIONAL BANK, having a place of
business at 370 Main Street, Worcester, Massachusetts ("Lender") and FLEET
INVESTMENT ADVISORS, having a place of business at 75 State Street, Boston,
Massachusetts ("Agent").
In order to induce Lender to make a loan in the amount of
$22,000,000.00 (the "Loan") to Borrower and its subsidiaries pursuant to various
notes issued by Borrower and its subsidiaries to Lender dated of even date
herewith (the "Notes") and in consideration thereof and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereby agree as follows:
1. Pledge of Collateral.
1.1 In order to secure the payment and satisfaction of all sums
due under the Loan and all documents executed in connection therewith, including
the Notes and this Pledge Agreement (the "Documents") and in order to secure the
performance of all of the obligations of Borrower and its subsidiaries under the
Documents, Borrower hereby pledges, assigns, transfers to Lender, grants to
Lender a continuing security interest in and delivers (in the case of
certificated securities of which Borrower is in possession) to Lender the
shares, securities or other property described in Exhibit A attached hereto and
any and all replacements and proceeds thereof (the "Pledged Collateral"). The
Pledged Collateral is held in Borrower's account (#0000610770) with Agent (the
"Account").
2. Rights and Remedies.
2.1 So long as (i) no Event of Default shall have occurred
under the Documents and (ii) Borrower is in compliance with its obligations
under the Documents, Borrower shall be entitled to (a) receive all sums paid in
respect of interest, dividends, or any other distributions on the Pledged
Collateral (whether in the form of cash payments, additional shares,
reclassified or readjusted shares or otherwise) (b) exercise any and all voting
rights as owner of the Pledged Collateral, and (c) sell and/or trade the Pledged
Collateral, provided all of Borrower's investments must be in accordance with
the parameters set forth in Exhibit 6.02(l) to the Loan Agreement. Other than as
set forth above, Borrower acknowledges that it will not give any instructions to
otherwise deal with any of the Pledged Collateral not specifically provided in
the preceding sentence without the prior written consent of Lender.
2.2 If an Event of Default under the Documents shall have
occurred, Lender shall have the following rights and remedies in addition to the
rights and remedies of a secured party under the Uniform Commercial Code, all
such rights and remedies being cumulative, not exclusive, and enforceable
alternatively, successively or concurrently, at such time or times as Lender
deems expedient:
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(i) Lender may demand, sue for, collect or make any compromise
or settlement Lender deems suitable in respect of the Pledged Collateral;
(ii) Lender may sell, resell, assign, deliver, or otherwise
dispose of any or all of the Pledged Collateral, for cash upon such terms at
such place or places, at such time or times and to such entities or other
persons as Lender deems expedient, all without demand for performance by
Borrower or any notice or advertisement whatsoever, except as expressly provided
herein; and
(iii) Lender may cause all or any part of the Pledged
Collateral to be transferred into its name or the name of its nominee or
nominees.
2.3 In the event of any private sale of the Pledged Collateral,
Lender shall give Borrower ten (10) days prior written notice of the time after
which any private sale is to be made. In the event of any disposition other than
a private sale no notice will be required. Borrower hereby acknowledges that ten
(10) days prior written notice of private sale shall be reasonable notice.
Lender may enforce its rights hereunder without any other notice and without
compliance with any other condition precedent now or hereafter imposed by
statute, rule of law or otherwise (all of which are hereby expressly waived by
Borrower to the fullest extent permitted by law). Lender may apply the cash
proceeds actually received from any sale or other disposition to the reasonable
expenses of retaking, holding, preparing for sale, selling and the like, to
reasonable attorneys' fees, and other expenses which may be incurred by Lender
in attempting to collect the Loan or to enforce the Documents or in the
prosecution or defense of any action or proceeding related to the subject matter
of the Documents and then to the Loan in such order or preference as Lender may
determine.
3. Covenants and Warranties.
3.1 Borrower agrees to reimburse Lender, on demand, for any
amounts paid or advanced by Lender for the purpose of preserving the Pledged
Collateral or any part thereof and/or any liabilities or expenses incurred by
Lender as the transferor or holder of the Pledged Collateral.
3.2 Lender shall be under no duty to: (i) collect or protect
the Pledged Collateral or any proceeds thereof or give any notice with respect
thereto; (ii) preserve the rights of Borrower with respect to the Pledged
Collateral against third parties; (iii) preserve rights against any parties to
any instrument or chattel paper which may become a part of the Pledged
Collateral; (iv) sell or otherwise realize upon the Pledged Collateral; or (v)
seek payment from any particular source. Without limiting the generality of the
foregoing, Lender shall not be obligated to take any action in connection with
any conversion, call, redemption, retirement or other event relating to any of
the Pledged Collateral.
