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EXHIBIT 10.93
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SPECTRAN CORPORATION
SPECTRAN COMMUNICATION FIBER TECHNOLOGIES, INC.
SPECTRAN SPECIALTY OPTICS COMPANY
APPLIED PHOTONIC DEVICES, INC.
TO
FLEET NATIONAL BANK, AS TRUSTEE
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PLEDGE AGREEMENT
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DATED AS OF DECEMBER 1, 1996
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PLEDGE AGREEMENT
THIS PLEDGE AGREEMENT (as may be amended, restated or otherwise
modified from time to time, this "AGREEMENT"), dated as of December 1, 1996, by
and among each of SPECTRAN CORPORATION (together, with its successors and
assigns, the "PLEDGOR"), a Delaware corporation, SPECTRAN COMMUNICATION FIBER
TECHNOLOGIES, INC., a Delaware corporation, SPECTRAN SPECIALTY OPTICS COMPANY, a
Delaware corporation, and APPLIED PHOTONIC DEVICES, INC., a Delaware corporation
(all of the foregoing (other than the Pledgor), together with their respective
successors and assigns, referred to herein, collectively, as the "CURRENT
SUBSIDIARIES"), and FLEET NATIONAL BANK, a national banking association, as
security trustee under a certain Trust Indenture (as may be amended, restated or
otherwise modified from time to time, the "TRUST INDENTURE"), dated as of the
date hereof, among the Pledgor, the Subsidiaries, Fleet National Bank (in its
capacity as such security trustee, and together with any successor or
co-security trustee that becomes such in accordance with the provisions of the
Trust Indenture, the "TRUSTEE") and the other parties signatory thereto.
1. PRELIMINARY STATEMENTS
1.1 The Liens granted herein to the Trustee by the Pledgor are for the
ratable benefit of the Beneficiaries, as provided in the Trust Indenture.
1.2 The Trustee is to act as trustee on behalf of the Beneficiaries in
accordance with the terms of the Trust Indenture and the other Security
Documents.
1.3 All acts and proceedings required by law and by the certificate or
articles of incorporation and bylaws of each of the Pledgor and the Subsidiaries
necessary to constitute this Agreement a valid and binding agreement for the
uses and purposes set forth herein, in accordance with its terms, have been done
and taken, and the execution and delivery hereof has been in all respects duly
authorized.
2. INTERPRETATION OF THIS AGREEMENT
2.1 TERMS DEFINED.
As used in this Agreement, the following terms have the respective
meanings set forth below or provided for in the section or other part of this
Agreement referred to immediately following such term (such definitions to be
equally applicable to both the singular and plural forms of the terms defined)
or, if not defined herein, then as defined in the Trust Indenture.
AGREEMENT, THIS -- the introductory paragraph.
BANK AGREEMENT -- has the meaning specified in the Trust Indenture.
BANK LENDER -- has the meaning specified in the Trust Indenture.
BENEFICIARY -- has the meaning specified in the Trust Indenture.
BUSINESS DAY -- has the meaning specified in the Trust Indenture.
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SPECTRAN CORPORATION PLEDGE AGREEMENT
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2. INTERPRETATION OF THIS AGREEMENT
CLOSING DATE -- has the meaning specified in the Trust Indenture.
CODE -- the Uniform Commercial Code as in effect from time to time in
any specified or applicable jurisdiction.
COLLATERAL -- Section 3.1(b).
CURRENT SUBSIDIARIES -- the introductory sentence hereto.
DEFAULT -- an event or condition the occurrence of which would, with
the lapse of time or the giving of notice or both, become an Event of Default.
EVENT OF DEFAULT -- has the meaning specified in the Trust Indenture.
GOVERNMENTAL AUTHORITY -- means
(a) the government of
(i) the United States of America or any state or
other political subdivision thereof, or
(ii) any jurisdiction in which the Company or any
Subsidiary conducts all or any part of its business, or which
asserts jurisdiction over any properties of the Company or any
Subsidiary, or
(b) any entity exercising executive, legislative, judicial,
regulatory or administrative functions of, or pertaining to, any such
government.
LENDING DOCUMENTS -- has the meaning specified in the Trust Indenture.
LIEN -- has the meaning specified in the Trust Indenture.
MAJORITY BENEFICIARIES -- has the meaning specified in the Trust
Indenture.
NOTE PURCHASE AGREEMENT -- has the meaning specified in the Trust
Indenture.
PERSON -- means an individual, sole proprietorship, partnership,
corporation, trust, joint venture, unincorporated organization, limited
liability company or a government or agency or political subdivision thereof.
PLEDGED STOCK -- means all the Pledgor's present and future right,
title, and interest in
(i) the capital stock of the Subsidiaries owned as of the date hereof
by it, and
(ii) all additional shares of capital stock of any Subsidiary from time
to time acquired by the Pledgor in any manner.
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2. INTERPRETATION OF THIS AGREEMENT
PLEDGED STOCK COLLATERAL -- Section 3.1(a).
PLEDGOR -- the introductory paragraph.
PROPERTY -- means any interest in any kind of property or asset,
whether real, personal or mixed, and whether tangible or intangible.
SECURED OBLIGATIONS -- has the meaning specified in the Trust
Indenture.
SECURITIES ACT -- means the Securities Act of 1933, as amended.
SECURITY -- means "security" as defined in section 2(1) of the
Securities Act.
SECURITY DOCUMENTS -- has the meaning specified in the Trust Indenture.
SUBSIDIARY -- has the meaning specified in the Trust Indenture.
TRUST INDENTURE -- the introductory paragraph.
TRUSTEE -- the introductory paragraph.
2.2 HEADINGS; INDEPENDENT CONSTRUCTION.
(a) SECTION HEADINGS ETC. The titles of the Sections of this
Agreement appear as a matter of convenience only, do not constitute a
part hereof and shall not affect the construction hereof. The words
"herein," "hereof," "hereunder" and "hereto" refer to this Indenture as
a whole and not to any particular Section or other subdivision.
References to Sections are, unless otherwise specified, references to
Sections of this Agreement. References to Annexes, Schedules, Exhibits
and Attachments are, unless otherwise specified, references to Annexes,
Schedules, Exhibits and Attachments attached to this Agreement.
