EXHIBIT 10.16
MEXICAN STOCK PLEDGE AGREEMENT
This MEXICAN STOCK PLEDGE AGREEMENT, dated as of July 29, 1999, between
ACT MANUFACTURING, INC. ("ACT"), and CMC INDUSTRIES, INC. ("CMC", and together
with ACT, the "Pledgors"), and THE CHASE MANHATTAN BANK ("Chase"), individually
and as a collateral agent for the Lenders under the Credit Agreement defined
below, having an address at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (the
"Collateral Agent" and together with the Lenders, the "Secured Parties");
W I T N E S S E T H:
WHEREAS, The Pledgors and ACT Manufacturing Securities Corporation, are
entering into an Amended and Restated Credit Agreement of even date herewith (as
the same may be modified, amended, supplemented or restated from time to time,
the "Credit Agreement"), with Chase, as administrative, documentation,
collateral and syndication agent, and the Lenders from time to time parties
thereto;
WHEREAS, ACT and the Collateral Agent are currently parties to a Pledge
Agreement dated as of October 14, 1998 with the Collateral Agent (the "Existing
Pledge Agreement"), and the Pledgors and the Collateral Agent are entering into
an AMENDED AND RESTATED PLEDGE AGREEMENT, in which, among other things, CMC
appears as an additional "pledgor" under the Existing Pledge Agreement.
WHEREAS, a pledge constituted on Mexican stock is subject to certain
non-waivable rules of law, the Pledgors and the Collateral Agent desire to
execute a separate agreement, in addition to the AMENDED AND RESTATED PLEDGE
AGREEMENT, governing the pledges to be constituted on Mexican stock owned by
CMC.
WHEREAS, in connection with the execution and delivery of the Credit
Agreement, the Collateral Agent has requested that the Pledgors, and the
Pledgors have agreed to, enter into this Mexican Stock Pledge Agreement,
pursuant to which the Pledgors are pledging and granting a security interest in
the Pledged Collateral of Mexican Subsidiaries (as defined below) in favor of
the Collateral Agent for the benefit of the Secured Parties.
NOW, THEREFORE, in consideration of the willingness of the Secured Parties
to enter into the Credit Agreement and of the Lenders to agree, subject to the
terms and conditions set forth therein, to make the Loans and issue Letters of
Credit to the Borrowers pursuant thereto, and for other good and valuable
consideration, receipt of which is hereby acknowledged, it is hereby agreed as
follows:
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ARTICLE I
DEFINITIONS
Except as otherwise expressly defined herein, all capitalized terms shall
have the meaning ascribed to them in the Credit Agreement.
1.1. Industrias. "Industrias" shall mean CMC Industrias ▇▇▇▇▇▇▇▇▇▇, ▇.▇.
de C.V., a subsidiary of CMC Industries, Inc.
1.2. Inmuebles. "Inmuebles" shall mean CMC Inmuebles, S.A. de C.V., a
subsidiary of CMC Industries, Inc.
1.3. Mexican Subsidiaries. "Mexican Subsidiaries" shall mean Industrias,
Inmuebles and Servicios. For purposes of the Credit Agreement, it shall be
understood that the Mexican Subsidiaries form part of the Foreign Subsidiaries
(as defined in the Credit Agreement).
1.4. Servicios. "Servicios" shall mean Servicios y Administracion de
Sonora, S.A. de C.V., a subsidiary of CMC Industries, Inc.
ARTICLE II
SECURITY INTEREST
The Pledgors hereby as depositors deposit with, and as pledgors pledge to,
the Collateral Agent, for the benefit of the other Secured Parties, with all the
responsibilities of a depositary: (a) the shares of capital stock as listed on
Schedule I hereto (the "Pledged Stock of the Mexican Subsidiaries") of the
Mexican Subsidiaries listed on Schedule I hereto, (b) the instruments,
agreements and other documents in favor of either Pledgor as listed on Schedule
II hereto (the "Pledged Debt Documents of the Mexican Subsidiary"), and (c) any
and all other additional investment property, securities, instruments and
chattel paper which may from time to time be pledged by the Pledgors to the
Collateral Agent for the benefit of the Secured Parties (hereinafter referred to
collectively as the "Pledged Collateral of Mexican Subsidiaries").