3.3 Borrower agrees to and hereby instructs Agent to comply at
all times with the covenants set forth in Section 4 of this Pledge Agreement.
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4. Agent.
4.1 Agent is hereby instructed to make an appropriate entry in
its records, either in writing or electronically, to register the pledge of the
Pledged Collateral to Lender and to the extent it is holding certificated
securities, to hold such securities in its possession on behalf of Lender and to
take any other action necessary in order to perfect Lender's security interest
in the Pledged Collateral. Agent represents and warrants to Lender that it has
taken all necessary action, including making entries in its records reflecting
Lender's security interest in the Pledged Collateral held by Agent in the
Account and shall maintain such book entries with respect to the Pledged
Collateral until it shall have received from Lender written acknowledgment that
the security interest granted to Lender by this Pledge Agreement has been
terminated.
4.2 Agent shall, at all times hereafter, become and irrevocably
remain agent for, and custodian of possession of, all Pledged Collateral in the
Account only on behalf of Lender, in its capacity as assignee and secured party
of Borrower for purposes of maintaining custody of the Pledged Collateral on
behalf of Lender to assure continuing perfection of the pledge, assignment, and
security interest granted hereby and to satisfy the terms and conditions of this
Pledge Agreement.
4.3 All fees, costs, and expenses due, or to become due to
Agent on account of continued maintenance of the Pledged Collateral, shall at
all times, however, remain Borrower's responsibility, without charge to Lender,
and Lender shall have no liability to Agent in the event of dispute, or claim by
Agent against Borrower upon any matter arising out of, or related to, the
Pledged Collateral.
4.4 Agent shall not allow assignment, sale (except in
accordance with Section 2.1 hereof and the investment parameters set forth in
Exhibit 6.02(l) to the Loan Agreement), or hypothecation of the Pledged
Collateral without the express written consent of Lender, nor to itself set-off
or debit any Pledged Collateral, or proceeds of sale thereof, upon claims or
liabilities of Borrower or any other party to it. At Borrower's request, Agent
may substitute certain of the Pledged Collateral with other shares, securities
or other property which meet the investment parameters set forth in Exhibit
6.02(l) to the Loan Agreement and Agent may facilitate such substitutions and
will take all necessary steps to perfect Lender's security interest in such
substituted Pledged Collateral. The Pledged Collateral may not be liquidated and
the proceeds disbursed to Borrower or any other person or entity without
Lender's prior written consent. Unless and until Agent has received written
notice from Lender that an Event of Default has occurred under the Documents,
Borrower shall be entitled to receive and Agent shall pay to Borrower promptly
after receipt, all sums paid in respect of interest, dividends, or any other
distributions on the Pledged Collateral (whether in the form of cash payments,
additional shares, reclassified or readjusted shares or otherwise), exercise any
and all voting rights as owner of the Pledged Collateral, and sell and/or trade
the Pledged Collateral.
4.5 In case any of the Pledged Collateral shall be attached,
garnished or levied upon pursuant to an order of court, or the delivery thereof
shall be stayed or enjoined by an order
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of court or any other order, judgement or decree shall be made or entered by any
court affecting such Pledged Collateral or any part thereof, or any act of
Agent, Agent is hereby expressly authorized in its reasonable discretion to obey
and comply with all final writs, orders, judgments or decrees so entered or
issued by any court without the necessity of inquiry whether such court had
jurisdiction; and in case Agent obeys or complies with any such writ, order,
judgment or decree, Agent shall not be liable to any of the parties hereto or to
any other person, firm or corporation by reason of such compliance. Agent shall
give written notice promptly to Lender and Borrower if all or any part of the
Pledged Collateral shall be attached, garnished, levied upon or otherwise made
the subject of judicial action. Should any dispute arise with respect to the
Pledged Collateral held by Agent and/or ownership or right of possession of such
Pledged Collateral or as to the existence of any Event of Default under the
Documents, Agent is authorized and directed to retain in its possession without
liability to anyone all (or the portion thereof subject to the dispute) of the
Pledged Collateral, then in its possession until such dispute shall have been
settled either by mutual agreement of the parties or by a final order, decree or
judgement of a court of competent jurisdiction in the United States of America
and time for appeal has expired and no appeal has been perfected, provided,
however, Agent shall be under no duty to institute or defend any such
proceedings.
4.6 Agent may resign at any time upon at least thirty (30) days
written notice to Lender and Borrower. In the event that Agent shall so resign
or shall for any reason be unable to or unwilling to act as Agent hereunder,
then Lender shall appoint a successor agent. Agent and Borrower shall take any
and all action (including delivery of the Pledged Collateral to the successor
agent) and sign, seal, execute, acknowledge and deliver any and all documents
necessary or convenient in the opinion of the succeeding agent to transfer title
to all of the Pledged Collateral to such successor. Notwithstanding the
foregoing, in no event will Agent's resignation or removal be effective unless
and until a successor agent has been appointed in accordance with the terms
hereof.
