UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. 1)*
BCAM International, Inc.
(NAME OF ISSUER)
Common Stock, Par Value $.01 Per Share
(TITLE OF CLASS OF SECURITIES)
055293104
(CUSIP NUMBER)
Arthur H. Amron, Esquire
WEXFORD MANAGEMENT LLC
411 W. Putnam Avenue, Greenwich, Connecticut 06830 (203) 862-7000
and
Stephen B. Selbst, Esquire
McDermott, Will & Emery, 50 Rockefeller Plaza, New York, N.Y. 10020, (212) 547-
5400
(NAME, ADDRESS AND TELEPHONE NUMBER OF PERSONS AUTHORIZED TO RECEIVE NOTICES AND
COMMUNICATIONS)
April 14, 1998
(DATE OF EVENT WHICH REQUIRES FILING OF THIS STATEMENT)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition that is the subject of this Schedule 13D, and is filing this
schedule because of Sections 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check
the following box _.
NOTE: Schedules filed in paper format shall include a signed original and five
copies of the schedule, including all exhibits. See Section 240.13d-7(b) for
other parties to whom copies are to be sent.
* The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
SCHEDULE 13D
CUSIP NO. 055293104 PAGE 2
1 NAME OF REPORTING PERSON:
IMPLEO LLC
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON:
(INTENTIONALLY OMITTED)
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (A) / /
(B) /X/
3 SEC USE ONLY
4 SOURCE OF FUNDS
WC
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS (2)(D) OR (E)
6 CITIZENSHIP OR PLACE OR ORGANIZATION
DELAWARE
7 SOLE VOTING POWER
NUMBER OF SHARES
BENEFICIALLY NONE
OWNED BY EACH
REPORTING
PERSON WITH
8 SHARED VOTING POWER
1,666,667
9 SOLE DISPOSITIVE POWER
NONE
10 SHARED DISPOSITIVE POWER
1,666,667
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,666,667 SHARES
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES / /
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
7.5%
14 TYPE OF REPORTING PERSON
OO
SCHEDULE 13D
CUSIP NO. 055293104 PAGE 3
1 NAME OF REPORTING PERSON:
WEXFORD MANAGEMENT LLC
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON:
(INTENTIONALLY OMITTED)
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (A) / /
(B) /X/
3 SEC USE ONLY
4 SOURCE OF FUNDS
AF
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS (2)(D) OR (E)
6 CITIZENSHIP OR PLACE OR ORGANIZATION
CONNECTICUT
7 SOLE VOTING POWER
NUMBER OF
SHARES NONE
BENEFICIALLY OWNED
BY
EACH REPORTING
PERSON WITH
8 SHARED VOTING POWER
1,666,667
9 SOLE DISPOSITIVE POWER
NONE
10 SHARED DISPOSITIVE POWER
1,666,667
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,666,667 SHARES
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES / /
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
7.5%
14 TYPE OF REPORTING PERSON
OO; IA
SCHEDULE 13D
CUSIP NO. 055293104 PAGE 4
1 NAME OF REPORTING PERSON:
WEXFORD SPECIAL SITUATIONS 1997, LP
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON:
(INTENTIONALLY OMITTED)
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (A) / /
(B) /X/
3 SEC USE ONLY
4 SOURCE OF FUNDS
WC
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS (2)(D) OR (E)
6 CITIZENSHIP OR PLACE OR ORGANIZATION
DELAWARE
7 SOLE VOTING POWER
NUMBER OF
SHARES NONE
BENEFICIALLY
OWNED BY EACH
REPORTING PERSON
WITH
8 SHARED VOTING POWER
1,042,167
9 SOLE DISPOSITIVE POWER
NONE
10 SHARED DISPOSITIVE POWER
1,042,167
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,042,167 SHARES
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES / /
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
4.7%
14 TYPE OF REPORTING PERSON
PN
SCHEDULE 13D
CUSIP NO. 055293104 PAGE 5
1 NAME OF REPORTING PERSON:
WEXFORD SPECIAL SITUATIONS 1997 INSTITUTIONAL , LP
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON:
(INTENTIONALLY OMITTED)
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (A) / /
(B) /X/
3 SEC USE ONLY
4 SOURCE OF FUNDS
WC
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS (2)(D) OR (E) / /
6 CITIZENSHIP OR PLACE OR ORGANIZATION
DELAWARE
7 SOLE VOTING POWER
NUMBER OF
SHARES NONE
BENEFICIALLY
OWNED BY EACH
REPORTING PERSON
WITH
8 SHARED VOTING POWER
291,167
9 SOLE DISPOSITIVE POWER
NONE
10 SHARED DISPOSITIVE POWER
291,1679
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
291,167 SHARES
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES / /
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
1.3%
14 TYPE OF REPORTING PERSON
PN
SCHEDULE 13D
CUSIP NO. 055293104 PAGE 6
1 NAME OF REPORTING PERSON:
WEXFORD SPECTRUM INVESTORS LLC
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON:
(INTENTIONALLY OMITTED)
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (A) / /
(B) /X/
3 SEC USE ONLY
4 SOURCE OF FUNDS
WC
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS (2)(D) OR (E) / /
6 CITIZENSHIP OR PLACE OR ORGANIZATION
DELAWARE
7 SOLE VOTING POWER
NUMBER OF
SHARES NONE
BENEFICIALLY
OWNED BY EACH
REPORTING PERSON
WITH
8 SHARED VOTING POWER
333,333
9 SOLE DISPOSITIVE POWER
NONE
10 SHARED DISPOSITIVE POWER
333,333
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
333,333 SHARES
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES / /
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
1.5%
14 TYPE OF REPORTING PERSON
OO
SCHEDULE 13D
CUSIP NO. 055293104 PAGE 7
1 NAME OF REPORTING PERSON:
CHARLES E. DAVIDSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON:
(INTENTIONALLY OMITTED)
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (A) / /
(B) /X/
3 SEC USE ONLY
4 SOURCE OF FUNDS
AF
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS (2)(D) OR (E) / /
6 CITIZENSHIP OR PLACE OR ORGANIZATION
UNITED STATES OF AMERICA
7 SOLE VOTING POWER
NUMBER OF
SHARES NONE
BENEFICIALLY
OWNED BY EACH
REPORTING PERSON
WITH
8 SHARED VOTING POWER
1,666,667
9 SOLE DISPOSITIVE POWER
NONE
10 SHARED DISPOSITIVE POWER
1,666,667
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,666,667 SHARES
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES / /
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
7.5%
14 TYPE OF REPORTING PERSON
IN
SCHEDULE 13D
CUSIP NO. 055293104 PAGE 8
1 NAME OF REPORTING PERSON:
JOSEPH M. JACOBS
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON:
(INTENTIONALLY OMITTED)
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (A) / /
(B) /X/
3 SEC USE ONLY
4 SOURCE OF FUNDS
AF
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS (2)(D) OR (E) / /
6 CITIZENSHIP OR PLACE OR ORGANIZATION
UNITED STATES OF AMERICA
7 SOLE VOTING POWER
NUMBER OF
SHARES NONE
BENEFICIALLY
OWNED BY EACH
REPORTING PERSON
WITH
8 SHARED VOTING POWER
1,666,667
9 SOLE DISPOSITIVE POWER
NONE
10 SHARED DISPOSITIVE POWER
1,666,667
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,666,667 SHARES
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES / /
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
7.5%
14 TYPE OF REPORTING PERSON
IN
SCHEDULE 13D
This Amendment No. 1 is filed on behalf of Impleo LLC ("Impleo"),
Wexford Management LLC ("Wexford Management"), Wexford Special Situations 1997,
LP, Wexford Special Situations 1997 Institutional, LP, Wexford Spectrum
Investors LLC, Charles E. Davidson and Joseph M. Jacobs and amends the Statement
dated October 29, 1997 ("Schedule 13D") with respect to the shares of common
stock, par value $.01 per share, of BCAM International, Inc., a New York
corporation (the "Issuer"). This Amendment No. 1 is filed in order to amend
Items 4, 5, 6 and 7.
Accordingly, Schedule 13D is amended as follows:
Item 4. Purpose of Transaction.
Impleo, Wexford Management and the Issuer entered into the First
Amendment dated as of April 14, 1998 (the "First Amendment") to the Note
Purchase Agreement dated as of September 19, 1997 in order to restructure the
Issuer's 10%/13% convertible notes. As required by the First Amendment, the
Issuer has appointed Joseph Jacobs to its Board of Directors. In addition, the
First Amendment gives Impleo, so long as the 10%/13% convertible notes are
outstanding, the right to designate a number of directors of the Issuer equal to
at least 25% of the number of such directors.
Item 5. Interest in Securities of the Issuer.
(a) Impleo is the registered holder of warrants for 1,666,667 shares of
the common stock of the Issuer, which by their terms are currently exercisable.
Such shares of common stock represent approximately 7.5% of the outstanding
common stock of the Issuer. This calculation includes shares issuable upon
exercise of such warrants, but does not include approximately 6,250,000 shares
issuable upon conversion of the 10%/13% convertible note at the initial
conversion price.
Each of Wexford Management, Charles Davidson and Joseph Jacobs
may be deemed the beneficial owner of the warrants for 1,666,667 shares of the
common stock of the Issuer held for the account of Impleo, which represent
approximately 7.5% of the outstanding common stock of the Issuer. Wexford
Special Situations 1997, LP, Wexford Special Situations 1997 Institutional, LP
and Wexford Spectrum Investors LLC, as members of Impleo, may be deemed the
beneficial owner of the warrants for 1,042,167, 291,167 and 333,333 shares of
the common stock of the Issuer held for the account of Impleo, respectively,
which represent approximately 4.7%, 1.3% and 1.5% of the outstanding common
stock of the Issuer, respectively.
(b) Pursuant to the terms of contracts relating to Impleo, Wexford Special
Situations 1997, LP, Wexford Special Situations 1997 Institutional, LP and
Wexford Spectrum Investors LLC and as a result of the positions held by Mr.
Davidson and Mr. Jacobs with Wexford Management, each of Impleo, Wexford
Management, Mr. Davidson and Mr. Jacobs may be deemed to have shared power to
direct any disposition and voting of the warrants held for the account of
Impleo. Wexford Special Situations 1997, LP, Wexford Special Situations 1997
Institutional, LP and Wexford Spectrum Investors LLC, as members of Impleo, may
be deemed to have shared power to direct any disposition and voting of the
warrants for 1,042,167, 291,167 and 333,333 shares of the common stock of the
Issuer held for the account of Impleo, respectively.
(c) Except for the First Amendment which, among other things, cancels
warrants for 333,333 shares of common stock of the Issuer formerly registered in
favor of Impleo, there have been no transactions with respect to the shares of
common stock of the Issuer since 60 days prior to the date hereof by any of the
reporting persons.
(d) The partners and members of Wexford Special Situations 1997, LP,
Wexford Special Situations 1997 Institutional, LP and Wexford Spectrum Investors
LLC have the right to participate in the receipt of any dividends from, or
proceeds from the sale of, the warrants held for the account of Impleo in
accordance with their ownership interests in those respective entities.
(e) Inapplicable.
Item 6. Contracts, Arrangements, Understandings or Relationships with Respect
to Securities of the Issuer.
The First Amendment restructures the Issuer's 10%/13% convertible
notes, as more fully stated in such agreement. Without limitation, the First
Amendment cancels warrants for 333,333 shares of common stock of the Issuer
formerly registered in favor of Impleo.
Item 7. Material to be Filed as Exhibits.
V. Agreement pursuant to Rule 13d-1(k)(1)(iii)
VI. First Amendment dated as of April 14, 1998 to the Note Purchase
Agreement dated as of September 19, 1997, between the Issuer and Impleo.
VII. 10%/13% Convertible Note dated April 30, 1998 in the amount of $5
million made by the Issuer.
VIII. Warrant certificate for 1,666,667 warrants dated April 30, 1998
issued by the Issuer.
SIGNATURE
After reasonable inquiry and to the best of each of the undersigned's
knowledge and belief, each of the undersigned certifies that the information set
forth in this statement is true, complete and correct.
May , 1998
IMPLEO LLC
By: /s/ Arthur H. Amron
Arthur H. Amron , Vice President
WEXFORD MANAGEMENT LLC
By: /s/ Arthur H. Amron
Arthur H. Amron, Senior Vice President
WEXFORD SPECIAL SITUATIONS 1997, LP
By Wexford 97 Advisors, LLC, General Partner
By: /s/ Arthur H. Amron
Arthur H. Amron, Vice President
WEXFORD SPECIAL SITUATIONS 1997 INSTITUTIONAL, LP
By Wexford `97 Advisors, LLC, General Partner
By: /s/ Arthur H. Amron
Arthur H. Amron, Vice President
WEXFORD SPECTRUM INVESTORS LLC
By: /s/ Arthur H. Amron
Arthur H. Amron; Vice President
/s/ Charles E. Davidson
Charles E. Davidson
/s/ Joseph M. Jacobs
Joseph M. Jacobs
EXHIBIT V
Pursuant to Rule 13d-1(k)(1)(iii) of Regulation 13D-G of the general Rules
and Regulations of the Securities and Exchange Commission under the Securities
Exchange Act of 1934, as amended, the undersigned agree that the statement to
which this Exhibit is attached is filed on behalf of each of them in the
capacities set forth below.
May , 1998
IMPLEO LLC
By: /s/ Arthur H.Amron
Arthur H. Amron, Vice President
WEXFORD MANAGEMENT LLC
By: /s/ Arthur H. Amron
Arthur H. Amron, Senior Vice President
WEXFORD SPECIAL SITUATIONS 1997, LP
By Wexford '97 Advisors, LLC, General Partner
By: /s/ Arthur H. Amron
Arthur H. Amron, Vice President
WEXFORD SPECIAL SITUATIONS 1997 INSTITUTIONAL, LP
By Wexford 97 Advisors, LLC, General Partner
By: /s/ Arthur H. Amron
Arthur H. Amron, Vice President
WEXFORD SPECTRUM INVESTORS LLC
By: /s/ Arthur H. Amron
Arthur H. Amron, Vice President
/s/ Charles E. Davidson
Charles E. Davidson
/s/ Joseph M. Jacobs
Joseph M. Jacobs
EXHIBIT VI
FIRST AMENDMENT TO NOTE PURCHASE AGREEMENT
FIRST AMENDMENT dated as of April 14, 1998 (the "First Amendment"), to
the NOTE PURCHASE AGREEMENT (the "Agreement") dated as of September 19, 1997,
among BCAM INTERNATIONAL, INC., a New York corporation (the "Company"), IMPLEO
LLC, a Connecticut limited liability company (the "Purchaser"), and WEXFORD
MANAGEMENT LLC, as agent for the Purchaser and the holders of Other Notes (the
"Agent"). Capitalized terms used herein shall have the respective meanings
ascribed thereto in the Agreement unless herein defined or the context shall
otherwise require.
W I T N E S S E T H
WHEREAS, the Purchaser and the Company have heretofore entered into
that certain Note Purchase Agreement dated as of September 19, 1997 (the
"Agreement"). The Company has heretofore issued, and the Purchaser has
heretofore purchased, the Company's 10%/13% convertible subordinated promissory
notes (the "Notes") in the aggregate principal amount of $5,000,000 pursuant to
the Agreement;
WHEREAS, concurrently with the Agreement, the Company entered into
that certain Note Purchase Agreement (the "Other Note Agreement"), on terms
substantially identical to the terms contained in the Agreement, providing for
the issuance of $1,000,000 principal amount of the Company's 10%/13% convertible
subordinated promissory notes (the "Other Notes");
WHEREAS, the Company has requested the Purchaser to make certain
adjustments to the covenants and other terms of the Agreement;
WHEREAS, the Purchaser and the Company now desire to amend and/or
waive certain provisions of the Agreement in the respects, but only in the
respects, hereinafter set forth;
WHEREAS, the Company has agreed to grant to the Agent, for the benefit
of the Purchaser and the holders of the Other Notes collateral security for the
prompt payment when due and performance by the Company of its obligations under
the Notes and the Other Notes;
WHEREAS, the Purchaser and the holders of the Other Notes desire to
appoint Wexford Management LLC as collateral agent for the purpose of
administering the collateral security;
NOW, THEREFORE, upon the full and complete satisfaction of the
conditions precedent to the effectiveness of this First Amendment set forth in
Section 2 hereof, and in consideration of good and valuable consideration the
receipt of which is hereby acknowledged, the Purchaser and the Company hereby
agree as follows:
1. AMENDMENTS
1.1 Maturity Date. Section 1.1 of the Agreement shall be and is hereby
amended by substituting the words "a final maturity date of September 19, 2002"
as such words appear in the second full sentence of said Section 1.1 with the
words "a final maturity date of April 16, 1999". No later than April 30, 1998,
the Company shall execute and deliver to the Purchaser one or more new Notes
(the "New Notes") in the aggregate principal amount of $5,000,000, in form and
substance identical to the Notes issued to the Purchasers pursuant to the
Purchase Agreement, but bearing the amended Maturity Date. In exchange for the
delivery by the Company of the New Notes, the Purchaser shall deliver to the
Company the original Note issued pursuant to the Purchase Agreement.