ARTICLE III
SECURED OBLIGATIONS
The security interest hereby granted shall secure the due and punctual
payment and performance of the following liabilities and obligations of the
Pledgors (herein called the "Secured Obligations"):
(a) Principal of and premium, if any, and interest on, and fees, charges
and other amounts due in respect of the Loans and any Letter of Credit;
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(b) Any and all other obligations of the Pledgors to the Secured Parties
under the Credit Agreement or under any agreement or instrument relating
thereto, all as amended from time to time, including without limitation any
Interest Rate Protection Agreements; and
(c) Any and all other obligations and Indebtedness of the Pledgors to the
Secured Parties or any of them, whether direct or indirect, absolute or
contingent, due or to become due, or now existing or hereafter arising,
including without limitation any and all other fees, premiums, and penalties
owing by the Pledgors to the Secured Parties or any of them.
ARTICLE IV
SPECIAL WARRANTIES AND COVENANTS OF THE PLEDGORS
The Pledgors hereby warrant and covenant to the Secured Parties that:
(a) The Pledged Collateral of Mexican Subsidiaries is duly and validly
pledged to the Collateral Agent, in favor of the Collateral Agent for the
benefit of the Secured Parties, and each Pledgor warrants and will defend the
Collateral Agent against all claims and demands of all Persons whomsoever.
(b) The Pledgors have good title to the Pledged Collateral of Mexican
Subsidiaries, free and clear of all Liens of every nature whatsoever except as
expressly set forth or permitted under the Credit Agreement.
(c) All of the Pledged Collateral of Mexican Subsidiaries has been duly
and validly issued and is fully paid and nonassessable.
(d) If any additional share of capital stock of any class of the Mexican
Subsidiaries or if any promissory notes of the Mexican Subsidiaries or other
securities of the Mexican Subsidiaries are acquired by any Pledgor after the
date hereof, the same shall constitute Pledged Collateral of Mexican
Subsidiaries and shall be deposited with and pledged to the Collateral Agent for
itself and for the benefit of the other Secured Parties as provided in Article
II hereof simultaneously with such acquisition; provided, however, that such
Pledge shall be constituted in the current pledge proportion, that is: 324:500
(Number of Shares that are to be pledged of each of the Mexican Subsidiary
versus Number of Outstanding Shares Capital Stock of each of the Mexican
Subsidiaries). The Pledgors will promptly notify the Collateral Agent of the
date and amount of any loans made from time to time by either Pledgor to the
Mexican Subsidiaries as permitted by the Credit Agreement.
(e) No Pledgor will sell, convey or otherwise dispose of any of the Pledge
Stock of the Mexican Subsidiaries, nor will any Pledgor create, incur or permit
to exist any Lien whatsoever with respect to any of the Pledged Collateral of
Mexican Subsidiaries, other than Liens on or in the Pledged Collateral of
Mexican Subsidiaries created hereby or which are otherwise required or permitted
under the Credit Agreement.
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(f) Neither Pledgor will consent to or approve the issuance of any
additional share of capital stock of any class of the Mexican Subsidiaries,
except for the issuance of additional shares of capital stock to the Pledgors as
permitted by and in accordance with the terms of the Credit Agreement, provided
that any such additional shares of capital stock shall be deposited with and
pledged to the Collateral Agent for itself and for the benefit of the Secured
Parties simultaneously with such issuance as provided in Article II and Article
IV (d) hereof.
(g) The Pledged Debt Documents of the Mexican Subsidiaries evidence the
amount of outstanding indebtedness for money borrowed of the respective issuers
thereof indicated on Schedule II hereto.
