SECOND RANKING SHARE PLEDGE AGREEMENT BETWEEN: INDUFLEX HOLDING (the Pledgor) AND: ROGERS CORPORATION, (the Beneficiary) WITH RESPECT TO THE SHARES IN ROGERS INDUFLEX NV
Exhibit
10.5
INDUFLEX
HOLDING
(the Pledgor)
AND:
XXXXXX
CORPORATION,
(the Beneficiary)
WITH
RESPECT TO THE SHARES IN
XXXXXX
INDUFLEX NV
31
October 2008
SECOND
RANKING SHARE PLEDGE AGREEMENT
BETWEEN:
(1) INDUFLEX HOLDING, a
Belgian company with registered office at Xxxxxxxxxxxxxxxxxx 000, 0000
Xxxxx (Xxxxxxx) and registered with the Crossroads ING Bank of Enterprises under
enterprise number 0807.149569,
(the
"Pledgor" or the “Buyer”);
AND:
(2) XXXXXX
CORPORATION, a Massachusetts corporation having its headquarters
at Xxx Xxxxxxxxxx Xxxxx, Xxxxxx, XX 00000,
(the
"Pledgee" or the "Beneficiary");
WHEREAS:
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(A)
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On
31 October 2008, the Pledgor as the buyer and the Pledgee as the seller
have entered into a stock purchase agreement with respect to all of the
shares in Xxxxxx Induflex NV (formerly UCB Induflex NV), a company limited
by shares ("naamloze
vennootschap" / "société anonyme")
incorporated and validly existing under Belgian law, with registered
offices at Xxxxxxxxxxxxxxxxxx 000, 0000 Xxxxx (Xxxxxxx) and registered
with the Crossroads Bank of Enterprises under enterprise number
0427.693.784 (the "Company") (the "Stock Purchase
Agreement").
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(B)
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Pursuant
to Article 2.f (Purchase
and Sale of Shares - Security and Subordination) of the Stock
Purchase Agreement, the Pledgor has undertaken to secure all amounts
payable by it under the Stock Purchase Agreement by way of a pledge on the
shares in the Company.
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(C)
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The
Pledgor owns 6,036 registered shares in the Company, representing 100% of
the issued shares of the Company.
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(D)
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On
or around 31 October 2008, the Pledgor and ING Bank have entered into a
first ranking share pledge agreement with respect to 100% of the shares in
the Company (the "First
Ranking Share Pledge Agreement") as security for any and all
obligations owing by the Pledgor to ING Bank arising out of or in
connection with a credit agreement between the Pledgor and ING Bank dated
31 October 2008.
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(E)
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It
is a condition under the Stock Purchase Agreement that this second ranking
pledge be granted by the Pledgor, subject to the terms and the conditions
of this agreement (the "Agreement").
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IT
HAS BEEN AGREED AS FOLLOWS:
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1.
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DEFINITIONS
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1.1
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Definitions
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In this
Agreement, unless the context otherwise requires:
1872 Law means the Belgian law
of 5 May 1872 on commercial pledges.
2004 Law means the Belgian law
of 15 December 2004 on financial collateral.
Enforcement Event means a
breach by Buyer of any of its obligations and liabilities vis-à-vis the
Beneficiary pursuant to Clause 2(b) (ii), (iii) and (iv) or pursuant to Clause
2(g) of the Stock Purchase Agreement provided that the Pledgor does not dispute
the underlying claim or that the Pledgor has been ordered to pay the underlying
claim (in whole or in part) in accordance with the provisions of Clause 9.f of
the Stock Purchase Agreement.
Enforcement Notice means a
written notice from the Pledgee to the Pledgor by which the Pledgee notifies the
Pledgor of the occurrence of an Enforcement Event and of its intention to
enforce the Pledge upon the expiry of the Notice Period.
First Ranking Share Pledge
Agreement has the meaning set out in the recitals to this
Agreement.
Notice Period means the period
starting from the date of the issuance of the Enforcement Notice to the date
falling 5 business days after such date of issuance.
Pledge means
the second ranking pledge over the Shares created pursuant to or arising under
this Agreement.
Secured Liabilities means any
and all obligations and liabilities of the Pledgor vis-à-vis the Beneficiary
pursuant to Clause 2(b) (ii), (iii) and (iv) or pursuant to Clause 2(g) of the
Stock Purchase Agreement.
