Exhibit 10.5
 
 
 
SECOND RANKING SHARE PLEDGE AGREEMENT
 
 
 
 
 
BETWEEN:
 
 
INDUFLEX HOLDING
 
(the Pledgor)
 
 
AND:
 
 
ROGERS CORPORATION,
 
(the Beneficiary)
 
 
 
 
WITH RESPECT TO THE SHARES IN
 
ROGERS INDUFLEX NV
 
 
 
 
 
 
31 October 2008
 
 
 

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SECOND RANKING SHARE PLEDGE AGREEMENT
 
BETWEEN:
 
(1)    INDUFLEX HOLDING, a Belgian company with registered office at
Ottergemsesteenweg 799, 9000 Ghent (Belgium) and registered with the Crossroads
ING Bank of Enterprises under enterprise number 0807.149569,
 
(the "Pledgor" or the “Buyer”);
 
AND:
 
(2)    ROGERS CORPORATION, a Massachusetts corporation having its headquarters
at One Technology Drive, Rogers, CT 06263,
 
(the "Pledgee" or the "Beneficiary");
 
WHEREAS:
 
(A)
On 31 October 2008, the Pledgor as the buyer and the Pledgee as the seller have
entered into a stock purchase agreement with respect to all of the shares in
Rogers Induflex NV (formerly UCB Induflex NV), a company limited by shares
("naamloze vennootschap" / "société anonyme") incorporated and validly existing
under Belgian law, with registered offices at Ottergemsesteenweg 799, 9000 Ghent
(Belgium) and registered with the Crossroads Bank of Enterprises under
enterprise number 0427.693.784 (the "Company") (the "Stock Purchase Agreement").

 
(B)
Pursuant to Article 2.f (Purchase and Sale of Shares - Security and
Subordination) of the Stock Purchase Agreement, the Pledgor has undertaken to
secure all amounts payable by it under the Stock Purchase Agreement by way of a
pledge on the shares in the Company.

 
(C)
The Pledgor owns 6,036 registered shares in the Company, representing 100% of
the issued shares of the Company.

 
(D)
On or around 31 October 2008, the Pledgor and ING Bank have entered into a first
ranking share pledge agreement with respect to 100% of the shares in the Company
(the "First Ranking Share Pledge Agreement") as security for any and all
obligations owing by the Pledgor to ING Bank arising out of or in connection
with a credit agreement between the Pledgor and ING Bank dated 31 October 2008.

 

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(E)
It is a condition under the Stock Purchase Agreement that this second ranking
pledge be granted by the Pledgor, subject to the terms and the conditions of
this agreement (the "Agreement").

 
IT HAS BEEN AGREED AS FOLLOWS:
 
1.  
DEFINITIONS

 
1.1  
Definitions

 
In this Agreement, unless the context otherwise requires:
 
1872 Law means the Belgian law of 5 May 1872 on commercial pledges.
 
2004 Law means the Belgian law of 15 December 2004 on financial collateral.
 
Enforcement Event means a breach by Buyer of any of its obligations and
liabilities vis-à-vis the Beneficiary pursuant to Clause 2(b) (ii), (iii) and
(iv) or pursuant to Clause 2(g) of the Stock Purchase Agreement provided that
the Pledgor does not dispute the underlying claim or that the Pledgor has been
ordered to pay the underlying claim (in whole or in part) in accordance with the
provisions of Clause 9.f of the Stock Purchase Agreement.
 
Enforcement Notice means a written notice from the Pledgee to the Pledgor by
which the Pledgee notifies the Pledgor of the occurrence of an Enforcement Event
and of its intention to enforce the Pledge upon the expiry of the Notice Period.
 
First Ranking Share Pledge Agreement has the meaning set out in the recitals to
this Agreement.
 
Notice Period means the period starting from the date of the issuance of the
Enforcement Notice to the date falling 5 business days after such date of
issuance.
 
Pledge means the second ranking pledge over the Shares created pursuant to or
arising under this Agreement.
 
Secured Liabilities means any and all obligations and liabilities of the Pledgor
vis-à-vis the Beneficiary pursuant to Clause 2(b) (ii), (iii) and (iv) or
pursuant to Clause 2(g) of the Stock Purchase Agreement.
 