(b) CONSTRUCTION. Each covenant contained herein shall be
construed (absent an express contrary provision herein) as being
independent of each other covenant contained herein, and compliance
with any one covenant shall not (absent such an express contrary
provision) be deemed to excuse compliance with one or more other
covenants.
2.3 SEPARATE AGREEMENTS.
Notwithstanding that this Agreement is among each of the Pledgor, the
Subsidiaries and the Trustee, this Agreement shall be construed and interpreted
as a separate Agreement between the Pledgor and each Subsidiary, respectively,
and the Trustee, and any whole or partial invalidity of this Agreement in
respect of the Pledgor or any Subsidiary shall not have any effect on the
validity or enforceability of this Agreement as among the Pledgor or each
Subsidiary, respectively, as the case may be, and the Trustee.
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3. GRANT OF SECURITY INTEREST
2.4 PARTIAL INVALIDITY.
The unenforceability or invalidity of any provision or provisions of
this Agreement shall not render any other provision or provisions contained in
this Agreement unenforceable or invalid.
2.5 GOVERNING LAW.
THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY
THE INTERNAL LAWS OF THE COMMONWEALTH OF MASSACHUSETTS, EXCEPT TO THE EXTENT
THAT THE PERFECTION OF THE LIENS IN AND TO THE COLLATERAL ARE GOVERNED BY THE
LAWS OF ANY JURISDICTION OTHER THAN THE COMMONWEALTH OF MASSACHUSETTS.
3. GRANT OF SECURITY INTEREST
3.1 GRANT OF SECURITY INTEREST.
As security for the payment by the Pledgor of the Secured Obligations
and the performance by the Pledgor of its other obligations and undertakings
under the Lending Documents to which it is a party and as security for the
performance of the obligations of the Pledgor hereunder, the Pledgor does hereby
grant, bargain, sell, release, convey, assign, transfer, mortgage, hypothecate,
pledge, confirm and grant a security interest to the Trustee, for the benefit of
the Beneficiaries in all of the Pledgor's right, title and interest in, to, and
under
(a) the Pledged Stock and all rights, options, warrants,
stock, other Securities or other Property of any kind whatsoever which
may hereafter be received, receivable or distributed in respect of, or
exchanged for, all or any of such Pledged Stock and all certificates
representing the foregoing (all of the foregoing being herein referred
to, collectively, as the "PLEDGED STOCK COLLATERAL"), and
(b) all proceeds of the Pledged Stock Collateral and any
replacements, additions, or substitutions thereof or thereto, all
after-acquired Property in connection therewith, and all accounts and
proceeds arising from the sale and disposition thereof, including,
where applicable, insurance proceeds (the Pledged Stock Collateral and
the proceeds and other Property described in this clause (b) are
collectively referred to herein as the "COLLATERAL").
3.2 PERFECTION OF SECURITY INTEREST IN COLLATERAL.
(a) DELIVERY OF PLEDGED STOCK. Contemporaneously with the
execution of this Agreement, the Pledgor shall deliver, or cause to be
delivered, to the Trustee:
(i) all certificates and other instruments evidencing
the shares of Pledged Stock owned as of the Closing Date by
the Pledgor and listed on Annex 1, accompanied by undated
stock powers and such other instruments and
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3. GRANT OF SECURITY INTEREST
documents as the Trustee may reasonably request, duly endorsed
in blank by the registered owners of such certificates, with
signatures properly guaranteed;
(ii) any and all certificates or other instruments or
documents representing any of the Collateral; and
(iii) all other Property comprising part of the
Collateral with proper instruments of assignment, duly
executed, and such other instruments or documents as the
Trustee may reasonably request.
(b) DELIVERY OF OTHER COLLATERAL. If the Pledgor shall become
entitled to receive or shall receive any shares of stock (including,
without limitation, shares of Pledged Stock acquired after the Closing
Date), options, warrants, rights or other similar Property (including,
without limitation, any certificate representing a stock dividend, or
any distribution in connection with any recapitalization,
reclassification or increase or reduction of capital, or issued in
connection with any reorganization of any Subsidiary or any other
subsidiary of the Pledgor) in respect of the Pledged Stock Collateral
(whether as an addition to, in substitution of, or in exchange for,
such Pledged Stock Collateral or otherwise), the Pledgor agrees:
(i) to accept the same as the agent of the Trustee;
(ii) to hold the same in trust on behalf of and for
the benefit of the Trustee; and
(iii) to deliver the same to the Trustee on or before
the close of business on the second Business Day following the
receipt thereof by the Pledgor, in the exact form received,
with the endorsement in blank of the Pledgor when necessary
and with appropriate undated stock powers duly executed in
blank (with signatures properly guaranteed), to be held by the
Trustee subject to the terms of this Agreement, as additional
Collateral.
3.3 FURTHER ASSURANCES.
The Pledgor agrees that it will cooperate with the Trustee and the
Beneficiaries and will execute and deliver, or cause to be executed and
delivered, all such additional conveyances, stock powers, proxies, assignments,
financing statements and other recordings, instruments and documents as are
required to maintain the perfection of the security interests herein granted to
the Trustee for the benefit of the Beneficiaries and will take all such other
action, as the Trustee or the Majority Beneficiaries may reasonably request from
time to time in order to assure and confer unto the Trustee its rights and
remedies hereunder and to carry out the provisions and purposes hereof.
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3. GRANT OF SECURITY INTEREST
3.4 ACTION BY TRUSTEE AND BENEFICIARIES.
The Trustee shall not be required to take any steps to perfect the
security interest in the Collateral or to realize upon the Collateral or
otherwise to enforce any of the rights hereunder. Without limiting the
generality of the foregoing, the Trustee shall not be under any obligation to
take any steps necessary to preserve rights in any of the Collateral against any
other parties but may do so upon the written instruction of the Majority
Beneficiaries, and all reasonable expenses incurred in connection therewith
shall be for the sole account of the Pledgor. The Beneficiaries shall not be
required to take any steps to perfect the security interest in the Collateral or
to realize upon the Collateral or otherwise to enforce any of the rights
hereunder. Without limiting the generality of the foregoing, the Beneficiaries
shall not be under any obligation to take any steps necessary to preserve rights
in any of the Collateral against any other parties.