1.2 Affirmative Covenants. Section 4.1 of the Agreement shall be and is
hereby amended by deleting the existing Section 4.1 and replacing in its
entirety as follows):
"(n) Board of Directors. Concurrently with the effectiveness of this First
Amendment, the Company agrees that it will appoint Joseph Jacobs to its
board of directors. In addition, so long as the Notes are outstanding, the
Purchaser shall have the right to designate a number of directors of the
Company equal to at least 25% (and if the number of directors is not
divisible by four, rounded up to the next whole number) of the number of
such directors. The Company also agrees that it will cause each of Drew
Shoe Corporation, an Ohio corporation ("Drew"), and BCAM Technologies,
Inc., a Delaware corporation ("BT"), to appoint Kenneth Rubin to their
respective boards of directors as the nominee of the Purchaser. In the
case that any nominee designated by the Purchaser ceases to serve as a
director of the Company, Drew or BT for any reason, the Company agrees
that, it will nominate to its board of directors or the board of directors
of Drew or BT, as the case may be, one or more replacement nominees
designated by the Purchaser and use its best efforts to cause such
replacement nominees to be elected."
1.3 Negative Covenants. Article 4 of the Agreement is hereby amended by
adding new Sections 4.2 (k), 4.2(l) and 4.2(m), which shall provide in their
entirety as follows:
"(k) Transactions with Drew. Without the consent of the Purchaser,
neither the Company nor any Subsidiary shall transfer any assets to Drew.
Without the consent of the Purchaser, neither the Company nor Drew shall create
any Subsidiaries of Drew.
(l) No Lien on Cash. The Company agrees that it will not, nor permit
any Subsidiary to, create any Lien on cash of the Company or such Subsidiary.
(m) BCAM Technologies, Inc. New York. The Company represents and
warrants to the Purchaser that BCAM Technologies, Inc., a New York corporation
("BT-NY"), is inactive. The Company agrees that it will not transfer any assets
to, or conduct any business through, BT-NY, and neither the Company nor any
Subsidiary will create any Subsidiary of BT-NY. In addition, no later than
April 30, 1998, the Company shall merge BT-NY with and into the Company, with
the Company being the surviving corporation.."
1.4 Notices. Section 8.9 of the Agreement shall and is hereby amended by
substituting the following address for the Purchaser and its counsel:
If to the Purchaser:
Impleo LLC
c/o Wexford Management LLC
411 West Putnam Avenue
Greenwich, Connecticut 06830
Attention: Joseph Jacobs
Tel: (203) 862-7020
Fax: (203) 862-7320
McDermott, Will & Emery
50 Rockefeller Plaza, 11th Fl.
New York, New York 10020
Attention: Stephen B. Selbst, Esq.
Telephone: (212) 547-5400
Telecopier: (212) 547-5444
1.5 Schedule II. Schedule II of the Agreement shall be and is hereby
amended in its entirety by substituting Schedule II attached hereto in place of
said Schedule II.
1.6 Schedule VI. Schedule VI of the Agreement shall be and is hereby
amended in its entirety by substituting Schedule VI attached hereto in place of
said Schedule VI.
2. WAIVERS
2.1 Events of Default. The Company hereby acknowledges the existence of
Events of Default under the Agreement arising as a result of (a) the failure of
the Company to make timely deliveries to required by Section 401(a) of the
Agreement to the Purchaser by March 31, 1998; (b) the breaches by the Company of
the debt service coverage covenant contained in Section 4.1(1) of the Agreement;
(c) the breaches by the Company of the leverage ratio covenant contained in
Section 4.1(m) of the Agreement; (d) the material inaccuracy of the
representation made by the Company in Section 6.1(b) of the Agreement; and (e)
the material inaccuracy of the representation made by the Company in Section
6.1(f) of the Agreement. The foregoing Events of Default are hereinafter
referred to collectively as the "Breaches".
2.2 Waivers. The Purchaser hereby waives (a) all Events of Default
arising under or related to the Breaches through and including the date hereof
and (b) compliance by the Company with Sections 4.1(l) and 4.1(m) of the
Agreement through and including April 16, 1999.
3. AGREEMENTS
3.1 Company Undertakings. In consideration of the agreement of the
Purchaser to waive the existing Events of Default under the Agreement as set
forth in Section 2.2 hereof and to consent to amend the Agreement in the
respects set forth in Article 1 hereof, the Company and the Purchaser agree as
follows:
(i) Concurrently herewith, each of the Company, BT and BCA Services,
Inc., a New York corporation ("BCA"), shall execute and deliver in favor of the
Agent a Security Agreement substantially in the form of Exhibit A attached
hereto providing for the grant of a security interest in favor of the Agent with
respect to the Collateral described therein;
(ii) Concurrently herewith, the Company shall execute and deliver in
favor of the Agent a Stock Pledge Agreement substantially in the form of Exhibit
B attached hereto providing for the pledge of (A) ninety percent (90%) of the
issued and outstanding Capital Stock of each of Drew and BT, (B) to one hundred
percent (100%) of the issued and outstanding Capital Stock of HumanCad Systems,
Inc., an Ontario corporation ("HCS"), and (C) one hundred percent (100%) of the
issued and outstanding common stock of BCA.
(iii) Concurrently herewith, the Company shall deliver to the Purchaser
stock certificates evidencing the issuance to the Purchaser of 8.33% of the
issued and outstanding shares of common stock of each of Drew and BT;
(iv) Unless and until the Company shall have transferred to BT all of
the Company's right, title and interest in any technology patents, pending
patents, trademarks, license agreements, any General Intangibles (as such term
is defined in the Security Agreement), and all other assets associated with the
intelligent surface technology and micro-valve projects that the Company is
engaged in (collectively, the "Intellectual Property"), the Purchaser and the
holders of the Other Notes shall be entitled to receive a royalty (the
"Noteholder Royalty") in the amount of ten percent (10%) of the gross revenues
received by the Company or any Subsidiary from the sale, license royalty, use or
any other form of exploitation of the Intellectual Property, payable pro rata in
accordance with their holdings of Notes and the Other Notes. The Noteholder
Royalty shall be paid to the Agent monthly within fifteen days following the end
of each calendar month, and at the time of making each payment, the Company
shall deliver a certificate, executed by its Chief Financial Officer as to the
sources of and calculation of the amount of the Noteholder Royalty.
3.2 Cancellation of Warrants. On or prior to April 30, 1998 the Purchaser
agrees to cancel and return to the Company 333,333 Warrants to purchase 333,333
Shares of the Company previously issued to the Purchaser pursuant to the Warrant
Agreement. Concurrently with the delivery by the Purchaser to the Company of
Warrant Certificate W-1 issued pursuant to the Warrant Agreement, the Company
shall execute and deliver to the Purchaser one or more Warrant Certificates in
the amount of 1,666,667 Warrants.
4. CONDITIONS TO EFFECTIVENESS OF THIS FIRST AMENDMENT
4.1 Conditions. This First Amendment shall not become effective until,
and shall become effective when, each and every one of the following conditions
shall have been satisfied:
(a) First Amendment. The Purchaser shall have received executed
counterparts of this First Amendment, duly executed by the Purchaser and the
Company.
(b) Opinion of Counsel. The Purchaser shall have received from Ruskin,
Moscou, Evans & Faltischek, P.C., counsel to the Company, a favorable opinion
dated the date of this First Amendment, which opinion shall be in form and
substance satisfactory to the Purchaser.
(c) Security Agreement. The Agent and each of the Company, BT and BCA shall
have executed and delivered the Security Agreement substantially in the form of
Exhibit A attached hereto.
(d) Stock Pledge Agreement. The Company and the Agent shall have executed
and delivered the Stock Pledge Agreement substantially in the form of Exhibit B
attached hereto.
(e) Issuance of Shares. The Company shall have delivered to the Purchaser
one or more stock certificates evidencing 8.33% of the issued and outstanding
common stock of each of Drew and BT.
(f) Amendment with Regard to Purchase and Sale of Other Notes. Concurrently
with the consummation of the transactions contemplated by this First Amendment,
the Company shall have entered into an amendment agreement with the holders of
the Other Notes on terms satisfactory to the Purchaser.
(g) Representations and Warranties; No Default. The representations and
warranties of the Company contained in this First Amendment, the Security
Agreement and the Stock Pledge Agreement(collectively, the "Transaction
Documents") or any other agreement or document executed pursuant to the
Transaction Documents shall be true in all material respects on and as of the
date of this First Amendment; the Company shall have complied with all of its
agreements and satisfied all conditions to be complied with or satisfied on or
prior to the date of this First Amendment.
(h) Proceedings. All corporate and other proceedings taken or to be taken
in connection with the transactions contemplated hereby and all documents
incident thereto shall be reasonably satisfactory in substance and form to the
Purchaser, and the Purchaser shall have received (i) copies of all corporate
action taken to authorize the Transaction Documents (including, without
limitation, a copy of the resolutions of the Board of Directors of the Company
authorizing the execution, delivery and performance by the Company of the
Transaction Documents, certified by the Secretary or an Assistant Secretary of
the Company), and (ii) all such counterpart originals or certified or other
copies of such other documents as it may reasonably request.
(i) Charter Documents. The Purchaser shall have received copies of the
certificate of incorporation of each of Drew, BT, HCS and BCA, and by-laws of
Drew, BT, HCS and BCA, certified in each case as being true and complete as of
the date of this First Amendment. No later than April 30, 1998, the Company
shall deliver to the Purchaser long-form good standing certificates for Drew,
BT, HCS and BCA.
(j) Payment of Fees. The Purchaser shall have received evidence that the
Company has paid (i) the fees and disbursements of McDermott, Will & Emery,
counsel to the Purchaser, in connection with the negotiation, preparation,
approval, execution and delivery of the Transaction Documents (ii) and any
unpaid fees and disbursements owed to Berlack, Israels & Liberman LLP, prior
counsel to the Purchaser.
Upon receipt of all of the foregoing, this First Amendment shall
become effective.
5. REPRESENTATIONS AND WARRANTIES
5.1 Representations, Warranties and Agreements of the Company. To induce
the Purchaser to execute and deliver this First Amendment (which representations
shall survive the execution and delivery of this First Amendment), the Security
Agreement and the Stock Pledge Agreement, the Company represents and warrants to
and agrees with the Purchaser:
(a) Authorization and Validity. The Company has the power and authority
and legal right to execute and deliver the Transaction Documents and to perform
its obligations hereunder. The execution and delivery by the Company of the
Transaction Documents and the performance of its obligations thereunder have
been duly authorized by the Company, and each of the Transaction Documents
constitutes the legal, valid and binding obligation of the Company enforceable
against the Company in accordance with its terms.
(b) No Violation. Neither the execution and delivery by the Company of
each of the Transaction Documents nor the consummation of the transactions
therein contemplated, nor compliance with the provisions hereof will (i) violate
the Company's or any Subsidiary's certificate of incorporation or by-laws; (ii)
violate any judgment, decree, order, statute, law, regulation or rule of any
court or governmental authority to which the Company or any of its Subsidiaries
or any of their respective properties may be subject; or (iii) (A) cause the
acceleration of the maturity of any Debt or obligation of the Company or any of
its Subsidiaries or (B) violate, or be in conflict with, or constitute a default
under, or permit the termination of, or result in the creation of, any Lien upon
any property of the Company or any of its Subsidiaries under any agreement or
instrument to which such Person is a party or by which such Person (or its
properties) may be bound. Neither the Company nor any of its Subsidiaries is
(1) in violation of any term of its respective certificates of incorporation or
by-laws, or (2) in default of or non-compliance with any material instrument,
contract or agreement to which it is a party or of any judgment, decree, order,
statute, rule or governmental regulation which is applicable to it or its
business or properties.
(c) Subsidiaries. The Subsidiaries and the capitalization thereof are
listed on Schedule II hereto.
(d) No Default. As of the date hereof and after giving effect to this
First Amendment, no Default or Event of Default has occurred which is
continuing, except to the extent expressly waived hereunder by the Purchaser.
(e) Representations and Warranties of Agreement. All the representations
and warranties contained in the Agreement are true and correct in all material
respects with the same force and effect as if made by the Company on and as of
the date hereof.
6. AGENCY PROVISIONS
6.1 Appointment. The Purchaser hereby appoints Wexford Management LLC as
its lawful agent and attorney-in-fact, with full power of substitution, for all
purposes under this First Amendment and all of the other Transaction Documents.
The Purchaser acknowledges and agrees that the Agent will also act as agent for
the holders of the Other Notes. This appointment is coupled with an interest,
and the Company as well as the Purchaser and the holders of Other Notes
(collectively, the "Noteholders") will rely upon the irrevocable nature of such
appointment.
6.2 Acceptance of Appointment. The Agent hereby accepts such appointment,
and agrees to exercise the powers granted hereunder and pursuant to the
Transaction Documents with the same degree of care it would use if the entire
risks and rewards were for its own account.
6.3 Application of Funds. In the event any monies received from the
Company directly or pursuant to any Transaction Document is in an amount
insufficient to pay all sums due to the Agent, the Purchaser and the holders of
the Other Notes, the Agent shall first apply the sum received to its own out-of-
pocket costs reasonably reimbursable under the terms of the Transaction
Documents, and shall pay the balance to the Noteholders pro rata in accordance
with the amounts then due and owing to each of them.
6.4 Agent's Liability. The Agent shall not be liable, except for its own
gross negligence or willful misconduct, and except with respect to claims based
upon such gross negligence or willful misconduct, that are successfully asserted
against the Agent, and any Person acting as the successor to the Agent, from and
against any and all losses, liabilities, claims, actions, damages and expenses,
including reasonable attorneys' fees and disbursements, arising out of or in
connection with the Agent's good faith acceptance of or performances of its
duties and obligations under the Transaction Documents. The Agent shall be
under no duty to institute any suit, or to take any remedial procedures or to
enter any appearance or in any way defend any suit in which it may be made a
defendant hereunder until it shall be indemnified as provided herein. The Agent
may act pursuant to the advice of counsel with respect to any matter relating to
the Transaction Documents, and shall not be liable for any action taken or
omitted in accordance with such advice.
6.5 Indemnity. The Purchaser agrees to indemnify, save and hold the Agent
(and any officer, director, manager, employee or agent thereof) harmless if the
Agent shall at any time or from time to time suffer any damage, liability, loss,
cost, expense (including reasonable attorneys' fees and expenses), penalties,
impositions or fines arising out of or resulting from the performance of its
duties hereunder; provided, however, that the Agent shall not be indemnified for
any acts of gross negligence or willful misconduct.
6.6 Resignation of Agent. The Agent (or any successor Agent) may at any
time resign as such by delivering to the Company, and the Noteholder at least
fifteen (15) days' written notice of such resignation. Within fifteen days
after the giving of such notice, the Agent shall affect a transfer of all funds
still held in such Agent's possession to any successor Agent jointly designated
by the Company and the Noteholders in writing, or in the event no such successor
has been designated within such fifteen day period, to any court of competent
jurisdiction, whereupon the Agent shall be discharged of and from any and all
further obligations arising in connection with the Transaction Documents. The
Agent's sole responsibility following the delivery of a notice of resignation
and prior to the delivery of the funds still under the Agent's control to a
successor Agent or to a court of competent jurisdiction shall be to safeguard
such funds until delivery thereof as aforesaid pursuant to a joint written
disposition instruction by all the other parties hereto or a final order of a
court of competent jurisdiction.