(h) If any additional instruments, agreements or other documents are
acquired by either Pledgor evidencing any additional indebtedness owing to
either Pledgor, the same shall constitute a part of the Pledged Debt Documents
of the Mexican Subsidiaries and Pledged Collateral of the Mexican Subsidiaries
and shall be deposited with and pledged to the Collateral Agent for itself and
for the benefit of the other Secured Parties as provided in Article II and
Article IV (d) hereof simultaneously with such acquisition.
ARTICLE V
DISTRIBUTION
In case, upon dissolution, winding up, liquidation or reorganization of the
Mexican Subsidiaries whether in bankruptcy, insolvency or receivership
proceedings or upon assignment for the benefit of creditors or any other
marshaling of assets and liabilities of the Mexican Subsidiaries or otherwise,
any sum shall be paid or any property shall be distributed upon or with respect
to any or the Pledged Collateral of Mexican Subsidiaries, such sum shall be
pledged over to the Collateral Agent as collateral security for the Secured
Obligations. In case any stock dividend shall be declared on any of the Pledged
Collateral of Mexican Subsidiaries, or any share of stock or piece thereof shall
be issued pursuant to any stock split involving any of the Pledged Collateral of
Mexican Subsidiaries, or any distribution of capital (excluding ordinary cash
dividends, that are to be delivered to Pledgors, pursuant to Article VIII) shall
be made on any of the Pledged Collateral of Mexican Subsidiaries, or any
property shall be distributed upon or with respect to the Pledged Collateral of
Mexican Subsidiaries pursuant to recapitalization or reclassification of the
capital of the Mexican Subsidiaries, the shares or other property so distributed
shall be pledged and delivered to the Collateral Agent to be held as collateral
security for the Secured Obligations.
ARTICLE VI
EVENTS OF DEFAULT
There shall exist a default under this Mexican Stock Pledge Agreement upon the
happening of any of the following events or conditions (herein called "Events of
Default"):
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(a) Default shall be made in the due and punctual payment of any principal
of or premium, if any, or interest on any of the Secured Obligations as and when
the same shall become due and payable (whether at maturity or at a date fixed
for any prepayment or installment or by declaration or acceleration or
otherwise) and such default shall continue beyond the expiration of the
applicable period of grace, if any; or
(b) The breach, violation or other non-performance of any term, covenant,
condition, agreement or obligation of the Pledgors contained herein; or
(c) Any other Event of Default (as defined or described in the Credit
Agreement) shall occur.
ARTICLE VII
RIGHTS OF THE SECURED PARTIES
In case there shall exist an Event of Default, the Collateral Agent may request
the court approval of the sale of the Pledged Collateral of Mexican
Subsidiaries, with the proceeds of the sale, once it is authorized and
consummated, payable to the Collateral Agent, to hold as collateral security, in
accordance with the terms of article 341 of the Ley General de Titulos y
Operaciones de Credito (General Law of Negotiable Instruments and Credit
Operations, hereinafter referred as the "GLCO"), until the final judgment under
the Events of Default is ruled.
ARTICLE VIII
VOTING POWER AND OTHER CORPORATE RIGHTS
The Collateral Agent and Pledgors agree that all rights to which the holders of
the Pledged Collateral of Mexican Subsidiaries are entitled, including without
limitation, voting rights, dividends, and capital increases, shall be exercised
by Pledgors through a proxy granted by the Collateral Agent to a person
appointed and instructed by either Pledgor, in the form of Exhibit A hereto;
provided, however, that if there shall exist an Event of Default, the Collateral
Agent may revoke such proxy by written notice, and will directly exercise the
voting power and all other corporate rights with respect to any or all of the
Pledged Collateral of Mexican Subsidiaries, receive and retain, as collateral
security for the Secured Obligations, any and all dividends or other
distributions at any time and from time to time declared or made upon any of the
Pledged Collateral of Mexican Subsidiaries, and exercise any and all rights of
payment, conversion, exchange, subscription or any other rights, privileges or
options pertaining to the Pledged Collateral of Mexican Subsidiaries.