3.5 POWER OF ATTORNEY.
(a) TRANSFER OF COLLATERAL. The Pledgor hereby makes,
constitutes and appoints the Trustee (or any duly authorized officer
thereof), with full power of substitution, as its true and lawful agent
and attorney-in-fact to arrange, at the request of the Trustee, for the
transfer of any shares of the Collateral comprised of registered
Securities on the books of the issuer thereof to the name of the
Trustee or the Trustee's nominee at any time after the occurrence and
during the continuance of an Event of Default.
(b) EXERCISE OF RIGHTS. The Pledgor hereby makes, constitutes,
and appoints the Trustee (or any duly authorized officer thereof), with
full power of substitution, its true and lawful agent and
attorney-in-fact in order to effect any or all of the rights set forth
in this Agreement; in addition thereto, the Pledgor hereby authorizes
and empowers the Trustee (or any duly authorized officer thereof), as
its lawful agent and attorney-in-fact as provided for in this Section
3.5(b), to execute on behalf of the Pledgor, or in its own name,
assignments, notices of assignments, financing statements, and other
public records and notices in respect of the Collateral, and to do
any and all things necessary or take any action in the name and on
behalf of the Pledgor to carry out the intent of this Agreement,
including, without limitation, to protect the interests in the
Collateral granted to the Trustee.
(c) LIABILITY. The Pledgor agrees that neither the Trustee,
Beneficiaries (or any of their respective officers, directors,
employees, agents, investment advisors and affiliates) shall have any
liability for any acts of commission or omission, or for any error of
judgment or mistake of fact or law, with respect to the exercise of the
powers of attorney granted under this Section 3.5, except that any
Person exercising such powers of attorney may be liable for any such
acts, errors, or mistakes resulting from its, his, or her own gross
negligence or willful misconduct. The powers of attorney granted under
this Section 3.5 are coupled with an interest and shall be irrevocable
for so long as any of the Secured Obligations shall not have been
fully and finally paid.
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4. COVENANTS AND WARRANTIES CONCERNING COLLATERAL
4. COVENANTS AND WARRANTIES CONCERNING COLLATERAL
4.1 COLLATERAL.
(a) SAFEKEEPING OF COLLATERAL. The Trustee shall not have any
duty with respect to any Collateral other than the duty to use
reasonable care in accordance with its customary practices in the
safekeeping of any certificate or instrument evidencing such Collateral
in its physical possession. Neither the Trustee nor any of the
Beneficiaries shall be liable for any loss or damage to any of the
Collateral arising from any act or default of any carrier, forwarding
agency or other similar Person. Neither the Trustee nor any of the
Beneficiaries shall be liable for any diminution in value of any of the
Collateral.
(b) PAYMENTS AND DISTRIBUTIONS. If, while this Agreement is in
effect, the Pledgor shall become entitled to receive or shall receive
(i) any payment or distribution upon the dissolution,
liquidation (in whole or in part), reorganization or
insolvency of any issuer of Collateral, or
(ii) any payment or distribution of capital on
account of any Collateral, the Pledgor agrees:
(A) to accept the same as the agent of the Trustee;
(B) to hold the same separate and apart from any of
its other funds or Property and in trust on behalf of and for
the benefit of the Trustee; and
(C) to deliver, or cause the delivery of, the same to
the Trustee, on or before the close of business on the second
Business Day following the receipt thereof by the Pledgor, in
the exact form received, with the endorsement of the Pledgor
when necessary, as additional Collateral.
(c) PAYMENTS AND DISTRIBUTIONS RETAINED BY PLEDGOR. Section
4.1(b) notwithstanding, this Agreement shall not limit the Pledgor's
right to receive, for so long as no Event of Default or Default shall
have occurred and be continuing, ordinary cash dividends in respect of
the Pledged Stock to the extent the same are permitted to be paid
pursuant to each of the other Lending Documents. Upon the occurrence
and during the continuance of any such Event of Default or Default, all
the rights of the Pledgor described in the preceding sentence shall
cease, and all such rights shall thereupon become vested in the
Trustee, which shall have the sole and exclusive right and authority to
retain and receive such dividends. If the Pledgor shall receive such
cash dividends in contravention of this Section 4.1(c), the Pledgor
shall promptly pay, or cause to be paid, all such cash dividends to the
Trustee and, while the Pledgor is in possession of any such moneys
received after an Event of Default, it shall hold the same separate and
apart from any of its other funds or Property and in trust for the
benefit of the Trustee. Any and all money and other Property paid over
to or received by the Trustee pursuant to this
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4. COVENANTS AND WARRANTIES CONCERNING COLLATERAL
Section 4.1 shall be retained by the Trustee in an account to be
established by the Trustee upon receipt of such money or other Property
and shall be applied in accordance with the provisions of Section 5.5.
4.2 VOTING RIGHTS CONCERNING PLEDGED STOCK COLLATERAL.
(a) PLEDGOR'S RIGHT TO VOTE. During the term of this
Agreement, and so long as no Event of Default shall have occurred and
be continuing, this Agreement shall not limit the Pledgor's right to
vote the Pledged Stock and the other Collateral (to the extent such
other Collateral has voting rights) on all corporate questions for all
purposes. To that end, if the Trustee transfers, or causes the transfer
of, such Pledged Stock or other Collateral into its name or the name of
its nominee, the Trustee shall, upon the request of the Pledgor, unless
an Event of Default shall have occurred and be continuing, execute and
deliver or cause to be executed and delivered to the Pledgor proxies
with respect to such Pledged Stock and other Collateral authorizing the
Pledgor or its nominee to vote such Pledged Stock or such other
Collateral.