7. MISCELLANEOUS
7.1 Effect of Amendment. This First Amendment shall be construed in
connection with and as part of the Agreement, and except as modified and
expressly amended by this First Amendment, all terms, conditions and covenants
contained in the Agreement and the Notes are hereby ratified and shall be and
remain in full force and effect. From and after the effective date of this
First Amendment, references to the Agreement shall mean the Agreement as amended
by this First Amendment.
7.2 Limited Waiver. Upon and by virtue of this First Amendment becoming
effective as herein contemplated, the waivers set forth in Section 2.2 hereof
shall become effective. The Company understands and agrees that the waivers
contained in Section 2.2 pertain only to the Events of Default described in
Section 2.1 and to the extent so described and not to any other Default or Event
of Default which may exist under, or any other matters arising in connection
with, the Agreement or to any rights which the holders of the Notes have arising
by virtue of any such other actions or matters.
7.3 No Waiver by Purchaser. The Purchaser's failure, at any time or
times, to require strict performance by the Company of any provision of the
Agreement shall not waive, affect or diminish any right of the Purchaser
thereafter to demand strict compliance and performance therewith. Except as
specifically provided herein, any suspension or waiver by the Purchaser of any
breach of the Agreement shall not suspend, waive or affect any breach or Event
of Default under the Agreement, whether the same is prior or subsequent thereto
and whether of the same or of a different type. None of the undertakings,
agreements, warranties, covenants and representations of the Company contained
in the Agreement shall be deemed to have been suspended or waived by the
Purchaser, except to the extent set forth in Section 2.2 hereof and unless such
suspension or waiver is by an instrument in writing signed by the Purchaser
specifying such suspension or waiver.
7.4 Notices, etc.. Any and all notices, requests, certificates and other
instruments executed and delivered after the execution and delivery of this
First Amendment may refer to the Agreement without making specific reference to
this First Amendment but nevertheless all such references shall include this
First Amendment unless the context otherwise requires.
7.5 Headings. The descriptive headings of the various Sections or parts
of this First Amendment are for convenience only and shall not affect the
meaning or construction of any of the provisions hereof.
7.6 Governing Law. THIS FIRST AMENDMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
7.7 Severability. If any part of this First Amendment shall be invalid or
unenforceable, such invalidity or unenforceability shall not affect the validity
and enforceability of the remaining portions.
7.8 Counterparts. The execution hereof by the parties hereto shall
constitute a contract between such parties for the uses and purposes hereinabove
set forth, and this First Amendment may be executed simultaneously in any number
of counterparts, each of which shall be deemed an original, and all of which
shall together constitute one agreement.
IN WITNESS WHEREOF, the parties have executed this First Amendment to
Note Purchase Agreement as of the date first written above.
BCAM INTERNATIONAL, INC.
By
Michael Strauss
President
IMPLEO LLC
By
WEXFORD MANAGEMENT LLC, as Agent for Impleo
LLC
By:
Joseph Jacobs
President
WEXFORD MANAGEMENT LLC,
As Agent
By
Joseph Jacobs
Title:
SCHEDULE II
<TABLE>
SUBSIDIARIES
<CAPTION>
Name Jurisdiction of Form Of Entity Company's
Organization Percentage Ownership
<S> <C> <C> <C>
Drew Shoe Corporation Ohio corporation 90%*
BCAM Technologies, Inc. Delaware corporation 90%*
HumanCAD Systems, Inc. Canada corporation 100%
BCAM Technologies, Inc. New York corporation 100% - Inactive
BCA Services, Inc. New York corporation 100% of Common
0% of the
Preferred Stock
</TABLE>
SCHEDULE VI
INTELLECTUAL PROPERTY
IMPLEO
EXECUTION COPY
BCAM INTERNATIONAL, INC.
____________________________________
FIRST AMENDMENT
Dated as of April 14, 1998
to
Note Purchase Agreement
Dated as of September 19, 1997
_____________________________________
EXECUTION COPY
STOCK PLEDGE AGREEMENT
STOCK PLEDGE AGREEMENT, dated as of April 14, 1998, between WEXFORD
MANAGEMENT LLC, a Connecticut limited liability company, as agent for the
Noteholders (the "Agent") and BCAM International, Inc., a New York corporation
(the "Pledgor").
W I T N E S S E T H:
WHEREAS, Pledgor is the record and beneficial owner of the shares of
common stock described on Schedule I hereto (the "Pledged Shares") issued by the
Subsidiaries of the Pledgor named therein; and
WHEREAS, Pledgor and IMPLEO LLC are parties to that certain Note
Purchase Agreement dated as of September 19, 1997, as amended by that certain
First Amendment (the "First Amendment") dated as of April 14, 1998 (as the same
may be further amended, modified and supplemented from time to time, the
"Purchase Agreement") pursuant to which the Purchaser purchased certain Notes
from the Company;
WHEREAS, Pledgor and Ralph E. Weil, Joseph Schueller, 621 Partners, R.
Weil & Associates, Strafe & Company for the account of David M. Kirr, Strafe &
Company for the account of Terry B. Marbach, and Strafe & Company for the
account of Gregg T. Summerville (collectively, the "KM Purchasers") are parties
to that certain Note Purchase Agreement dated as of September 19, 1997, as
amended by that certain First Amendment (the "KM First Amendment") dated as of
April 14, 1998 (as the same may be further amended, modified and supplemented
from time to time, the "KM Purchase Agreement") pursuant to which the KM
Purchasers purchased the Other Notes from the Company.
WHEREAS, terms defined in the Purchase Agreement, unless separately
defined herein, shall have the meanings assigned to such terms therein; and
WHEREAS, in connection with the transactions contemplated under the
Purchase Agreement, as amended by the First Amendment thereto, and the KM
Purchase Agreement, as amended by the KM First Amendment, and as security for
all of the obligations of the Company under the Notes, the Other Notes and the
Transaction Documents, the Purchaser and the KM Purchasers are requiring that
Pledgor shall have executed and delivered this Stock Pledge Agreement and
granted the security interest contemplated hereby in favor of the Agent;
NOW, THEREFORE, in consideration of the premises and the covenants
hereinafter contained and to induce the Purchaser to enter into the First
Amendment and to induce the KM Purchasers to enter into the KM First Amendment,
it is agreed as follows:
1. Definitions. Unless otherwise defined herein, terms defined
in the Purchase Agreement and the Notes are used herein as therein defined, and
the following shall have (unless otherwise provided elsewhere in this Agreement)
the following respective meanings (such meanings being equally applicable to
both the singular and plural form of the terms defined):
"Agreement" means this Stock Pledge Agreement, including all
amendments, modifications and supplements and any exhibits or schedules to any
of the foregoing, and shall refer to the Agreement as the same may be in effect
at the time such reference becomes operative.
"Bankruptcy Code" means title 11, United States Code, as amended from
time to time, and any successor statute thereto.
"Capital Stock" means any shares of authorized capital stock of a
corporation.
"KM Warrant Agreement" means that certain Warrant Agreement dated as
of September 19, 1997 among the Company and the KM Purchasers.
"Noteholders" means the holders of the Notes and the Other Notes.
"Pledged Collateral" has the meaning assigned to such term in Section
2 hereof.
"Secured Obligations" has the meaning assigned to such term in Section
3 hereof.
"Security Agreement" means the Security Agreement of even date
herewith among BCAM International, Inc., BCAM Technologies, Inc., and Impleo
LLC, as the Agent as the same may be amended from time to time hereafter.
"Transaction Documents" means this Agreement, the Security Agreement,
the Purchase Agreement, the KM Purchase Agreement, the Notes, the Other Notes,
the Warrant Agreement and the KM Warrant Agreement.
"Warrant Agreement" means that certain Warrant Agreement dated as of
September 19, 1997 between the Company and Impleo LLC.
2. Pledge. The Pledgor hereby pledges to the Agent, and grants
to the Agent, a first priority security interest in, all of the following
(collectively, the "Pledged Collateral"):
the Pledged Shares owned by the Pledgor listed on Schedule I
hereto and the certificates representing the Pledged Shares, and all
dividends, distributions, cash, instruments and other property or proceeds
from time to time received, receivable or otherwise distributed in respect
of or in exchange for any or all of the Pledged Shares;
all additional shares of stock of any issuer of the Pledged
Shares from time to time acquired by the Pledgor in any manner (which
shares shall be deemed to be part of the Pledged Shares), and the
certificates representing such additional shares, and all dividends,
distributions, cash, instruments and other property or proceeds from time
to time received, receivable or otherwise distributed in respect of or in
exchange for any or all of such shares; and
all shares of any Person who, after the date of this Agreement,
becomes, as a result of any occurrence, a wholly-owned Subsidiary of the
Pledgor (which shares shall be deemed to be part of the Pledged Shares) and
the certificates representing such shares, and all dividends, cash,
instruments and other property or proceeds from time to time received,
receivable or otherwise distributed in respect of or in exchange for any or
all of such shares.
Notwithstanding the foregoing, if the Pledgor is unable to
deliver to the Agent stock certificates representing all of the issued and
outstanding shares of Capital Stock of HumanCAD Systems, Inc., an Ontario
corporation, concurrently with the execution and delivery of this
Agreement, then the Pledgor agrees (i) not to pledge such shares of Capital
Stock in favor of any other Person, and (ii) to pledge such shares of
Capital Stock to the Agent as promptly as practicable after the Pledgor
comes into possession thereof.
3. Security for Obligations. This Agreement secures, and the
Pledged Collateral is security for, the prompt payment in full when due, whether
at stated maturity, by acceleration or otherwise, and performance of the
obligations, whether for principal, premium, interest, fees, costs and expenses,
and all obligations of the Pledgor now or hereafter existing under the
Transaction Documents (collectively, the "Secured Obligations"). This term
includes, without limitation, the Notes and any and all future advances, as well
as all interest, fees, charges, expenses, attorneys' fees and any other sum
chargeable to the Company under any of the Transaction Documents.
4. Delivery of Pledged Collateral. All certificates
representing or evidencing the Pledged Shares shall be delivered to and held by
or on behalf of the Agent pursuant hereto and shall be accompanied by duly
executed instruments of transfer or assignment in blank, all in form and
substance satisfactory to the Agent. Upon the occurrence of an Event of
Default, the Agent shall have the right, at any time in its sole and absolute
discretion and without notice to the Pledgor, to transfer to or to register in
the name of the Agent or any of its nominees any or all of the Pledged Shares.
In addition, the Agent shall have the right at any time to exchange certificates
or instruments representing or evidencing Pledged Shares for certificates or
instruments of smaller or larger denominations.
5. Representations and Warranties. The Pledgor represents and
warrants to the Agent that:
The Pledgor is, and at the time of delivery of the Pledged Shares
to the Agent pursuant to Section 4 hereof will be, the sole holder of
record and the sole beneficial owner of the Pledged Collateral free and
clear of any Lien thereon or affecting the title thereto, except for the
Lien created by this Agreement.
All of the Pledged Shares pledged pursuant to this Agreement have
been duly authorized, validly issued and are fully paid and non-assessable.
The Pledgor has the right and requisite corporate authority to
pledge, assign, transfer, deliver, deposit and set over the Pledged
Collateral pledged by the Pledgor to the Agent as provided herein.
None of the Pledged Shares pledged pursuant to this Agreement has
been issued or transferred in violation of the securities registration,
securities disclosure or similar laws of any jurisdiction to which such
issuance or transfer may be subject.
The authorized Capital Stock of each of the corporations listed
on Schedule I hereto consists of the number of shares of common stock, with
the number of shares issued and outstanding that are described in Schedule
I hereto. Schedule I correctly states the Company's ownership percentage
of each class of Capital Stock of the Subsidiaries listed thereon. No
Subsidiary listed on Schedule I owns, directly or indirectly, any
Subsidiaries. As of the date the Pledged Collateral is delivered to the
Agent, there are no existing options, warrants, calls or commitments of any
character whatsoever relating to any Capital Stock of any of such
corporations. Except as listed on Schedule I, the Company has no
Subsidiaries.
No consent, approval, authorization or other order of any Person
and no consent, authorization, approval, or other action by, and no notice
to or filing with, any Governmental Authority is required either (i) for
the pledge by the Pledgor of the Pledged Collateral pursuant to this
Agreement or for the execution, delivery or performance of this Agreement
by the Pledgor or (ii) for the exercise by the Agent of the voting or other
rights provided for in this Agreement or the remedies in respect of the
Pledged Collateral pursuant to this Agreement, except as may be required in
connection with such disposition by laws affecting the offering and sale of
securities generally.
The pledge, assignment and delivery of the Pledged Collateral
pursuant to this Agreement will create a valid first priority Lien on and a
first priority perfected security interest in the Pledged Collateral
pledged by the Pledgor, and the proceeds thereof, securing the payment of
the Secured Obligations, subject to no other Lien or security interest.
This Agreement has been duly authorized, executed and delivered
by the Pledgor and constitutes a legal, valid and binding obligation of the
Pledgor enforceable in accordance with its terms.
Schedule I correctly states the Company's ownership percentage of
each class of Capital Stock of the Subsidiaries listed thereon.
The representations and warranties set forth in this Section 5 shall
survive the execution and delivery of this Agreement.
6. Covenants. The Pledgor covenants and agrees that until the
payment in full of all of the Secured Obligations:
Without the prior written consent of the Agent, the Pledgor will
not sell, assign, transfer, pledge, or otherwise encumber any of its rights
in or to the Pledged Collateral pledged by the Pledgor or any unpaid
dividends or other distributions or payments with respect thereto or grant
a Lien therein.
The Pledgor will, at its expense, promptly execute, acknowledge
and deliver all such instruments and take all such action as the Agent from
time to time may reasonably request in order to ensure to the Agent the
benefits of the Liens in and to the Pledged Collateral intended to be
created by this Agreement, including the filing of any necessary Uniform
Commercial Code financing statements, which may be filed by the Agent with
or without the signature of the Pledgor, and will cooperate with the Agent,
at the Pledgor's expense, in obtaining all necessary approvals and making
all necessary filings under federal or state law in connection with such
Liens or any sale or transfer of the Pledged Collateral.
The Pledgor has and will defend the title to the Pledged
Collateral and the Liens of the Agent thereon against the claim of any
Person and will maintain and preserve such Liens until the payment in full
of all of the Secured Obligations.
The Pledgor will, upon obtaining any additional shares of any
Subsidiaries or any new directly owned Subsidiary, which shares are not
already Pledged Collateral, promptly (and in any event within three (3)
Business Days) deliver to the Agent a Pledge Amendment, duly executed by
the Pledgor, in substantially the form of Schedule II hereto (a "Pledge
Amendment"), in respect of the additional Pledged Shares which are to be
pledged pursuant to this Agreement. The Pledgor hereby authorizes the Agent
to attach each Pledge Amendment to this Agreement and agrees that all
Pledged Shares listed on any Pledge Amendment delivered to the Agent shall
for all purposes hereunder be considered Pledged Collateral.
7. Pledgors' Rights. As long as no Event of Default shall have
occurred and be continuing and until written notice shall be given to the
Pledgor in accordance with Section 8(a) hereof,
the Pledgor shall have the right, from time to time, to vote and
give consents with respect to the Pledged Collateral or any part thereof
for all purposes not inconsistent with the provisions of this Agreement,
the Notes, the Other Notes and any Transaction Document; provided, however,
that no vote shall be cast, and no consent shall be given or action taken,
which would have the effect of impairing the position or interest of the
Agent in respect of the Pledged Collateral or which would authorize or
effect (i) the dissolution or liquidation, in whole or in part, of any
corporation listed on Schedule I, (ii) the consolidation or merger of any
corporation listed on Schedule I with any other Person, (iii) the sale,
disposition or encumbrance of all or substantially all of the assets of any
corporation or partnership listed on Schedule I, (iv) any change in the
authorized number of shares, the stated capital or the authorized share
capital of any corporation listed in Schedule I or the issuance of any
additional shares of its capital stock, or (v) the alteration of the voting
rights with respect to the Capital Stock of any corporation listed on
Schedule I; and
all dividends and all other distributions in respect of any of
the Pledged Shares of the Pledgor, whenever paid or made, shall be
delivered to the Agent to hold as Pledged Collateral and shall, if received
by the Pledgor, be received in trust for the benefit of the Agent, be
segregated from the other property or funds of the Pledgor, and be
forthwith delivered to the Agent as Pledged Collateral in the same form as
so received (with any necessary endorsement).