For information purposes, the Parties agree as follows, as provided in article
338 of the GLCO: "El acreedor prendario, ademas de estar obligado a la guarda y
conservacion de los bienes o titulos dados en ▇▇▇▇▇▇, ▇▇▇▇ ejercitar todos los
derechos inherenetes a ellos, siendo los gastos por cuenta del deudor, y
debiendo aplicarse en su oportunidad al pago del credito todas las sumas que
▇▇▇▇ percibidas, salvo pacto en contrario. Es nulo todo convenio que limite la
responsabilidad que para el acreedor establece este articulo." ("The creditor
who holds a pledge,
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in addition to being obliged to keep and preserve the goods or instruments
pledged, must exercise all the rights inherent in them, all expenses to be for
account of the debtor, and must apply all payments received to paying off the
loan, unless there be an agreement to the contrary. Any agreement which limits
the liability of the creditor, as stipulated in this article, shall be null.")
ARTICLE IX
OTHER AGREEMENTS
Notwithstanding any other provision of this Mexican Stock Pledge Agreement, the
rights of the parties hereunder are subject to the provisions of the Credit
Agreement, including the provisions thereof pertaining to the rights and
responsibilities of the Collateral Agent. In the event that any provision of
this Mexican Stock Pledge Agreement is in conflict with the terms of the Credit
Agreement, the Credit Agreement shall control. It is agreed by Pledgors and the
Collateral Agent, that this Mexican Stock Pledge Agreement only governs the
pledges of the Pledged Collateral of Mexican Subsidiaries, and all other pledges
made to guarantee the Secured Obligations of the Credit Agreement shall be
governed by the Amended and Restated Pledge Agreement or Other Pledge
Agreements. Unless the context shall otherwise clearly indicate, the terms
"Secured Party" and "Secured Parties" as used herein shall be deemed to include
the Collateral Agent acting on behalf of the Secured Parties pursuant to the
Credit Agreement. The term "Collateral Agent" as used herein shall include The
Chase Manhattan Bank or any other Person acting as Collateral Agent for the
Secured Parties pursuant to the terms of the Credit Agreement.
ARTICLE X
MISCELLANEOUS
10.1 Waivers. No delay or omission on the part of the Secured Parties in
exercise any right hereunder shall operate as a waiver of such right or of any
other right hereunder. Any waiver of any such right on any one occasion shall
not be construed as a bar to or waiver of any such right on any future occasion.
10.2. Termination; Assignment, etc. This Mexican Stock Pledge Agreement
and the security interest in the Pledged Collateral of Mexican Subsidiaries
created hereby shall terminate when all of the Secured Obligations have been
paid and finally discharged in full; provided that the Lenders are no longer
obligated to make Loans or issue Letters of Credit under the Credit Agreement.
No waiver by the Collateral Agent or by any other holder of Secured Obligations
of any default shall be effective unless in writing nor operate as a waiver of
any other default or of the same default on a future occasion. In the event of a
sale or assignment by any Secured Party of all or any of the Secured Obligations
held by it, any Secured Party may assign or transfer its rights and interest
under this Mexican Stock Pledge Agreement in whole or in part to the purchaser
or purchaser of such Secured Obligations, whereupon such purchaser or purchasers
shall become vested with all of the powers and rights of such Secured Party
hereunder.
10.3. Reinstatement. Notwithstanding the provisions of Section 10.2, this
Mexican Stock Pledge Agreement shall continue to be effective or be reinstated,
as the case may be, if at
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any time any amount received by any Secured Party in respect of the Secured
Obligations is rescinded or must otherwise be restored or returned by any such
Secured Party upon the insolvency, bankruptcy, dissolution, liquidation or
reorganization of any of the Mexican Subsidiaries, either Pledgor or any other
Credit Party or upon the appointment of any intervener or conservator of, or
trustee or similar official for, any of the Borrowers (as defined in the Credit
Agreement), either Pledgor, or any other Credit Party or any substantial part of
their respective properties, or otherwise, all as though such payments had not
been made.