(b) TRUSTEE'S RIGHT TO VOTE. Upon the occurrence and during
the continuance of an Event of Default, all rights of the Pledgor to
exercise the voting rights described in Section 4.2(a) shall cease, and
the Trustee, upon written notice to the Pledgor (given in accordance
with written instructions from the Majority Beneficiaries), shall be
entitled to exercise all voting powers and corporate rights pertaining
to the Pledged Stock and the other Collateral (including, without
limitation, exchange, subscription and other rights, privileges and
options with respect thereto), and the Trustee may, upon the occurrence
and during the continuance of an Event of Default, upon written notice
to the Pledgor (given in accordance with written instructions from the
Majority Beneficiaries), declare all proxies theretofore executed by
the Trustee to be terminated and to be null and void, and upon such
notice, such proxies shall terminate and thereafter be null and void
and of no effect whatsoever, and the Pledgor, forthwith upon the
request of the Trustee (given in accordance with written instructions
from the Majority Beneficiaries), shall cause the removal (if not
already secured by the Trustee) of the officers and directors of each
Subsidiary in order that the Trustee may elect the officers and
directors of each Subsidiary that the Trustee would be entitled to
elect pursuant to the voting rights under the Pledged Stock and other
Collateral. The Pledgor shall execute and deliver to the Trustee all
such documents and instruments (including, without limitation, proxies)
as the Trustee shall request in order to effect the purposes of this
Section 4.2(b).
4.3 REPRESENTATIONS CONCERNING PLEDGED STOCK COLLATERAL.
The Pledgor warrants and represents as follows:
(a) OWNERSHIP OF COLLATERAL.
(i) Except for the security interests granted
hereunder, the Pledgor is the direct owner, beneficially and
of record, of the Pledged Stock and holds the
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4. COVENANTS AND WARRANTIES CONCERNING COLLATERAL
Collateral free and clear of all Liens and security interests
of every kind and nature.
(ii) The Pledgor has the full right and legal
authority to pledge the Collateral in the manner hereby done
or contemplated.
(b) PRIORITY OF LIEN OF TRUSTEE. By virtue of the execution
and delivery by the Pledgor of this Agreement, when the certificates
representing the Pledged Stock owned by the Pledgor are delivered to
the Trustee in accordance with this Agreement, the Trustee will obtain
a valid and perfected first priority Lien upon and security interest in
such Pledged Stock.
(c) VOTING RESTRICTIONS. There are no contractual restrictions
upon the voting rights or upon the transfer of any of the shares of the
Pledged Stock set forth on Annex 1.
(d) RIGHT TO VOTE. The Pledgor has the right to vote (to the
extent such shares have voting rights), pledge, and grant a security
interest in the Pledged Stock free of any encumbrances.
(e) GOVERNMENTAL AUTHORITIES. The Pledgor's execution and
delivery of this Agreement, the pledging of the Collateral hereunder
and the perfection of the security interest granted to the Trustee
hereby does not require the consent, approval or authorization of, or
filing, registration or qualification with, any Governmental Authority,
including, without limitation, any securities exchange, other than the
filing of appropriate Uniform Commercial Code financing statements (or
other appropriate instruments evidencing security interests) in each of
the jurisdictions listed on Annex 2.
(f) PLEDGED STOCK. The stock certificates set forth on Annex 1
evidence all of the issued and outstanding shares of capital stock of
the Subsidiaries.
(g) ENFORCEABILITY. This Agreement constitutes the legal,
valid and binding obligation of the Pledgor, enforceable in accordance
with its terms, except as such enforceability may be affected by
applicable bankruptcy, reorganization, insolvency, moratorium and
similar laws affecting creditors' rights generally and by general
principles of equity, including judicial discretion in the enforcement
thereof.
(h) NO CONFLICT. The execution, delivery and performance in
accordance with its terms of this Agreement do not violate, conflict
with, result in a breach of or constitute a default under
(i) any charter, bylaw, contract or other instrument of
agreement to which the Pledgor is a party or by which its
Property may be bound, or
(ii) to the Pledgor's knowledge, applicable law.
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4. COVENANTS AND WARRANTIES CONCERNING COLLATERAL
4.4 SUBSEQUENT CHANGES AFFECTING THE COLLATERAL.
The Pledgor represents and warrants that it has made its own
arrangements for keeping informed of changes or potential changes affecting the
Collateral (including, but not limited to, rights to convert, rights to
subscribe, payment of dividends, reorganization or other exchanges, tender
offers and voting rights), and the Pledgor agrees that neither the Trustee nor
any of the Beneficiaries shall have any responsibility or liability for
informing the Pledgor of any such changes or potential changes or for taking any
action or omitting to take any action with respect thereto.
4.5 PLEDGED STOCK COVENANTS.
(a) STOCK ISSUANCE. The Pledgor shall not permit or suffer any
Subsidiary or any other subsidiary of the Pledgor to, and no Subsidiary
shall:
(i) issue any stock, any right to receive stock or
any similar right (including, without limitation, warrants,
options and other similar agreements) whether in addition to,
by stock dividend or other distribution upon, or in
substitution for, the Pledged Stock or otherwise, unless such
issuance is not prohibited by any of the Lending Documents and
such stock or other Securities are effectively pledged
hereunder in a manner satisfactory to the Trustee; or
(ii) sell, assign, transfer, exchange or otherwise
dispose of, or grant any option with respect to, the
Collateral.
(b) SUBSIDIARIES. The Pledgor shall not:
(i) permit or suffer any Subsidiary or any other
subsidiary of the Pledgor to, and no Subsidiary shall,
dissolve or liquidate, retire any of its capital stock, reduce
its capital or merge or consolidate with any other entity,
except as otherwise expressly permitted by each of the Lending
Documents; or
(ii) vote any of the Pledged Stock in favor of any of
the foregoing.
(c) LIENS. The Pledgor will not cause or permit, or agree or
consent to cause or permit in the future (upon the happening of a
contingency or otherwise), any of the Collateral, whether now owned or
hereafter acquired, to be subject to a Lien other than the security
interest created by this Agreement.
4.6 PROTECTION OF COLLATERAL; REIMBURSEMENT.
All necessary expenses of protecting, storing, insuring, handling,
maintaining and shipping the Collateral, and all excise, property, sales and use
taxes imposed by any Governmental Authority on any of the Collateral or in
respect of the sale or other transfer thereof shall be borne and paid by the
Pledgor; and if the Pledgor shall fail to so pay any portion thereof when due,
the Trustee may at its option, but shall not be required to, pay the same and
charge the Pledgor
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4. COVENANTS AND WARRANTIES CONCERNING COLLATERAL
therefor, and the Pledgor agrees to promptly reimburse the Trustee therefor with
interest at the highest rate then payable on any of the Secured Obligations. The
Pledgor shall pay all sums so paid or incurred by the Trustee in respect of any
of the foregoing, any and all sums for which the Pledgor may become liable under
this Agreement or under any other Lending Document and all costs and
out-of-pocket expenses (including reasonable attorneys' fees, legal expenses and
court costs) that the Trustee may incur in evaluating, asserting, enforcing,
defending or protecting its security interest in or rights and interest in, the
Collateral, or any of its rights or remedies under this Agreement or under any
other Lending Document, and, until paid by the Pledgor with interest at the
highest rate then payable on any of the Secured Obligations, such sums shall be
considered as additional Secured Obligations owing by the Pledgor and, as such,
shall be secured by the Collateral and the proceeds from the sale thereof.