8. Defaults and Remedies.
Upon the occurrence of an Event of Default and during the
continuation of such Event of Default, then or at any time after such
declaration and following written notice to the Pledgor, the Agent
(personally or through an agent) is hereby authorized and empowered to
transfer and register in its name or in the name of its nominee the whole
or any part of the Pledged Collateral, to exchange certificates or
instruments representing or evidencing Pledged Securities for certificates
or instruments of smaller or larger denominations, to exercise the voting
rights with respect thereto, to collect and receive all cash dividends and
other distributions made thereon, to sell in one or more sales after seven
(7) days' notice of the time and place of any public sale or of the time
after which a private sale is to take place (which notice the Pledgor
agrees is commercially reasonable), but without any previous notice or
advertisement, the whole or any part of the Pledged Collateral and to
otherwise act with respect to the Pledged Collateral as though the Agent
was the outright owner thereof, the Pledgor hereby irrevocably constituting
and appointing the Agent as the proxy and attorney-in-fact of the Pledgor,
with full power of substitution to do so, and which shall remain in effect
until the Secured Obligations are paid in full; provided, however, the
Agent shall not have any duty to exercise any such right or to preserve the
same and shall not be liable for any failure to do so or for any delay in
doing so. Any sale shall be made at a public or private sale at the
Agent's place of business, or at any public building in the City of New
York or elsewhere to be named in the notice of sale, either for cash or
upon credit or for future delivery at such price as the Agent may deem
fair, and the Agent may be the purchaser of the whole or any part of the
Pledged Collateral so sold and hold the same thereafter in its own right
free from any claim of the Pledgor or any right of redemption. Each sale
shall be made to the highest bidder, but the Agent reserves the right to
reject any and all bids at such sale which, in its sole and absolute
discretion, it shall deem inadequate. Demands of performance, except as
otherwise herein specifically provided for, notices of sale, advertisements
and the presence of property at sale are hereby waived and any sale
hereunder may be conducted by an auctioneer or any officer or agent of the
Agent.
If, at the original time or times appointed for the sale of the
whole or any part of the Pledged Collateral, the highest bid, if there be
but one sale, shall be inadequate to discharge in full all the Secured
Obligations, or if the Pledged Collateral be offered for sale in lots, if
at any of such sales, the highest bid for the lot offered for sale would
indicate to the Agent, in its sole and absolute discretion, the
unlikelihood of the proceeds of the sales of the whole of the Pledged
Collateral being sufficient to discharge all the Secured Obligations, the
Agent may, on one or more occasions and in its sole and absolute
discretion, postpone any of said sales by public announcement at the time
of sale or the time of previous postponement of sale, and no other notice
of such postponement or postponements of sale need be given, any other
notice being hereby waived; provided, however, that any sale or sales made
after such postponement shall be after seven (7) days' notice to the
Pledgor.
In the event of any sales hereunder the Agent shall, after
deducting all costs or expenses of every kind (including reasonable
attorneys' fees and disbursements) for care, safekeeping, collection, sale,
delivery or otherwise, apply the residue of the proceeds of the sales to
the payment or reduction, either in whole or in part, of the Secured
Obligations in accordance with the agreements and instruments governing and
evidencing such Obligations, returning the surplus, if any, to the Pledgor.
If, at any time when the Agent in its sole and absolute
discretion determines, following the occurrence and during the continuance
of an Event of Default, that, in connection with any actual or contemplated
exercise of its rights (when permitted under this Section 8) to sell the
whole or any part of the Pledged Collateral hereunder, it is necessary or
advisable to effect a public registration of all or part of the Pledged
Collateral pursuant to the Securities Act of 1933, as amended (or any
similar statute then in effect) (the "Act"), the Pledgor shall, in an
expeditious manner, cause its Subsidiaries, if any, to:
Prepare and file with the Securities and Exchange Commission (the
"Commission") a registration statement with respect to the Pledged
Collateral and use its best efforts to cause such registration statement to
become and remain effective.
Prepare and file with the Commission such amendments and supplements to
such registration statement and the prospectus used in connection therewith
as may be necessary to keep such registration statement effective and to
comply with the provisions of the Act with respect to the sale or other
disposition of the Pledged Collateral covered by such registration
statement whenever the Agent shall desire to sell or otherwise dispose of
the Pledged Collateral.
Furnish to the Agent such numbers of copies of a prospectus and a
preliminary prospectus, in conformity with the requirements of the Act, and
such other documents as the Agent may request in order to facilitate the
public sale or other disposition of the Pledged Collateral by the Agent.
Use its best efforts to register or qualify the Pledged Collateral covered
by such registration statement under such other securities or blue sky laws
of such jurisdictions within the United States as the Agent shall request,
and do such other reasonable acts and things as may be required of it to
enable the Agent to consummate the public sale or other disposition in such
jurisdictions of the Pledged Collateral by the the Agent.
Furnish, at the request of the Agent, on the date that shares of the
Pledged Collateral are delivered to the underwriters for sale pursuant to
such registration or, if the security is not being sold through
underwriters, on the date that the registration statement with respect to
such shares of the Pledged Collateral becomes effective, (A) an opinion,
dated such date, of the independent counsel representing such registrant
for the purposes of such registration, addressed to the underwriters, if
any, and in the event the Pledged Collateral is not being sold through
underwriters, then to the Agent, in customary form and covering matters of
the type customarily covered in such legal opinions; and (B) a comfort
letter, dated such date, from the independent certified public accountants
of such registrant, addressed to the underwriters, if any, and in the event
the Pledged Collateral is not being sold through underwriters, then to the
Agent, in a customary form and covering matters of the type customarily
covered by such comfort letters and as the underwriters or the Agent shall
reasonably request. The opinion of counsel referred to above shall
additionally cover such other legal matters with respect to the
registration in respect of which such opinion is being given as the Agent
may reasonably request. The letter referred to above from the independent
certified public accountants shall additionally cover such other financial
matters (including information as to the period ending not more than five
(5) Business Days prior to the date of such letter) with respect to the
registration in respect of which such letter is being given as the Agent
may reasonably request.
Otherwise use its best efforts to comply with all applicable rules and
regulations of the Commission, and make available to its security holders,
as soon as reasonably practicable, but not later than 18 months after the
effective date of the registration statement, an earnings statement
covering the period of at least 12 months beginning with the first full
month after the effective date of such registration statement, which
earnings statement shall satisfy the provisions of Section 11(a) of the
Act.
All expenses incurred in complying with Section 8(d) hereof,
including, without limitation, all registration and filing fees (including
all expenses incident to filing with the National Association of Securities
Dealers, Inc.), printing expenses, fees and disbursements of counsel for
the registrant, the fees and expenses of counsel for the Agent, expenses of
the independent certified public accountants (including any special audits
incident to or required by any such registration) and expenses of complying
with the securities or blue sky laws or any jurisdictions, shall be paid by
the Pledgor.
If, at any time when the Agent shall determine to exercise its
right to sell the whole or any part of the Pledged Collateral hereunder,
such Pledged Collateral or the part thereof to be sold shall not, for any
reason whatsoever, be effectively registered under the Act, the Agent may,
in its sole and absolute discretion (subject only to applicable
requirements of law), sell such Pledged Collateral or part thereof by
private sale in such manner and under such circumstances as the Agent may
deem necessary or advisable, but subject to the other requirements of this
Section 8, and shall not be required to effect such registration or to
cause the same to be effected. Without limiting the generality of the
foregoing, in any such event the Agent in its sole and absolute discretion
(x) may, in accordance with applicable securities laws, proceed to make
such private sale notwithstanding that a registration statement for the
purpose of registering such Pledged Collateral or part thereof could be or
shall have been filed under the Act (or similar statute), (y) may approach
and negotiate with a single possible purchaser to effect such sale, and (z)
may restrict such sale to a purchaser who will represent and agree that
such purchaser is purchasing for its own account, for investment and not
with a view to the distribution or sale of such Pledged Collateral or part
thereof. In addition to a private sale as provided above in this Section
8, if any of the Pledged Collateral shall not be freely distributable to
the public without registration under the Act (or similar statute) at the
time of any proposed sale pursuant to this Section 8, then the Agent shall
not be required to effect such registration or cause the same to be
effected but, in its sole and absolute discretion (subject only to
applicable requirements of law), may require that any sale hereunder
(including a sale at auction) be conducted subject to restrictions (i) as
to the financial sophistication and ability of any Person permitted to bid
or purchase at any such sale, (ii) as to the content of legends to be
placed upon any certificates representing the Pledged Collateral sold in
such sale, including restrictions on future transfer thereof, (iii) as to
the representations required to be made by each Person bidding or
purchasing at such sale relating to that Person's access to financial
information about the Pledgor and such Person's intentions as to the
holding of the Pledged Collateral so sold for investment, for its own
account, and not with a view to the distribution thereof, and (iv) as to
such other matters as the Agent may, in its sole and absolute discretion,
deem necessary or appropriate in order that such sale (notwithstanding any
failure so to register) may be effected in compliance with the Bankruptcy
Code and other laws affecting the enforcement of creditors' rights and the
Act and all applicable state securities laws.
The Pledgor acknowledges that notwithstanding the legal
availability of a private sale or a sale subject to the restrictions
described above in Section 8(f), the Agent may, in its sole and absolute
discretion, elect to register any or all the Pledged Collateral under the
Act (or any applicable state securities law) in accordance with its rights
hereunder. The Pledgor, however, recognizes that the Agent may be unable to
effect a public sale of any or all the Pledged Collateral and may be
compelled to resort to one or more private sales thereof. The Pledgor also
acknowledges 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
Agent shall be under no obligation to delay a sale of any of the Pledged
Collateral for the period of time necessary to permit the registrant to
register such securities for public sale under the Act, or under applicable
state securities laws, even if the Pledgor would agree to do so.
The Pledgor agrees that following the occurrence and during the
continuance of an Event of Default it will not at any time plead, claim or
take the benefit of any appraisal, valuation, stay, extension, moratorium
or redemption law now or hereafter in force in order to prevent or delay
the enforcement of this Agreement, or the absolute sale of the whole or any
part of the Pledged Collateral or the possession thereof by any purchaser
at any sale hereunder, and the Pledgor waives the benefit of all such laws
to the extent it lawfully may do so. The Pledgor agrees that it will not
interfere with any right, power and remedy of the Agent provided for in
this Agreement or now or hereafter existing at law or in equity or by
statute or otherwise, or the exercise or beginning of the exercise by the
Agent of any one or more of such rights, powers or remedies. No failure or
delay on the part of the Agent to exercise any such right, power or remedy
and no notice or demand which may be given to or made upon the Pledgor by
the Agent with respect to any such remedies shall operate as a waiver
thereof, or limit or impair the right of the Agent to take any action or to
exercise any power or remedy hereunder, without notice or demand, or
prejudice its rights as against the Pledgor in any respect.
The Pledgor further agrees that a breach of any of the covenants
contained in this Section 8 will cause irreparable injury to the Agent, that the
Agent 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 8
shall be specifically enforceable against the Pledgor, and the Pledgor hereby
waives and agrees not to assert any defenses against an action for specific
performance of such covenants except for a defense that the Secured Obligations
are not then due and payable in accordance with the agreements and instruments
governing and evidencing such obligations. The Pledgor further acknowledges the
impossibility of ascertaining the amount of damages which would be suffered by
the Agent by reason of a breach of any of such covenants and, consequently,
agrees that, if the Agent shall sue for damages for breach, it shall pay, as
liquidated damages and not as a penalty, an amount equal to the lesser of (i)
the value of the Pledged Collateral pledged by the Pledgor on the date the Agent
shall demand compliance with this Section 8, and (ii) the amount required to pay
in full the Secured Obligations.
9. Application of Proceeds. Any cash held by the Agent as
Pledged Collateral and all cash proceeds received by the Agent in respect of any
sale of, liquidation of, or other realization upon all or any part of the
Pledged Collateral shall be applied by the Agent as follows:
a. first, to the Agent in an amount sufficient to pay in
full the expenses of the Agent in connection with such sale, disposition or
other realization, including all expenses, liabilities and advances incurred or
made by the Agent in connection therewith, including, without limitation,
attorneys' fees;
b. second, to the Agent in an amount equal to the then
unpaid principal of and accrued interest and prepayment premiums, if any, on the
Secured Obligations;
c. third, to the Agent in an amount equal to any other
Secured Obligations which are then unpaid; and
d. finally, after payment in full of all Secured
Obligations, to pay to the Pledgor, or its successors or assigns, or to
whomsoever may be lawfully entitled to receive the same, or as a court of
competent jurisdiction may direct, any surplus then remaining from such
proceeds.
10. Waiver. No delay on the part of the Agent in
exercising any power of sale, Lien, option or other right hereunder, and no
notice or demand which may be given to or made upon the Pledgor by the Agent
with respect to any power of sale, Lien, option or other right hereunder, shall
constitute a waiver thereof, or limit or impair the Agent's right to take any
action or to exercise any power of sale, Lien, option, or any other right
hereunder, without notice or demand, or prejudice any of their rights as against
the Pledgor in any respect.
11. Assignment. The Agent may assign, endorse or transfer
any instrument evidencing all or any part of the Secured Obligations as provided
in, and in accordance with, the Transaction Documents, and the holder of such
instrument shall be entitled to the benefits of this Agreement.
12. Termination. Immediately following the payment of all
Secured Obligations, the Agent shall deliver to the Pledgor the Pledged
Collateral at the time subject to this Agreement and all instruments of
assignment executed in connection therewith, free and clear of the Liens hereof
and, except as otherwise provided herein, all of the Pledgor's obligations
hereunder shall at such time terminate.
13. Lien Absolute. All rights of the Agent hereunder, and
all obligations of the Pledgor hereunder, shall be absolute and unconditional
irrespective of:
any lack of validity or enforceability of any Transaction
Document or any other agreement or instrument governing or
evidencing any Secured Obligations;
any change in the time, manner or place of payment of, or in
any other term of, all or any part of the Secured Obligations, or
any other amendment or waiver of or any consent to any departure
from any Transaction Document or any other agreement or instrument
governing or evidencing any Secured Obligations;
any exchange, release or non-perfection of any other
collateral, or any release or amendment or waiver of or consent to
departure from any guaranty, for all or any of the Secured
Obligations; or
any other circumstance which might otherwise constitute a
defense available to, or a discharge of, the Pledgor.
14. Release. The Pledgor consents and agrees that the
Agent may at any time, or from time to time, in its sole and absolute discretion
(a) renew, extend or change the time of payment, and/or the manner, place or
terms of payment of all or any part of the Secured Obligations and (b) exchange,
release and/or surrender all or any of the Pledged Collateral, or any part
thereof, by whomsoever deposited, which is now or may hereafter be held by the
Agent in connection with all or any of the Secured Obligations; all in such
manner and upon such terms as the Agent may deem proper, and without notice to
or further assent from the Pledgor, it being hereby agreed that the Pledgor
shall be and remain bound upon this Agreement, irrespective of the existence,
value or condition of any of the Pledged Collateral, and notwithstanding any
such change, exchange, settlement, compromise, surrender, release, renewal or
extension, and notwithstanding also that the Secured Obligations may, at any
time, exceed the aggregate principal amount thereof set forth in the Notes, or
any other agreement governing any Secured Obligations. The Pledgor hereby waives
notice of acceptance of this Agreement, and also presentment, demand, protest
and notice of dishonor of any and all of the Secured Obligations, and promptness
in commencing suit against any party hereto or liable hereon, and in giving any
notice to or of making any claim or demand hereunder upon the Pledgor. No act
or omission of any kind on the part of the Agent shall in any event affect or
impair this Agreement.