Shares means the 6,036 registered shares numbered 1 to 6,036 inclusive that the
Pledgor currently owns in the Company.
 
Stock Purchase Agreement has the meaning set out in the recitals to this
Agreement.
 
A Clause is a reference to a clause of this Agreement.
 
In this Agreement, each reference to a document will be deemed to be a reference
to such document as amended, extended and/or supplemented from time to time.
 
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1.2  
Successors

 
The expressions Beneficiary and Pledgor include their respective successors.
 
1.3  
Headings

 
Clause headings are inserted for convenience of reference only and will not
serve to interpret this Agreement.
 
2.  
PLEDGE

 
2.1
The Pledgor hereby grants to the Beneficiary a second ranking pledge ("pand in
tweede rang" / "gage de second rang") over the Shares, ranking immediately after
the pledge on the Shares granted to ING Bank under the First Ranking Share
Pledge Agreement, as a continuing security for the due performance of the
Secured Liabilities. The Pledgor and the Beneficiary acknowledge that the
obligations of the Pledgor under this Clause 2 are of a commercial nature and
that this Agreement henceforth constitutes a commercial pledge in accordance
with the 1872 Law and an in rem security agreement in accordance with the 2004
Law.

 
3.
THE SHARES

 
3.1
The Shares are in registered form. The Pledgor will not permit the conversion of
the Shares into book-entry or dematerialized form.

 
3.2
The Pledgor will arrange for the following notice to be recorded and dated in
the Company's share register and signed therein on behalf of the Pledgor and the
Beneficiary simultaneously with the execution hereof:

 
"6.036 aandelen op naam, genummerd van 1 tot en met 6.036  zijn in tweede rang
in pand gegeven ten voordele van ROGERS CORPORATION overeenkomstig de
overeenkomst tot inpandgeving van aandelen in tweede rang ("Second Ranking Share
Pledge Agreement") afgesloten op [datum]. Dit pand volgt in rang onmiddellijk na
het pand verschaft aan ING Bank overeenkomstig de overeenkomst tot inpandgeving
van aandelen afgesloten op [date] (First Ranking Share Pledge Agreement). Deze
inpandgeving in tweede rang werd ingeschreven op [datum]."
 
The Beneficiary hereby appoints the Pledgor as its special attorney for the
purpose of recording the pledge in the Company's share register,
 
4.
REPRESENTATIONS, WARRANTIES AND UNDERTAKINGS

 
4.1
Representations and warranties

 
The Pledgor represents and warrants to the Beneficiary that:
 
 
(a)
it is the owner of the Shares and has not granted any security interest in
respect of the Shares save for the first ranking pledge granted by the Pledgor
to ING Bank under the First Ranking Share Pledge Agreement.

 
 
(b)
this Agreement constitutes legally binding obligations for the Pledgor,
enforceable in accordance with its terms and creates a valid second ranking
pledge over the Shares; and

 
 
(c)
the Shares are capable of being pledged hereunder without the consent of the
Company, or any third party, save for the consent required from ING Bank under
the First Ranking Share Pledge Agreement, which has been duly and validly
obtained.

 

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4.2
Undertakings

 
At any time and until the Pledge will have been finally discharged in accordance
with Clause 8 (Discharge of the Pledge) the Pledgor:
 
 
(a)
will procure that the Shares will at all times represent 75% + 1 of the voting
rights attached to all shares of the Company;.

 
 
(b)
not allow that additional shares are created unless such shares are subscribed
to at fair market value.

 
 
(c)
undertakes not to create or permit the existence of any security interest in
respect of the Shares or any part thereof (unless ranking behind the Pledge and
except for the first ranking pledge granted by the Pledgor to ING BANK under the
First Ranking Share Pledge Agreement) without the prior written consent of the
Pledgee.

 
 
(d)
shall procure that no executory seizure ("uitvoerend beslag" / "saisie
exécutoire") will be made on the Shares and that any conservatory seizure
("bewarend beslag" / "saisie conservatoire") thereon will be lifted within 90
days of it first being made.

 
 
(e)
will cooperate with the Beneficiary and sign or cause to be signed all such
further documents and take all such further action as the Beneficiary may from
time to time reasonably request to create, perfect and protect the Pledge and to
carry out the provisions and purposes of this Agreement.

