218870
EXHIBIT 10.5
PLEDGE AGREEMENT
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This PLEDGE AGREEMENT (this "Agreement"), is made as of the 1st day of
July, 1996 by and between AFC CABLE SYSTEMS, INC., a Delaware corporation (the
"Company"), and FLEET NATIONAL BANK, a national banking association organized
and existing under the laws of the United States of America having an office at
000 Xxxxxxxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxx Xxxxxx 00000 (the "Bank"), in the
following circumstances:
A. The Massachusetts Industrial Finance Agency (the "Issuer") has
agreed with the Company to issue its $3,570,000 Industrial Revenue Bonds (AFC
Cable Systems, Inc. Issue - Series 1996) (the "Bonds") under a certain Loan and
Trust Agreement dated as of July 1, 1996 (the "Indenture"), between the Issuer
and Fleet National Bank, as Trustee (the "Trustee").
B. The Bank has agreed to issue its irrevocable, transferable,
direct-pay letter of credit (the "Letter of Credit") pursuant to the terms of a
Reimbursement Agreement dated as of July 1, 1996 between the Company and the
Bank (the "Reimbursement Agreement").
C. In connection with the issuance of the Bonds, the Company has
agreed to enter into the Reimbursement Agreement in order to induce the Bank to
issue the Letter of Credit thereunder, which Letter of Credit may be used, inter
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alia, to pay the Purchase Price of Bonds which are not successfully remarketed
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in the event that a Bondowner (as defined in the Indenture) elects to tender any
Bonds or in the event that such Bonds are subject to mandatory tender.
D. It is a condition precedent to the obligation of the Bank to issue
its Letter of Credit that the Company shall have entered into this Agreement
with the Bank.
NOW, THEREFORE, in consideration of the premises and in order to induce
the Bank to issue the Letter of Credit pursuant to the Reimbursement Agreement,
and for other good and valuable consideration, receipt of which is hereby
acknowledged, the parties hereto agree as follows:
Section 1. Defined Terms. Unless otherwise defined herein, terms
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defined in the Reimbursement Agreement shall have such defined meanings when
used herein.
Section 2. Pledge. The Company hereby pledges, assigns, hypothecates,
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transfers, and delivers to the Bank all of its right, title and interest to all
Bonds which may from time to time be (a) delivered to or held on behalf of the
Trustee, (b) delivered to or held on behalf of the Remarketing Agent, as defined
in the Indenture, and (c) delivered to or held on behalf of the Bank, in any
such event in connection with a drawing by the Trustee under the Letter of
Credit for an A-Drawing, a B-Drawing or a C-Drawing (all as defined in the
Letter of Credit) to purchase Bonds which have not been successfully remarketed
by the Remarketing Agent (the "Purchased Bonds"), and hereby grants to the Bank
a first lien on,
and security interest in, all right, title and interest in and to the Purchased
Bonds and all proceeds thereof, as collateral security for the complete payment
when due of all amounts due the Bank from the Company under the Reimbursement
Agreement and interest on such amounts as set forth therein and all obligations
due and owing the Bank under any of the other Related Documents (collectively,
the "Obligations").
Section 3. Registration of Bonds.
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(a) Purchased Bonds shall be registered in the name of the Bank. The
Bank may, but shall not be obligated to, register Purchased Bonds in the name of
its designee, as pledgee, at any time and from time to time. Purchased Bonds
held by or on behalf of the Bank shall not be entitled to the benefits of, and
shall not be presented for payment under, the Letter of Credit.
(b) If, while this Agreement is in effect, the Company shall become
entitled to receive or shall receive any payment, including, without limitation,
any payment of principal, premium, interest or proceeds of sale with respect to
the Purchased Bonds, such payment shall be subject to this Agreement, and the
Company hereby irrevocable directs the Trustee to make any such payments
directly to the Bank and, in the event any such payments are received by the
Company, the Company agrees to accept the same as the Bank's agent and to hold
the same in trust on behalf of the Bank and to deliver the same forthwith to the
Bank. All sums of money so paid with respect to the Purchased Bonds which are
received by the Company and paid to the Bank, and all such amounts which shall
be paid directly to the Bank by the Trustee, shall be credited against the
corresponding reimbursement obligations of the Company under the Reimbursement
Agreement.