15. Indemnification. The Pledgor agrees to indemnify and
hold the Agent harmless from and against any taxes, liabilities, claims and
damages, including reasonable attorney's fees and disbursements, and other
expenses incurred or arising by reason of the taking or the failure to take
action by the Agent, in good faith, in respect of any transaction effected under
this Agreement or in connection with the Lien provided for herein, including,
without limitation, any taxes payable in connection with the delivery or
registration of any of the Pledged Collateral as provided herein. Whether or
not the transactions contemplated by this Agreement shall be consummated, the
Pledgor agrees to pay to the Agent all out-of-pocket costs and expenses incurred
in connection with this Agreement and all reasonable fees, expenses and
disbursements, including registration costs under the Act (or similar statute)
and the reasonable fees of the Agent's agents or representatives, incurred in
connection with the execution and delivery of this Agreement and the performance
by the Agent of the provisions of this Agreement and of any transactions
effected in connection with this Agreement. The obligations of the Pledgor
under this Section 15 shall survive the termination of this Agreement.
16. Reinstatement. This Agreement shall remain in full
force and effect and continue to be effective should any petition be filed by or
against the Pledgor for liquidation or reorganization, should the Pledgor become
insolvent or make an assignment for the benefit of creditors or should a
receiver or trustee be appointed for all or any significant part of the
Pledgor's assets, and shall continue to be effective or be reinstated, as the
case may be, if at any time payment and performance of the Secured Obligations,
or any part thereof, is, pursuant to applicable law, rescinded or reduced in
amount, or must otherwise be restored or returned by any obligee of the Secured
Obligations, whether as a "violable preference", "fraudulent conveyance", or
otherwise, all as though such payment or performance had not been made. In the
event that any payment, or any part thereof, is rescinded, reduced, restored or
returned, the Secured Obligations shall be reinstated and deemed reduced only by
such amount paid and not so rescinded, reduced, restored or returned.
17. WAIVER OF JURY TRIAL. THE PLEDGOR WAIVES ALL RIGHT TO
TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO DEFEND ANY RIGHTS OR REMEDIES
HEREUNDER, UNDER THE AGREEMENT, THE KM AGREEMENT OR UNDER THE OTHER TRANSACTION
DOCUMENTS OR RELATING TO ANY OF THE FOREGOING.
18. Miscellaneous.
The Agent may execute any of its duties hereunder by or
through agents or employees and shall be entitled to advice of
counsel concerning all matters pertaining to its duties hereunder.
The Pledgor agrees to promptly reimburse the Agent for
actual out-of-pocket expenses, including, without limitation,
reasonable counsel fees, incurred by the Agent in connection with
the administration and enforcement of this Agreement.
None of the Agent, nor any of their respective officers,
directors, employees, agents or counsel shall be liable for any
action lawfully taken or omitted to be taken by it or them
hereunder or in connection herewith, except for its or their own
gross negligence or willful misconduct.
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 Agent and its respective successors and
assigns, and shall be governed by, and construed and enforced in
accordance with, the internal laws in effect in the State of New
York without giving effect to principles of conflict of laws, and
none of the terms or provisions of this Agreement may be waived,
altered, modified or amended except in writing duly signed for and
on behalf of the Agent and the Pledgor.
19. Severability. If for any reason any provision or
provisions hereof are determined to be invalid and contrary to any existing or
future law, such invalidity shall not impair the operation of or effect those
portions of this Agreement which are valid.
20. Notices. Except as otherwise provided herein, whenever
it is provided herein that any notice, demand, request, consent, approval,
declaration or other communication shall or may be given to or served upon any
of the parties by any other party, or whenever any of the parties desires to
give or serve upon any other a communication with respect to this Agreement,
each such notice, demand, request, consent, approval, declaration or other
communication shall be in writing and either shall be delivered in person with
receipt acknowledged or sent by registered or certified mail, return receipt
requested, postage prepaid, or by telecopy and confirmed by telecopy and
addressed as follows:
If to the Agent, at:
i. Wexford Management LLC
ii. 411 West Putnam Avenue
iii. Greenwich, Connecticut 06830
iv. Attention: Joseph Jacobs
v. Telephone:(203) 862-7020
vi. Telecopier:(203) 862-7320
vii.
viii. with a copy to:
ix.
x. McDermott, Will & Emery
xi. 50 Rockefeller Plaza, 11th Fl.
xii. New York, New York 10020
xiii. Attn: Stephen B. Selbst, Esq.
xiv. Telephone:(212) 547-5400
xv. Telecopier:(212) 547-5444
If to the Pledgors, to:
xvi. c/o BCAM International, Inc.
xvii. 1800 Walt Whitman Road
xviii. Melville, New York 11747
xix. Attn: Michael Strauss, President
xx. Telephone:(516) 752-7530
xxi. Telecopier:(516) 752-3558
xxii.
xxiii. With a copy to:
xxiv.
xxv. Ruskin, Moscou, Evans & Faltischek, PC
xxvi. 170 Old Country Road
xxvii. Mineola, New York 11501
xxviii.Attn: Norman Friedland, Esq.
xxix. Telephone:(212) 663-6600
xxx. Telecopier:(212) 663-6642
or at such other address as may be substituted by notice given as herein
provided. The giving of any notice required hereunder may be waived in writing
by the party entitled to receive such notice. Every notice, demand, request,
consent, approval, declaration or other communication hereunder shall be deemed
to have been duly given or served on the date on which personally delivered,
with receipt acknowledged, telecopied and confirmed by telecopy answerback or
three (3) Business Days after the same shall have been deposited in the United
States mail. Failure or delay in delivering copies of any notice, demand,
request, consent, approval, declaration or other communication to the persons
designated above to receive copies shall in no way adversely affect the
effectiveness of such notice, demand, request, consent, approval, declaration or
other communication.
21. Section Titles. The Section titles contained in this
Agreement are and shall be without substantive meaning or content of any kind
whatsoever and are not a part of the agreement between the parties hereto.
22. Counterparts. This Agreement may be executed in any number
of counterparts, which shall, collectively and separately, constitute one
agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Stock Pledge
Agreement to be duly executed as of the date first written above.
BCAM INTERNATIONAL, INC.
By:
Name: Michael Strauss
Title: President
WEXFORD MANAGEMENT LLC, AS THE AGENT
FOR THE NOTEHOLDERS
By:
Name: Joseph Jacobs
Title: President
SCHEDULE I
to the Stock Pledge Agreement
Issued and
Outstanding Shares Before
State of Authorized Issuance of Stock to the
Company Organization Capital Noteholders
Drew Shoe Ohio 1,711.3422 1,709.829
Corporation shares of
common
stock, no
par value
BCAM Delaware 1,000 1,000
Technologies, Inc common shares
stock par
value $.001
per share
100 shares 0
of mutual
stock, par
value $.001
preferred
per share
HumanCAD Ontario An [to be
Systems, unlimited provided]
Inc. number of
shares,
without par
value
BCAM New York [to be [to be
Technologies, provided] provided]
Inc.
BCA New York 10,000,000 10,000,000
Services, shares of
Inc. common
stock, par
value $.01
per share
SCHEDULE II
to the Stock Pledge Agreement
PLEDGE AMENDMENT
This Pledge Amendment, dated __________ __, 19__ is delivered pursuant to
Section 6(d) of the Stock Pledge Agreement referred to below. The undersigned
hereby agrees that this Pledge Amendment may be attached to that certain Stock
Pledge Agreement, dated as of April __, 1998 by the undersigned, as Pledgor, to
Wexford Management LLC, as Agent, and that the Pledged Securities listed on this
Pledge Amendment shall be and become a part of the Pledged Collateral referred
to in said Stock Pledge Agreement and shall secure all Secured Obligations
referred to in said Stock Pledge Agreement.
BCAM INTERNATIONAL, INC.
By:_________________________
Name:
Title:
<TABLE>
<CAPTION>
Class of Certificate Number of Shares Issued
Name and Address of Pledgor Stock Number(s) Number of Shares and Outstanding
<S> <C> <C> <C> <C>
</TABLE>
EXECUTION COPY
SECURITY AGREEMENT
SECURITY AGREEMENT, dated as of April 14, 1998, made by BCAM
INTERNATIONAL, INC., a New York corporation (the "Company"), BCA SERVICES, INC.,
a New York corporation ("BCA"), and BCAM TECHNOLOGIES, INC., a Delaware
corporation ("BT" and collectively with the Company and BCA, the "Pledgors") in
favor of WEXFORD MANAGEMENT LLC, a Connecticut limited liability company, as
agent (the "Agent") for the Noteholders (as herein defined).
W I T N E S S E T H :
WHEREAS, pursuant to that certain Note Purchase Agreement dated as of
September 19, 1997, between the Company and Impleo LLC, as amended by that
certain First Amendment (the "First Amendment") dated as of April 14, 1998 (as
the same may from time to time be further amended, modified or supplemented,
collectively the "Purchase Agreement"), the Purchaser purchased the Notes (as
defined in the Purchase Agreement) from the Company;
WHEREAS, pursuant to that certain Note Purchase Agreement dated as of
September 19, 1997 among the Company, Ralph E. Weil, Joseph Schueller, R. Weil &
Associates, 621 Partners, Strafe & Company for the account of David M. Kirr,
Strafe & Company for the account of Terry B. Marbach and Strafe & Company for
the account of Gregg T. Summerville (collectively, the "KM Purchasers"), as
amended by that certain First Amendment (the "KM First Amendment") dated as of
April 14, 1998 (as the same may from time to time be further amended, modified
or supplemented, the "KM Purchase Agreement"), the KM Purchasers purchased the
Other Notes from the Company;
WHEREAS, the Purchaser is willing to enter into the First Amendment,
but only upon the condition, among others, that the Company shall have executed
and delivered to the Agent this Security Agreement; and
WHEREAS, the KM Purchasers are willing to enter into the KM First
Amendment, but only on the condition, among others, that the Company shall have
executed and delivered to the Agent the Security Agreement;
WHEREAS, each of the Pledgors will derive substantial direct and
indirect benefit from the transactions contemplated by the First Amendment and
the KM First Amendment;
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants herein contained and for other good and valuable consideration, the
receipt of which is hereby acknowledged, the parties hereto agree as follows:
1. Defined Terms. Unless otherwise defined herein, terms defined in
the Purchase Agreement are used herein as therein defined, and the following
terms shall have the following meanings (such meanings being equally applicable
to both the singular and plural forms of the terms defined):
"Account Debtor" shall mean any "account debtor," as such term is
defined in Section 9-105(1)(a) of the UCC.
"Accounts" shall mean any "account," as such term is defined in
Section 9-106 of the UCC, now owned or hereafter acquired by the Pledgors and,
in any event, shall include, without limitation, all accounts receivable, book
debts and other forms of obligations (other than forms of obligations evidenced
by Chattel Paper, Documents or Instruments) now owned or hereafter received or
acquired by or belonging or owing to the Pledgors (including, without
limitation, under any trade names, styles or divisions thereof) whether arising
out of goods sold or services rendered by the Pledgors or from any other
transaction, whether or not the same involves the sale of goods or services by
the Pledgors (including, without limitation, any such obligation which might be
characterized as an account or contract right under the UCC) and all of the
Pledgors' rights in, to and under all purchase orders or receipts now owned or
hereafter acquired by it for goods or services, and all of the Pledgors' rights
to any goods represented by any of the foregoing (including, without limitation,
unpaid seller's rights of rescission, replevin, reclamation and stoppage in
transit and rights to returned, reclaimed or repossessed goods), and all moneys
due or to become due to the Pledgors under all contracts for the sale of goods
or the performance of services or both by the Pledgors (whether or not yet
earned by performance on the part of the Pledgors or in connection with any
other transaction), now in existence or hereafter occurring, including, without
limitation, the right to receive the proceeds of said purchase orders and
contracts, and all collateral security and guarantees of any kind given by any
Person with respect to any of the foregoing.
"Chattel Paper" shall mean any "chattel paper," as such term is
defined in Section 9-105(1)(b) of the UCC, now owned or hereafter acquired by
the Pledgors.
"Collateral" shall have the meaning assigned to such term in Section 2
of this Security Agreement.
"Contracts" shall mean all contracts, undertakings, or other
agreements (other than rights evidenced by Chattel Paper, Documents or
Instruments) in or under which the Pledgors may now or hereafter have any right,
title or interest, including, without limitation, with respect to an Account,
any agreement relating to the terms of payment or the terms of performance
thereof.
"Documents" shall mean any "documents," as such term is defined in
Section 9-105(1)(f) of the UCC, now owned or hereafter acquired by the Pledgors.
"Equipment" has the meaning set forth in Section 9-109(2) of the UCC.
"hereby," "herein," "hereof," "hereunder" and words of similar import
refer to this Security Agreement as a whole (including, without limitation, any
schedules hereto) and not merely to the specific section, paragraph or clause in
which the respective word appears.
"Instruments" shall mean any "instrument," as such term is defined in
Section 9-105(1)(i) of the UCC, now owned or hereafter acquired by the Pledgors,
other than instruments that constitute, or are a part of a group of writings
that constitute, Chattel Paper.
"Inventory" shall mean all "inventory," as such term is defined in
Section 9-109(4) of the UCC, now owned or hereafter acquired by the Pledgors
and, in any event, shall include, without limitation, all inventory,
merchandise, goods and other personal property now owned or hereafter acquired
by the Pledgors which are held for sale or lease or are furnished or are to be
furnished under a contract of service or which constitute raw materials, work in
process or materials used or consumed or to be used or consumed in any Pledgors'
business, or the processing, packaging, delivery or shipping of the same, and
all finished goods.
"KM Warrant Agreement" shall mean that certain Warrant Agreement dated
as of September 19, 1997 between the Company and the KM Purchasers.
"Lien" shall mean any mortgage or deed of trust, pledge,
hypothecation, assignment, deposit arrangement, Lien, charge, claim, security
interest, easement or encumbrance, or preference, priority or other security
agreement or preferential arrangement of any kind or nature whatsoever
(including, without limitation, any lease or title retention agreement, any
financing lease having substantially the same economic effect as any of the
foregoing, and the filing of, or agreement to give, any financing statement
perfecting a security interest under the Uniform Commercial Code or comparable
law of any jurisdiction).
"Noteholders" shall mean the holders of the Notes and the Other Notes.
"Proceeds" shall mean "proceeds," as such term is defined in Section
9-306(1) of the UCC and, in any event, shall include, without limitation, (i)
any and all proceeds of any insurance, indemnity, warranty or guaranty payable
to the Pledgors from time to time with respect to any of the Collateral, (ii)
any and all payments (in any form whatsoever) made or due and payable to the
Pledgors from time to time in connection with any requisition, confiscation,
condemnation, seizure or forfeiture of all or any part of the Collateral by any
governmental body, authority, bureau or agency (or any person acting under color
of governmental authority), and (iii) any and all other amounts from time to
time paid or payable under or in connection with any of the Collateral.
"Secured Obligations" shall mean (i) all of the unpaid principal
amount of, and accrued interest on, the Notes and the Other Notes, (ii) all
other indebtedness, liabilities and obligations of the Pledgors to the Agent,
whether now existing or hereafter incurred, and whether created under, arising
out of or in connection with the Transaction Documents. This term includes,
without limitation, all fees, charges, expenses, attorneys' fees and any other
sum chargeable to the Company under any of the Transaction Documents.
"Security Agreement" shall mean this Security Agreement, as the same
may from time to time be amended, modified or supplemented and shall refer to
this Security Agreement as in effect on the date such reference becomes
operative.
"Transaction Documents" shall mean, collectively, this Security
Agreement, the Stock Pledge Agreement, the Purchase Agreement, the KM Purchase
Agreement, the Warrant Agreement, the KM Warrant Agreement, the Notes and the
Other Notes.
"UCC" shall mean the Uniform Commercial Code as the same may, from
time to time, be in effect in the State of New York; provided, however, in the
event that, by reason of mandatory provisions of law, any or all of the
attachment, perfection or priority of the Agent's security interest in any
Collateral is governed by the Uniform Commercial Code as in effect in a
jurisdiction other than the State of New York, the term "UCC" shall mean the
Uniform Commercial Code as in effect in such other jurisdiction for purposes of
the provisions hereof relating to such attachment, perfection or priority and
for purposes of definitions related to such provisions.