10.4. Governmental Approvals, etc. Upon the exercise by the Collateral
Agent of any power, right, privilege or remedy pursuant to this Mexican Stock
Pledge Agreement which requires any consent, approval, qualification or
authorization of any governmental authority or instrumentality, the Pledgors
will execute and deliver, or will cause the execution and delivery of, all
applications, certificates, instruments and other documents and papers that the
Collateral Agent may be required to obtain for such governmental consent,
approval, qualification or authorization.
10.5. Restrictions on Transfer, etc. To the extent that any restriction
imposed by the charter or by-laws of the Mexican Subsidiaries or any other
document or instrument would in any way affect or impair the pledge of the
Pledged Collateral of Mexican Subsidiaries hereunder or the exercise by the
Collateral Agent of any right granted hereunder, each Pledgor hereby represents
and warrants that it has caused the Borrowers and the Mexican Subsidiaries to
take all necessary action to waive such restrictions, and each Pledgor hereby
agrees that it will take any further action which the Collateral Agent may
reasonably request in order that the Collateral Agent may obtain and enjoy the
full rights and benefits granted to the Collateral Agent by this Mexican Stock
Pledge Agreement free of any such restrictions.
10.6. Notices. All notices, consents, approvals, elections and other
communications hereunder shall be in writing (whether or not the other
provisions of this Mexican Stock Pledge Agreement expressly so provide) and
shall be deemed to have been duly given if delivered personally or by facsimile
transmission or sent by registered or certified mail, postage prepaid, as
follows:
If to ACT or CMC, to:
CMC Industrias ▇▇▇▇▇▇▇▇▇▇, ▇.▇. de C.V.
Carretera International, ▇▇▇▇▇▇▇▇▇▇-▇▇▇▇▇▇▇ Km 8.5
Sonora, Mexico
with a copy to:
ACT Manufacturing, Inc.
▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Chief Financial Officer
and
▇
▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, LLP
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇
If to the Collateral Agent:
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ACT Manufacturing Account Representative
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
10.7. Severabililty. In case any provision in this Mexican Stock Pledge
Agreement shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.
10.8. Counterparts. This Mexican Stock Pledge Agreement may be executed in
any number of counterparts and by the different parties hereto on separate
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.
10.9. Governing Law. This Mexican Stock Pledge Agreement, the proxy that
shall be granted by the Collateral Agent in accordance with Article VIII, and
the endorsement of the respective share certificates, shall be construed in
accordance with and governed by the laws in force in the United Mexican States
without regard to the conflict of laws provisions thereof, provided however,
that the Credit Agreement, the Amended and Restated Pledge Agreement, and any
other agreement relating thereto, shall be governed by the laws provided for in
such agreements.
10.10. Jurisdiction. The parties agree that the Courts having jurisdiction
to construe, and order the execution or performance of this Mexican Stock Pledge
Agreement, the proxy that shall be granted by the Collateral Agent in accordance
with Article VIII, and the endorsement of the respective share certificates,
shall be the Courts of Mexico, Distrito Federal; provided, however, that the
Credit Agreement, the Amended and Restated Pledge Agreement, and any other
agreement relating thereto, shall be subject to the Courts provided for in such
agreements.
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IN WITNESS WHEREOF, the parties have executed this Mexican Stock Pledge
Agreement as sealed instrument as of the date first above written.
PLEDGORS
ACT MANUFACTURING, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Chief Financial Officer
CMC INDUSTRIES, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Chief Financial Officer
COLLATERAL AGENT
THE CHASE MANHATTAN BANK
As Collateral Agent for the Secured Parties
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Vice President
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