5. DEFAULTS - REMEDIES
5.1 DEFAULT REMEDIES.
(a) REMEDIES. If an Event of Default shall exist hereunder,
the Trustee shall have, in addition to any other rights, all of the
rights and remedies with respect to the Collateral of a secured party
under the Code. In addition, to the extent permitted by applicable law,
if an Event of Default shall exist hereunder, the Trustee, at the
written instruction of the Majority Beneficiaries and on behalf of all
Beneficiaries, shall sell or cause to be sold all or any part of the
Collateral at public or private sale, in one (1) or more sales or lots,
at such price as the Majority Beneficiaries may deem best, and for cash
or on credit, or for future delivery, without assumption of any credit
risk, and the purchaser of any or all of the Collateral so sold shall
thereafter hold the Collateral so purchased absolutely, and free from
any claim, encumbrance, or right of the Pledgor of any kind whatsoever.
The Trustee will give the Pledgor reasonable notice of the time and
place of any public sale thereof, or of the time after which any
private sale or other intended disposition is to be made. Any sale of
the Collateral conducted in conformity with reasonable commercial
practices of banks, insurance companies, or other financial
institutions disposing of Property similar to the Collateral shall be
deemed to be commercially reasonable. Any requirements of reasonable
notice shall be met if such notice is delivered to the Pledgor, as
provided herein, at least ten (10) days before the time of the sale or
disposition. Any other requirement of notice, demand, or advertisement
for sale is, to the extent permitted by law, waived.
(b) SETOFF. If an Event of Default shall exist hereunder, any
of the Beneficiaries may, without notice (with or without proceeding
with or causing a sale or sales, or a foreclosure or foreclosures, of
the Collateral or demanding performance by the Pledgor of the Secured
Obligations owing to such Beneficiary), appropriate and apply to the
payment of the Secured Obligations owed to it any and all Collateral in
its possession and any and all balances, credits, deposit accounts,
reserves, or other moneys due or owing to the Pledgor held by such
Beneficiary hereunder or otherwise, subject, however, to the terms and
provisions of the Trust Indenture.
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5. DEFAULTS - REMEDIES
(c) PRIVATE SALE. Anything herein to the contrary
notwithstanding, and in view of the fact that federal and state
Securities laws may impose certain restrictions on the method by which
a sale of the Securities constituting all or part of the Collateral may
be effected after and during the continuance of an Event of Default,
the Pledgor agrees that, if an Event of Default shall exist hereunder,
the Trustee may, from time to time, attempt to sell all or any part of
such Securities by means of a private placement, restricting the
bidders and prospective purchasers to those who will represent or agree
as to their investment intent or method of resale or both in a manner
reasonably required by the Trustee to assure compliance with applicable
Securities laws. In so doing, the Trustee may solicit offers to buy
such Securities or any part thereof, for cash, from a limited number of
investors deemed by the Trustee, in its exclusive judgment or the
exclusive judgment of the Majority Beneficiaries, to be responsible
parties who might be interested in purchasing such Securities. If the
Trustee solicits such offers from not fewer than three (3) such
investors, then the acceptance by the Trustee of the highest offer
obtained therefrom shall be deemed to be a commercially reasonable
method of disposition of such Securities.
(d) REMEDIES ARE CUMULATIVE. All covenants, conditions,
provisions, warranties, guaranties, indemnities, and other undertakings
of the Pledgor contained in this Agreement and the other Lending
Documents, or in any document referred to herein or therein, or
contained in any agreement supplementary hereto or thereto, shall be
deemed in addition to, and not in derogation or substitution of, any of
the terms, covenants, conditions, or agreements of the Pledgor herein
or therein contained; and the giving, taking, or enforcement of any
other or additional security, collateral, or guaranty for the payment
or performance of the Secured Obligations shall not operate to
prejudice, waive, or affect the security of this Agreement, or any
rights, powers, or remedies hereunder, nor shall the Beneficiaries or
the Trustee be required to first look to, enforce, or exhaust, any such
other or additional security, collateral or guaranties. No course of
dealing on the part of any of the Beneficiaries or the Trustee, nor any
delay or failure on the part of such Beneficiaries or the Trustee to
exercise any right, shall impair such right or operate as a waiver of
such right or otherwise prejudice the rights, powers, and remedies of
such Beneficiaries or the Trustee. No waiver by the Beneficiaries or
the Trustee of any Default or Event of Default, whether such waiver be
full or partial, shall extend to or be taken to affect any subsequent
Default or Event of Default, or to impair the rights resulting
therefrom.
(e) EXPENSES. The Pledgor upon demand shall pay to the
Beneficiaries and the Trustee all of their respective out-of-pocket
expenses (including court costs and reasonable attorneys' fees and
disbursements) of, or incident to, the enforcement of any of the
provisions hereof and all other charges due against the Collateral,
including, without limitation, taxes, assessments, and other amounts
secured by security interests, Liens, or encumbrances upon the
Collateral and any expenses, including transfer or other taxes, arising
in connection with any sale, transfer, collection, or other disposition
of the Collateral.
12
SPECTRAN CORPORATION PLEDGE AGREEMENT
15
5. DEFAULTS - REMEDIES
5.2 EFFECT OF SALE, ETC.
(a) TITLE. Any sale or sales pursuant to the provisions of
this Agreement, whether under any right or power granted hereby or
pursuant to any legal proceedings, shall operate to divest the Pledgor
of all right, title, interest, claim and demand whatsoever, either at
law or in equity, of, in and to the Collateral, or any part thereof, so
sold, and any Property so sold shall be free and clear of any and all
rights of redemption by, through or under the Pledgor. At any such sale
one or more Beneficiaries or the Trustee acting on behalf of such
Beneficiaries may, to the extent permitted by applicable law, bid for
and purchase the Property sold and may make payment therefor as set
forth in Section 5.2(b), and any such Person so purchasing any such
Property, upon compliance with the terms of sale, may hold, retain and
dispose of such Property without further accountability to the Pledgor.