 
 
(f)
will not take any initiative, adopt or vote in favour of any resolutions to
dissolve the Company, and defend (and procure the Company to defend) any third
claims seeking to obtain the dissolution of the Company.

 
 
(g)
shall procure that (i) the Shares remain free and clear of any security interest
save for the provisions of the first ranking pledge granted by the Pledgor to
ING Bank under the First Ranking Share Pledge Agreement (ii) that there are no
limitations, whether pursuant to the Articles or to any agreement, to the
transferability of the Pledged Assets or to the exercise of the voting rights
attached to the Shares (iii) that the Shares are not certificated and (iv) that
there is no cause for suspension of the voting rights attached to the Shares.

 
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5.
RIGHTS ATTACHING TO THE SHARES

 
5.1
Voting Rights

 
(a)
As long as no Enforcement Event has occurred, the Pledgor will be entitled to
exercise its voting rights in respect of the Shares in a manner which is not
inconsistent with any provision of this Agreement.

 
(b)
If an Enforcement Event has occurred, and subject to the provisions of the First
Ranking Share Pledge Agreement, the Pledgor will cast the votes attaching to its
Shares in accordance with the Beneficiary's instructions, which instructions the
Pledgor will seek in due time.

 
5.2
Cash and non-cash returns on the Shares

 
(a)
If and as long as no Enforcement Event has occurred, all dividends on the Shares
will be paid to the Pledgor.

 
(b)
Subject to the provisions of the First Ranking Share Pledge Agreement, in the
event that an Enforcement Event has occurred, all dividends and any other cash
return on the Shares will be paid exclusively to the Beneficiary, which will
apply the same towards the Secured Liabilities.

 
(c)
The Pledge will not in any way be affected by any regrouping or split of the
Shares or by any similar transaction and the securities resulting from any such
transaction will be part of the Shares.

 
6.
CONTINUING SECURITY AND OTHER MATTERS

 
6.1
Continuing Security

 
(a)
The Pledge will be a continuing security for the due performance of the Secured
Liabilities, and will remain in force until expressly released in accordance
with Clause 8 (Discharge of the Pledge).

 
6.2
Rights Additional

 
All the rights of the Beneficiary pursuant to this Agreement will be in addition
to any other right vested in the Beneficiary and all such rights may be
exercised from time to time and as often as the Beneficiary may deem expedient.
The Pledgor waives any right it may have of first requiring the Beneficiary to
proceed against or claim payment from any other party, or enforce any guarantee
or security before enforcing the Pledge.
 
6.3
Preservation of the Pledge in the event of novation

 
In accordance with Articles 1278 to 1281 (inclusive) of the Belgian Civil Code
and without prejudice to the scope of the Secured Liabilities, the Pledgor and
the Beneficiary agree that in the event of novation of all or any part of the
Secured Liabilities or the change or replacement of the Beneficiary, the Pledge
will be maintained automatically, without any further formality or consent, to
secure the Secured Liabilities as novated, in favour of the Beneficiary.
 
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6.4
Waiver

In general, and to the extent applicable, the Pledgor waives the benefit of
Articles 1285, 2022, 2026 and 2037 of the Civil Code.
 
7.
ENFORCEMENT

 
Following the occurrence of an Enforcement Event which has not been cured during
the Notice Period, and subject to the provisions of the First Ranking Share
Pledge Agreement, the Beneficiary will have the right, upon expiry of the Notice
Period:
 
 
(i)
to enforce the Pledge in accordance with the legal provisions applicable to the
enforcement of a pledge of shares at the time of such enforcement;

 
 
(ii)
and in particular,

 
 
-
to realize ("uitwinnen" / "réaliser") the Shares, without prior judicial
consent, to exercise its priority on the Shares, and to dispose of the Shares in
accordance with the applicable Belgian regulations, in particular Article 8, §1
of the 2004 Law, as applicable at the moment of the realization ("uitwinning" /
"realisation") of the Shares;

 
 
-
notwithstanding the rights of the Beneficiary as set out in the paragraph above
and in accordance with Article 8, §2 of the 2004 Law, to appropriate itself
("zich toe-eigenen" / "s’approprier") the Shares. An independent auditor from a
reputable firm jointly appointed by the Pledgor and the Pledgee, or if no
agreement can be reached on the identity of the auditor, by the president of the
Instituut der Bedrijfsrevisoren / Institut des Reviseurs d'Entreprise at the
first request of either Party, shall, within a timeframe of one month,
determine, in a final manner and without recourse, the fair market value of the
Shares taking into account customary valuation methods. Should the value of the
appropriated Shares be higher than the outstanding amount of the Secured
Liabilities secured by this Agreement, then the Beneficiary can only appropriate
itself such part of the Shares as corresponds to the outstanding amount of the
Secured Liabilities secured by this Agreement. The Beneficiary unilaterally
determines which Shares it will appropriate itself.