2. Grant of Security Interest. (a) As collateral security for
the prompt and complete payment and performance when due (whether at stated
maturity, by acceleration or otherwise) of all the Secured Obligations and to
induce the Purchaser to enter into the First Amendment and the KM Purchasers to
enter into the KM First Amendment, and the transactions contemplated thereby,
each of the Pledgors hereby assigns, conveys, mortgages, pledges, hypothecates
and transfers to the Agent, and hereby grants to the Agent, for the benefit of
the Noteholders, a security interest in, all of such Pledgor's right, title and
interest in, to and under the following (all of which being hereinafter
collectively called the "Collateral"):
all Accounts of such Pledgor;
all Chattel Paper of such Pledgor;
all Contracts of such Pledgor;
all Documents of such Pledgor;
all Equipment of such Pledgor;
all Instruments of such Pledgor;
all Inventory of such Pledgor;
the United States Patents and applications for patent described on Schedule
VI to the First Amendment, and the patents and applications for patent in
other countries described on Schedule VI to the First Amendment, and all
other United States and foreign patents and applications for patent of the
Pledgors now existing or hereafter filed or acquired;
the inventions disclosed and/or claimed in all of the said United States
and foreign patents and applications for patents, and all other inventions
now owned by the Pledgors or hereinafter made, created or acquired by or
for the Pledgors whether or not any of said inventions are patentable;
all other applications for patent or like protection on any of said
inventions that have now or may in the future be filed by the Pledgors, or
by the assignor(s) of the rights to said inventions to the Pledgors,
whether in the United States or in any other country or place anywhere in
the world;
all other patents or like protection that have been or may in the future be
granted on any of the aforesaid inventions and/or applications to the
Pledgors, or to any assignor of the rights to any such invention to the
Pledgors, whether in the United States or in any other country or place
anywhere in the world;
the United States copyrights and applications for copyrights described on
Schedule VI to the First Amendment, and the copyrights and applications for
copyrights in other countries described on Schedule VI to the First
Amendment, and all other copyrights of the Pledgors, now existing or
hereafter acquired, whether or not the underlying works of authorship have
been published and whether said copyrights are statutory or arise under the
common law, all applications of the Pledgors for copyright presently
existing or hereafter filed or acquired and all works of authorship and
other intellectual property rights now owned or hereafter created by or
for, or acquired by the Pledgors;
the United States registered trademarks and applications for registrations
of trademarks described on Schedule VI to the First Amendment, and the
trademarks and applications for registrations of trademarks in other
countries described on Schedule VI to the First Amendment, and all other
trademarks, service marks and applications to register the same of the
Pledgors, whether registered or unregistered and wherever registered, now
existing or hereafter arising, created or acquired by the Pledgors;
all renewals, reissues, continuations, extensions or the like of any
patents, copyrights, trademarks, service marks and like protection,
including without limitation, those obtained or permissible under past,
present and future laws and statutes;
all rights of action on account of past, present and future unauthorized
use of any of said inventions, copyrights, trademarks or service marks and
for infringement of said patents, copyrights, trademarks or service marks
and like protection;
the right to file and prosecute applications for patents, copyrights, and
for registration of trademarks and service marks on any of said inventions,
copyrights, trademarks, service marks or for similar intellectual property
in the United States or any other country or place anywhere in the world;
the entire goodwill of the businesses of the Pledgors connected with and
symbolized by the trademarks, service marks, trade names and the other
general intangibles of the Pledgors;
all of the Pledgors' trade names, customer lists, trade secrets, corporate
and other business records, license rights, advertising materials,
operating manuals, methods, processes, know-how, sales literature,
drawings, specifications, descriptions, inventions, name plates, catalogs,
dealer contracts, supplier contracts, distributor agreements, confidential
information, consulting agreements, engineering contracts, and all other
assets which uniquely reflect the goodwill of the businesses of the Pledgor
to which said general intangibles relate;
all of the proceeds of any of the foregoing (the intangible assets
enumerated in subparagraphs (vii) through (xvii) being hereinafter
collectively referred to as the "General Intangibles"); and
to the extent not otherwise included, all Proceeds of each of the foregoing
and all accessions to, substitutions and replacements for, and rents,
profits and products of each of the foregoing.
If Drew Shoe Corporation ("Drew") repays its loan from Bank One,
N.A. prior to the repayment in full of the Secured obligations, the Company
shall cause Drew to grant to the Agent a Lien on substantially all of the
assets of Drew (whether such assets are real property, personal property or
mixed) pursuant to such mortgages and security agreements as the Agent may
require Drew to execute and deliver. The Company agrees to take, and to
cause Drew to take, any and all acts and to execute and deliver any and all
documents necessary, or in the opinion of the Agent, desirable, to give
effect to the foregoing covenant.
If the Company shall create any subsidiary after the date hereof,
the Company shall cause such Subsidiary to grant to the Agent a Lien on
substantially all of the assets of such subsidiary (whether such assets are
real property, personal property or mixed) pursuant to such mortgages and
security agreements as the Agent may require such Subsidiary to execute and
deliver. The Company agrees to take, and to cause such Subsidiary to take,
any and all acts and to execute and deliver any and all documents
necessary, or in the opinion of the Agent, desirable, to give effect to the
foregoing covenant.
3. Rights of the Agent; Limitations on the Agent's Obligations.
(a) It is expressly agreed by each Pledgor that, anything herein to the contrary
notwithstanding, each Pledgor shall remain liable under each of its Contracts to
observe and perform all the conditions and obligations to be observed and
performed by it thereunder and each Pledgor shall perform all of its duties and
obligations thereunder, all in accordance with and pursuant to the terms and
provisions of each such Contract. The Agent shall not have any obligation or
liability under any Contract by reason of or arising out of this Security
Agreement or the granting to the Agent of a security interest therein or the
receipt by the Agent of any payment relating to any Contract pursuant hereto,
nor shall the Agent be required or obligated in any manner to perform or fulfill
any of the obligations of the Pledgors under or pursuant to any Contract, or to
make any payment, or to make any inquiry as to the nature or the sufficiency of
any payment received by it or the sufficiency of any performance by any party
under any Contract, or to present or file any claim, or to take any action to
collect or enforce any performance or the payment of any amounts which may have
been assigned to it or to which it may be entitled at any time or times.
The Agent authorizes each Pledgor to collect its Accounts,
provided that such collection is performed in a prudent and businesslike
manner, and the Agent may, upon the occurrence and during the continuation
of an Event of Default and without notice, limit or terminate said
authority at any time. If required by the Agent at any time during the
continuation of any Event of Default, any Proceeds, when first collected by
any Pledgor, received in payment of any such Account or in payment for any
of its Inventory or on account of any of its Contracts, shall be promptly
deposited by such Pledgor in precisely the form received (with all
necessary endorsements) in a special bank account maintained by the Agent
subject to withdrawal by the Agent only, as hereinafter provided, and until
so turned over shall be deemed to be held in trust by such Pledgor for and
as the Agent's property and shall not be commingled with such Pledgor's
other funds or properties. Such Proceeds, when deposited, shall continue to
be collateral security for all of the Secured Obligations and shall not
constitute payment thereof until applied as hereinafter provided. The
Agent shall apply all or a part of the funds on deposit in said special
account to the principal of or interest on or both in respect of any of the
Secured Obligations in accordance with the provisions of Section 8(d)
hereof and any part of such funds which the Purchaser elects not so to
apply and deems not required as collateral security for the Secured
Obligations shall be paid over from time to time by the Agent to the
Pledgors. If an Event of Default has occurred and is continuing, at the
request of the Agent the Pledgors shall deliver to the Agent all original
and other documents evidencing, and relating to, the sale and delivery of
such Inventory or the performance of labor or service which created such
Accounts, including, without limitation, all original orders, invoices and
shipping receipts.
The Agent may at any time, upon the occurrence and during the
continuation of any Event of Default (whether or not waived), after first
notifying the Pledgors of its intention to do so, notify Account Debtors of
the Pledgors, parties to the Contracts of the Pledgors, obligors of
Instruments of the Pledgors and obligors in respect of Chattel Paper of the
Pledgors that the Accounts and the right, title and interest of the
Pledgors in and under such Contracts, Instruments and Chattel Paper have
been assigned to the Agent and that payments shall be made directly to the
Agent. Upon the request of the Agent, the Pledgors will so notify such
Account Debtors, parties to such Contracts, obligors of such Instruments
and obligors in respect of such Chattel Paper. Upon the occurrence and
during the continuation of or an Event of Default (whether or not waived)
the Agent may in its own name or in the name of others communicate with
such Account Debtors, parties to such Contracts, obligors of such
Instruments and obligors in respect of such Chattel Paper to verify with
such Persons to the Agent's satisfaction the existence, amount and terms of
any such Accounts, Contracts, Instruments or Chattel Paper.
Upon reasonable prior notice to the Pledgors (unless an Event of
Default has occurred and is continuing, in which case no notice is
necessary), the Agent shall have the right, during normal business hours,
to make test verifications of the Accounts and physical verifications of
the Inventory in any manner and through any medium that it considers
advisable, and each Pledgor agrees to furnish all such assistance and
information as the Agent may require in connection therewith. Each Pledgor
at its expense will prepare and deliver to the Agent at any time and from
time to time promptly upon the Agent's request, the following reports: (i)
a reconciliation of all its Accounts, (ii) an aging of all its Accounts,
(iii) trial balances, and (iv) a test verification of such Accounts as the
Agent may request.
The Agent (a) shall have no obligation or responsibility to
protect or defend the General Intangibles or the right to use thereof, and
the Pledgors shall, at their own expense, protect, defend and maintain the
General Intangibles to the full extent advisable for their business, and
(b) to use their best efforts to detect any infringers of the rights
described herein and shall forthwith advise the Agent in writing of
material infringements detected, and (c) if the Pledgors fails to comply
with the foregoing, the Agent may do so in the Pledgors' name to the extent
permitted by law, but at the Pledgors' expense, and the Pledgors hereby
agree to reimburse the Agent in full for all expenses, including reasonable
attorney's fees, incurred by the Agent in protecting, defending and
maintaining the General Intangibles.
4. Representations and Warranties. Each Pledgor hereby
represents and warrants that:
Except for the security interest granted to the Agent pursuant to
this Security Agreement, such Pledgor is the sole owner of each item of the
Collateral in which it purports to grant a security interest hereunder,
having good and marketable title thereto, free and clear of any and all
Liens. No material amounts payable under or in connection with any of its
Accounts or Contracts are evidenced by Instruments which have not been
delivered to the Agent.
No effective security agreement, financing statement, equivalent
security or lien instrument or continuation statement covering all or any
part of the Collateral is on file or of record in any public office, except
such as may have been filed by such Pledgor in favor of the Agent pursuant
to this Security Agreement.
When appropriate financing statements have been filed in the
jurisdictions listed on Schedule I hereto, this Security Agreement will be
effective to create a valid and continuing lien on and first priority
perfected security interest in the Collateral with respect to which a
security interest may be perfected by filing pursuant to the UCC, prior to
all other Liens, and will be enforceable as such as against creditors of
and purchasers from such Pledgor (other than purchasers of Inventory in the
ordinary course of business).
Each Pledgor's principal place of business and the place where
its records concerning the Collateral are kept and the location of its
Inventory are set forth on Section 11 hereof, and such Pledgor will not
change such principal place of business or remove such records or change
the location of its Inventory unless it has taken such action as is
necessary to cause the security interest of the Agent in the Collateral to
continue to be perfected. Each Pledgor will not change its principal place
of business or the place where its records concerning the Collateral are
kept or change the location of its Inventory and Equipment without giving
thirty (30) days' prior written notice thereof to the Agent.
The amount represented by each Pledgor to the Agent from time to
time as owing by each Account Debtor or by all Account Debtors in respect
of the Accounts of the Pledgors will at such time be the correct amount
actually and unconditionally owing by such Account Debtors thereunder.
5. Covenants. Each Pledgor covenants and agrees with the Agent
that from and after the date of this Security Agreement and until the Secured
Obligations are fully satisfied:
Further Documentation; Pledge of Instruments. At any time and
from time to time, upon the written request of the Agent, and at the sole
expense of such Pledgor, such Pledgor will promptly and duly execute and
deliver any and all such further instruments and documents and take such
further action as the Agent may reasonably deem desirable to obtain the
full benefits of this Security Agreement and of the rights and powers
herein granted, including, without limitation, using its best efforts to
secure all consents and approvals necessary or appropriate for the
assignment to the Agent of any Contract held by such Pledgor or in which
such Pledgor has any rights not heretofore assigned, the filing of any
financing or continuation statements under the UCC with respect to the
Liens and security interests granted hereby, and transferring Collateral to
the Agent's possession (if a security interest in such Collateral can be
perfected by possession). Each Pledgor hereby authorizes the Agent to file
any such financing or continuation statement without the signature of such
Pledgor to the extent permitted by applicable law. If any amount payable
under or in connection with any of the Collateral shall be or become
evidenced by any Instrument, such Instrument shall be immediately pledged
to the Agent hereunder, and shall be duly endorsed in a manner satisfactory
to the Agent and delivered to the Agent.
Maintenance of Records. Each Pledgor will keep and maintain at
its own cost and expense satisfactory and complete records of the
Collateral, including, without limitation, a record of all payments
received and all credits granted with respect to the Collateral and all
other dealings with the Collateral. Each Pledgor will mark its books and
records pertaining to the Collateral to evidence this Security Agreement
and the security interests granted hereby. All Chattel Paper will be
marked with the following legend: "This writing and the obligations
evidenced or secured hereby are subject to the security interest of Wexford
Management LLC, as Agent". For the Agent's further security, each Pledgor
agrees that the Agent shall have a special property interest in all of such
Pledgor's books and records pertaining to the Collateral and, upon the
occurrence and during the continuation of an Event of Default, each Pledgor
shall deliver and turn over any such books and records to the Agent or to
its representatives at any time on demand of the Agent. Prior to the
occurrence of an Event of Default and upon reasonable notice from the
Agent, each Pledgor shall permit any representative of the Agent to inspect
such books and records and will provide photocopies thereof to the Agent.
Indemnification. In any suit, proceeding or action brought by
the Agent relating to any Account, Chattel Paper, Contract, or Instrument
for any sum owing thereunder, or to enforce any provision of any Account,
Chattel Paper, Contract, or Instrument, each Pledgor will save, indemnify
and keep the Agent harmless from and against all expense, loss or damage
suffered by reason of any defense, setoff, counterclaim, recoupment or
reduction of liability whatsoever of the obligor there-under, arising out
of a breach by any Pledgor of any obligation thereunder or arising out of
any other agreement, indebtedness or liability at any time owing to, or in
favor of, such obligor or its successors from any Pledgor, and all such
obligations of any Pledgor shall be and remain enforceable against and only
against such Pledgor and shall not be enforceable against the Agent.
Compliance with Laws, etc. The Pledgors will comply, in all
material respects, with all acts, rules, regulations, orders, decrees and
directions of any govern-mental authority, applicable to the Collateral or
any part thereof or to the operation of such Pledgor's business; provided,
however, that the Pledgors may contest any act, regulation, order, decree
or direction in any reasonable manner which shall not in the sole opinion
of the Agent adversely affect the Agent's rights hereunder or adversely
affect the first priority of its security interest in the Collateral.
Payment of Obligations. Each Pledgor will pay promptly when due
all taxes, assessments and governmental charges or levies imposed upon the
Collateral or in respect of its income or profits therefrom and all claims
of any kind (including, without limitation, claims for labor, materials and
supplies), except that no such charge need be paid if (i) such nonpayment
does not involve any danger of the sale, forfeiture or loss of any of the
Collateral or any interest therein, and (ii) such charge is being contested
in good faith, by proper proceedings, and adequate reserves therefor have
been established by such Pledgor in accordance with and to the extent
required by GAAP.
Compliance with Terms of Accounts, etc. In all material
respects, each Pledgor will perform and comply with all obligations in
respect of Accounts, Chattel Paper, Contracts and all other agreements to
which it is a party or by which it is bound.