(b) APPLICATION OF PROCEEDS. The receipt by the Trustee, or by
any Person authorized under any judicial proceedings to make any such
sale, of the proceeds of any such sale shall be a sufficient discharge
to any purchaser of the Collateral, or of any part thereof, sold as
aforesaid; and no such purchaser shall be bound to see to the
application of such proceeds, or be bound to inquire as to the
authorization, necessity or propriety of any such sale. In the event
that, at any such sale, any of the Beneficiaries is the successful
purchaser, it shall be entitled, for the purpose of making settlement
or payment, to use and apply such Collateral to its Secured Obligations
by crediting thereon the amount apportionable and applicable thereto
out of the net proceeds of such sale.
5.3 RESTORATION OF RIGHTS AND REMEDIES.
If the Trustee or any of the Beneficiaries (in accordance with the
Trust Indenture) shall have instituted any proceeding to enforce any right or
remedy hereunder, and such proceeding shall have been discontinued or abandoned
for any reason, or shall have been determined adversely to the Trustee or such
Beneficiary, then and in every such case, the Trustee and such Beneficiary
shall, subject to any determination in any such proceeding, be restored
severally and respectively to their former positions hereunder, and thereafter
all rights and remedies of the Trustee and such Beneficiary shall continue as
though no such proceeding had been instituted.
5.4 CONSENT; MARSHALLING; SUBROGATION, ETC.
(a) CONSENT. The Pledgor hereby consents that from time to
time, before or after the occurrence or existence of any Event of
Default, with or without notice to or assent from the Pledgor, any
Collateral at such time held by or available to the Trustee or any of
the Beneficiaries or any other collateral at any time held by or
available to any such Beneficiary or the Trustee for any obligation of
any other Person secondarily or otherwise liable for any of the Secured
Obligations, may be exchanged, surrendered, or released, and any of the
obligations secured hereby or any of the obligations of such other
Person may be changed, modified, altered, renewed, extended, continued,
surrendered, compromised, waived, or released, in whole or in part, or
any other indulgences may be granted to the Pledgor, all as such
Beneficiary or the Trustee may
13
SPECTRAN CORPORATION PLEDGE AGREEMENT
16
5. DEFAULTS - REMEDIES
see fit, and the Pledgor shall remain bound under this Agreement
notwithstanding any such exchange, surrender, change, modification,
alteration, renewal, extension, continuance, compromise, waiver, or
release.
(b) MARSHALLING. The Pledgor hereby acknowledges that neither
the Trustee nor any Beneficiary shall be under any obligation to
marshal any assets in favor of the Pledgor or against or in payment of
any or all of the Secured Obligations.
(c) SUBROGATION, ETC. The Pledgor hereby acknowledges that
until all of the Secured Obligations shall have been indefeasibly paid
in full and no Bank Lender is obligated to make a further advance under
the Bank Agreement, the Pledgor shall have no right of subrogation,
reimbursement, or indemnity whatsoever arising out of remedies
exercised by the Trustee or any Beneficiary.
5.5 APPLICATION OF PROCEEDS.
The proceeds of any exercise of rights with respect to the Collateral,
or any part thereof, and the proceeds and the avails of any remedy under this
Agreement shall be paid to the Trustee and applied by the Trustee in accordance
with the provisions of the Trust Indenture. If there is a deficiency, the
Pledgor shall, subject always to the other provisions of this Agreement, remain
liable therefor and shall forthwith pay the amount of any such deficiency to the
Trustee.
5.6 WAIVERS BY THE PLEDGOR.
(a) ACCEPTANCE. The Pledgor hereby waives notice of acceptance
of this Agreement. The Pledgor further waives presentment and demand
for payment of any of the Secured Obligations, protest and notice of
dishonor or default with respect to any of the Secured Obligations, and
all other notices to which the Pledgor might otherwise be entitled,
except as otherwise expressly provided in this Agreement or any of the
other Lending Documents to which it is party.
(b) WAIVER OF VALUATIONS, ETC. The Pledgor (to the extent that
it may lawfully do so) covenants that it shall not at any time insist
upon or plead, or in any manner claim or take the benefit or advantage
of, any stay (except in connection with a pending appeal), valuation,
appraisal, redemption or extension law now or at any time hereafter in
force that, but for this waiver, might be applicable to any sale made
under any judgment, order or decree based on this Agreement or any
other Lending Document to which it is a party; and the Pledgor (to the
extent that it may lawfully do so) hereby expressly waives and
relinquishes all benefit and advantage of any and all such laws and
hereby covenants that it will not hinder, delay or impede the execution
of any power in this Agreement or in any other Lending Document granted
and delegated to the Trustee, but that it will suffer and permit the
execution of every such power as though no such law or laws had been
made or enacted.
14
SPECTRAN CORPORATION PLEDGE AGREEMENT
17
5. DEFAULTS - REMEDIES
5.7 REGISTRATION RIGHTS.
In furtherance of the right of the Trustee to sell any or all of the
Collateral pursuant to Section 5.1, the Pledgor and each Subsidiary, as the case
may be, agrees that, following the occurrence of an Event of Default and upon
request of the Trustee and without expense to the Trustee, it will (and it will
cause the issuer of any of the Collateral to):
(a) use its best efforts to obtain all necessary governmental
approvals for the sale by the Trustee of the Collateral or any part
thereof;
(b) prepare, cause to be filed and use its best efforts to
cause to become effective with respect to the Collateral, regardless of
the number of shares or principal amount thereof, then held by the
Trustee, one or more registration statements under the Securities Act,
on Form S-1 (or such other form for which the respective issuer of the
shares or other Securities constituting Collateral then qualifies and
which is available for the sale of the Collateral in accordance with
the method of disposition thereof) or one or more qualifications for
exemption from registration under the Securities Act, or one or more
similar documents pursuant to any statute then in effect corresponding
to the Securities Act, relating to any public offering or sale by the
Trustee of such Collateral;
(c) prepare, cause to be filed and use its best efforts to
have such Collateral qualified or registered under the securities or
"Blue Sky" laws of such other jurisdictions as the Trustee may request
in connection with any such offering or sale;
(d) include in any such registration statement, qualification
statement or similar document all appropriate information relating to
the transaction or transactions in which the Trustee proposes to offer
or sell such Collateral;
(e) cause to be filed such post-effective amendments and
supplements to each such registration statement, qualification
statement or similar document (including, without limitation, any
prospectus or offering circular) as may be necessary to make any
statement therein contained not untrue or misleading, and such filing,
qualification or registration to be kept effective for such period as
the Trustee may deem appropriate to facilitate the sale or other
disposition of such Collateral;
(f) furnish the Trustee with such number of copies of each
such registration statement, qualification statement or similar
document, preliminary prospectus, prospectus, offering circular and any
post-effective amendments or supplements thereto as the Trustee may
request; and
(g) do such further acts and things as the Trustee may deem
necessary or advisable to effectuate the offering and sale by the
Trustee of such Collateral.