 
8.
DISCHARGE OF THE PLEDGE

 
8.1
The Pledge will be discharged by, and only by, the express release thereof
granted by the Beneficiary, in accordance with the provisions of the Stock
Purchase Agreement or by means of final court decision or arbitral award, which
can no longer be appealed, ordering the release of the Pledge.

 
8.2
The Beneficiary shall grant an express release of this Pledge, promptly upon
demand of the Pledgor, as soon as all Secured Liabilities shall have been
finally discharged, it being understood that all Secured Liabilities shall have
been discharged if either the obligations of the Pledgor pursuant to Clause 2
(b) (ii), (iii) and (iv), either the obligations of the Pledgor pursuant to
Clause 2(g) shall have been discharged. The Beneficiary shall inform the Company
of such release, and shall provide the Pledgor with a power of attorney in
favour of the Pledgor or any person designated by it for the purpose of
recording the release of the Pledge in the Company's share register. Forthwith
upon such release being granted, the Beneficiary shall return to the Pledgor the
other Shares, if any, and the Pledgor shall take delivery thereof.

 
 
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8.3
Any release or discharge of the Pledge will be null and void and without effect
if any payment received by the Beneficiary and applied towards satisfaction of
all or part of the Secured Liabilities is avoided or declared invalid as against
the creditors of the maker of such payment and the Beneficiary will be entitled
to enforce the Pledge as if such release or discharge had not occurred.

 
9.
EXPENSES

 
All expenses and duties in connection with this Agreement shall be borne in
accordance with Clause 9 §h) of the Stock Purchase Agreement.
 
10.
GENERAL

 
10.1
Notices

 
All notices or other communications under or in connection with this Agreement
will be given in accordance with clause 9.a (General Provisions Notices) of the
Stock Purchase Agreement.
 
10.2
No Waiver

 
No failure or delay by the Beneficiary to exercise any right, power or remedy
under this Agreement will operate as a waiver thereof nor will any single or
partial exercise or waiver of any right, power or remedy. The remedies provided
in this Agreement are cumulative and are not exclusive of any remedies provided
by law.
 
10.3
Severability

 
Each of the provisions of this Agreement is several and distinct from the others
and if at any time one or more of such provisions is or becomes invalid,
illegal or unenforceable the validity, legality and enforceability of the
remaining provisions hereof will not in any way be affected or impaired thereby.
 
In case of any such illegality, invalidity or unenforceability, the parties will
negotiate in good faith with a view to agreeing on the replacement of such
provision by a provision which is legal, valid and enforceable and which is to
the fullest extent practicable in accordance with the intents and purposes of
this Agreement and which in its economic effect comes as close as practicable to
the provision being replaced.
 
10.4
Counterparts

 
This Agreement may be executed in any number of counterparts. This has the same
effect as if the signatures on the counterparts were on a single copy of this
Agreement.
 
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10.5
Governing Law

 
This Agreement will be governed by and interpreted in accordance with Belgian
law.
 
10.6
Jurisdiction

 
All disputes arising in connection with this Agreement shall be settled
exclusively by the courts of Ghent.
 
Made in 2 originals, one of which will be held by the Pledgor and one of which
will be held by the Beneficiary, on 31 October 2008.
 

Induflex Holding NV
as Pledgor

 
/s/ Hans
Vanoorbeek                                                                           
Name:  Hans Vanoorbeek, as Managing Director of Gevepe BVBA
Title:   Managing Director

ROGERS CORPORATION
as Beneficiary

 
 
/s/ Luc Van
Eenaeme                                                                           
Name:  Luc Van Eenaeme
Title:   Vice President Europe
 
 
 
 
 
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