EXHIBIT 4.16.2
COLLATERAL SECURITY
STOCK PLEDGE AGREEMENT
This AGREEMENT is made and entered into on June 30, 1997, by and
between DDL ELECTRONICS, INC. ("Pledgor" and "Debtor"), and THOMAS M.
WHEELER ("Pledgee" and "Creditor").
RECITALS
At the time of the execution of this Agreement the Pledgee lent the
Debtor, TWO MILLION DOLLARS ($2,000,000.00) evidenced by the promissory
note of the Pledgor dated June 30, 1997.
To induce the Pledgee to make the loan, the Pledgor has agreed to
pledge certain stock to the Pledgee as security for the repayment of the
loan.
It is therefore agreed:
PLEDGE
1. In consideration of the sum TWO MILLION DOLLARS ($2,000,000.00)
lent to the Pledgor by the Pledgee, receipt of which is acknowledged,
the Pledgor grants a security interest to the Pledgee in instruments of
the following describe description:
ALL OF THE ISSUED AND OUTSTANDING COMMON AND PREFERRED STOCK
OF SMTEK, INC. A CALIFORNIA CORPORATION, EVIDENCED BY
CERTIFICATE NUMBER 50 STANDING IN THE NAME OF DDL ELECTRONICS,
INC. AND REPRESENTING 250,000 SHARES OF THE COMMON STOCK OF
SMTEK, INC.
Said certificates shall be duly endorsed in blank and delivered to
the Pledgee with this Agreement. The Pledgor appoints the Pledgee as
his attorney-in-fact to arrange for the transfer of the pledged shares
on the books of the issuer to the name of the Pledgee. The Pledgee
shall hold the pledged shares as security for the repayment of the loan,
and shall not encumber or dispose of the shares except in accordance
with the provisions of Paragraph 8 of this Agreement.
DIVIDENDS
2. During the term of this pledge, all dividends and other amounts
received by the Pledgee as a result of the Pledgee's record ownership of
the pledged shares shall be applied to the payment of the principal and
interest on the loan. This provision shall not apply to intercompany
transfers in the ordinary course of business.
VOTING RIGHTS
3. During the term of this pledge, and as long as the Pledgor not in
default in the performance of any of the terms of this Agreement or in
the payment of the principal or interest of the loan, the Pledgor shall
have the right to vote the pledged shares on all corporate questions.
The Pledgee shall execute due and timely proxies in favor of the Pledgor
to this end.
REPRESENTATIONS
4. The Pledgor warrants and represents that there are no
restrictions on the transfer of any of the pledged shares, other than
may appear on the face of the certificates and that the Pledgor has the
right to transfer the shares free of any encumbrances and without
obtaining the consents of the over shareholders.
ADJUSTMENT
5. In the event that, during the term of this pledge, any share
dividend, reclassification, readjustment, or other change is declared or
made in the capital structure of the company that has issued the pledged
shares, all new, substituted, and additional shares or other securities
issued by reason of any change shall be held by the Pledgee in the same
manner as the shares originally pledged under this Agreement.
WARRANTS AND RIGHTS
6. In the event that during the term of this pledge, subscription
warrants or any other tights or options shall be issued in connection
with the pledged shares, the warrants, rights, and options shall be
immediately assigned by the Pledgee to the Pledgor, and if exercised by
the Pledgor, all new shares or other securities so acquired by the
Pledgor shall be immediately assigned to the Pledgee to be held in the
same manner as the shares originally pledged under this Agreement.
PAYMENT OF LOAN
7. On payment at or before maturity of the principal and interest of
the loan, less amounts received and applied by the Pledgee in reduction
of the loan, the Pledgee shall transfer to the Pledgor all the pledged
shares and all rights received by the Pledgee as a result of the
Pledgee's record ownership of the pledged shares.
DEFAULT
8. In the event that the Pledgor defaults in the performance of any
of the terms of this Agreement, or in the payment at maturity of the
principal or interest of the loan, the Pledgee shall have the rights and
remedies provided in the California Commercial Code. In this
connection, the Pledgee may, on five days' written notice to the Pledgor
and without liability for any diminution in price that may have
occurred, sell all the pledged shares in the manner and for the price
that the Pledgee may determine at either public or private sale. At any
bona fide public or private sale the Pledgee shall be free to, purchase
all or any part of the pledged shares. In the event that Pledgee
purchases the shares at a private sale, the minimum bid by the Pledgee
shall be the then outstanding balance of principal and interest on the
loan. Out of the proceeds of any sale the Pledgee may retain an amount
equal to the principal and interest then due on the loan, plus the
amount of the expenses of the sale, and shall pay any balance of the
proceeds of any sale to the Pledgor. If the proceeds of the sale are
insufficient to cover the principal and interest of the loan plus
expenses of the sale, the Pledgor shall remain liable to the Pledgee for
any deficiency in accordance with the provisions set forth in Commercial
Code Section 9504.
DATED: JUNE 30, 1997
PLEDGOR PLEDGEE
DDL ELECTRONICS, INC. THOMAS M. WHEELER
/s/ Gregory L. Horton /s/ Thomas M. Wheeler
------------------------- -----------------------
GREGORY HORTON, PRESIDENT THOMAS M. WHEELER