The Pledgor further agrees to indemnify and hold harmless the Trustee, each
Beneficiary and each underwriter (as defined in the Securities Act or any
statute then in effect corresponding to the Securities Act) acting in the
transaction, and each Person controlling (within the meaning of
15
SPECTRAN CORPORATION PLEDGE AGREEMENT
18
5. DEFAULTS - REMEDIES
the Securities Act or such corresponding statute) the Trustee, any Beneficiary
or any such underwriter, from and against any and all claims, actions, damages,
demands, judgments, losses, liabilities and expenses based upon or arising out
of any actual or alleged untrue statement of a material fact contained in any
such registration statement, qualification statement or similar document, or
part thereof, or any actual or alleged omission to state a material fact
required to be stated in any such registration statement, qualification
statement or similar document, or part thereof, or necessary to make the
statements contained therein not misleading.
If the indemnification provided for in this Section 5.7 is unavailable
to or otherwise insufficient to hold harmless an indemnified party hereunder in
respect of any claims, actions, demands, judgments, losses, liabilities or
expenses referred to above, then the Pledgor shall, in lieu of indemnifying such
indemnified party, contribute to the amount paid or payable by such indemnified
party as a result of any claims, actions, demands, judgments, losses,
liabilities or expenses referred to above in such proportion as is appropriate
to reflect the relative fault of the Pledgor, the Trustee, each Beneficiary and
each underwriter in connection with the statements or omissions which resulted
in such indemnified party suffering any such claims, actions, demands,
judgments, losses, liabilities or expenses, as well as any other equitable
considerations. The relative fault of the Pledgor, the Trustee, each Beneficiary
and each underwriter shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission to state a material fact relates to information supplied by the
Pledgor, the Trustee, such Beneficiary or such underwriter and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission. The amount paid or payable by the Pledgor as
a result of any claims, actions, damages, demands, judgments, losses,
liabilities and expenses shall be deemed to include any legal or other fees or
expenses reasonably incurred by any indemnified party in connection with
investigating or defending any action or claim. The Pledgor and the Trustee
agree that it would not be just and equitable if contribution pursuant to this
paragraph were determined by any method of allocation that did not take account
of the equitable considerations referred to in this paragraph.
The registration and other rights provided in this Section 5.7 may be
transferred to any purchaser of the Collateral, or any portion thereof, at any
sale described in Section 5.1. The Trustee may exercise its rights and powers
under this Section 5.1 prior to any sale pursuant to Section 5.1 or,
alternatively, the Trustee may assign such rights to the purchaser at any such
sale, who shall then have the registration rights and other rights specified
herein.
The Pledgor and each Subsidiary further agrees that a breach of any of
the covenants contained in this Section 5.7 will cause irreparable injury to the
Beneficiaries, that the Beneficiaries have no adequate remedy at law in respect
of such breach and, as a consequence, agrees that each and every covenant
contained in this Section 5.7 shall be specifically enforceable against the
Pledgor and each Subsidiary, and the Pledgor and each Subsidiary hereby waives
and agrees not to assert any defenses against an election for specific
performance of such covenants except for a defense that no portion of the
Secured Obligations is then due and payable.
16
SPECTRAN CORPORATION PLEDGE AGREEMENT
19
6. MISCELLANEOUS 6. MISCELLANEOUS
6.1 NOTICES.
All communications under this Agreement shall be in writing and shall
be made to the Persons and addresses, and in the manner, provided in the Trust
Indenture.
6.2 WAIVER AND AMENDMENT.
No provision of this Agreement will be waived, amended, modified or
supplemented except by a written instrument executed by the Obligors and the
Trustee in accordance with the Trust Indenture.
6.3 SURVIVAL.
All warranties, representations, and covenants made by the Pledgor
herein or in any certificate or other document or instrument delivered by it or
on its behalf under this Agreement shall be considered to have been relied upon
by the Beneficiaries and shall survive the delivery to the Trustee of the
Collateral regardless of any investigation made by such Beneficiaries, from time
to time, of Secured Obligations or any other Person on their behalf. All
statements in any such certificate or other instrument shall constitute
warranties and representations by the Pledgor hereunder. This Agreement shall be
binding upon the Pledgor and its successors and assigns, and shall inure to the
benefit of and be enforceable by the Beneficiaries.
6.4 SUCCESSORS AND ASSIGNS.
Whenever any of the parties to this Agreement is referred to, such
reference shall be deemed to include the successors and assigns of such party,
and all the covenants, promises and agreements in this Agreement contained by or
on behalf of any of the Obligors, or by or on behalf of the Trustee, shall bind
and inure to the benefit of the respective successors and assigns of such
parties whether so expressed or not.
6.5 ADDITIONAL PARTIES.
Any Person which becomes the owner of capital stock Subsidiary after
the Closing Date and which is required, pursuant to the Trust Indenture or any
other Lending Document, to become a party to this Agreement shall execute and
deliver a duplicate original of this Agreement and, upon acceptance thereof by
the Trustee, such Person shall become a "Pledgor" under this Agreement for all
purposes and shall be deemed to have made the covenants and agreements of the
Pledgor set forth herein as of the date of the execution and delivery of such
acknowledgment and agreement (including, without limitation, the grant of the
security interest contained in Section 3) and shall comply with all other
obligations to be performed by a Pledgor.