4.7 Agent shall provide Lender and Borrower with information
reasonably required by Lender with respect to the value of the Pledged
Collateral, income earned thereon or compliance with this Section 4. Agent shall
provide to Lender and Borrower within fifteen (15) days of the end of each month
a report setting forth (i) the value of the Pledged Collateral, (ii) the income
earned thereon, and (iii) such other information as Lender may reasonably
request in order to monitor Borrower's compliance with the terms hereof.
4.8 Agent hereby represents and warrants to Lender that: (i)
the Pledged Collateral is made up of "certificated securities" as that term is
defined in Section 8-102 of the Uniform Commercial Code (the "Code") and the
Pledged Collateral is registered in the name and is subject to the exclusive
control of The Depository Trust Company ("DTC") or its nominee; (ii) Agent is a
"financial intermediary" as that term is defined in Section 8-313(4) of the Code
and is not a "clearing corporation", as that term is defined in Section 8-102(3)
of the Code; (iii) appropriate entries have been made on the books of DTC to
reflect that the Pledged Collateral is being held by DTC for Agent or for one or
more other financial intermediaries for the benefit of Agent and (iv) Agent is
unaware of any other security interest in, or pledge of, the Pledged
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Collateral.
4.9 Agent's signature hereto will serve as an acknowledgment
that (i) it has received a copy of a duly executed original of this Pledge
Agreement, (ii) it has received the Pledged Collateral, (iii) the Pledged
Collateral has been delivered to the Account, (iv) it has taken all necessary
steps to perfect Lender's security interest in the Pledged Collateral and (v)
Agent is unaware of any other security interest in, or pledge of, the Pledged
Collateral.
4.10 Borrower hereby irrevocably appoints Agent as Borrower's
true and lawful attorney-in-fact, with full power (a) to sign or endorse the
name of Borrower on any and all of the Pledged Collateral held by Agent
hereunder, (b) to keep the Pledged Collateral held hereunder in the form of
street certificates or in the name of a nominee without indication of any
fiduciary capacity, and (c) in Borrower's name, to sign or execute any other
documents or do any act in furtherance of this Pledge Agreement.
4.11 Borrower agrees to indemnify and hold harmless Agent from
and against any cost, expense, damage or liability which Agent may incur as a
result of compliance herewith except for gross negligence or wilful misconduct.
5. General.
5.1 Each reference herein to Lender shall be deemed to include
its successors and assigns, and each reference to Borrower shall be deemed to
include the heirs, administrators, legal representatives, successors and assigns
of Borrower, all of whom are bound by the provisions hereof. All obligations of
Borrower hereunder shall inure to the benefit of Lender.
5.2 No delay on the part of Lender in exercising any rights
hereunder or failure to exercise the same shall operate as a waiver of such
rights; no notice to or demand on Borrower shall be deemed to be a waiver of any
obligations of Borrower or of the right of Lender to take other or further
action without notice or demand as provided herein. In any event, no
modification or waiver of the provisions hereof will be effective unless in
writing and signed by Lender, nor shall any waiver be applicable except in the
specific instance or matter for which given.
5.3 Each provision of this Pledge Agreement shall be
interpreted in accordance with and in all respects governed by the laws of the
Commonwealth of Massachusetts and should any portion of this Pledge Agreement be
declared invalid for any reason, such declaration shall have no effect upon the
remaining portions of this Pledge Agreement.
5.4 Any notices hereunder shall be deemed given upon delivery
if delivered in hand, and only two (2) days after they have been mailed by
registered or certified mail, postage prepaid, or twelve (12) hours after such
notice has been sent by straight telegram, telegraphic charges prepaid, to the
parties at the addresses set forth below:
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(i) SpecTran Corporation
50 Hall Road
Sturbridge, MA 01566
(ii) Fleet National Bank
370 Main Street
Worcester, MA 01608
Attention: Senior Commercial Loan Officer
(iii) Fleet Investment Advisors
75 State Street
Boston, MA 02109
IN WITNESS WHEREOF, the parties hereto have caused these presents to be
executed as a sealed instrument this 25th day of April, 1996.
SPECTRAN CORPORATION
By: /s/ G.Moore
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Its Duly Authorized Officer
FLEET NATIONAL BANK
By:/s/ John Lynch
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Its Duly Authorized Officer
FLEET INVESTMENT ADVISORS
By:/s/
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Its Duly Authorized Officer
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Exhibit A
PLEDGED COLLATERAL
Pledged Collateral held by Agent in account number: 0000610770
as Agent for Lender:
Par Market Value
Cusip Description Amount (April _, 1996)
- ----- ----------- ------ ---------------
Total $___________
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