(c) During such time as Bonds are pledged to the Bank under the terms
of this agreement, the Bank shall be entitled to exercise all of the rights of
an owner of Bonds with respect to voting, consenting and directing the Trustee
as if the Bank were the owner of such Bonds, and the Company hereby grants and
assigns to the Bank all such rights.
Section 4. Collateral. All Purchased Bonds at any time pledged
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hereunder and all income therefrom and proceeds thereof, are herein collectively
referred to as the "Collateral."
Section 5. Release of Bonds. Simultaneously with the receipt by the
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Bank of the proceeds of the sale of any Purchased Bonds in an amount equal to
the principal amount of Purchased Bonds remarketed by the Remarketing Agent
pursuant to the Remarketing Agreement (both as defined in the Indenture),
together with any interest accrued on account of the A-Drawing, B-Drawing or C-
Drawing, Purchased Bonds in the principal amount equal to the principal amount
received by the Bank from said sale shall be released from the lien of this
Agreement and shall be delivered to the Remarketing Agent, and such payment
shall increase
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the amount payable on account of the A-Drawing, B-Drawing or C-Drawing, as the
case may be.
Section 6. Rights of the Bank. The Bank shall not be liable for
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failure to collect or realize upon the Obligations or any collateral security or
guarantee therefor, or any part thereof, or for any delay in so doing nor shall
it be under any obligation to take any action whatsoever with regard thereto.
Except as otherwise provided in the Indenture, the Bank shall be treated as the
owner of all Purchased Bonds for purposes of giving directions, consents and
waivers and taking other actions, all upon such terms and conditions as it may
determine all without liability, provided, however, the Bank shall have no duty
to exercise any of the aforesaid rights, privileges or options and shall not be
responsible for any failure to do so or delay in so doing.
Section 7. Remedies. If an Event of Default has occurred and is
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continuing, and any portion of the Obligations has been declared due and
payable, the Bank, without demand of performance or other demand, advertisement
or notice of any kind (except the notice specified below of the time and place
of public or private sale) to or upon the Company or any other Person (all and
each of which demands, advertisements and/or notices are hereby expressly
waived), may forthwith collect, receive, appropriate and realize upon the
Collateral, or any part thereof, and/or may forthwith sell, assign, give option
or options to purchase, contract to sell or otherwise dispose of and deliver all
or any part of the Collateral, in such manner as the Bank may elect, including a
purchase for its own account, upon such terms and conditions and at such price
as it may deem advisable. All Purchased Bonds so sold shall be free of any
right or equity of redemption in the Company, which right or equity is hereby
expressly waived or released. The Bank shall apply the net proceeds of any such
realization of sale, after deducting all reasonable costs and expenses incurred
in connection therewith including reasonable attorneys' fees, to the payment in
whole or in part, of the Obligations in such order as the Bank may elect. The
Company shall remain liable for any deficiency remaining unpaid after such
application, and the Bank shall be required to account to the Company for any
surplus only after so applying such net proceeds and after the payment by the
Bank of any other amount required by any provision of law. The Bank shall give
ten (10) days' notice of the time and place of any public sale or of the time
after which a private sale or other intended disposition of the Purchased Bonds
is to take place and such notice shall constitute reasonable notification
thereof. In addition to the rights and remedies granted to it in this Agreement
and in any other instrument agreement securing, evidencing or relating to any of
the Obligations, the Bank shall have all the rights and remedies of a secured
party under the Uniform Commercial Code of the State of Rhode Island.
Section 8. Representations, Warranties and Covenants of the Company.