17
SPECTRAN CORPORATION PLEDGE AGREEMENT
20
6. MISCELLANEOUS
6.6 SUBJECT TO TRUST INDENTURE.
Any and all rights granted to the Trustee under this Agreement are to
be held and exercised by the Trustee as security trustee for the benefit of the
Beneficiaries pursuant to the provisions of the Trust Indenture. To the extent
set forth in the Lending Documents, each of the Beneficiaries shall be a
beneficiary of the terms of this Agreement. Any and all obligations under this
Agreement of the parties to this Agreement, and the rights and indemnities
granted to the Trustee under this Agreement, are created and granted subject to,
and in furtherance (and not in limitation) of, the terms of the Trust Indenture.
Nothing in this Agreement expressed or implied is intended or shall be construed
to give to any Person other than the Pledgor, the Beneficiaries and the Trustee
any legal or equitable right, remedy, or claim under or in respect of this
Agreement or any covenant, condition, or provision herein contained; and all
such covenants, conditions, and provisions are and shall be held to be for the
sole and exclusive benefit of the Pledgor, the Beneficiaries and the Trustee.
6.7 TERM OF AGREEMENT.
This Agreement shall be and remain in full force and effect until
terminated in accordance with the Trust Indenture; provided, that all
indemnities of the Pledgor contained in this Agreement shall survive, and remain
operative and in full force and effect regardless of, the termination of this
Agreement.
6.8 ENTIRE AGREEMENT.
This Agreement constitutes the final written expression of all of the
terms hereof and is a complete and exclusive statement of those terms.
6.9 COUNTERPARTS.
This Agreement may be executed and delivered in any number of
counterparts, each of such counterparts constituting an original but all
together one (1) and the same Agreement.
[Remainder of page intentionally blank. Next page is signature page.]
18
SPECTRAN CORPORATION PLEDGE AGREEMENT
21
IN WITNESS WHEREOF, the parties have executed this Agreement of the
date first above mentioned.
SPECTRAN CORPORATION
By /s/ Bruce A. Cannon
--------------------------------------
Name: Bruce A. Cannon
Title: Secretary
SPECTRAN COMMUNICATION FIBER
TECHNOLOGIES, INC.
By /s/ Bruce A. Cannon
--------------------------------------
Name: Bruce A. Cannon
Title: Secretary
SPECTRAN SPECIALTY OPTICS
COMPANY
By /s/ Bruce A. Cannon
--------------------------------------
Name: Bruce A. Cannon
Title: Secretary
APPLIED PHOTONIC DEVICES, INC.
By /s/ Bruce A. Cannon
--------------------------------------
Name: Bruce A. Cannon
Title: Secretary
SPECTRAN CORPORATION PLEDGE AGREEMENT
22
FLEET NATIONAL BANK, AS TRUSTEE
By /s/ Michael T. Quaile
--------------------------------------
Name: Michael T. Quaile
Title: Corporate Trust Officer
SPECTRAN CORPORATION PLEDGE AGREEMENT
23
Annex 1 to Pledge Agreement
PLEDGED STOCK
SpecTran Specialty Optics Company Stock Certificate No. 1 for 10 shares of
common stock, par value $.01 per share, issued to SpecTran Corporation.*
SpecTran Communication Fiber Technologies, Inc. Stock Certificate No. 1 for 10
shares of common stock, par value $.01 per share, issued to SpecTran
Corporation.**
Applied Photonic Devices, Inc. Stock Certificate No. 1 for 10 shares of common
stock, par value $.01 per share, issued to SpecTran Corporation.
* This stock certificate was issued under the name EBOC Acquisition Corp.
The company changed its name to SpecTran Specialty Optics Company on
February 7, 1994.
** This stock certificate was issued under the name PTI Acquisition Corp.
The company changed its name to SpecTran Fiber Communication
Technologies, Inc. on October 8, 1995.
24
ANNEX 2
LIST OF OFFICES IN WHICH FINANCING STATEMENTS OR OTHER APPROPRIATE
INSTRUMENTS EVIDENCING SECURITY INTERESTS ARE FILED
DEBTOR NAME SECURED PARTY FILING OFFICE
- -----------------------------------------------------------------------------------------------------------------------------
SPECTRAN CORPORATION Fleet National Bank, as Trustee Financing Statements:
---------------------
Massachusetts Secretary of the Commonwealth
Worcester County, MA
Town of Sturbridge, MA
Connecticut Secretary of the State
Patent & Trademark:
-------------------
Commissioner of Patents & Trademarks
- -----------------------------------------------------------------------------------------------------------------------------
SPECTRAN COMMUNICATION FIBER Fleet National Bank Financing Statements:
TECHNOLOGIES, INC. ---------------------
Massachusetts Secretary of the Commonwealth
Worcester County, MA
Town of Sturbridge, MA
Florida Secretary of State
Virginia Secretary of the Commonwealth
Mortgage:
---------
Worcester County, Registry of Deeds
Patent & Trademark:
-------------------
Commissioner of Patents & Trademarks
- -----------------------------------------------------------------------------------------------------------------------------
SPECTRAN SPECIALTY OPTICS COMPANY Fleet National Bank Financing Statements:
---------------------
Connecticut Secretary of the State
Town Clerk, Avon, CT
Massachusetts Secretary of the Commonwealth
Town of Sturbridge, MA
Mortgage:
---------
Town Clerk, Avon, CT
Patent & Trademark:
-------------------
Commissioner of Patents & Trademarks
- -----------------------------------------------------------------------------------------------------------------------------
SPECTRAN CORPORATION Annex 2-1 PLEDGE AGREEMENT
25
- ---------------------------------------------------------------------------------------------
APPLIED PHOTONIC DEVICES, INC. Fleet National Bank, as Financing Statements:
Trustee Connecticut Secretary of the
State
Town Clerk, Killingly, CT
Town Clerk, Brooklyn, CT
Massachusetts Secretary of the
Commonwealth
Town Clerk, Avon, CT
Patent & Trademark:
Commissioner of Patents &
Trademarks
- ---------------------------------------------------------------------------------------------
SPECTRAN CORPORATION Annex 2-2 PLEDGE AGREEMENT