Limitation on Liens on Collateral. Each Pledgor will not create,
permit or suffer to exist, and will defend the Collateral against and take
such other action as is necessary to remove, any Lien on the Collateral,
and will defend the right, title and interest of the Purchaser in and to
any of such Pledgor's rights under the Chattel Paper, Contracts, Documents,
and Instruments and Inventory and in and to the Proceeds thereof against
the claims and demands of all Persons whomsoever. Without limiting the
foregoing, each of the Pledgors acknowledges and agrees that the Agent has
not had an opportunity to conduct a Lien search against the Pledgors. If
and to the extent that a Lien search discloses that there are Liens on any
of the Collateral, the Pledgors shall provide the Agent with satisfactory
evidence of the release of such Lien within ten (10) Business Days. The
failure by any Pledgor to deliver evidence of the release of any such Lien
within ten (10) Business Days shall be an Event of Default under the Notes
and the Other Notes.
Limitations on Modifications of Accounts. Upon the occurrence
and during the continuation of any Event of Default, each Pledgor will not,
without the Agent's prior written consent, grant any extension of the time
of payment of any of the Accounts, Chattel Paper or Instruments,
compromise, compound or settle the same for less than the full amount
thereof, release, wholly or partly, any Person liable for the payment
thereof, or allow any credit or discount whatsoever thereon other than
trade discounts granted in the ordinary course of business of such Pledgor.
Maintenance of Insurance. Each Pledgor will maintain, with
financially sound and reputable companies, insurance policies (i) insuring
its Inventory against loss by fire, explosion, theft and such other
casualties as are usually insured against by companies engaged in the same
or similar businesses and (ii) insuring each Pledgor and the Agent against
liability for personal injury and property damage relating to such
Inventory, and Equipment, such policies to be in such amounts and against
at least such risks as are usually insured against in the same general area
by companies engaged in the same or a similar business, naming the Agent as
an additional insured with losses payable to each Pledgor and the Agent as
their respective interests may appear under a standard Agent "loss-payable"
clause.
Limitations on Disposition. Each Pledgor will not sell, lease,
transfer or otherwise dispose of any of the Collateral, or attempt or
contract to do so except for sales of Inventory or licenses of General
Intangibles in the ordinary course of business.
Further Identification of Collateral. Each Pledgor will, if so
requested by the Agent, furnish to the Agent, as often as the Agent
reasonably requests, statements and schedules further identifying and
describing the Collateral and such other reports in connection with the
Collateral as the Agent may reasonably request, all in reasonable detail.
Notices. Each Pledgor will advise the Agent promptly, in
reasonable detail, (i) of any material Lien, security interest, encumbrance
or claim made or asserted against any of the Collateral, (ii) of any
material change in the composition of the Collateral, and (iii) of the
occurrence of any other event which would have a material adverse effect on
the aggregate value of the Collateral or on the security interests created
hereunder.
Right of Inspection. Upon reasonable notice to each Pledgor
(unless an Event of Default has occurred and is continuing, in which case
no notice is necessary), the Agent shall at all times have full and free
access during normal business hours to all the books and records and
correspondence of each Pledgor, and the Agent or its representatives may
examine the same, take extracts therefrom and make photocopies thereof.
Continuous Perfection. Each Pledgor will not change its name,
identity or corporate structure in any manner which might make any
financing or continuation statement filed in connection herewith seriously
misleading within the meaning of Section 9-402(7) of the UCC (or any other
then applicable provision of the UCC) unless such Pledgor shall have given
the Agent at least thirty (30) days' prior written notice thereof and shall
have taken all action (or made arrangements to take such action
substantially simultaneously with such change if it is impossible to take
such action in advance) necessary or reasonably requested by the Agent to
amend such financing statement or continuation statement so that it is not
seriously misleading.
General Intangibles. (i) The Pledgors shall diligently
prosecute all applications for patents, copyrights and trademarks and shall
file and prosecute any and all continuations, continuations-in-part,
applications for reissue, applications for certificate of correction and
like matters as shall be reasonably indicated to be desirable from facts
available to it from time to time during the term of this Agreement, and
the Pledgors shall bear the entire cost of all such filing and proceedings.
The Pledgors agree to retain a licensed patent attorney if necessary and an
experienced copyright and trademark counsel approved by the Agent for the
filing and prosecution of all such applications and other proceedings.
(ii) The Pledgors agrees to pay when due all fees, including license
fees, taxes and other expenses which shall be incurred or which shall accrue
with respect to any of the patents or patent applications, copyrights and
copyright applications, trademarks and trade mark applications and know-how
within the General Intangibles.
(iii) The Pledgors shall not allow any patent, copyright, trademark,
trade name, service mark or any application for patent, copyright, trademark or
like protection included within the General Intangibles to become abandoned, nor
any patent, copyright, trademark or like protection to be forfeited or dedicated
to the public without express written approval of the Agent and any license
thereof by the Pledgors shall be legally sufficient to prevent any abandonment,
forfeiture or dedication to public use. In the event any pending or hereafter
filed patent or trademark application, other than trademark renewal
applications, has been finally rejected by the United States Patent and
Trademark Office or any foreign patent or trademark office and the Pledgors have
exhausted their administrative remedies, the Pledgors may abandon the same after
sixty (60) days written notice to the Agent, who may thereafter at its own
expense pursue judicial appeals. The Pledgors shall cooperate in any such
appeal.
(iv) The Agent may, at its option, whether before or after default,
but without obligation to do so, discharge taxes, Liens, or security interests
or other encumbrances at any time levied or placed upon the General Intangibles,
or pay for maintenance or preservation of the General Intangibles, or pay any
other fee, attorneys' fee or other expenses necessary to preserve and protect
the assignment and security interest hereby granted.
6. Agent's Appointment as Attorney-in-Fact. (a) Each Pledgor
hereby irrevocably constitutes and appoints the Agent and any officer or agent
thereof, with full power of substitution, as its true and lawful attorney-in-
fact with full irrevocable power and authority in the place and stead of such
Pledgor and in the name of such Pledgor or in its own name, from time to time in
the Agent's sole and absolute discretion, for the purpose of carrying out the
terms of this Security Agreement, to take any and all appropriate action and to
execute and deliver any and all documents and instruments which may be necessary
or desirable to accomplish the purposes of this Security Agreement and, without
limiting the generality of the foregoing, hereby gives the Agent the power and
right, on behalf of such Pledgor, without notice to or assent by such Pledgor to
do the following:
to ask, demand, collect, receive and give acquittances and receipts for any
and all moneys due and to become due under any Collateral and, in the name
of such Pledgor or its own name or otherwise, to take possession of and
endorse and collect any checks, drafts, notes, acceptances or other
Instruments for the payment of moneys due under any Collateral and to file
any claim or to take any other action or proceeding in any court of law or
equity or otherwise deemed appropriate by the Agent for the purpose of
collecting any and all such moneys due under any Collateral whenever pay-
able and to file any claim or to take any other action or proceeding in any
court of law or equity or other-wise deemed appropriate by the Agent for
the purpose of collecting any and all such moneys due under any Collateral
whenever payable;
to pay or discharge taxes, Liens, security interests or other encumbrances
levied or placed on or threatened against the Collateral, to effect any
repairs or any insurance called for by the terms of this Security Agreement
and to pay all or any part of the premiums therefor and the costs thereof;
and
to direct any party liable for any payment under any of the Collateral to
make payment of any and all moneys due, and to become due thereunder,
directly to the Agent or as the Agent shall direct; (B) to receive payment
of and receipt for any and all moneys, claims and other amounts due, and to
become due at any time, in respect of or arising out of any Collateral; (C)
to sign and indorse any invoices, freight or express bills, bills of
lading, storage or warehouse receipts, drafts against debtors, assignments,
verifications and notices in connection with accounts and other Documents
constituting or relating to the Collateral; (D) to commence and prosecute
any suits, actions or proceedings at law or in equity in any court of
competent jurisdiction to collect the Collateral or any part thereof and to
enforce any other right in respect of any Collateral; (E) to defend any
suit, action or proceeding brought against any Pledgor with respect to any
Collateral; (F) to settle, compromise or adjust any suit, action or
proceeding described above and, in connection therewith, to give such
discharges or releases as the Purchaser may deem appropriate; (G) generally
to sell, transfer, pledge, make any agreement with respect to or otherwise
deal with any of the Collateral as fully and completely as though the Agent
were the absolute owner thereof for all purposes, and to do, at the
Purchaser's option and such Pledgors's expense, at any time, or from time
to time, all acts and things which the Agent reasonably deems necessary to
protect, preserve or realize upon the Collateral and the Agent's Lien
therein, in order to effect the intent of this Security Agreement, all as
fully and effectively as such Pledgor might do.
The Agent agrees that, except upon the occurrence and during the
continuation of an Event of Default, it will forebear from exercising the
power of attorney or any rights granted to the Agent pursuant to this
Section 6. Each Pledgor hereby ratifies, to the extent permitted by law,
all that said attorneys shall lawfully do or cause to be done by virtue
hereof. The power of attorney granted pursuant to this Section 6 is a
power coupled with an interest and shall be irrevocable until the Secured
Obligations are indefeasibly paid in full.
The powers conferred on the Agent hereunder are solely to protect
the Agent's interests in the Collateral and shall not impose any duty upon
it to exercise any such powers. The Agent shall be accountable only for
amounts that it actually receives as a result of the exercise of such
powers and neither it nor any of its officers, directors, employees or
agents shall be responsible to each Pledgor for any act or failure to act,
except for its own gross negligence or willful misconduct.
Each Pledgor also authorizes the Agent, at any time and from time
to time upon the occurrence and during the continuation of an Event of
Default, (i) to communicate in its own name with any party to any Contract
with regard to the assignment of the right, title and interest of such
Pledgor in and under the Contracts hereunder and other matters relating
thereto and (ii) to execute, in connection with the sale provided for in
Section 8 hereof, any endorsements, assignments or other instruments of
conveyance or transfer with respect to the Collateral.
7. Performance by the Agent of each Pledgor's Obligations. If
any Pledgor fails to perform or comply with any of its agreements contained
herein and the Agent, as provided for by the terms of this Security Agreement,
shall itself perform or comply, or otherwise cause performance or compliance,
with such agreement, the reasonable expenses of the Agent incurred in connection
with such performance or compliance, together with interest thereon at the rate
then in effect in respect of the Notes and the Other Notes, shall be payable by
such Pledgor to the Agent on demand and shall constitute Secured Obligations
secured hereby.
8. Remedies, Rights Upon Default. (a) If an Event of
Default shall occur and be continuing, in addition to all other rights and
remedies granted to it in this Security Agreement and in any other instrument or
agreement securing, evidencing or relating to the Secured Obligations, the Agent
may exercise all rights and remedies of a secured party under the UCC. Without
limiting the generality of the foregoing, each Pledgor expressly agrees that in
any such event the Agent, without demand of performance or other demand,
advertisement or notice of any kind (except the notice specified below of time
and place of public or private sale) to or upon such Pledgor or any other person
(all and each of which demands, advertisements and/or notices are hereby
expressly waived to the maximum extent permitted by the UCC and other applicable
law), may forth-with collect, receive, appropriate and realize upon the
Collateral, or any part thereof, and/or may forthwith sell, lease, assign, give
an option or options to purchase, or sell or otherwise dispose of and deliver
said Collateral (or contract to do so), or any part thereof, in one or more
parcels at public or private sale or sales, at any exchange or broker's board or
at the Agent's offices or elsewhere at such prices as it may deem best, for cash
or on credit or for future delivery without assumption of any credit risk. The
Agent shall have the right upon any such public sale or sales, and, to the
extent permitted by law, upon any such private sale or sales, to purchase the
whole or any part of said Collateral so sold, free of any right or equity of
redemption, which equity of redemption each Pledgor hereby releases. Each
Pledgor further agrees, at the Agent's request, to assemble the Collateral and
make it available to the Agent at places which the Agent shall reasonably
select, whether at such Pledgor's premises or elsewhere. The Agent shall apply
the net proceeds of any such collection, recovery, receipt, appropriation,
realization or sale, as provided in Section 8(d) hereof, each Pledgor remaining
liable for any deficiency remaining unpaid after such application, and only
after so paying over such net proceeds and after the payment by the Agent of any
other amount required by any provision of law, including Section 9-504(1)(c) of
the UCC, need the Agent account for the surplus, if any, to such Pledgor. To
the maximum extent permitted by applicable law, each Pledgor waives all claims,
damages, and demands against the Agent arising out of the repossession,
retention or sale of the Collateral except such as arise out of the gross
negligence or willful misconduct of the Agent. Each Pledgor agrees that the
Agent need not give more than ten (10) days' notice (which notification shall be
deemed given when mailed or delivered on an overnight basis, postage prepaid,
addressed to such Pledgor at its address referred to in Section 11 hereof) of
the time and place of any public sale or of the time after which a private sale
may take place and that such notice is reasonable notification of such matters.
Each Pledgor shall remain liable for any deficiency if the proceeds of any sale
or disposition of the Collateral are insufficient to pay all amounts to which
the Purchaser is entitled, such Pledgor also being liable for the fees of any
attorneys employed by the Purchaser to collect such deficiency. In addition to
the foregoing, during the existence of any Event of Default, the Agent shall
have the right (x) to obtain an absolute assignment of any General Intangible,
(y) to sell, assign, transfer, or convey any General Intangible, or (z) to
license any Person to use any General Intangible on terms deemed reasonable by
the Agent.
Each Pledgor also agrees to pay all costs of the Agent,
including, without limitation, reasonable attorneys' fees, incurred in
connection with the enforcement of any of its rights and remedies
hereunder.
Each Pledgor hereby waives presentment, demand, protest or any
notice (to the maximum extent permitted by applicable law) of any kind in
connection with this Security Agreement or any Collateral.
The Proceeds of any sale, disposition or other realization upon
all or any part of the Collateral shall be distributed by the Agent in the
following order of priorities:
first, to the Agent in an amount sufficient to pay in full the
expenses of the Agent in connection with such sale, disposition or other
realization, including all expenses, liabilities and advances incurred or made
by the Agent in connection therewith, including, without limitation, attorney's
fees;
second, to the Agent in an amount equal to the then unpaid principal
of and accrued interest on the Secured Obligations;
third, to the Agent in an amount equal to any other Secured
Obligations which are then unpaid; and
finally, upon payment in full of all of the Secured Obligations, to
pay to each Pledgor, or its representatives or as a court of competent
jurisdiction may direct, any surplus then remaining from such Proceeds.
9. Limitation on the Agent's Duty in Respect of Collateral.
The Agent shall not have any duty as to any Collateral in its possession or
control or in the possession or control of any agent or nominee of it or any
income thereon or as to the preservation of rights against prior parties or any
other rights pertaining thereto, except that the Purchaser shall use reasonable
care with respect to the Collateral in its possession or under its control.
Upon request of any Pledgor, the Agent shall account for any moneys received by
it in respect of any foreclosure on or disposition of the Collateral.
10. Termination of Security Interests. Upon the payment in full
of all Secured Obligations, the Agent shall release all Liens granted in its
favor and shall file appropriate UCC termination statements.
11. Reinstatement. This Agreement shall remain in full force
and effect and continue to be effective should any petition be filed by or
against any Pledgor for liquidation or reorganization, should any Pledgor become
insolvent or make an assignment for the benefit of creditors or should a
receiver or trustee be appointed for all or any significant part of any
Pledgor's assets, and shall continue to be effective or be reinstated, as the
case may be, if at any time payment and performance of the Secured Obligations,
or any part thereof, is, pursuant to applicable law, rescinded or reduced in
amount, or must otherwise be restored or returned by any obligee of the Secured
Obligations, whether as a "voidable preference", "fraudulent conveyance", or
otherwise, all as though such payment or performance had not been made. In the
event that any payment, or any part thereof, is rescinded, reduced, restored or
returned, the Secured Obligations shall be reinstated and deemed reduced only by
such amount paid and not so rescinded, reduced, restored or returned.