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The Company represents and warrants that:
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(a) On the date of delivery to the Bank of any Purchased Bonds
described herein, neither the Issuer, the Remarketing Agent, the Trustee nor any
other Person will have any right, title or interest in and to the Purchased
Bonds:
(b) It has, and on the date of delivery to the Bank of any Purchased
Bonds will have, full capacity and legal right to pledge all of its rights,
title and interest in and to the Purchased Bonds pursuant to this Agreement;
(c) This Agreement has been duly authorized, executed and delivered by
the Company and constitutes a legal, valid and binding obligation of the Company
enforceable in accordance with its terms;
(d) No consent of any other party including, without limitation,
creditors of the Company and no consent, license, permit, approval or
authorization of, exemption by, notice or report to, or registration, filing or
declaration with, any governmental authority is required to be obtained by the
Company in connection with the execution, delivery or performance of this
Agreement;
(e) The execution, delivery or performance of this Agreement will not
violate the Company's Articles of Incorporation or bylaws or any provision of
any applicable law or regulation or of any order, judgment, writ, award or
decree of any court, arbitrator, or Governmental Person, or of any mortgage,
indenture, lease, contract, or other agreement, instrument undertaking to which
the Company is a party or by which it is bounded or upon any of its assets and
will not result in the creation or imposition of any lien, charge or encumbrance
on or security interest in any of the assets of the Company except as
contemplated by this Agreement which would have a material and adverse effect on
the security of the Bank;
(f) There is no pending action or proceeding before any court,
governmental agency or arbitrator against or directly involving the Company and,
to the best of the Company's knowledge, there is no threatened action on
materially proceeding affecting the Company before any court, governmental
agency or arbitrator which, in any case, is likely naturally to impair the
Company's ability to perform its obligations under this Agreement;
(g) Upon the delivery to the Bank of Purchased Bonds (or notice to the
appropriate financial intermediaries in the case of book-entry securities), the
pledge of such Purchased Bonds under this Agreement will create a valid first
lien on and a first perfected security interest in all right, title and interest
of the Company in and to such Purchased Bonds, and the proceeds thereof, subject
to no prior pledge, lien, mortgage, hypothecation, security interest, charge,
option or encumbrance or to any agreement purporting to grant to any third party
a security interest in the property or assets of the Company which would include
the Purchased Bonds; and
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(h) The Company covenants and agrees that it will defend the Bank's
right, title and security interest in and to the Purchased Bonds and the
proceeds thereof against the claims and demands of all Persons whomsoever, and
covenants and agrees that it will have like title and right to pledge any other
Collateral at any time hereafter pledged to the Bank as Collateral hereunder and
will likewise defend the Bank's right thereto and security interest therein.
Section 9. No Disposition, etc. Without prior written consent of the
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Bank, the Company agrees that it will not sell, assign, transfer, exchange, or
otherwise dispose of, or grant any option with respect to, the Collateral, nor
will it create, incur or permit to exist any pledge, lien, mortgage,
hypothecation, security interest, charge, option or any other encumbrance with
respect to any of the Collateral, or any interest therein, or any proceeds
thereof, except for the lien and security interest provided for by this
Agreement.
Section 10. Sale of Collateral.
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(a) The Company recognizes that the Bank may be unable to effect a
public sale of any or all of the Purchased Bonds by reason of certain
prohibitions contained in applicable state and federal securities and banking
laws, rules and regulations and in the Indenture, but may be compelled to resort
to one or more private sales thereof to a restricted group of purchasers who
will be obligated to agree, among other things, to acquire such securities for
their own account for investment and not with a view to the distribution or
resale thereof. The Company acknowledges and agrees that any such private sale
may result in prices and other terms less favorable to the seller than if such
sale were a public sale and, notwithstanding such circumstances, agrees that any
such private sale shall be deemed to have been made in a commercially reasonable
manner. The Bank shall be under no obligation to delay a sale of any of the
Purchased Bonds for the period of time necessary to permit the Issuer to
register such securities for public sale under any applicable state or federal
securities laws even if the Issuer would agree to do so.
(b) The Company further agrees to do or cause to be done all such
other acts and things as may be necessary to make such sale or sales of any
portion or all of the Purchased Bonds valid and binding and in compliance with
any and all applicable laws, regulations, order, writs, injunctions, decrees or
awards of any and all courts, arbitrators or governmental instrumentalities
having jurisdiction over any such sale or sales, all at the Company's expense.
The Company further agrees that a breach of any of the covenants contained in
this Section 10 will cause irreparable injury to the Bank, the Bank has no
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adequate remedy at law in respect of such breach and, as a consequence, agrees
that each and every covenant contained in this paragraph shall be specifically
enforceable against the Company and the Company hereby waives and agrees not to
assert any defenses against an action for specific performance of such covenants
except for a defense that no Event of Default has occurred under the
Reimbursement Agreement.
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Section 11. Further Assurances. The Company agrees that at any time
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and from time to time upon the written request of the Bank, the Company will
execute and deliver such further documents and do such further acts and things
as the Bank may reasonably request in order to effect the purposes of this
Agreement.
Section 12. Notices. All notices provided for hereunder shall be in
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writing and shall be mailed or delivered to the respective parties hereto as
follows:
To the Company:
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AFC Cable Systems, Inc.
00 Xxxxxxx Xxxxx
Xxxxxxxxxx, Xxxxx Xxxxxx 00000
Attn: Xxxxx X. Xxxxxxx, Chairman
with a copy to:
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Xxxxxxxx, Xxxxx & Xxxxxx
0000 Xxxxx Xxxxxx
Xxxxxxxxxx, Xxxxx Xxxxxx 00000;
Attention: Xxxxxxxx Xxxx
To the Bank:
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Fleet National Bank
000 Xxxxxxxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxx Xxxxxx 00000
Attn: Xxxxxxx X. Xxxxx, Vice President
with a copy to:
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Xxxxxxxxx, Snow & Xxxx
000 Xxxxx Xxxx Xxxxxx
Xxxxxxxxxx, Xxxxx Xxxxxx 00000
Attention: Xxxxx X. Xxxxxx
or as to each party at such other address as shall be designated by such party
in a written notice to each other party. All such notices shall be in writing
and shall be deemed given when (A) sent to the applicable address stated above
by registered or certified mail, postage prepaid, return receipt requested, or
by such other means (including, but not limited to, personal delivery) as shall
provided the sender with documentary evidence of such delivery, (B) delivery is
refused by the addressee as evidenced by the affidavit of the person who
attempted to effect such delivery.
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Section 13. Severability. Any provision of this Agreement which is
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prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
Section 14. No Waiver; Cumulative Remedies. The Bank shall not by any
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act, delay, omission or otherwise be deemed to have waived any of its rights or
remedies hereunder and no waiver shall be valid unless in writing, signed by the
Bank, and then only to the extent therein set forth. A waiver by the Bank of
any right or remedy hereunder on any one occasion shall not be construed as a
bar to any aright or remedy which the Bank would otherwise have on any future
occasion. No failure to exercise or any delay in exercising on the part of the
Bank any right, power or privilege hereunder, shall operate as a waiver thereof,
nor shall any single or partial exercise of any right, power or privilege
hereunder preclude any other or further exercise thereof or the exercise of any
other right, power or privilege. The rights and remedies herein provided are
cumulative and may be exercised singly or herein provided concurrently, and are
in addition to and are not exclusive of any rights or remedies provided by the
other Related Documents, or by law or in equity.
Section 15. Waivers, Amendments; Applicable Law. None of the terms or
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provisions of this Agreement may be waived, altered, modified or amended except
by an instrument in writing, duly executed by the Company and the Bank. This
Agreement shall be binding upon, and shall inure to the benefit of the parties
hereto and their respective successors and assigns. This Agreement shall be
governed by, and be construed and interpreted in accordance with, the laws of
the State of Rhode Island.
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed by their proper and duly authorized by officers as of the day and year
first above written.
AFC CABLE SYSTEMS, INC.
[SIGNATURE APPEARS HERE] By: /s/ Xxxxxxx X. Xxxxxx
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Xxxxxxx X. Xxxxxx, Vice President and
Chief Financial Officer
FLEET NATIONAL BANK
[SIGNATURE APPEARS HERE] By: /s/ Xxxxxxx X. Xxxxx
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Xxxxxxx X. Xxxxx, Vice President
218870_3
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