Shares means the 6,036
registered shares numbered 1 to 6,036 inclusive that the Pledgor currently owns
in the Company.
Stock Purchase Agreement has
the meaning set out in the recitals to this Agreement.
A Clause is a reference to a
clause of this Agreement.
In this
Agreement, each reference to a document will be deemed to be a reference to such
document as amended, extended and/or supplemented from time to
time.
2
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1.2
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Successors
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The
expressions Beneficiary
and Pledgor include
their respective successors.
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1.3
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Headings
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Clause
headings are inserted for convenience of reference only and will not serve to
interpret this Agreement.
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2.
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PLEDGE
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2.1
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The
Pledgor hereby grants to the Beneficiary a second ranking pledge ("pand in tweede rang" /
"gage de second
rang") over the Shares, ranking immediately after the pledge on the
Shares granted to ING Bank under the First Ranking Share Pledge Agreement,
as a continuing security for the due performance of the Secured
Liabilities. The Pledgor and the Beneficiary acknowledge that the
obligations of the Pledgor under this Clause 2 are of a commercial nature
and that this Agreement henceforth constitutes a commercial pledge in
accordance with the 1872 Law and an in rem security
agreement in accordance with the 2004
Law.
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3.
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THE
SHARES
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3.1
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The
Shares are in registered form. The Pledgor will not permit the conversion
of the Shares into book-entry or dematerialized
form.
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3.2
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The
Pledgor will arrange for the following notice to be recorded and dated in
the Company's share register and signed therein on behalf of the Pledgor
and the Beneficiary simultaneously with the execution
hereof:
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"6.036
aandelen op naam, genummerd van 1 tot en met 6.036 zijn in tweede
rang in pand gegeven ten voordele van ROGERS CORPORATION overeenkomstig de
overeenkomst tot inpandgeving van aandelen in tweede rang ("Second Ranking Share
Pledge Agreement") afgesloten op [datum]. Dit pand volgt in rang onmiddellijk na
het pand verschaft aan ING Bank overeenkomstig de overeenkomst tot inpandgeving
van aandelen afgesloten op [date] (First Ranking Share Pledge Agreement). Deze
inpandgeving in tweede rang werd ingeschreven op [datum]."
The
Beneficiary hereby appoints the Pledgor as its special attorney for the purpose
of recording the pledge in the Company's share register,
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4.
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REPRESENTATIONS,
WARRANTIES AND UNDERTAKINGS
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4.1
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Representations
and warranties
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The
Pledgor represents and warrants to the Beneficiary that:
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(a)
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it
is the owner of the Shares and has not granted any security interest in
respect of the Shares save for the first ranking pledge granted by the
Pledgor to ING Bank under the First Ranking Share Pledge
Agreement.
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(b)
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this
Agreement constitutes legally binding obligations for the Pledgor,
enforceable in accordance with its terms and creates a valid second
ranking pledge over the Shares; and
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(c)
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the
Shares are capable of being pledged hereunder without the consent of the
Company, or any third party, save for the consent required from ING Bank
under the First Ranking Share Pledge Agreement, which has been duly and
validly obtained.
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3
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4.2
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Undertakings
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At any
time and until the Pledge will have been finally discharged in accordance with
Clause 8 (Discharge of the
Pledge) the Pledgor:
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(a)
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will
procure that the Shares will at all times represent 75% + 1 of the voting
rights attached to all shares of the
Company;.
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(b)
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not
allow that additional shares are created unless such shares are subscribed
to at fair market value.
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(c)
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undertakes
not to create or permit the existence of any security interest in respect
of the Shares or any part thereof (unless ranking behind the Pledge and
except for the first ranking pledge granted by the Pledgor to ING BANK
under the First Ranking Share Pledge Agreement) without the prior written
consent of the Pledgee.
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(d)
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shall
procure that no executory seizure ("uitvoerend beslag" /
"saisie
exécutoire") will be made on the Shares and that any conservatory
seizure ("bewarend
beslag" / "saisie
conservatoire") thereon will be lifted within 90 days of it first
being made.
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(e)
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will
cooperate with the Beneficiary and sign or cause to be signed all such
further documents and take all such further action as the Beneficiary may
from time to time reasonably request to create, perfect and protect the
Pledge and to carry out the provisions and purposes of this
Agreement.
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(f)
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will not take any initiative,
adopt or vote in favour of any resolutions to dissolve the Company, and
defend (and procure the Company to defend) any third claims seeking to
obtain the dissolution of the
Company.
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(g)
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shall
procure that (i) the Shares remain free and clear of any security interest
save for the provisions of the first ranking pledge granted by the Pledgor
to ING Bank under the First Ranking Share Pledge Agreement (ii) that there
are no limitations, whether pursuant to the Articles or to any agreement,
to the transferability of the Pledged Assets or to the exercise of the
voting rights attached to the Shares (iii) that the Shares are not
certificated and (iv) that there is no cause for suspension of the voting
rights attached to the Shares.
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4
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5.
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RIGHTS
ATTACHING TO THE SHARES
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5.1
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Voting
Rights
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(a)
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As
long as no Enforcement Event has occurred, the Pledgor will be entitled to
exercise its voting rights in respect of the Shares in a manner which is
not inconsistent with any provision of this
Agreement.
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(b)
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If
an Enforcement Event has occurred, and subject to the provisions of the
First Ranking Share Pledge Agreement, the Pledgor will cast the votes
attaching to its Shares in accordance with the Beneficiary's instructions,
which instructions the Pledgor will seek in due
time.
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5.2
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Cash
and non-cash returns on the Shares
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(a)
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If
and as long as no Enforcement Event has occurred, all dividends on the
Shares will be paid to the Pledgor.
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(b)
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Subject
to the provisions of the First Ranking Share Pledge Agreement, in the
event that an Enforcement Event has occurred, all dividends and any other
cash return on the Shares will be paid exclusively to the Beneficiary,
which will apply the same towards the Secured
Liabilities.
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(c)
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The
Pledge will not in any way be affected by any regrouping or split of the
Shares or by any similar transaction and the securities resulting from any
such transaction will be part of the
Shares.
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6.
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CONTINUING
SECURITY AND OTHER MATTERS
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6.1
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Continuing
Security
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(a)
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The
Pledge will be a continuing security for the due performance of the
Secured Liabilities, and will remain in force until expressly released in
accordance with Clause 8 (Discharge of the
Pledge).
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6.2
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Rights
Additional
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All the
rights of the Beneficiary pursuant to this Agreement will be in addition to any
other right vested in the Beneficiary and all such rights may be exercised from
time to time and as often as the Beneficiary may deem expedient. The Pledgor
waives any right it may have of first requiring the Beneficiary to proceed
against or claim payment from any other party, or enforce any guarantee or
security before enforcing the Pledge.
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6.3
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Preservation
of the Pledge in the event of
novation
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In
accordance with Articles 1278 to 1281 (inclusive) of the Belgian Civil Code and
without prejudice to the scope of the Secured Liabilities, the Pledgor and the
Beneficiary agree that in the event of novation of all or any part of the
Secured Liabilities or the change or replacement of the Beneficiary, the Pledge
will be maintained automatically, without any further formality or consent, to
secure the Secured Liabilities as novated, in favour of the
Beneficiary.
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6.4
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Waiver
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In
general, and to the extent applicable, the Pledgor waives the benefit of
Articles 1285, 2022, 2026 and 2037 of the Civil Code.
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7.
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ENFORCEMENT
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Following
the occurrence of an Enforcement Event which has not been cured during the
Notice Period, and subject to the provisions of the First Ranking Share Pledge
Agreement, the Beneficiary will have the right, upon expiry of the Notice
Period:
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(i)
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to
enforce the Pledge in accordance with the legal provisions applicable to
the enforcement of a pledge of shares at the time of such
enforcement;
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(ii)
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and
in particular,
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to
realize ("uitwinnen" / "réaliser") the Shares,
without prior judicial consent, to exercise its priority on the Shares,
and to dispose of the Shares in accordance with the applicable Belgian
regulations, in particular Article 8, §1 of the 2004 Law, as applicable at
the moment of the realization ("uitwinning" / "realisation") of the
Shares;
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notwithstanding
the rights of the Beneficiary as set out in the paragraph above and in
accordance with Article 8, §2 of the 2004 Law, to appropriate itself
("zich
toe-eigenen" / "s’approprier") the
Shares. An independent auditor from a reputable firm jointly appointed by
the Pledgor and the Pledgee, or if no agreement can be reached on the
identity of the auditor, by the president of the Instituut der
Bedrijfsrevisoren / Institut des Reviseurs d'Entreprise at the
first request of either Party, shall, within a timeframe of one month,
determine, in a final manner and without recourse, the fair market value
of the Shares taking into account customary valuation methods. Should the
value of the appropriated Shares be higher than the outstanding amount of
the Secured Liabilities secured by this Agreement, then the Beneficiary
can only appropriate itself such part of the Shares as corresponds to the
outstanding amount of the Secured Liabilities secured by this Agreement.
The Beneficiary unilaterally determines which Shares it will appropriate
itself.
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8.
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DISCHARGE
OF THE PLEDGE
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8.1
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The
Pledge will be discharged by, and only by, the express release thereof
granted by the Beneficiary, in accordance with the provisions of the Stock
Purchase Agreement or by means of final court decision or arbitral award,
which can no longer be appealed, ordering the release of the
Pledge.
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8.2
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The
Beneficiary shall grant an express release of this Pledge, promptly upon
demand of the Pledgor, as soon as all Secured Liabilities shall have been
finally discharged, it being understood that all Secured Liabilities shall
have been discharged if either the obligations of the Pledgor pursuant to
Clause 2 (b) (ii), (iii) and (iv), either the obligations of the Pledgor
pursuant to Clause 2(g) shall have been discharged. The Beneficiary shall
inform the Company of such release, and shall provide the Pledgor with a
power of attorney in favour of the Pledgor or any person designated by it
for the purpose of recording the release of the Pledge in the Company's
share register. Forthwith upon such release being granted, the Beneficiary
shall return to the Pledgor the other Shares, if any, and the Pledgor
shall take delivery thereof.
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6
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8.3
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Any
release or discharge of the Pledge will be null and void and without
effect if any payment received by the Beneficiary and applied towards
satisfaction of all or part of the Secured Liabilities is avoided or
declared invalid as against the creditors of the maker of such payment and
the Beneficiary will be entitled to enforce the Pledge as if such release
or discharge had not occurred.
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9.
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EXPENSES
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All
expenses and duties in connection with this Agreement shall be borne in
accordance with Clause 9 §h) of the Stock Purchase Agreement.
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10.
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GENERAL
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10.1
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Notices
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All
notices or other communications under or in connection with this Agreement will
be given in accordance with clause 9.a (General Provisions Notices) of the Stock
Purchase Agreement.
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10.2
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No
Waiver
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No failure
or delay by the Beneficiary to exercise any right, power or remedy under this
Agreement will operate as a waiver thereof nor will any single or partial
exercise or waiver of any right, power or remedy. The remedies provided in this
Agreement are cumulative and are not exclusive of any remedies provided by
law.
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10.3
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Severability
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Each of
the provisions of this Agreement is several and distinct from the others and if
at any time one or more of such provisions is or becomes invalid, illegal or unenforceable the
validity, legality and enforceability of the remaining provisions hereof will
not in any way be affected or impaired thereby.
In case of
any such illegality, invalidity or unenforceability, the parties will negotiate
in good faith with a view to agreeing on the replacement of such provision by a
provision which is legal, valid and enforceable and which is to the fullest
extent practicable in accordance with the intents and purposes of this Agreement
and which in its economic effect comes as close as practicable to the provision
being replaced.
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10.4
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Counterparts
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This
Agreement may be executed in any number of counterparts. This has the same
effect as if the signatures on the counterparts were on a single copy of this
Agreement.
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10.5
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Governing
Law
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This
Agreement will be governed by and interpreted in accordance with Belgian
law.
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10.6
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Jurisdiction
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All
disputes arising in connection with this Agreement shall be settled exclusively
by the courts of Ghent.
Made in 2
originals, one of which will be held by the Pledgor and one of which will be
held by the Beneficiary, on 31 October 2008.
Induflex
Holding NV
as Pledgor
/s/ Xxxx
Xxxxxxxxxx
Name: Xxxx
Xxxxxxxxxx, as Managing Director of Gevepe BVBA
Title: Managing
Director
XXXXXX
CORPORATION
as Beneficiary
/s/ Luc Van
Eenaeme
Name: Luc
Van Eenaeme
Title: Vice
President Europe