12. Notices. Except as otherwise provided here-in, whenever it
is provided herein that any notice, demand, request, consent, approval,
declaration or other communication shall or may be given to or served upon any
of the parties by any other party, or whenever any of the parties desires to
give or serve upon any other communication with respect to this Security
Agreement, each such notice, demand, request, consent, approval, declaration or
other communication shall be in writing and either shall be delivered in person
with receipt acknowledged or sent by registered or certified mail, return
receipt requested, postage prepaid, or by telecopy and confirmed by telecopy
answerback addressed as follows:
If to the Agent, at:
c/o Wexford Management LLC
411 West Putnam Avenue
Greenwich, Connecticut 06830
Attention: Joseph Jacobs
Telephone: (203)862-7020
Telecopier: (203)862-7320
With a copy to:
McDermott, Will & Emery
50 Rockefeller Plaza, 11th Fl.
New York, New York 10020
Attention: Stephen B. Selbst, Esq.
Telephone: (212) 547-5400
Telecopier: (212) 547-5444
If to either of the Pledgors, at:
c/o BCAM International, Inc.
1800 Walt Whitman Road
Melville, New York 11747
Attention: Michael Strauss, President
Telephone: (516) 752-7530
Telecopier: (516) 752-3558
With a copy to:
Ruskin, Moscou, Evans & Faltischek, PC
170 Old Country Road
Mineola, New York 11501
Attention: Norman Friedland, Esq.
Telephone: (516) 663-6600
Telecopier: (516) 663-6642
or at such other address as may be substituted by notice given as herein
provided. The giving of any notice required hereunder may be waived in writing
by the party entitled to receive such notice. Every notice, demand, request,
consent, approval, declaration or other communication hereunder shall be deemed
to have been duly given or served on the date on which personally delivered,
with receipt acknowledged, telecopied and confirmed by telecopy answerback or
three (3) Business Days after the same shall have been deposited in the United
States mail. Failure or delay in delivering copies of any notice, demand,
request, consent, approval, declaration or other communication to the persons
designated above to receive copies shall in no way adversely affect the
effectiveness of such notice, demand, request, consent, approval, declaration or
other communication.
13. Severability. Any provision of this Security Agreement
which is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability with-out 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.
14. No Waiver; Cumulative Remedies. The Agent shall not by any
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 Agent, and then only to the extent therein set forth. A waiver by the Agent
of any right or remedy hereunder on any one occasion shall not be construed as a
bar to any right or remedy which the Agent would otherwise have had on any
future occasion. No failure to exercise nor any delay in exercising on the part
of the Agent, 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 future exercise thereof or the
exercise of any other right, power or privilege. The rights and remedies
hereunder provided are cumulative and may be exercised singly or concurrently,
and are not exclusive of any rights and remedies provided by law. None of the
terms or provisions of this Security Agreement may be waived, altered, modified
or amended except by an instrument in writing, duly executed by the Agent and,
where applicable by each Pledgor.
15. Successors and Assigns; Governing Law. (a) This Security
Agreement and all obligations of each Pledgors hereunder shall be binding upon
the successors and assigns of such Pledgor, and shall, together with the rights
and remedies of the Agent hereunder, inure to the benefit of the Agent, all
future holders of the Notes and their respective successors and assigns. No
sales of participations, other sales, assignments, transfers or other
dispositions of any agreement governing or instrument evidencing the Obligations
or any portion thereof or interest therein shall in any manner affect the
security interest granted to the Agent hereunder.
THIS SECURITY AGREEMENT SHALL BE GOVERNED BY, AND BE CONSTRUED
AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK,
WITHOUT REGARD TO THE PROVISIONS THEREOF RELATING TO CONFLICT OF LAWS OTHER
THAN SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW.
16. Waiver of Jury Trial. EACH PLEDGOR WAIVES ALL RIGHT TO
TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS OR
REMEDIES HEREUNDER, UNDER THE AGREEMENT, THE KM AGREEMENT OR UNDER THE OTHER
TRANSACTION DOCUMENTS OR RELATING TO EACH OF THE FOREGOING.
17. Section Titles. The Section titles contained in this
Security Agreement are and shall be without substantive meaning or content of
any kind whatsoever and are not a part of the agreement between the parties
hereto.
18. Counterparts. This Security Agreement may be executed in
any number of counterparts, which shall, collectively and separately, constitute
one agreement.
IN WITNESS WHEREOF, the Agent and each Pledgor have caused this
Security Agreement to be executed and delivered by its duly authorized officer
on the date first set forth above.
BCAM INTERNATIONAL, INC.
By:_________________________
Name: Michael Strauss
Title: President
BCAM TECHNOLOGIES, INC.
By:_________________________
Name:
Title:
BCA SERVICES, INC.
By:_________________________
Name:
Title:
WEXFORD MANAGEMENT LLC, as Agent
By:_________________________
Name: Joseph Jacobs
Title: President
SCHEDULE I
FILINGS
Jurisdiction Filing Office
New York Secretary of State
New York Suffolk County Clerk
EXHIBIT VII
EXECUTION COPY
BCAM INTERNATIONAL, INC.
10%/13% CONVERTIBLE NOTE
$5,000,000New York, New York
April 30, 1998
FOR VALUE RECEIVED, BCAM INTERNATIONAL, INC. (the "Company"), a New
York corporation, hereby promises to pay to the order of IMPLEO LLC or
registered assigns, the principal sum of FIVE MILLION DOLLARS ($5,000,000) on
April 16, 1999, with interest (computed on the basis of a 360-day year,
consisting of twelve 30-day months) on the unpaid balance thereof at the rate of
10% per annum from the date hereof, payable semi-annually in arrears on March 19
and September 19 (each, an "Interest Payment Date") until the principal hereto
shall have been paid in full; provided, however, that in lieu of making interest
payments in cash, the Company may elect (the "Interest Election"), by giving
written notice to each registered holder of Notes of such election, to pay
interest in kind at the rate of 13% per annum, in which event such interest
shall be capitalized and added to the outstanding principal balance of this Note
on the date of each such Interest Election. Payments of both principal and
interest are to be made at the principal office of the Company in lawful money
of the United States of America. Any amounts of principal hereof or interest
hereon which are not paid when due or required hereunder or under the Agreement
shall thereafter bear interest until paid in full at the rate of 15% per annum.
This Note is issued pursuant to a Note Purchase Agreement dated as of
September 19, 1997, as amended, between the Company and the Purchaser (as
defined therein) (the "Agreement") and is entitled to the benefits thereof.
Payments of principal, interest, premium (if any), and all other
amounts in respect of this Note are subordinate, to the extent specified in that
certain Subordination Agreement dated as of September 19, 1997, among the
Subordinated Creditors (as such term is defined in the Subordination Agreement)
and Bank One, N.A., to the prior payment in full of the Senior Debt (as defined
in such Subordination Agreement). By accepting this Note, the holder hereof
agrees to such subordination.
This Note may not be prepaid, in whole or in part, prior to maturity
without the consent of the holder hereof.
If any payment on this Note becomes due and payable on a day other
than a Business Day (as defined in the Agreement), the maturity thereof shall be
extended to the next succeeding Business Day.
At any time or from time to time on and after September 19, 1998, the
holder of this Note may convert all or any portion of the unpaid principal
amount of this Note and accrued but unpaid interest hereon (and any interest
which the Company has elected to pay in kind in accordance with the terms
hereof) into shares of common stock of the Company (the "Conversion Privilege"),
par value $.01 per share at the Conversion Price (as such term is defined in the
Agreement) in effect as of the date of such conversion by executing and
delivering to the Company the Conversion Notice attached hereto as Exhibit 1.
Upon request by the holder hereof, the Company shall advise the holder of the
applicable Conversion Price and all other terms and conditions of the Conversion
Privilege.
As provided in the Agreement, upon surrender of the Note for
registration of transfer, duly endorsed, or accompanied by a written instrument
of transfer duly executed by the registered holder hereof or his attorney duly
authorized in writing, a new Note for a like principal amount will be issued to,
and registered in the name of, the transferee. Prior to due presentment for
registration of transfer, the Company may treat the person in whose name this
Note is registered as the owner hereof for the purpose of receiving payment and
for all other purposes, and the Company shall not be affected by any notice to
the contrary.
THIS NOTE SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS
OF THE STATE OF NEW YORK.
If an Event of Default, as defined in the Agreement, shall occur and
be continuing, the unpaid principal amount of this Note and all accrued but
unpaid interest may be declared due and payable in the manner and with the
effect provided in the Agreement.
[seal] BCAM INTERNATIONAL, INC.
Attest: By: _________________________
Title: ____________________
___________________________
EXHIBIT 1
BCAM INTERNATIONAL, INC.
10%/13% CONVERTIBLE NOTE
CONVERSION NOTICE
To the Company:
The undersigned hereby exercises the option to convert one or more of the
10%/13% Convertible Notes of the BCAM International, Inc., aggregate amount
$__________, or the portion thereof below designated, into shares of Common
Stock of the Company in accordance with the terms of such Notes, and directs
that the shares of Common Stock issuable upon conversion, together with any
check in payment of fractional shares and any Note representing any unconverted
principal amount hereof, be issued and delivered to the undersigned at the
address indicated below unless a different name has been indicated below, in
which case the undersigned will pay all transfer taxes payable with respect
thereto.
Dated: _________________
___________________________________
Signature of Holder
DELIVERY ADDRESS: Social Security or Identifying Number
___________________________________
______________________
______________________
______________________ Amount to be Converted:
$___________________________
FILL IN FOR REGISTRATION OF SHARES
AND NOTES, IF DIFFERENT FROM HOLDER
SUBMITTING THIS NOTE:
______________________
Name
______________________
Address
Social Security or Identifying Number:
______________________
EXHIBIT VIII
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OR ANY STATE SECURITIES LAWS AND, ACCORDINGLY, THE TRANSFER,
RESALE OR OTHER DISPOSITION OF SUCH SECURITIES MAY ONLY BE MADE PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR A VALID EXEMPTION
THEREFROM AND IN COMPLIANCE WITH ALL APPLICABLE STATE SECURITIES LAWS, AND BY
DELIVERY OF AN OPINION OF COUNSEL SATISFACTORY TO COUNSEL FOR THE COMPANY THAT
THERE IS SUCH AN EXEMPTION.
THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE TERMS AND
CONDITIONS OF THAT CERTAIN WARRANT AGREEMENT DATED AS OF SEPTEMBER 19, 1997,
BETWEEN IMPLEO LLC AND THE COMPANY. COPIES OF SUCH AGREEMENT MAY BE OBTAINED
UPON WRITTEN REQUEST TO THE SECRETARY OF THE COMPANY.
EXERCISABLE ONLY ON OR BEFORE 5:00 P.M. NEW YORK CITY TIME
SEPTEMBER 19, 2002
NO. W-1A 1,666,667 WARRANTS
WARRANT CERTIFICATE
BCAM INTERNATIONAL, INC.
This Warrant Certificate certifies that IMPLEO LLC, or registered
assigns, is the registered holder (the "Holder") of ONE MILLION SIX HUNDRED
SIXTY-SIX THOUSAND SIX HUNDRED SIXTY SEVEN (1,666,667) Warrants (the "Warrants")
expiring September 19, 2002 to purchase common stock of BCAM International,
Inc., a New York corporation (the "Company"). Each Warrant entitles the Holder
to purchase from the Company, on or after the issuance hereof, and on or before
5:00 p.m. New York City time on September 19, 2002 one fully paid and
nonassessable share of common stock of the Company, par value $.01 per share
("Common Stock"), at the exercise price (the "Exercise Price") at the time in
effect under the Warrant Agreement (as hereinafter defined), payable in lawful
money of the United States of America, upon surrender of this Warrant
Certificate and payment of such Exercise Price to the Company in New York, New
York, but only subject to the conditions set forth herein and in the Warrant
Agreement; provided, however, that the number or kinds of shares of Common Stock
or other securities (or in certain events other property) purchasable upon
exercise of the Warrants and the Exercise Price referred to herein may as of the
date of this Warrant Certificate have been, or may after such date be, adjusted
as a result of the occurrence of certain events, as more fully provided in the
Warrant Agreement. Payment of the Exercise Price shall be made by certified or
official bank check payable to the order of the Company.
No Warrant may be exercised after 5:00 p.m. New York City time on
September 19, 2002 (the "Expiration Date").
The Warrants evidenced by this Warrant Certificate are part of a duly
authorized issue of Warrants issued pursuant to a Warrant Agreement, dated as of
September 19, 1997 (the "Warrant Agreement"), duly executed and delivered by the
Company, which Warrant Agreement is hereby incorporated by reference in and made
a part of this instrument and is hereby referred to for a description of the
rights, limitation of rights, obligations, duties and immunities thereunder of
the Company and Holder. initially capitalized terms used but not defined herein
shall have the meanings assigned to such terms in the Warrant Agreement. A copy
of the Warrant Agreement is available for inspection at the Company, located
1800 Walt Whitman Road, Melville, New York 11747 during regular business hours.
Warrants may be exercised to purchase shares of Common Stock from the
Company at any time, or from time to time on or after the date hereof and on or
before the Expiration Date, at the Exercise Price then in effect. The Holder may
exercise the Warrants represented by this Warrant Certificate by surrendering
the Warrant Certificate with the Form of Exercise set forth hereon properly
completed and executed, together with payment of the Exercise Price at the time
in effect, to the Company. In the event that an exercise of Warrants evidenced
hereby shall be an exercise of less than the total number of Warrants evidenced
hereby, there shall be issued to Holder or Holder's assignee a new Warrant
Certificate evidencing the number of Warrants not exercised. No adjustment will
be made for any dividends on any shares of Common Stock issuable upon exercise
of this Warrant.
The Warrant Agreement provides that upon the occurrence of certain
events the Exercise Price may, subject to certain conditions, be adjusted and
under certain circumstances the Warrant may become exercisable for securities or
other assets other than the shares of Common Stock referred to on the face
hereof. If the Exercise Price is adjusted, the Warrant Agreement provides that
the number of shares of Common Stock purchasable upon the exercise of each
Warrant shall be adjusted.
The Company may, but shall not be required to, issue fractions of
shares of Common Stock or any certificates that evidence fractional shares of
Common Stock. In lieu of fractional shares of Common Stock, the Company shall
make a cash payment therefor equal in amount to the product of the applicable
fraction multiplied by the current market price then in effect.
Subject to the terms and conditions contained in the Warrant
Agreement, the Warrants represented by this Warrant Certificate are
transferable, in whole or in part, upon surrender of this Warrant Certificate to
the Company, together with a written assignment of the Warrant on the Form of
Assignment or Partial Assignment, as the case may be, set forth hereon or in
other form satisfactory to the Company, duly executed by Holder or Holder s duly
appointed legal representative, and together with funds to pay any transfer
taxes payable in connection with such transfer. Upon such surrender and
payment, a new Warrant Certificate shall be issued and delivered in the name of
the assignee and in the denomination or denominations specified in such
instrument of assignment. If less than all of the Warrants represented by this
Warrant Certificate are being transferred, a new Warrant Certificate or
Certificates shall be issued for the portion of this Warrant Certificate not
being transferred.
This Warrant Certificate may be divided or combined with other Warrant
Certificates upon surrender hereof to the Company, together with a written
notice specifying the names and denominations in which new Warrant Certificates
are to be issued, signed by Holder or Holder's duly appointed legal
representative, and together with the funds to pay any transfer taxes payable in
connection with such transfer. Upon such surrender and payment, a new Warrant
Certificate or Certificates shall be issued and delivered in accordance with
such notice.
The Company shall make no service or other charge in connection with
any such transfer or exchange of this Warrant Certificate (notwithstanding any
notation of ownership or other writing hereon made by anyone), for the purpose
of any exercise hereof, any distribution to Holder hereof, and for all other
purposes.
This Warrant Certificate shall not be valid unless countersigned by
Holder by the manual signature of one of its authorized officers.
IN WITNESS WHEREOF, the Company has caused this Warrant Certificate to
be duly executed under its corporate seal.
BCAM INTERNATIONAL, INC..
By:
Name:
Title:
Dated: April 30, 1998
Attest:
Countersigned:
BCAM INTERNATIONAL, INC.
By:
Name:
Title:
